RAJASTHA GAU SEWA SANGH, Jaipur V. ITO, Jaipur

ITA 113/JPR/2014

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5883 (ITAT-JAIPUR)
• Duration Of Justice: 5 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 13-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K GUPTA DHK
• Assessee Lawyers: O P AGARWAL
• Keywords: Charitable institution; Opportunity of being heard; Retrospective amendment; Competent authority; Capital receipt; Cancellation of registration; Set aside
• Section: 143(3); 12A; 12AA; 113; 13; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH B , JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE : SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 748/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 (U/S 254/12AA(1)(B)OF I. T. ACT 1961) M/S. RAJASTHAN GAU SEVA SANGH DURGAPURA, TONK ROAD,JAIPUR CUKE VS. THE CIT(EXEMPTIONS) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAATR 0809 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 113/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 M/S. RAJASTHAN GAU SEVA SANGH DURGAPURA, TONK ROAD, JAIPUR CUKE VS. THE ITO WARD- 6(2),JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAATR 0809 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL, CA AND SHRI O.P. AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI B.K. GUPTA, CIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10/12/2019 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 07 /02/2020 VKNS'K@ ORDER PER VIJAY PAL RAO, JM THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE ORDER DATED 11-09-2015 OF LD. CIT(EXEMPTIONS), JAIPUR P ASSED U/S 12AA(1)(B) OF THE ACT AS WELL AS ORDER DATED 17-12-2013 OF LD. CIT(A)-II, JAIPUR ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 2 ARISING FROM ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2009-10 RESPECTIVELY. 2.1 SINCE THE ISSUE OF CANCELLATION/ WITHDRAWAL OF REGISTRATION U/S 12A(1)(A) OF THE ACT GOES TO THE ROOT OF THE MATTER AND SHALL HAVE BEARING ON THE ASSESSMENT ORDER AND CONSEQUENTIAL IMPUGNED ORDER OF THE LD. CIT(A), THEREFORE, WE FIRST TAKE UP THE APPEAL OF T HE ASSESSEE CHALLENGING THE ORDER OF THE LD. CIT(E) PASSED U/S 12A(1)(B) OF THE ACT. THE ASSESSEE IN ITA NO. 748/JP/2015 FOR THE A.Y. 2009-10 ASSESSE E HAS RAISED THE FOLLOWING GROUNDS. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(E),JAIPUR HAS GROSSLY ERRED IN WITHDRAWING REGISTRATION U/S 12AA(3) OF THE I.T. ACT, 1961 FOR A.Y. 2009-10 AND ONWARDS, WITHOUT APPRECIATING THAT HE WAS NOT EMPOWERED UNDE R THE SAID SECTION TO WITHDRAW THE REGISTRATION GRANTED TO APP ELLANT U/S 12A(1)(A) IN THE YEAR 1974, AS THE EMPOWERING PROVI SION I.E. SECTION 12AA(3) WAS MADE OPERATIVE W.E.F. 01-06-201 0 I.E. A.Y. 2011-12 ONWARDS ONLY WITH RETROSPECTIVE EFFECT AS H ELD BY CBDT AS WELL AS VARIOUS COURTS. THUS THE ORDER OF THE LD . CIT(E), JAIPUR CANCELLING THE REGISTRATION W.E.F. 2009-10 ONWARDS DESERVES TO BE HELD BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(E),JAIPUR HAS GROSSLY ERRED IN WITHDRAWING REGISTRATION U/S 12AA(3) OF THE I.T. ACT, 1961 VIDE HIS IMPUGNED ORD ER PASSED U/S 12AA(3) OF THE I.T. ACT, 1961 ARBITRARILY BY HOLDIN G THAT THE CASEOF THE ASSESSEE IS HIT BY PROVISO TO SECTION 2(15) WI THOUT INTERPRETING THE PROVISO TO SECTION 2(15) IN ITS TRUE PERSPECTIV E. THUS, THE ORDER OF THE LD. CIT(E) DESERVES TO BE HELD BAD IN LAW A ND BE QUASHED. ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 3 2.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(E),JAIPUR HAS GROSSLY ERRED IN OBSERVING TH AT THE ASSESSEE IS CARRYING ON ACTIVITIES IN THE NATURE OF TRADE, COMM ERCE OR BUSINESS WHEREAS THE ASSESSEE IS NOT CARRYING ON ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AND THE ASSESSEE TRUST IS NOT RUNNING ON COMMERCIAL LINES AND THE ACTIVITIES OF THE ASSES SEE ARE CHARITABLE AND IS CARRYING ON ITS ACTIVITIES FOR A CHARITABLE PURPOSE WITHIN THE MEANING OF SECTION 2(15) OF THE I.T. ACT, 1961. 2.2 THAT THE LD. CIT HAS FURTHER ERRED IN NOT PROPE RLY CONSIDERING THE CASE LAWS SQUARELY APPLICABLE TO TH E CASE OF ASSESSEE AND HAS FAILED TO DISTINGUISH THEM, THEREF ORE, THE ORDER OF THE LD. CIT DESERVES TO BE HELD BAD IN LAW 2.2 THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 VIDE REGISTRATION CERTIFICATE DATED 14-10 -1954. THE ASSESSEE WAS GRANTED REGISTRATION U/S 12AA(1) OF THE ACT ON 06-12-1974. THEREAFTER THE ASSESSEE HAS BEEN AVAILING THE BENEF IT OF SECTION 11 AND 12 OF THE I.T. ACT, 1961 TILL 29-12-2011 WHEN THE REGI STRATION WAS WITHDRAWN BY THE CIT-II, JAIPUR AS WELL AS THE AO DENIED THE BENEFIT U/S 11 AND 12 OF THE ACT TO THE ASSESSEE WHILE PASSING THE ASSESS MENT ORDER ON THE SAME DATE I.E. 29-12-2011. THE ASSESSEE CHALLENGED THE O RDER OF THE LD. CIT WITHDRAWING THE REGISTRATION GRANTED TO THE ASSESSE E U/S 12AA(1)(B) OF THE ACT BEFORE THIS TRIBUNAL AND VIDE ORDER DATED 28-1 1-2014 IN ITA NO.85/JP/2012 THIS TRIBUNAL SET ASIDE THE ORDER OF THE LD. CIT WITHDRAWING THE REGISTRATION U/S 12AA(3) OF THE ACT AND REMANDED THE ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 4 MATTER TO THE RECORD OF THE LD. CIT (ADMN.) TO DECI DE THE SAME AFRESH. IN PURSUANCE TO THE SAID ORDER OF THE TRIBUNAL DATED 2 8-11-2014, THE LD. CIT (EXEMPTIONS) HAS AGAIN PASSED THE IMPUGNED ORDER DA TED 11-09-2015 WHEREBY REGISTRATION GRANTED U/S 12AA WAS WITHDRAWN BY INVOKING THE PROVISIONS OF SECTION 12AA(3) OF THE ACT. THE LD. C IT (EXEMPTIONS) CONCLUDED THAT THE ASSESSEE SOCIETY CARRIED OUT THE ACTIVITIES WHICH ARE NOT IN ACCORDANCE WITH THE OBJECTS OF THE SOCIETY AND T URNOVER FROM THE COMMERCIAL ACTIVITIES EXCEEDS THE PRESCRIBED LIMIT PROVIDED UNDER PROVISO TO SECTION 2(15) OF THE I.T. ACT, 1961. 2.3 BEFORE US, THE LD.AR OF THE ASSESSEE SUBMITTED THAT THE ORDER PASSED BY THE LD. CIT (EXEMPTIONS) WITHDRAWING THE EXEMPTIONS IS NOT IN ACCORDANCE WITH LAW AND PROCEDURE LAID DOWN U/S 12A A(3) OF THE ACT. THEREFORE, THE IMPUGNED ORDER IS BAD IN THE EYES O F LAW AND IS LIABLE TO BE STRUCK DOWN. THE LD.AR OF THE ASSESSEE FURTHER S UBMITTED THAT SECTION 12AA(3) OF THE ACT EMPOWERS THE COMMISSIONER TO CAN CEL THE REGISTRATION GRANTED U/S 12AA/12A OF THE ACT IN SPE CIFIED CIRCUMSTANCES WHERE THE COMMISSIONER IS SATISFIED THAT THE ACTIVI TIES OF THE TRUST/INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST/INTUITION. ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 5 2.4 THE LD.AR OF THE ASSESSEE HAS REFERRED TO THE O BJECTS OF THE ASSESSEE SOCIETY/ TRUST AND SUBMITTED THAT THE OBJECTS OF TH E ASSESSEE TRUST INCLUDES THE PRESERVATION OF ENVIRONMENT, MEDICAL RELIEF TO AILING PERSONS, RELIEF TO THE POOR, IMPARTING THE EDUCATION. THUS THE DOMI NANT FUNCTIONS OF THE ASSESSEE TRUST ARE TO PROVIDE (I) AN ASYLUM TO OLD, MAIMED, SICK AND STRAY COWS AND FURTHER TO PROVIDE RELIEF TO COWS IN FAMIN E AFFECTS AREAS, (II) TO EDUCATE AND TO HOLD CAMPS TO IMPART TRAINING FOR PR EPARATION OF MEDICINES PRODUCED FROM COW PRODUCTS AND (III) TO EDUCATE MIL KMEN IN ORDER TO IMPROVE THE QUALITY OF MILK AND THEREBY WORKING FOR THEIR UPLIFTMENT WHICH ARE VERY WELL COVERED WITHIN THE AMBIT OF REL IEF TO POOR AND EDUCATION. THE LD.AR OF THE ASSESSEE THEN SUBMITTED THAT APART FROM PROVIDING RELIEF TO THE POOR AND IMPARTING EDUCATIO N, THE ASSESSEE IS ALSO ENGAGED IN PLANTATION ACTIVITIES AND SPREADING AWAR ENESS ABOUT BIO-FUEL IN ORDER TO PRESERVE / PROTECT THE ENVIRONMENT. THUS T HE ASSESSEE TRUST HAS SET UP A BIO GAS PLANT AT ALL THE CENTERS WHICH ARE SP ECIFICALLY COVERED UNDER THE HEAD CHARITABLE ACTIVITIES IN THE NATURE OF EN VIRONMENT PROTECTION. THE LD. CIT (EXEMPTIONS) HAS PASSED THE IMPUGNED OR DER ON THE GROUND THAT THE PURCHASE AND SALE OF MILK, MILK PRODUCT, C ATTLE FEED ETC. DOES NOT COME UNDER THE OBJECT OF THE ASSESSEE TRUST. FURTHE R, LD. CIT (EXEMPTIONS) HAS FAILED TO APPRECIATE THE PURPOSE OF ATTAINMENT OF MAIN OBJECTS OF THE ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 6 ASSESSEE TRUST WHICH IS AUTHORIZED BY MEMORANDUM OF ASSOCIATION TO CARRYOUT VARIOUS FUNCTIONS WHICH INTER ALIA INCLUDE S PURCHASE AND SALE. WHEN THE ASSESSEE IS DOING SHELTER/ASYLUM TO STRAY COWS THEN PURCHASE AND SALE OF MILK IS CLOSELY RELATED TO THE MAIN OBJ ECTS OF THE SOCIETY AND IT BECOMES THE ANCILLARY ACTIVITY FOR UPLIFTMENT OF TH E MAIN OBJECTS OF THE ASSESSEE TRUST. THE LD.AR OF THE ASSESSEE FURTHER C ONTENDED THAT PURCHASE AND SALE OF MILK, GHEE, CATTLE FEED ETC. HAS NOT BE EN DONE ON COMMERCIAL LINES OR TO EARN THE PROFIT BUT IT IS A PART OF PRO VIDING FINANCIAL SUPPORT TO MILKMEN WHO BELONGS WEAKER AND POOR SECTIONS OF THE SOCIETY. THUS THE MILKMEN IN THE ABSENCE OF MUCH KNOWLEDGE AND NET WO RK ARE FORCED TO SELL THEIR PRODUCTS AT LOW PRICES. THE ASSESSEE TRU ST PROVIDES BETTER QUALITY OF CATTLE FEED SO AS TO ENABLE THE COW OWNERS/ MILK MEN TO GET BETTER QUALITY OF MILK PRODUCTS. THE LD.AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS MAINTAINING 11 GAUSHALAS AND 14 FAMINE RELIEF CENTRES AND THEY ARE RUN AT VARIOUS PLACES IN THE STATE OF RAJA STHAN WHEREAS THE MILK AND GHEE ARE BEING SOLD ONLY FROM 03 COUNTERS / CEN TRES I.E. JAIPUR, BIKANER AND JODHPUR. THE ASSESSEE TRUST IS PROCURI NG THE MILK AND GHEE FROM JAIPUR GAU SAMVERDHAN SAMITI WHICH IS FORM ED FOR UPLIFTMENT OF MILKMEN. THUS THE ACTIVITY OF PURCHASE AND SALE OF MILK IS NOT TO EARN THE PROFIT OR TO CARRY OUT THE ACTIVITIES ON COMMERCIAL LINES BUT TO SUPPORT THE ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 7 MILKMEN THROUGH JAIPUR GAU SAMVERDHAN SAMITI. TH E ACTIVITY OF SELLING THE CATTLE FEED IS TO PROVIDE THE GOOD QUAL ITY OF CATTLE FEED TO THE MILKMEN/ COW OWNERS AT A REASONABLE PRICE. THUS THE ASSESSEE TRUST IS PROVIDING THE BALANCED AND NUTRITIOUS FODDER FOR TH E COWS SO THAT THE MILKMEN CAN HAVE GOOD QUALITY OF MILK & MILK PRODU CTS. SIMILARLY, THE MILK AND GHEE IS PURCHASED THROUGH JAIPUR GAU SAMV ERDHAN SAMITI WHICH PROCURES THE SAME FROM LOCAL MILKMEN AT A BET TER PRICE AND SELL IT THROUGH ITS THREE COUNTERS/ CENTRES. THUS ALL THESE ACTIVITIES ARE BEING CARRIED OUT BY THE ASSESSEE TRUST WITH THE MAIN OBJ ECT TO PROTECT THE COWS AS WELL AS ENVIRONMENT. IN SUPPORT OF HIS CONTENTIO NS, THE LD.AR OF THE ASSESSEE RELIED ON THE FOLLOWING DECISIONS. (I) DIT(EXEMPTIONS) VS SABARMATI ASHRAM GAUSHALA TRUST (2014) 362 ITR 538 (GUJ). (II) DIT (EXEMPTIONS), MUMBAI VS SHREE NASHIK PANCHVATI PANJRAPOLE (2017) 81 TAXMANN.COM 375 (BOM) (III) BHARTIYA GOVANSH RAKASHAN SAMVARDHAN PARISHAD VS CIT, (2015) 58 TAXMANN.COM 37 (GAUHATI TRIB) (IV) SHREE NASHIK PANCHVATI PANJRAPOLE (2014) 45 TAXMANN.COM 220 (MUMBAI TRIB) (V) CIT VS SWASTIK TEXTILE TRADING COMPANY (P) LTD, (1978), 113 ITR 853 (GUJ) ALTERNATIVELY THE LD.AR OF THE ASSESSEE SUBMITTED THAT IMPUGNED ORDER WAS ORIGINALLY PASSED ON 29-12-2011 MAKING IT EFFEC TIVE FROM 01-04-2009 ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 8 WHEREAS THE AMENDMENT BROUGHT TO THE PROVISIONS OF SECTION 12AA(3) WAS W.E.F. ASSESSMENT YEAR 2011-12. HENCE, THE LD. CIT (E) HAS WITHDRAWN / CANCELLED THE REGISTRATION WITH RETROSP ECTIVE EFFECT WHICH IS NOT PERMISSIBLE. THEREFORE, THE IMPUGNED ORDER PASS ED BY THE LD. CIT (E) WITHDRAWING THE REGISTRATION WAS UNLAWFUL, DESERVES TO BE QUASHED AND REGISTRATION OF THE ASSESSEE TRUST GRANTED U/S 12AA DESERVES TO BE RESTORED. 2.5 ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T ACTIVITIES OF THE ASSESSEE TRUST ARE NOT FOR ATTAINMENT OF ITS OBJECT S. THE PRIMARY OBJECT OF THE ASSESSEE TRUST IS TO PROVIDE SHELTER TO THE COW S AND THEREFORE, THE SAID OBJECT IS FOR SOCIAL CAUSE AND WOULD FALL IN THE LA ST LEG OF CHARITABLE ACTIVITIES AS PROVIDED U/S 2(15) OF THE I.T. ACT, 1 961 AND CONSEQUENTLY WHEN THE ACTIVITIES OF THE ASSESSEE ARE FOUND TO BE TRADE AND COMMERCE THEN PROVISO TO SECTION 2(15) IS ATTRACTED. IN THE OBJECT CLAUSE, NOWHERE IT IS PROVIDED THAT THE ASSESSEE WILL PURCHASE AND SE LL GHEE, MILK, CATTLE FEED ETC. THE SAID ACTIVITY IS NOTHING BUT A PURE TRADIN G IN THE NATURE OF TRADE AND COMMERCE. THE TOTAL TURNOVER FROM THE ACTIVITIE S OF SALE AND PURCHASE IS RS. 13.15 CRORES WHICH IS BEYOND THE THRESHOLD L IMIT PROVIDED IN THE PROVISO TO SECTION 2(15) OF THE ACT. THE DECISIONS RELIED ON BY THE LD.AR OF THE ASSESSEE ARE DISTINGUISHABLE ON FACTS AND CA NNOT BE APPLIED IN THE ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 9 FACTS OF THE PRESENT CASE. THE LD. DR RELIED ON TH E DECISION OF ITAT BANGLORE BENCH IN THE CASE OF SRI VIDYARANYA SEVA S ANGHA VS CIT (2016) 71 TAXMANN.COM 152 (BANGLORE TRIB). THE LD. DR ALSO RELIED ON THE IMPUGNED ORDER OF THE LD. CIT(A). 2.6 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIALS AVAILABLE ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE TRUST WAS GRANTED REGISTRATION U/S 12A(1)(A) OF THE ACT O N 6-12-1974. WE FURTHER NOTE THAT THERE IS NO CHANGE SINCE THE ASSE SSEE TRUST WAS FORMED AND REGISTERED UNDER SOCIETIES REGISTRATION ACT, 18 60 VIDE REGISTRATION CERTIFICATE DATED 14-10-1954 AS A PUBLIC CHARITABLE SOCIETY, EITHER IN THE OBJECT OF THE ASSESSEE TRUST OR IN THE MEMORANDUM O F ASSOCIATION OF THE SOCIETY. THEREFORE, THE OBJECT OF THE ASSESSEE TRUS T CANNOT BE QUESTIONED BEING CHARITABLE IN NATURE WHEN THE SAME OBJECTS WE RE CONSIDERED BY THE COMPETENT AUTHORITY WHILE GRANTING REGISTRATION U/S 12A(1) OF THE ACT. THE LD. CIT(ADMN) INITIALLY HAD WITHDRAWN THE REGI STRATION VIDE ORDER DATED 29 TH DEC. 2011 ON THE GROUND THAT THE ACTIVITY OF THE A SSESSEE TRUST AND PARTICULARLY THE ACTIVITY OF PURCHASE AND SALE OF MILK, GHEE, CATTLE FEED ETC. IS IN THE NATURE OF TRADE, COMMERCE OR BUSINES S AS PROVIDED IN THE PROVISO TO SECTION 2(15) OF THE ACT AND CONSEQUENTL Y THE ACTIVITIES ARE NOT CARRIED OUT FOR ACHIEVING THE OBJECT OF THE ASSESSE E TRUST. THE SAID ORDER ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 10 WAS CHALLENGED BY THE ASSESSEE TRUST BEFORE THIS TR IBUNAL AND VIDE ORDER DATED 28-11-2014 THIS TRIBUNAL SET ASIDE THE MATTER TO THE RECORD OF THE LD. CIT(ADMM) IN PARA 3.10 AND 3.11 AS UNDER:- 3.10 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. THE ARGUMENTS OF THE LD COUNSE L ABOUT THE LEGISLATIVE SCHEME OF PROVISIONS WITH REGARD TO REGISTRATION OF TRUST U/S 12AA, WIDER MEANING OF CHARITABLE OBJECT; POWER OF WITHDRAWAL O F REGISTRATION U/S 12AA(3) HAVE SOME MERIT. THE CONCLUSION OF ORDER OF LD. CIT IN WITHDRAWING THE REGISTRATION DOES NOT APPEAR TO CONFORM TO THE SPECIFIC CONDITIONS LAID DOWN IN SEC 12AA(3). AN ORDER WITHDRAWING THE REGIS TRATION OF TRUST IS A DRASTIC ACTION AND THE LAW PROVIDED A STATUTORY MEC HANISM OF ASSESSMENT, VERIFICATION OF TRUST ACTIVITIES, AND APPORTIONMENT OF INCOME AND EXPENDITURE OF VARIOUS ACTIVITIES OF THE TRUST. BENEFITS OF SEC 11 AND 12 CAN BE EXTENDED ON THE BASIS OF SCRUTINY AND VERIFICATION BY THE AO. LD. C IT HAS NOT POINTED OUT ANY SPECIFIC INSTANCE OF ANY ACTIVITY, INCOME OR EXPEND ITURE BEING NONGENUINE. SEC. 293C IS NOT APPLICABLE TO APPROVALS WHICH SPEC IFICALLY PROVIDE MANNER OF WITHDRAWAL OF APPROVAL AS HELD BY THIS BENCH OF ITA T IN THE CASE OF JAIPUR DEVELOPMENT AUTHORITY VS. CIT IN ITA NO.182/JP/2012 VIDE ORDER DATED 30- 09-2014 AS UNDER:- THE LEARNED CIT ALSO ERRED IN APPLYING THE PROVISIO NS OF SECTION 293(C) OF THE ACT, IN THIS CASE, WHICH APPL IED WITHDRAWAL OF APPROVAL GRANTED UNDER ANY PROVISION OF THIS ACT, N OTWITHSTANDING THAT A PROVISION TO WITHDRAW SUCH APPROVAL HAS NOT BEEN SPECIFICALLY PROVIDED FOR IN SUCH PROVISION. FOR CANCELLATION OF REGISTRATION, THE SPECIFIC PROVISION U/S 12AA IS PROVIDED. 3.11 IN VIEW OF ENTIRETY OF FACTS, CIRCUMSTANCES AN D CASE LAWS, WE ARE OF CONSIDERED OPINION THAT THE IMPUGNED ORDER O F LD. CIT (ADMN.) WITHDRAWING THE REGISTRATION U/S 12AA(3) IS NOT IN CONFORMITY WITH THE LANGUAGE OF THIS SECTION. WE ARE OF THE VIEW THAT LD. CIT(ADMN) SHOULD REVISIT THE ISSUE OF WITHDRAWAL OF REGISTRATION AFRESH AFTE R TAKING INTO CONSIDERATION THE LEGISLATIVE SCHEME OF POWERS, INCORPORATION OF PR OVISO, INCLUSIVE DEFINITION OF THE CHARITABLE OBJET AS INTERPRETED BY PLETHORA OF JUDICIAL DECISIONS AND DECIDE THE ISSUE OF REGISTRATION AFTER GIVING THE A SSESSEE AN OPPORTUNITY OF BEING HEARD. SINCE WE HAVE SET ASIDE THE ISSUE, THE ADDITIONAL GROUND AS ADMITTED BY US WITH OTHER PLEADINGS FOR PROPER DISP OSAL OF THE SAME SHALL BE CONSIDERED BY LD. CIT . ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 11 THE TRIBUNAL HAS OBSERVED IN THAT SET ASIDE ORDER T HAT ORDER DATED 29-12- 2011 PASSED BY THE LD. CIT (ADMN.) WITHDRAWING THE REGISTRATION DOES NOT APPEAR IN CONFORMITY WITH THE SPECIFIC CONDITIONS L AID DOWN U/S 12AA(3) OF THE ACT. ACCORDINGLY, EARLIER ORDER WAS SET ASID E AND THE MATTER WAS REMANDED TO THE RECORD OF THE LD. CIT(ADMN) FOR REC ONSIDERATION OF THE MATTER AS PER THE SCHEME OF THE PROVISIONS OF SECTI ON 12AA(3) OF THE ACT AS WELL AS IN ACCORDANCE WITH THE JUDICIAL PRECEDEN TS ON THE ISSUE AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. IN T HE SET ASIDE PROCEEDINGS, THE LD. CIT(E) HAS AGAIN REITERATED ITS STAND AND H ELD THAT THE ACTIVITY OF THE ASSESSEE TRUST IS NOT AS PER THE OBJECT CLAUSE OF THE ASSESSEE TRUST AND FURTHER THE ACTIVITIES ARE IN THE NATURE OF TRADE A ND COMMERCE AND TURNOVER FROM THESE ACTIVITIES IS MORE THAN THE PRESCRIBED L IMIT AS PER PROVISO TO SECTION 2(15) OF THE ACT AND CONSEQUENTLY THE SAME ARE NOT CHARITABLE IN NATURE. THE LD. CIT(E) HAS GIVEN MORE EMPHASIS ON THE POWERS FOR CANCELLATION/ WITHDRAWAL OF THE REGISTRATION GRANTE D U/S 12A OF THE ACT BY VIRTUE OF THE AMENDMENT BROUGHT IN SECTION 12AA(3 ) W.E.F. 01-06-2010. FOR READY REFERENCE, WE REPRODUCE SECTION 12AA(3) O F THE ACT AS UNDER:- SUB-SECTION (3) OF SECTION 12AA :- [(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTED REGISTRATION UNDER CLAUSE ( B ) OF SUB-SECTION (1) [OR HAS OBTAINED REGISTRATION AT ANY TIME UNDER SECTION 12A [AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO.2) ACT, 1996 (33 OF 19 96) AND SUBSEQUENTLY THE [PRINCIPAL COMMISSIONER OR ] COMMISSIONER IS SA TISFIED THAT THE ACTIVITIES ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 12 OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION, AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGIS TRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSE D UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONAB LE OPPORTUNITY OF BEING HEARD.] SUB-SECTION 3 OF SECTION 12AA CONFERS THE POWERS TO COMPETENT AUTHORITY BEING A PRINCIPAL COMMISSIONER/ COMMISSIO NER TO CANCEL THE REGISTRATION OF THE TRUST OR AN INSTITUTION GRANTED U/S 12AA(1)(B) OR 12A OF THE ACT, ON HIS SATISFACTION THAT THE ACTIVITY OF S UCH TRUST/INSTITUTION ARE NOT GENUINE OR BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION AS THE CASE MAY BE. THUS THERE ARE TWO SITUATIONS UNDER WHICH REGISTRATION GRANTED U/S 12AA/12A CAN BE CANCELLED EITHER THE ACTIVITIES OF THE TRUST/ INSTITUTIONS ARE NOT GENUINE OR THE A CTIVITIES ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE T RUST/INSTITUTION. IN THE CASE IN HAND, THERE IS NO ALLEGATION THAT THE ACTIV ITIES OF THE ASSESSEE TRUST ARE NOT GENUINE BUT THE LD. CIT(E) HAS OBSERVED THA T THE ACTIVITIES OF THE ASSESSEE TRUST ARE NOT BEING CARRIED OUT IN ACCORDA NCE WITH THE OBJECTS OF THE TRUST. IT IS PERTINENT TO NOTE THAT ONCE THE OB JECTS OF THE ASSESSEE TRUST ARE FOUND TO BE CHARITABLE IN NATURE THEN IN ORDER TO HOLD THAT THE ACTIVITIES ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT THE SAME MUST NOT BE IN THE NATURE OF ACHIEVING OR ATTAINMEN T OF THE PURPOSE AND ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 13 OBJECTS OF THE TRUST. THERE IS NO DISPUTE THAT THE MAIN DOMINANT FUNCTIONS OF THE ASSESSEE TRUST IS TO PROVIDE AN ASYLUM/SHELT ER TO OLD SICK, ,MAIMED, AND STRAY COWS. THE ASSESSEE IS MAINTAINING 11 GAUS HALAS AND14 FAMINE RELIEF CENTRES PARTICULARLY FOR PROVIDING THE SHELT ER TO THE COWS. IT IS ALSO NOT IN DISPUTE THAT FOR LAST MORE THAN 45 YEARS THE ASSESSEE HAS BEEN PROVIDING ASYLUM/ SHELTER TO THE COWS AND MAINTAINI NG THESE GAUSHALAS AS WELL AS FAMINE RELIEF CENTRES WITH THE OBJECT TO PR OVIDE PROPER TREATMENT AND FODDER TO THE NEEDY STRAY COWS. APART FROM MAI NTAINING GAUSHALAS AND FAMINE RELIEF CENTRES, THE ASSESSEE TRUST IS A LSO CARRYING OUT VARIOUS ACTIVITIES OF PROVIDING RESEARCH AND TRAINING CENTR ES FOR DEVELOPMENT OF MEDICAL TREATMENT AND USE OF COW PRODUCTS IN THE ME DICINE. THE ASSESSEE IS ALSO IMPARTING EDUCATION AND OTHER TRAINING NECE SSARY FOR ANIMAL HUSBANDRY AND PARTICULAR REARING THE COWS BY MILKME N. THE DEPARTMENT HAS NOT DISPUTED THE FACT THAT ENTIRE RECEIPT/ INCO ME EARNED BY THE ASSESSEE FROM VARIOUS ACTIVITIES ARE APPLIED IN THE ATTAINME NT OF ITS MAIN AND DOMINANT OBJECTS OF MAINTAINING THE GAUSHALAS AND FAMINE RELIEF CENTRES. EVEN THE ACTIVITIES OF PURCHASE AND SALE O F MILK, GHEE AND CATTLE FEED IS DONE THROUGH ANOTHER SOCIETY NAMELY JAIPUR GAU SAMVARDHAN SAMITI. THE SOLE OBJECT & PURPOSE OF PURCHASE AND SELL OF THE MILK, MILK PRODUCTS AND CATTLE FEED IS TO PROVIDE THE FINANC IAL HELP TO THE PERSONS IN ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 14 OCCUPATION OF ANIMAL HUSBANDRY AND PARTICULARLY SEL LING OF MILK. THERE IS NO ALLEGATION THAT THE ASSESSEE IS CARRYING OUT THE SE ACTIVITIES WITH SOLE MOTIVE OF EARNING PROFIT RATHER THE ASSESSEE HAS BR OUGHT ON RECORD THE DETAILS TO SHOW THAT THE ASSESSEE IS NOT EARNING AN Y PROFIT BUT ONLY CHARGING SOME COMMISSION TO FACILITATE THE BETTER S ERVICE, PRICE AND GOOD PRODUCTS TO THE NEEDY PERSONS AND PARTICULARLY IN T HE FIELD OF REARING THE COWS AND PRODUCTION OF MILK. THE INCOME SO EARNED B Y THE ASSESSEE TRUST FROM THESE ACTIVITIES IS APPLIED FOR THE MAIN OBJEC TS OF THE ASSESSEE TRUST AND THEREFORE, IT CANNOT BE SAID THAT ALL THESE ACT IVITIES ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF THE AS SESSEE TRUST RATHER THESE ACTIVITIES ARE BEING CARRIED OUT TO ATTAIN THE MAIN OBJECTS OF THE ASSESSEE TRUST. IN THE CASE OF DIT (EXEMPTIONS), MUMBAI VS S HREE NASIK PANCHVATI PANJRAPOLE (SUPRA), THE HON'BLE MUMBAI HIGH COURT H AS UPHELD THE ORDER OF THE TRIBUNAL WHEREBY THE ORDER OF DIT(E), WITHDR AWING THE REGISTRATION U/S 12A OF THE ACT WAS SET ASIDE. THE OBSERVATION O F THE HON'BLE BOMBAY HIGH COURT HELD IN PARA 16 TO 19 IS AS UNDER:- 16. IN FACT, THE DECISION RELIED UPON BY THE IMPUGNED ORDER OF THE TRIBUNAL IN THE CASE OF SABARMATI ASHRAM GAUSHALA TRUST ( SUPRA ) WAS APPEALED TO BEFORE THE HON'BLE GUJARAT HIGH COURT B EING TAX APPEAL NO.1162 OF 2013. THE QUESTION POSED FOR CONSIDERATION WAS W HETHER THE PROVISO TO SECTION 2(15) OF THE ACT WOULD BE APPLICABLE IN CAS E OF THE SABARMATI ASHRAM ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 15 GAUSHALA TRUST ( SUPRA ) AS IT WAS SELLING MILK WHICH GENERATED CONSIDERAB LE REVENUE. THIS IN THE CONTEXT OF EXEMPTION UNDER SEC TION 11 OF THE ACT. THE GUJARAT HIGH COURT DISPOSED/DISMISSED ON 15TH JANUA RY, 2014 AFTER CONSIDERING THE STATUTORY PROVISIONS, THE SPEECH OF FINANCE MINISTER WHILE INTRODUCING THE PROVISO AND THE CBDT CIRCULAR ISSUE D IN THE CONTEXT OF NEWLY ADDED PROVISO TO SECTION 2(15) OF THE ACT, OBSERVIN G AS UNDER : 'IT IS NOT AIMED AT EXCLUDING THE GENUINE CHARITABL E TRUSTS OF GENERAL PUBLIC UTILITY BUT IS AIMED AT EXCLUDING ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS WHICH ARE MARKED AS 'CHARITABLE PURPOSE'. MANY ACTIVITIES OF GENUINE CHARITABLE PURPOSES WHIC H ARE NOT IN THE NATURE OF TRADE, COMMERCE OR BUSINESS MAY STILL GENERATE MARK ETABLE PRODUCTS. AFTER SETTING OFF OF THE COST, FOR PRODUCTION OF SUCH MAR KETABLE PRODUCTS FROM THE SALE CONSIDERATION, THE ACTIVITY MAY LEAVE A SURPLUS. THE LAW DOES NOT EXPECT THE TRUST TO DISPOSE OF ITS PRODUCE AT ANY CONSIDERATIO N LESS THAN THE MARKET VALUE. IF THERE IS ANY SURPLUS GENERATED AT THE END OF THE YEAR, THAT BY ITSELF WOULD NOT BE THE SOLE CONSIDERATION FOR JUDGING WHETHER ANY A CTIVITY IS TRADE, COMMERCE OR BUSINESS - PARTICULARLY IF GENERATING 'SURPLUS' IS WHOLLY INCIDENTAL TO THE PRINCIPAL ACTIVITIES OF THE TRUST; WHICH IS OTHERWISE FOR GENERAL PUBLIC UTILITY, AND THEREFORE, OF CHARITABLE NATURE.' .... .. 'MERELY BECAUSE WHILE CARRYING OUT THE ACTIVITIES F OR THE PURPOSE OF ACHIEVING THE OBJECTS OF THE TRUST, CERTAIN INCIDEN TAL SURPLUSES WERE GENERATED, WOULD NOT RENDER THE ACTIVITY IN THE NATURE OF TRAD E, COMMERCE OR BUSINESS. AS CLARIFIED BY THE CBDT IN ITS CIRCULAR NO.11/2008 DA TED 19TH DECEMBER, 2008 THE PROVISO AIMS TO ATTRACT THOSE ACTIVITIES WHICH ARE TRULY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS BUT ARE CARRIED OUT UNDER THE GUISE OF ACTIVITIES IN THE NATURE OF 'PUBLIC UTILITY'. DELHI HIGH COURT IN CASE OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA & ANR. VS. DIRECTOR GENERAL OF INCOME-TAX (EXEMPTION) AND ORS. REPORTED IN (2012) 347 ITR 99 (DELHI) CONSIDERED THESE VERY PROVISIONS IN THE CONTEXT OF ACTIVITIES OF THE INSTITUTE OF CHARTERED ACCOUNTANTS HOLDING T HAT THE FUNDAMENTAL OR DOMINANT FUNCTION OF THE INSTITUTE WAS TO EXERCISE OVERALL CONTROL AND REGULATE THE ACTIVITIES OF THE MEMBERS / ENROLLED CHARTERED ACCOUNTANTS AND MERELY BECAUSE THE INSTITUTE WAS HOLDING COACHING CLASSES WHICH ALSO GENERATE INCOME, THE COURT HELD THAT PROVISO TO SECTION 2(15) OF THE ACT WOULD NOT BE APPLICABLE. IT THUS HELD AND OBSERVED AS UNDER :- 'SECTION 2(15) DEFINES THE TERM 'CHARITABLE PURPOSE '. THEREFORE, WHILE CONSTRUING THE TERM 'BUSINESS' FOR THE SAID SECTION , THE OBJECT AND PURPOSE OF THE SECTION HAS TO BE KEPT IN MIND. WE DO NOT THINK THAT A VERY BROAD AND EXTENDED DEFINITION OF THE TERM 'BUSINESS' IS INTEN DED FOR THE PURPOSE OF INTERPRETING AND APPLYING THE FIRST PROVISO TO SECT ION 2(15)OF THE ACT TO INCLUDE ANY TRANSACTION FOR A FEE OR MONEY. AN ACTIVITY WOU LD BE CONSIDERED 'BUSINESS' IF IT IS UNDERTAKEN WITH A PROFIT MOTIVE, BUT IN SO ME CASES THIS MAY NOT BE ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 16 DETERMINATIVE. NORMALLY, THE PROFIT MOTIVE TEST SHO ULD BE SATISFIED BUT IN A GIVE CASE ACTIVITY MAY BE REGARDED AS BUSINESS EVEN WHEN PROFIT MOTIVE CANNOT BE ESTABLISHED / PROVED. IN SUCH CASES, THERE SHOULD B E EVIDENCE AND MATERIAL TO SHOW THAT THE ACTIVITY HAS CONTINUED ON SOUND AND R ECOGNIZED BUSINESS PRINCIPLES, AND PURSUED WITH REASONABLE CONTINUITY. THERE SHOULD BE FACTS AND OTHER CIRCUMSTANCES WHICH JUSTIFY AND SHOW THAT THE ACTIVITY UNDERTAKEN IS IN FACT IN THE NATURE OF BUSINESS. THE TEST AS PRESCRI BED IN RAIPUR MANUFACTURING COMPANY (1967) 19 STC 1 (SC) AND SAI PUBLICATION FU ND (2002) 258 ITR 70 (SC); (2002) 126 STC 288 (SC) CAN BE APPLIED. THE SIX INDICIA STIPULATED IN LORD FISHER (1981) STC 238 (SIC) ARE ALSO RELEVANT. EACH CASE, THEREFORE, HAS TO BE EXAMINED ON ITS OWN FACTS.' (EMPHASIS SUPPLIED) 17. WE FIND OURSELVES IN COMPLETE AGREEMENT WITH THE R EASONING SET OUT BY THE GUJARAT HIGH COURT IN ITS ORDER DATED 15 TH JANUARY, 2014 IN DIT (EXEMPTION) V. SABARMATI ASHRAM GAUSHALA TRSUT [2011] 362 ITR 539/223 TAXMAN 43/44 TAXMANN.COM 141 . ALTHOUGH THE SAME WAS RENDERED IN THE CONTEXT OF EXEMPTION BEING DENIED UNDER SECTION 11 OF THE ACT AND IT WAS NOT A CASE OF WITHDRAWAL OF REGISTRATION. NEVERTHELESS, THE REASONING THEREIN WOULD BE EQUALLY APPLICABLE TO THE PRESENT FACTS AS IT CO NSIDERED THE APPLICABILITY OF THE PROVISO TO SECTION 2(15) OF THE ACT AS ARISING IN THIS CASE. ONE MORE FACT THAT MAY BE NOTED IS THAT MR. MALHOTRA SOUGHT TO RE LY UPON THE ORDER PASSED BY THE CIT(A) IN SECTION 11 PROCEEDINGS TO ESTABLISH T HAT THE MILK IS SOLD AT MARKET PRICE. HOWEVER, IT WOULD MAKE NO DIFFERENCE AS THERE IS NO BAR IN LAW TO A TRUST SELLING ITS PRODUCE AT MARKET PRICE AS O BSERVED ABOVE BY THE GUJARAT HIGH COURT. IN FACT, THE ABOVE FACTOR ALONE WILL NO T MAKE IT AN ACTIVITY OF TRADE, COMMERCE OR BUSINESS OR EVEN IN ITS NATURE. 18. WE MAY ALSO REFER TO ANOTHER DECISION OF THE DELHI HIGH COURT IN ICAI V. DGIT (EXEMPTION) [2013] 358 ITR 91/217 TAXMAN 152/35 TAXMANN.COM 140 , WHERE THE COURT OBSERVED AT PARA 67 THEREOF AS UN DER : 'THE EXPRESSIONS 'TRADE', 'COMMERCE' AND 'BUSINESS' , AS OCCURRING IN THE FIRST PROVISO TO SECTION 2(15) OF THE ACT, MUST BE READ I N THE CONTEXT OF THE INTENT AND PURPORT OF SECTION 2(15) OF THE ACT AND CANNOT BE I NTERPRETED TO MEAN ANY ACTIVITY WHICH IS CARRIED ON IN AN ORGANISED MANNER . THE PURPOSE AND THE DOMINANT OBJECT FOR WHICH AN INSTITUTION CARRIES ON ITS ACTIVITIES IS MATERIAL TO DETERMINE WHETHER THE SAME IS BUSINESS OR NOT. THE PURPORT OF THE FIRST PROVISO TO SECTION 2(15) OF THE ACT IS NOT TO EXCLUDE ENTIT IES WHICH ARE ESSENTIALLY FOR CHARITABLE PURPOSE BUT ARE CONDUCTING SOME ACTIVITI ES FOR A CONSIDERATION OR A FEE. THE OBJECT OF INTRODUCING THE FIRST PROVISO IS TO EXCLUDE ORGANIZATIONS WHICH ARE CARRYING ON REGULAR BUSINESS FROM THE SCO PE OF 'CHARITABLE PURPOSE'. THE PURPOSE OF INTRODUCING THE PROVISO TO SECTION 2 (15) OF THE ACT CAN BE UNDERSTOOD FROM THE BUDGE SPEECH OF THE FINANCE MIN ISTER WHILE INTRODUCING THE FINANCE BILL, 2008. . THE EXPRESSION 'BUSINESS', 'TRADE' OR 'COMMERCE' AS USED IN THE FIRST PROVISO MUST, THUS, BE INTERPRETED RESTRICTIVELY AN D WHERE THE DOMINANT OBJECT ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 17 OF AN ORGANISATION IS CHARITABLE ANY INCIDENTAL ACT IVITY FOR FURTHERANCE OF THE OBJECT WOULD NOT FALL WITHIN THE EXPRESSIONS 'BUSIN ESS', 'TRADE' OR 'COMMERCE' .' (EMPHASIS SUPPLIED) 19. IN FACT THE REVENUE HAS NOT BEEN ABLE TO SHOW THAT THE VIEW TAKEN BY THE APEX COURT IN SURAT ART SILK CLOTH MFG ASSOCIATION ( SUPRA ), GUJARAT HIGH COURT IN SABARMATI ASHRAM GAUSHALA TRUST ( SUPRA ) AND THE DELHI HIGH COURT IN ICAI 347 ITR 99 (SUPRA) AND ICAI 358 ITR 9 1 (SUPRA) LAYING DOWN THE DOMINANT ACTIVITY TEST SHOULD NOT COMMEND TO US . THEREFORE, THE VIEW TAKEN BY THE TRIBUNAL IN THE PRESENT FACTS CANNOT BE FOUN D FAULT WITH. THUS THE PROVISO INSERTED IN SECTION 2(15) WAS CONS IDERED BY THE HON'BLE BOMBAY HIGH COURT AND HELD THE EXPRESSION TRADE, CO MMERCE AND BUSINESS AS PROVIDED IN FIRST PROVISO TO SECTION 2( 15) MUST BE READ IN THE CONTEXT OF INTENT AND PURPORT OF SECTION 2(15) OF T HE ACT AND CANNOT BE INTERPRETED TO MEAN ANY ACTIVITY WHICH IS CARRIED O N IN AN ORGANIZED MANNER, EVEN AS PER INTENT OF THE LEGISLATURE AND A S PER FINANCE BILL, 2008 WHEREBY THE SAID PROVISO TO SECTION 2(15) WAS INSER TED, IS FOUND TO BE NOT TO BRING THE INCIDENTAL ACTIVITY FOR FURTHERANCE OF THE OBJECT WITHIN THE EXPRESSION BUSINESS, TRADE OR COMMERCE. IT IS PERTI NENT TO NOTE THAT WHEN THE ASSESSEE IS MAINTAINING VARIOUS GAUSHALAS THEN PRODUCTION OF MILK IS BOUND TO HAPPEN AND DEALING IN PURCHASE AND SALE O F MILK & MILK PRODUCTS AS WELL AS CATTLE FEED IS NOTHING BUT THE ACTIVITY IN FURTHERANCE OF THE OBJECTS OF THE ASSESSEE TRUST. THE LD.DR OF THE ASSESSEE RELIED ON THE DECISION OF ITAT BANGALORE BENCH IN THE CASE OF SRI VIDYARANYA SEVA SAMITI VS CIT (SUPRA) WHEREIN THE TRIBUNAL HAS SPE CIFICALLY NOTED THAT ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 18 THE ASSESSEE SOCIETY IS NOT CARRYING OUT ANY ACTIVI TY SINCE 2001. THEREFORE, THE GENUINENESS OF THE ACTIVITY ITSELF WAS NOT EVEN IN EXISTENCE. HENCE, THE SAID DECISION CANNOT BE APPLIED IN THE PRESENT CASE WHERE THERE IS NO DISPUTE ABOUT THE ACTIVITIES BEING CARRIED OUT BY T HE ASSESSEE TRUST AND IT HAS MAINTAINED 11 GAUSHALAS AND 14 FAMINE RELIEF CE NTRES WHICH IS THE MAIN AND PRE-DOMINANT OBJECT OF THE ASSESSEE TRUST. HENCE, THE IMPUGNED ORDER PASSED BY THE LD. CIT(E) IS BASED ON THE PRE SUMPTION OF INCORRECT FACTS THAT THE ACTIVITIES OF THE ASSESSEE TRUST ARE NOT IN ACCORDANCE WITH THE OBJECT OF THE ASSESSEE TRUST. THE LD. CIT(E) HAS EV EN NOT TAKEN INTO CONSIDERATION THE FACT THAT THE ASSESSEE IS MAINTAI NING VARIOUS GAUSHALAS AND FAMINE RELIEF CENTRES AND ALSO CARRYING OUT VAR IOUS ACTIVITIES OF IMPARTING EDUCATION AND TRAINING. THE ASSESSEE TRUS T IS ALSO ENGAGED IN THE ACTIVITIES OF RESEARCH AND DEVELOPMENT OF MEDIC INES BY THE USE OF COW PRODUCTS. THEREFORE, THE FINDINGS OF THE LD. CI T(E) IS CONTRARY TO THE UNDISPUTED FACTS REGARDING THE OBJECTS OF THE ASSES SEE TRUST AND THE ACTIVITIES OF THE TRUST ARE BEING CARRIED OUT FOR ATTAINMENT OF MAIN OBJECTS OF THE TRUST. HENCE IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER OF THE LD. CIT(E) IS SET A SIDE AND GRANT OF REGISTRATION U/S 12A IS RESTORED. THUS THE APPEAL O F THE ASSESSEE IS ALLOWED. ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 19 3.1 THE ASSESSEE IN ITA NO.113/JP/2014 FOR THE ASSE SSMENT YEAR 2009-10 HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(E),JAIPUR HAS GROSSLY ERRED IN UPHOLDING THE AC TION OF THE AO IN TREATING THE INCOME DECLARED BY THE APPELLANT AS INCOME FROM BUSINESS, ARBITRARILY ON MERE ASSUMPTIONS AND PRESU MPTIONS, THUS THE ACTION OF THE AO DESERVES TO BE HELD BAD IN LAW . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(E), JAIPUR HAS GROSSLY ERRED IN SUSTAINING THE ADDITION OF RS. 15,55,000/- MADE ON ACCOUNT OF SURPLUS ON SALE OF L AND ON PROTECTIVE BASIS MORE PARTICULARLY WHEN THE LAND UN DER QUESTION WAS SOLD IN F.Y. 2007-08 RELEVANT TO ASSESSMENT YEA R 2008-09. HENCE, THE ADDITION OF RS. 15,55,000/- MADE ON PROT ECTIVE BASIS IN THE YEAR UNDER APPEAL DESERVES TO BE DELETED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(E), JAIPUR HAS GROSSLY ERRED IN SUSTAINING ADDI TION OF RS. 1,05,000/- ON ACCOUNT OF CONTRIBUTION RECEIVED FROM VARIOUS ORGANIZATIONS AS REVENUE RECEIPT WHEN IN FACT SAID CONTRIBUTION IS A CAPITAL RECEIPT. HENCE, THE ADDITION OF RS. 1,05,00 0/- SO MADE DESERVES TO BE DELETED. 3.2 WE HAVE HEARD THE LD.AR AND LD. DR AS WELL AS C ONSIDERED THE RELEVANT MATERIALS AVAILABLE ON RECORD. THE LD. CIT (A) WHILE PASSING THE IMPUGNED ORDER HAS HELD IN PARA 3.3 AS UNDER:- 3.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSE SSMENT ORDER AND APPELLANTS WRITTEN SUBMISSION. ASSESSING OFFICER M ADE ADDITION ON ACCOUNT OF SURPLUS ON SALE OF LAND AND CONTRIBUTION RECEIVED F ROM VARIOUS ORGANIZATIONS SINCE APPELLANTS REGISTRATION U/S 12A IS WITHDRAWN BY CIT. APPELLANT ARGUED THAT THE WITHDRAWAL OF REGISTRATION IS NOT SUSTAINA BLE HOWEVER IT IS NOT IN DISPUTE THAT ORDER OF CIT WITHDRAWING REGISTRATION U/S 12A IS APPEALABLE ONLY BEFORE ITAT. TILL SUCH TIME, ITAT DECIDE THE ISSUE , APPELLANT IS NOT A CHARITABLE TRUST REGISTERED U/S 12A AND IS NOT ENTI TLED FOR EXEMPTION U/S 11,12 ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 20 AND 13. ACCORDINGLY APPELLANTS ARGUMENTS AGAINST W ITHDRAWAL OF REGISTRATION ARE NOT REQUIRED TO BE DISCUSSED HERE. ASSESSING OFFICER MADE THE ADDITION OF SURPLUS OF L AND WHICH WAS SOLD LAST YEAR ON PROTECTIVE BASIS. APPELLANT SUBMITTED THAT PROPERTY WAS SOLD AND REGISTERED LAST YEAR AND ENTIRE PAYMENT WAS ALSO RE CEIVED IN THAT YEAR THEREFORE, THERE IS NO QUESTION OF TAXING THE SURPLUS DURING T HE CURRENT YEAR. HOWEVER, IT IS NOT IN DISPUTE THAT APPELLANT REFLECTED SURPLUS ON SALE OF LAND ONLY DURING THE YEAR AND NOT IN EARLIER YEAR THEREFORE, AS FAR AS A O IS CONCERNED, HE HAS TAXED THE SURPLUS ON THE BASIS OF SALE DISCLOSED BY THE A PPELLANT. APPELLANT DID NOT EXPLAIN AS TO WHY SALE OF PROPERTY WHICH WAS COMPLE TE LAST YEAR, WAS NOT REFLECTED IN THE ACCOUNTS LAST YEAR BUT THE SAME IS DISCLOSED DURING THE YEAR. IN ABSENCE OF ANY REASON FOR NOT DISCLOSING THE SALE A ND SURPLUS ARISING FROM THEREFROM LAST YEAR, ASSESSING OFFICER IS JUSTIFIED IN TAXING THE SURPLUS IN THE CURRENT YEAR WHEN SUCH SURPLUS IS REFLECTED IN THE ACCOUNTS AT LEAST ON PROTECTIVE BASIS. ACCORDINGLY, THE ADDITION OF SURP LUS ON SALE OF LAND MADE ON PROTECTIVE BASIS IS CONFIRMED. ASSESSING OFFICER MADE ANOTHER ADDITION OF RS. 1,05 ,000/- ON ACCOUNT OF CONTRIBUTIONS RECEIVED FROM OTHER ORGANIZATIONS AS REVENUE. SINCE INCOME OF THE APPELLANT TRUST IS TO BE COMPUTED UNDER NORMAL PROVISIONS, ANY RECEIPT IS TO BE TREATED AS TAXABLE UNLESS IT IS EXEMPT. SINCE AP PELLANT DID NOT SUBMIT ANY INFORMATION WITH REGARD TO THE NATURE OF THIS RECEI PT, ASSESSING OFFICER JUSTIFIED IN TAXING THIS RECEIPT AS REVENUE. IN THE FINAL RESULT, APPEAL IS DISMISSED. THE LD. CIT(A) HAS CONFIRMED THE ORDER OF THE AO ON THE GROUND THAT THE REGISTRATION WAS WITHDRAWN BY THE LD. CIT(E) AND CO NSEQUENTLY THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 11 AND 1 2 OF THE ACT. SINCE THE SAID ORDER OF THE LD. CIT(E) WITHDRAWING THE EXEMPT ION HAS BEEN REVERSED BY US, THEREFORE, THE IMPUGNED ORDER OF THE LD. CIT (A) IS NOT SUSTAINABLE AND LIABLE TO BE SET ASIDE IN VIEW OF OUR FINDINGS ON THE APPEAL FILED AGAINST WITHDRAWAL OF THE EXEMPTIONS. HENCE, THE AD DITION MADE BY THE AO IS LIABLE TO BE DELETED AND THE ASSESSEE TRUST I S ENTITLED FOR THE BENEFIT ITA NO.748/JP/2015 M/S. RAJASTHAN GAU SEWA SANGH VS CIT(E), J AIPUR 21 U/S 11 AND 12 OF THE ACT TO THE EXTENT THE INCOME I S APPLIED FOR CHARITABLE PURPOSES. THE AO HAS NOWHERE ALLEGED THAT THE ASSES SEE HAS NOT APPLIED THE INCOME FOR CHARITABLE PURPOSES. ACCORDINGLY, TH E ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE. 4.0 IN THE RESULT, BOTH THE APPEALS OF THE ASSESS EE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 /02/ 2020. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07/02/ 2020 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. RAJASTHAN GAU SEWA SANGH, JAIP UR 2. IZR;FKHZ@ THE RESPONDENT- THE CIT(E), JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.748/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR