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2017 (1) TMI 446 - ITAT DELHI

2017 (1) TMI 446 - ITAT DELHI - TMI - Benefits of exemption u/s. 11 denied - Withdrawal of registration granted to the assessee u/s. 12AA - CIT has recorded a finding that the assessee is operating like a commercial tour operator and there is no element of charitable activity involved in the assessee activities - Held that:- As decided in assessee's own case [2016 (12) TMI 1420 - ITAT DELHI] CIT(E) has not brought out any allegation to show that the receipt/income of the assessee's trust was not .....

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eligible for registration under section 12A of the Act. - Decided in favour of assessee - Disallowance of expenses on account of valuation of section 40A(3) - Held that:- CIT(A) has observed that the assessee has not filed any submission either before the AO or before the Ld. CIT(A) to explain the reasons for the infringement of section 40A(3), hence, the appeal on this ground was dismissed. In my considered opinion, this ground needs to be examined by the AO afresh, because no document was .....

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l against the impugned Order dated 24.2.2016 passed by the Ld. CIT(A), Dehradun on the following grounds:- 1. That in facts and circumstances of the case, the return of income was filed on 28.9.2012 declaring NIL income as the exemption u/s. 12AA was allowed to the appellant society vide order dated 10.10.2008, the said exemption was withdrawn vide order dated 26.3.2014 to disallow the claim with retrospective effect is unjustified and bad at law. 2. That in facts and circumstances of the case, .....

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due relief in law may please be granted and returned income may please be accepted. 7. That in fact and circumstance of the case, appellant be permitted to add or delete any grounds of appeal. 2. The brief facts of the case are that the assessee society registered under the Society Registration Act with the Registrar of Societies, Uttarakhand vide Registration No. 11/2008-2009 dated 11.3.2008 for a period upto 3.4.2013. The assessee was registered u/s. 12AA with the CIT, Dehradun vide order dat .....

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ponse to the same, assessee submitted his reply, which was considered by the AO, but AO did not find the same satisfactory and convincing, hence, he held that the society is not working as per aims and objects as mentioned in Smriti Patra and not covered as exemption u/s. 11 of the I.T. Act and was squarely hit by the amended provisions of section 2(15) of the I.T. Act, 1961. Accordingly, AO vide his order dated 13.11.2014 passed u/s. 143(3) of the I.T. Act, 1961 assessed the income of the asses .....

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as withdrawn the registration granted to the assessee u/s. 12AA of the I.T. Act, 1961. While withdrawing the registration, the CIT has recorded a finding that the assessee is operating like a commercial tour operator and there is no element of charitable activity involved in the assessee activities. Accordingly, since the registration u/s. 12AA issued vide C.No. 40/12(1)/Registration/Haridwar/2008-09 / Tech. 11321-324 dated 8.10.2008 stands withdrawn by the CIT, the assessee cannot be granted th .....

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o explain the reasons for the infringement of section 40A(3), hence, Ld. CIT(A) has confirmed this addition of ₹ 32685/- and dismiss the ground. 4. At the time of hearing Ld. Counsel of the assessee has stated that the ITAT, Delhi Bench vide its order dated 25.10.2016 in assessee s own in ITA No. 2425/Del/2013 has restored the registration u/s. 12AA of the I.T. Act, 1961, hence, the assessee is eligible for benefit of exemption u/s. 11 of the I.T. Act, 1961 and addition made on this accoun .....

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elay which is placed on record. I have perused the Application for condonation of delay and of the view that the reasons mentioned in the application for condonation of delay is quite genuine, hence, the delay is condoned. On merits, I find that addition of ₹ 6,01,755/- is confirmed by the Ld. CIT(A) solely on the basis of withdrawal of registration u/s. 12AA vide order dated 8.10.2008 passed by the CIT, Dehradun, as a result the assessee cannot be granted the benefits of exemption u/s. 11 .....

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that only effective issue in the present appeal is against the cancellation of registration by the CIT by invoking the powers u/s. 12AA(3) on the ground that assessee s activity of organizing tours to various religious places was on commercial lines. We note that the registration u/s. 12AA was granted by CIT on 10.10.2008 on the basis of the objects reproduced at page no. 1 of the impugned order according to which assessee was to conduct pilgrimage tours to elderly people for spread of religious .....

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sment order dated 22.1.2016 relevant for the AY 2013-14 passed u/s. 143(3) of the I.T. Act, 1961 vide para no. 1 has observed that the assessee is engaged in the activity of organizing tours to religious and historical places in India for senior citizens. The society is purely religious and works for the charitable purposes. He further observed that if the society would have been carrying on the business activity for the motive of profit then it would have conducted a tour not to the religious p .....

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being carried out by the assessee, registration cannot be cancelled as held by the Coordinate Bench decision in the case of Sharda Educational Trust vs. CIT (Central) 147 ITD 271, 107 DTR 201 (Agra Trib) dated 24.5.2013. 7.1 We further find that registration cannot be cancelled by re-examination of the objects on the basis of which registration was originally granted and CIT does not have power of review as held in Chaturvedi Har Prasad Educational Society vs. CIT 134 TTJ 781 (Lucknow) dated 30 .....

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jection of the Ld. CIT was that the assessee was pursuing the said objects on commercial line - a ground which is not permissible ground u/s. 12AA(3) as held in CIT vs. Sarvodaya Ilakkiya Pannai 343 ITR 300 (Madras High Court). 7.3 We further find that Ld. CIT observed that the assessee is charging a fee for the tour and hence came to conclusion that the assessee basically a tour operator. However, in August, 2008 when the journey was organized out of 294 people who undertook the journey, 243 pe .....

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r a period of 31 days, which comes to less that ₹ 700/- daily. This includes provision of train tickets, bus hire, lodging charges, refreshments and three freshly cooked meals daily. Hence, it is established that charging such minimal amount could never be compared to an activity run with profit motive. 7.5 We further note that the Ld. CIT cancelled the registration without giving the date from which cancellation of registration would take place and therefore in the absence of any date whi .....

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