TMI Blog2012 (11) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... e object of the trust / institution. In other words, the registration can be cancelled only if the Commissioner is satisfied that the object of the trust is not genuine or the activity of the taxpayer society was not carried out in accordance with the object. Decision in favour of assessee. - I.T.A No. 250/Coch/2011 - - - Dated:- 16-11-2012 - SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARAN(AM) For the Petitioner : Shri K.M.V. Pandalai For the Respondent : SHRI m. Anil Kumar ORDER PER N.R.S. GANESAN (JM) This appeal of the taxpayer is directed against the order of the Commissioner of Income-tax, Thiruvananthapuram dated 24-02-2011 withdrawing the registration granted u/s 12A of the Act. 2. Shri K.M.V. Pandalai, the ld.counsel for the taxpayer submitted that the Administrative Commissioner has not recorded his satisfaction and the circumstances which warranted the exercise of his powers u/s 12AA(3) of the Act. According to the ld.counsel, the powers conferred on the Commissioner u/s 12AA(3) of the Act could be invoked on recording his satisfaction and the circumstances which warrants the withdrawal of the registration. The ld.counsel placed hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edy and deserving people is a charitable activity. Therefore, the Administrative Commissioner is not correct in withdrawing the registration granted u/s 12AA of the Act. 3. On the contrary, Shri Anilkumar, the ld.DR submitted that no doubt registration was granted u/s 12AA of the Act by the Commissioner. However, the provisions of section 2(15) of the Act was amended by Parliament by Finance Act 2009 with retrospective effect from 01-04-2009. According to the ld.DR, if the activity of the taxpayer involves carrying on any trade, commerce or business or activity of rendering services in relation to trade, commerce or business cannot be considered to be a charitable activity. The Parliament, however, introduced another Proviso to section 2(15) of the Act w.e.f. 01-04-2012 thereby brought down the requirement of the aggregate value of the receipt from the activities to ₹ 10 lakhs or more in the previous year. In this case, according to the ld.DR, the taxpayer has participated in an auction with Indian Railway and became a successful bidder. The total receipt from the contract with Indian Railway exceeds ₹ 4 crores. Therefore, in view of the First Proviso to section 2(15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfaction about the non genuineness of the institution or that the activities are not carried out in accordance with the object of the trust. The ld.counsel further contended that once registration was granted, there cannot be any further reference to section 2(15) of the Act since there was no reference in section 12AA(3) of the Act. 5. The question arises for consideration is that when the taxpayer trust was registered u/s 12AA of the Act on the basis of the object disclosed in the Memorandum of Association and considering the provisions of section 2(15) of the Act, can such registration be cancelled or withdrawn after introduction of Proviso to section 2(15) of the Act? We have also carefully gone through the provisions of section 2(15) of the Act. The Parliament defined charitable purpose in section 2(15) of the Act. This is an inclusive definition. One of the objects of the trust is public utility which was considered to be charitable in nature. However, by First Proviso to section 2(15) of the Act, the Parliament intended to exclude the object of general public utility from the definition of charitable purpose provided, if the activity involved carrying on of any activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e trust is not genuine or the activity of the taxpayer society was not carried out in accordance with the object. It is not the case of the revenue that the object of the trust is not genuine. It is also not the case of the revenue that the taxpayer has not carried out its activity in accordance with the object of the trust. The only objection of the revenue is that the aggregate contract receipt from railway ₹ 4 crores is exceeding ₹ 10 lakhs; therefore, the taxpayer is not charitable institution. If the aggregate contract receipts exceed ₹ 10 lakhs in any of the years, at the best, the assessing officer may deny exemption at the time of assessment proceedings. In view of the above, this Tribunal is of the considered opinion that the subsequent amendment to section 2(15) of the Act by introducing Proviso fixing the monetary limit in respect of public utility services cannot be a reason to cancel the registration. 6. Another question which may incidentally arise for consideration is that once the taxpayer is not a charitable institution in terms of section 2(15) of the Act, since contract receipts admittedly exceed the limit prescribed by the Parliament, whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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