TMI Blog2010 (5) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... granted registration u/s12AA(3), subsequently, the if Commissioner finds that one of the conditions viz. (i) the activity of such trust or institution are not genuine, and (ii) the activity of the such trust or institution are not being carried out in accordance with the objects of the trust or institution is satisfied, then the Commissioner has power to cancel registration granted u/s.12AA(1) by passing an order in writing. Therefore, registration granted u/s.12AA(1) cannot be cancelled u/s.12AA(3) unless one of the conditions prescribed u/s.12AA(3) is satisfied. In present case, the assessee is recovering the cost as provided under the GTP Act , under which the assessee is functioning. Merely because the assessee is recovering the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anning and Urban Development Act, 1976 (hereinafter referred to as GTP Act ). That the assessee was registered under Section 12AA of the IT Act w.e.f. 1-4-2002 vide order dated 23-10-2003 of the DIT(Exemption), Ahmedabad. The DIT(Exemption) vide his order under Section 12AA(3) dated 15-2-2010 cancelled the registration under Section 12AA w.e.f. 1-4-2002. He submitted that as per Section 12AA(3) registration once granted can be canceled only in two circumstances (i) that the activities of the institution are not genuine and (2) the activities of the institution are not being carried out in accordance with the objects of the institution. He has stated that in the case of the assessee none of the above conditions is satisfied. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the DIT(Exemption) and stated that the registration under Section 12AA(3) was granted erroneously and therefore it was withdrawn from the first date of the registration. He submitted that if the registration was granted erroneously the same can be withdrawn from the date from which the registration was granted. He also stated that even if the conditions prescribed under Section 12AA(3) are not satisfied, the registration, if granted erroneously, can be withdrawn. In support of this contention, he relied upon the decision of Kerala High Court in the case of M.P.Santhiverma Jain Vs. State of Kerala, 265 ITR 385. He further stated that the activities of the assessee-institution are not charitable because the assessee is acting in a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or institution are not being carried out in accordance with the objects of the trust or institution is satisfied, then the Commissioner has power to cancel registration granted u/s.12AA(1) by passing an order in writing. Therefore, registration granted u/s.12AA(1) cannot be cancelled u/s.12AA(3) unless one of the conditions prescribed u/s.12AA(3) is satisfied. We are unable to agree with the contention of the learned DR that if the registration is erroneously granted, it can be withdrawn, even if the condition prescribed under Section 12AA(3) are not satisfied. We may point out that in support of the contention, the learned DR has relied upon the decision of Kerala High Court in the case of M.P.Santhiveerma Jain (supra). However, the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver is incurred on its permitted activity is fully recovered on a self reliant basis as admitted by them. As detailed in the chart given in Annexure-II, they have huge reserve of saleable plots/sale of which would more than recover the cost. Further, the income expenditure statement furnished with return do not satisfy the requirements of matching principle of accountancy as regards omission of closing stock value of saleable plots with AUDA year on year. 6. It was pointed out by the learned counsel that the Section 79 of the GTP Act provides for recovery of the cost of project by imposing levy on the plots being developed by the assessee. The Section 79 of the GTP Act reads as under: 79.(1) The costs of the scheme shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of each plot included in the final scheme shall be primarily liable for the payment of the contribution leviable in respect of such plot. From the above, it is evident that the assessee is recovering the cost as provided under the GTP Act , under which the assessee is functioning. Merely because the assessee is recovering the cost of the project, partially or wholly, it cannot be said that the activities of the assessee are not being carried out in accordance with the object of the institution. 7. In view of the above, we are satisfied that none of the conditions as prescribed under Section 12AA(3) is satisfied in the case of the assessee so as to cancel the registration granted under Section 12AA. We therefore quash the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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