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TMI Blog2016 (7) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... petition of delay. The ld. DR raised no objection if the delay of condonation is considered. Hence, we condone the delay and proceed for hearing the appeal. 3. Solitary ground raised by assessee in this appeal is that Ld. CIT erred in rejecting the registration application u/s 12AA of the Act on account of delay in filing the registration application and holding that the activities of the assessee are non charitable. 4. Facts in brief are that assessee-applicant is a Development Authority constituted u/s. 11 of the West Bengal Town and Country (Planning & Development) Act, 1979 and engaged in the activities of developing the public utilities. The assessee-trust upto including Assessment Year 2003-04 was claiming the exemption u/s. 10(20A) of the Act. However, the Section was omitted by Finance Act 2002 with effect from 01.04.2003. Thereafter assessee submitted the registration application u/s 12A of the Act on 19.03.2009. During the course registration proceedings, Ld. CIT observed that assessee has declared following income in the earlier years:- Items of income: Year ended 31-03-2008 Year ended 31-03-2007 Year ended 31.03.2006 All figures are in Rupees crores R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation u/s 12A of the Act within one year from the date of its creation or establishment, whichever is later. If it is filed on or after 01.06.2007 the exemption shall be available u/s. 11 and 12 of the Act on prospective basis. The Ld. counsel for the assessee further submitted that the expression incorporated u/s 2(15) of the Act that the object of public utility is not restricted to the objects beneficial to the whole mankind and object beneficial to the section of the public is an object of general public utility. It is sufficient if the intention is for the benefit of the section of the public as distinguished from specific individuals. Finally the ld. AR requested the Bench that the issue may be decided on merit. On the other hand, L'd DR submitted that the application for registration is filed delayed. The ld. DR further submitted that as per the proviso to Sec.2(15) of the Act the activities of the assessee-trust are in the nature of commerce and trade and therefore the assessee-trust is not to entitle for registration u/s. 12A of the Act and he vehemently relied on the order of L'd CIT. 6. From the facts of the case, we find that assessee-trust in the instant case, is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld grant the registration on prospective basis. In our considered view, the action of L'd CIT for rejecting the registration application on the ground that it is filed late is not correct. It is because, L'd CIT has power to grant registration prospectively. Now coming to the issue that the activities of the assessee-trust are in the nature of trade, commerce or business, we find that various benches ITAT have decided this issue in favour of assessee. Reference in this connection is made to Chandigarh Bench in the case of Punjab Cricket Asociation v. CIT (2016) 65 taxmann.com 239 (Chandigarh -Trib) 157 ITD 227 (Chan) wherein the head note:- ÏT: Commissioner is empowered to cancel registration granted to a society under section 12A from assessment year 2011-12 onwards, he cannot assume such power for earlier assessment years; IT: Consideration of first proviso to section 2(15) has no role to play in matters relating to registration of a trust or institution under section 12A in respect of granting or declining or cancelling registration. Further reference in Amritsar Bench in the case of Kapurthala Improvement Trust v. CIT (20115) 60 taxmann.com 301 (Amritsar -Trib.) wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme of the Act would unambiguously show this aspect of the matter. 11. Let us begin by taking a look at Section 2(15) which defines charitable activities and first and second provisos thereto. These statutory provisions are as follows: (15) "charitable purpose" includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places orobjects of artistic or historic interest,] and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity: Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh rupees or less in the previous year: (Emphasis supplie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral public utility, and it involves carrying on of any activity in the nature of trade, commerce or business; but the aggregate value of receipts from the commercial activities does not exceed Rs. 25,00,000 in the previous year, then the purpose of such institution shall be considered as charitable, and accordingly, the benefits of exemption shall be available to it. Thus, a charitable trust or institution pursuing advancement of object of general public utility may be a charitable trust in one year and not a charitable trust in another year depending on the aggregate value of receipts from commercial activities. There is, therefore, need to expressly provide in law that no exemption would be available for a previous year, to a trust or institution to which first proviso of sub-section 2(15) become applicable for that particular previous year. However, this temporary excess in one year may not be treated as altering the very nature of the trust or institution, so as to lead to cancellation of registration or withdrawal of approval or rescinding of notification issued in respect of trust or institution. Therefore, there is need to ensure that if the purpose of a trust or instit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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