TMI Blog2011 (6) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... not genuine or are not being carried out in accordance with the objects of the society, hence the order passed by the CIT, cancelling/withdrawing the registration is void ab initio. 4. Because the CIT, Lucknow has erred on facts and in law in arbitrarily holding that the objects of the trust are not charitable whereas, the action under s. 12AA(3) can only be invoked when the activities are not in accordance with the objects. The order passed by the CIT cancelling/withdrawing the registration is erroneous, misconceived, bad in law and be quashed. 5. Because the order passed by the CIT-I be cancelled and the CIT-I be directed to restore the registration granted under s. 12A of the Act, 1961. 6. Because once the registration under s. 12A of IT Act, 1961 was granted to the assessee as per due procedure of law and because there was no material and no reason with the learned CIT while passing such order of withdrawal of registration under s. 12A that the activities of the trust are not genuine and are not being carried out in accordance with the objects of the law. Hence withdrawal of registration is bad in law and on facts. Hence liable to be quashed as baseless and arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elonging to minorities and that the Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association v. CIT [1971] 82 ITR 704 has observed as under : Under the Act of 1922, a trust for the benefit of any particular religious community or caste was entitled to exemption but under the Act, 1961, a charitable trust which is created for such benefit on or after 1st day of April, 1962 would be disentitled to the exemption. 3.1 The learned CIT was of the view that the assessee was wrongly granted registration under s. 12A of the Act in view of the above said decision. He, therefore, issued notice dt. 27th Oct., 2010 to the assessee to show-cause as to why the registration earlier granted under s. 12A of the Act should not be withdrawn. In response to the said notice, the assessee vide letter dt. 20th Dec., 2010 submitted as under : With reference to your subjected notice we beg to produce s. 12AA(3) hereunder : Where a trust or an institution has been granted registration under cl. (b) of sub-s. (1) or has obtained registration at any time under s. 12A as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996) and subsequently the CIT is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjournment was nothing but the deliberate attempt to avoid the proceeding before me. 3.3 According to learned CIT the only objection of the assessee was that s. 12AA(3) does not empower CIT to look into whether trust has been created for the benefit of any particular religious community or caste. The learned CIT was of the view that it was well within his power to withdraw the registration wrongly granted to the society. The reliance was placed on the judgment of Hon'ble Andhra Pradesh High Court in the case of Arsha Vijnana Trust v. D.P. Sharma, IRS, DIT (Exemptions) [2007] 295 ITR 437/[2008] 171 Taxman 182 wherein it has been held that even if the renewal was granted under s. 80G for last 30 years, the Director of IT (Exemptions) was correct in not allowing the renewal under s. 80G in subsequent year though the facts were same. The learned CIT, by keeping in view the ratio laid down in the case of Ahmedabad Rana Caste Association (supra) withdrew the registration granted to the assessee under s. 12A of the Act. Now the assessee is in appeal. 4. The learned counsel for the assessee reiterated the submissions made before the learned CIT and further submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the material available on the record. In the present case the learned CIT withdrew the registration already granted to the assessee society under s. 12A of the Act by observing that the assessee society was created for the benefit of a particular community or caste and the objects were meant for welfare and progress ofthe persons belonging to the minorities. In the instant case, the objects of the assessee society were considered and found to be charitable in nature when the registration was granted on 30th Sept., 2005, however, nothing is brought on record that there was any change in the objects of the society or the activities were not in accordance with those objects. In the present case, on the one hand the learned CIT has stated that the objects of the assessee society were meant for welfare and progress of the persons belonging to minority/SC/ST/OBC etc., on the other hand he was of the view that the assessee society was created for the benefit of a religious community. The said observation of the learned CIT is contradictory. It appears that the learned CIT, while withdrawing the registration under s. 12AA(3) of the Act, considered the application dt. 31st March, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue cannot take a very narrow meaning of the word minority as has been observed in the order dt. 23rd June, 2010 of the Tribunal, Lucknow Bench 'B' in the case of R.B.N. Social Educational Society v. CIT [IT Appeal No. 169/Luck/2010, wherein the following observations have been given in paras 5 to 7 : '5. We have carefully considered the issue in view of the material placed on record and rival submissions. In the case of Umed Charitable Trust Umaid Charitable Trust v. Union of India [2008] 218 CTR (Raj.) 30 : [2008] 10 DTR (Raj.) 37 : [2008] 307 ITR 226 (Raj.), it has been held as under : 'The line of distinction between religious purposes and charitable purposes is very thin and no watertight compartment between the two activities can be established. Unless the objective of the charitable trust in question itself is to spend its income for a particular religion and it is so found in the trust deed, the IT Department cannot reject the renewal of the trust as charitable trust under s. 80G of the IT Act, 1961, merely because one particular expenditure is for an activity which may be termed as spending for a particular religion.' 6. In the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee from the date when the registration was already granted under s. 12A of the IT Act or that the activities were not in accordance with those objects, which were already examined by the learned CIT while granting the registration under s. 12A of the IT Act. In the present case, the learned CIT invoked the provisions of s. 12AA(3) of the IT Act, which provides that the CIT has to satisfy himself about either of the two conditions prescribed therein, namely, that the activities were not genuine or that the activities were not being carried out in accordance with the objects of the trust or the institution, as the case may be. However, in the instant case, the learned CIT has not brought any material on record to substantiate that the activities of the assessee were not genuine or that the activities were not being carried out in accordance with the objects of the assessee. On a similar issue, this Bench of the Tribunal vide order dt. 30th Aug., 2010 in the case of Chaturvedi Har Prasad Educational Society v. CIT [2010] 46 DTR (Lucknow)(Trib) 121has held as under : 'From s. 12AA(3), it is clear that registration granted to any trust or society under s. 12AA(1)(b) can be c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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