TMI Blog2016 (12) TMI 1423X X X X Extracts X X X X X X X X Extracts X X X X ..... because there is no change in the activities of the trust for the impugned assessment year and further the fact is not disputed by the revenue that registration under section 12 A of the appellant trust still remains in the force, we are not inclined to uphold the order of the lower authorities. Furthermore the case of the assessee is also squarely covered by the decision in case of director of income tax (exemptions) versus Khar Gymkhana [2016 (6) TMI 489 - BOMBAY HIGH COURT] wherein considered the issue of registration of trust vis-a-vis is the above circular issued by the CBDT and held that in view of the above circular the assessee was entitled to continue registration under section 12 A of the income tax act. Therefore, we allow ground No. 2 and 3 of the appeal of the assessee, in view of the circular issued by the CBDT holding that assessee is entitled to registration under section 12 A of the income tax act and its income shall be governed by the provisions of section 11 and 12 of the income tax act, 1961. - Decided in favour of assessee - ITA No.6479/Del/2012 - - - Dated:- 25-10-2016 - SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income. The assessee has claimed that it is the charitable organization and activities of the nature of for charitable charitable purpose that therefor claims exemption under section 11 and 12 of the income tax act. According to the Ld. assessing officer activity carried out by the assessee is not for the public at large, but it is for a small class of people. Therefore he held activities of the assessee are not for the charitable purposes. Therefore, he denied the claim of the assessee as a charitable organization and exemption under section 11 was rejected. However, he stated that as the assessee is also receiving consideration from the members and fixed deposits in bank in the form of subscription and interest and the income has also been applied towards the benefit of members therefore the income is not taxable in view of the principles of mutuality. Therefore, accordingly, the income of the assessee was assessed at nil and he mentioned that a proposal to the director of income tax (E) is also forwarded to withdraw the registration granted under section 12 A of the income tax act. Aggrieved by the order of the Ld. assessing officer, the appellant preferred appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itution merely on the ground that the cut-off specified in provisions of section 2 (15) of the income tax act has exceeded in a particular year, cannot be cancelled. He further submitted that registration of the appellant has so far not been cancelled by the registering authority. Therefore he submitted that the action of the Ld. assessing officer of not allowing assessee exemption under section 11 and 12 of the income tax act is not proper and the Ld. CIT appeal has erred in confirming the same. 7. Ld. departmental representative relied upon the orders of the Ld. assessing officer and the Ld. CIT appeal and submitted that that assessee is not carrying on any activities as a charitable activities, but it is carrying on activities for the class of the society and therefore the object of the assessee is not for charitable purposes as defined under section 2 (15) of the income tax act. 8. We have carefully considered the rival contentions and perused the material available before us. The appellant is a society registered under the societies registration act in the year 1997 and has been granted the registration under section 12 A of the income tax act, w.e.f. 26/9 /2005. Main o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sarily be the outcome of alteration in the very nature of the activities of the trust or institution requiring cancellation of registration already granted to the trust or institution. Hence, section 13 of the Act has been amended vide Finance Act, 2012 by inserting a new sub-section (8) therein to provide that such organization would not get benefit of tax exemption in the particular year in which its receipts from commercial activities exceed the threshold whether or not the registration granted is cancelled. This amendment has taken effect retrospectively from 1st April, 2009 and accordingly applies in relation to the assessment year 2009-10 onwards. 4. In view of the aforesaid position, it is clarified that it shall not be mandatory to cancel the registration already granted u/s 12AA to a charitable institution merely on the ground that the cut-off specified in the proviso to section 2(15) of the Act is exceeded in a particular year without there being any change in the nature of activities of the institution. If in any particular year, the specified cut-off is exceeded, the tax exemption would be denied to the institution in that year and cancellation of registration ..... X X X X Extracts X X X X X X X X Extracts X X X X
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