TMI Blog2008 (12) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... and Sri D. D. Chopra learned counsel for the respondents. 2. The present writ petition has been preferred against the impugned order dated March 9, 2004, passed by the Commissioner of Income-tax under section 12A of the Income-tax Act, 1961, where he has cancelled the registration granted earlier on April 1, 1999, for being a charitable institution. 3. Brief facts, giving rise to the present writ petition, are that the petitioner is a society registered under the Societies Registration Act. 1860, bearing registration number 290 of 1995. The petitioner, hereinafter known as the assessee, has applied for registration under section 12A of the Income-tax Act being a charitable institution. The opposite parties have granted registration on April 1, 1999. Further, the exemption was also granted under section 80G of the Income-tax Act on May 10, 1999. 4. A survey was conducted at the business premises of the assessee under section 133A of the Act on September 20, 2002, wherein documents were impounded. During the course of survey, the statement of Sri Ajit Pal Chaudhary, the president of the society, was also recorded, On the basis of the information, it was felt by the oppos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that once registration is granted then it could not be cancelled by the Commissioner. Further, he relied on the ratio laid down in the case of CIT v. Red Rose School [2007] 212 CTR 394 (All), where it was observed that "Profit earning or misuse of the income derived by charitable institution from its charitable activities may be a ground for refusing exemption only with respect to that part of the income but cannot be taken to be a synonym to the genuineness of the activities of the trust or the institution. 7. Learned counsel for the petitioner continued to argue that due to cancellation of the registration, the petitioner's society is suffering great loss and the plot purchased by the petitioner's society on allotment basis for establishing a school at South City, Lucknow, is held up in spite of the fact that the consideration was fully paid. According to him, the registration was granted under section 12A of the Act after a due enquiry as provided under the Act for the assessment years under consideration (2000-01 and 2001-02). There was no jurisdiction with the opposite parties to cancel or withdraw such registration. He submitted that section 12AA(3) came into force w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld necessarily imply that the property was acquired for one of the charitable purposes stipulated in the memorandum." 10. Lastly, he submitted that the main object of the petitioner's society is to serve and educate the students specially poor students to acquire knowledge for the future education and career. The facility is provided free of cost to 1500 students in a year. Forms are given at printed price. However, a nominal fee is received from the students if admission is obtained by him in the desired institution. He also submitted that this is only on voluntary payment and is taken only if a student can afford it. Finally, he made a request that the impugned order dated March 9, 2004, may kindly be quashed. 11. On the other hand Sri D. D. Chopra, the learned counsel for the opposite parties has relied on the impugned order. He stated that in the assessment order for the assessment year 2000-01, it was clearly mentioned that "no books of account, no bill and vouchers could be produced." He submitted that the assessee was not engaged in the charitable activities but all the activities were meant for the benefit of its president Mr. Chaudhary and his family members. Duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act or Regulation, a power to issue notifications, orders, rules or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction, and conditions (if any), to add to, amend, vary or rescind any notifications, orders rules or bye-laws so issued." 14. Lastly, he made a request to uphold the impugned order and dismiss the writ petition. 15. We have heard the arguments advanced on behalf of both the parties and gone through the material available on record. 16. Regarding the alternative remedy available, it may be mentioned that the alternative remedy is not an absolute bar and writ lies as per observation made by the hon'ble apex court in the case of M. P. State Agro Industries v. Jahan Khan [2007] 10 SCC 88. 17. In the instant case, the petitioner is a registered society, which was earlier granted registration under section 12A of the Income-tax Act on April 1, 1999. A survey was conducted at the business premises on September 20, 2002, from where documents were impounded. The registration was cancelled for the assessment years 2000-01 and 2001-02 for the reasons that the surplus was quite heavy. In the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pril 1, 1999, under section 12A of the Act, it is true that there was no express provision in section 12A of the Act for cancellation of the registration. The applicability of section 21 of the General Clauses Act, 1897, was discussed by the Uttaranchal High Court in the case of Welham Boy's School Society [2006] 285 ITR 74 (Uttaranchal), where it was observed that any order passed by the Commissioner of Income-tax under section 12A is a quasi judicial order, which does not fall in the category of "orders" mentioned in section 21 of the General Clauses Act, 1897, by relying the ratio laid down in the case of Ghaurul Hasan v. State of Rajasthan, AIR 1967 SC 107. The High Court observed that by virtue of section 21 of the General Causes Act, the Commissioner of Income-tax had no power to rescind the order passed earlier by the Commissioner granting registration to the petitioner's society. It may be mentioned that section 12AA(3) was incorporated with effect from October 1, 2004, to empower the Commissioner to cancel the registration granted to a trust or institution. The same is not applicable retrospectively and in the assessee's case for the assessment years under consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , was repealed and replaced by the 1961 Act, section 2(15) thereof adopted the 1922 Act definition with a modification, namely, by enacting that, "'charitable purpose' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit" Thus, the scope of the definition was changed for the Income-tax Act, 1961, specially after an amendment in section 2(15) by the Finance Act, 1983, with effect from April 1, 1984. 24. In the instant case, the assessee is preparing students by providing coaching/guidelines to get admissions in professional institutions to pursue their studies. The sense in which the word "education" has been used in section 2(15) of the Act is the systematic instruction, schooling or training given to the young in preparation for the work of life. Similarly, extending financial assistance/scholarship, etc., to students for their educational purpose would squarely and fairly fall within the connotation of "education" as per the ratio laid down in the case of CIT v. Saraswath Poor Students Fund [1984] 150 ITR 142 (Karn). Thus, the assessee is engaged i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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