Mathura Vrindava Development Authority, Mathura V. C.I.T.-I, Agra

ITA 13/AGR/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2150 (ITAT-AGRA)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-07-2013
• Assessment Year: misc
• Appeal Filed On: 08-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L MAURYA
• Assessee Lawyers: G P AGARWAL
• Keywords: Charitable institution; Opportunity of being heard; Cancellation of registration
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.13/AGRA/2013 MATHURA VRINDAVAN DEVELOPMENT VS. COMMISSIONER OF INCOME TAX, AUTHORITY, RANGE-1, AGRA. CIVIL LINES, MATHURA. (PAN AAALM 0135 A). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.P. AGARWAL, C.A. RESPONDENT BY : SHRI S.L. MAURYA, JR. D.R. DATE OF HEARING : 16.07.2013 DATE OF PRONOUNCEMENT : 19.07.2013 ORDER PER A.L. GEHLOT,ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 09.11.2012 PASSED BY THE LEARNED CIT I, AGRA. 2. THE GROUNDS RAISED IN THIS APPEAL ARE REPRODUCED AS BELOW:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, THE LD. CIT HAS ERRED IN CANCELLING THE REGISTRATIO N U/S 12AA(3) AND THAT TOO RETROSPECTIVELY FROM A.Y. 2009 -10. 2. THAT IN ANY VIEW OF THE MATTER AND IN ANY CASE A CTION OF LD. CIT IN PASSING THE IMPUGNED ORDER U/S 12AA(3) CANCELLIN G THE REGISTRATION IS BAD IN LAW AND AGAINST THE FACTS AN D CIRCUMSTANCES OF THE CASE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT GROSSLY ERRED BOTH IN LAW AND FACT BY CANCE LLING ITA NO.13/AGRA/2013 2 REGISTRATION U/S 12AA(3) IN THE LIGHT OF CHANGE IN DEFINITION OF CHARITABLE PURPOSE [U/S 2(15) OF INCOME TAX ACT. 19 61 W.E.F. A.Y. 2009-10]. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, THE LD. CIT HAS ERRED IN HOLDING THAT THE ACTIVITIE S CARRIED OUT BY THE ASSESSEE ARE COVERED BY THE PROVISO TO SECTI ON 2(15) INSERTED BY FINANCE ACT, 2008 AND ARE NOT FOR CHAR ITABLE PURPOSES. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, THE LD. CIT HAS ERRED IN LAW IN CANCELLING THE REGI STRATION GRANTED TO THE ASSESSEE U/S 12A OF THE INCOME TAX A CT, 1961 AND THAT TOO BY RECORDING INCORRECT FACTS AND FINDI NGS. 6. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT HAS ERRED IN LAW AND ON FACTS IN HOLDING TH AT ASSESSEE SOCIETY IS NOT ELIGIBLE FOR THE BENEFIT OF EXEMPTIO N U/S 12AA OF THE INCOME TAX ACT, 1961 AND THE ACTIVITIES CARRIED OUT BY THE ASSESSEE ARE IN THE NATURE OF TRADE AND BUSINESS. 7. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT WHILE APPLYING HAS ERRED IN LAW AND ON FACT S OF OTHER STATUTORY BODIES REFERRED TO IN PARA 8 OF HIS ORDER . LD. CIT FAILED TO APPRECIATE THE ORDER OF HONBLE ITAT, AMR ITSAR BENCH IN THE CASE OF JALANDHAR DEVELOPMENT AUTHORITY, REL IED UPON BY HIM, RELATES TO GRANT REGISTRATION AND NOT CANCELLA TION. THE APPLICATION OF HON'BLE ITAT BY LD. CIT IS WHOLLY IL LEGAL. 8. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODI FY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. THE BRIEF FACTS OF THE CASE ARE THAT REGISTRATIO N UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) WAS GR ANTED TO MATHURA VRINDAVAN DEVELOPMENT AUTHORITY W.E.F. 01.04.2002 VIDE ORDER DATED 18.02.2008. THE CIT ITA NO.13/AGRA/2013 3 IN ORDER TO EXAMINE THE CLAIM OF THE ASSESSEE IN TH E LIGHT OF CHANGE IN DEFINITION OF CHARITABLE PURPOSE UNDER SECTION 2(15) OF THE ACT , NOTICE FOR CANCELLATION OF REGISTRATION W.E.F. A.Y. 2009-10 WAS ISSUED TO THE ASSESSEE ON 17/19-10-2012 BY INVOKING SECTION 12AA(3). THE CIT NOTED THAT THE A SSESSEE, MATHURA VRINDAVAN DEVELOPMENT AUTHORITY, COULD NOT CLAIM EXEMPTION UN DER SECTION 10(20A) OF THE ACT AS THE SECTION WAS DELETED BY THE FINANCE ACT, 2002. THE CIT FURTHER NOTED THAT THE OBJECT OF THE ASSESSEE, MATHURA VRINDAVAN DEVELOPMENT AUTHORITY, CLEARLY FALLS IN THE LIMB I.E. ADVANCEMENT OF ANY OTHER OBJ ECT OF GENERAL PUBLIC UTILITY AS IT IS NEITHER RELIEF TO POOR, NOR EDUCATION NOR HEALTH . THE CIT HAS ALSO EXAMINED THE ISSUE WHETHER THE ASSESSEE CARRIES ON ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OF BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVIC E IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A CESS FOR A FEE OR ANY OT HER CONSIDERATION. ON PERUSAL OF INCOME AND EXPENDITURE STATEMENT, THE CIT NOTED THA T THE ACTIVITIES OF THE ASSESSEE, MATHURA VRINDAVAN DEVELOPMENT AUTHORITY, ARE IN NAT URE OF TRADE, COMMERCE OR BUSINESS AND ATTRACT PROVISIONS OF SECTION 2(15) AS SUCH. THE CIT REJECTED THE ASSESSEES SUBMISSION ON THE GROUND THAT THE OBJECT OF THE ASSESSEE, MATHURA VRINDAVAN DEVELOPMENT AUTHORITY, CLEARLY FALLS IN T HE FOURTH LIMB I.E. ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY AS IT IS NEITHER RELIEF TO POOR, NOR EDUCATION NOR HEALTH. THE ACTIVITIES CA RRIED ON BY THE ASSESSEE ARE IN THE NATURE AND TRADE, COMMERCE OR BUSINESS. THUS, THE ASSESSEE IS HIT BY PROVISO TO ITA NO.13/AGRA/2013 4 SECTION 2(15) OF THE ACT AS INSERTED BY FINANCE ACT , 2008. THE CIT CANCELLED THE REGISTRATION OF THE ASSESSEE UNDER SECTION 12A/12AA OF THE ACT AS UNDER :- (PAGE 9) 8. IN ADDITION TO ABOVE, ANOTHER NOTEWORTHY FACT I S THAT STATUTORY BODIES WITH SIMILAR OBJECTS AND ACTIVITIES LIKE PUN JAB URBAN DEVELOPMENT AUTHORITY, HARYANA URBAN DEVELOPMENT AU THORITY, INDORE DEVELOPMENT AUTHORITY, JALANDHAR DEVELOPMENT AUTHORITY ETC. WERE NOT PROVIDED WITH EXEMPTION U/S 12AA EVEN WHEN PROVISO TO SECTION 2(15) WAS NOT ADDED BY THE FINANCE ACT, 200 8. EVEN AT THAT TIME THESE AUTHORITIES WERE HELD TO BE NOT FOR CHA RITABLE PURPOSE AS PER THEN DEFINITION U/S 2(15). HONBLE ITAT, AMRIT SAR IN THE CASE OF JALANDHAR DEVELOPMENT AUTHORITY VS. CIT (ITA NO.562 /AGR/2008) HAS DISCUSSED VARIOUS CASE LAWS AND UPHELD THE ORDER OF CIT, JALANDHAR WHO HAD REJECTED THE REGISTRATION OF JALANDHAR DEVE LOPMENT AUTHORITY U/S 12AA HOLDING THAT THE AUTHORITY IS NOT FOR CHA RITABLE PURPOSE AS MENTIONED IN SEC. 2(15). THIS POSITION OF LAW HAS NOW CHANGED CONSIDERABLY BY INSERTION OF PROVISO TO SECTION 2(1 5) BY FINANCE ACT, 2008 WHICH HAS CONSIDERABLY RESTRICTED AND LIMITED THE EXEMPTION CLAIMED BY THE ASSESSEE WHOS CLAIMED ACTIVITY FOR CHARITABLE PURPOSE FALLS IN THE FOURTH LIMB I.E. ANY OTHER OB JECT OF GENERAL PUBLIC UTILITY. 10. FROM THE FACTS DISCUSSED ABOVE, I AM FULLY CONV INCED THAT THE ACTIVITIES UNDER CONSIDERATION OF THE ASSESSEE ARE COVERED BY THE PROVISO TO SECTION 2(15) INSERTED BY FINANCE ACT, 2 008, AND ARE NOT FOR CHARITABLE PURPOSE. 4. THE LD. AUTHORISED REPRESENTATIVE, AT THE OUTSET , SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE ORDER OF I.T.A.T., AGRA BEN CH IN THE CASE OF AGRA DEVELOPMENT AUTHORITY IN ITA NO.166/AGRA/2012, ORDE R DATED 11.01.2013. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE FA CTS OF THE CASE OF AGRA DEVELOPMENT AUTHORITY AND FACTS OF THE CASE OF THE ASSESSEE, MATHURA VRINDAVAN DEVELOPMENT AUTHORITY, ARE IDENTICAL AND ONLY DIFFE RENCE IN FACT IS THAT IN THE CASE ITA NO.13/AGRA/2013 5 OF AGRA DEVELOPMENT AUTHORITY, THE REGISTRATION WAS GRANTED UNDER SECTION 12A OF THE ACT WHEREAS IN THE CASE OF THE ASSESSEE, MATHUR A VRINDAVAN DEVELOPMENT AUTHORITY, THE REGISTRATION WAS GRANTED UNDER SECTI ON 12AA OF THE ACT. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESS EE, MATHURA VRINDAVAN DEVELOPMENT AUTHORITY, HAS BEEN ESTABLISHED BY GOVE RNMENT OF UTTAR PRADESH UNDER THE U.P. URBAN PLANNING & DEVELOPMENT ACT, 19 73. HE FURTHER SUBMITTED THAT OBJECT OF THE ASSESSEE, MATHURA VRINDAVAN DEVE LOPMENT AUTHORITY, IS SAME AS IN THE CASE OF AGRA DEVELOPMENT AUTHORITY AS IN BOT H THE CASES SECTION 7 OF U.P. URBAN PLANNING & DEVELOPMENT ACT, 1973 IS APPLICABL E. SECTION 7 OF U.P. URBAN PLANNING & DEVELOPMENT ACT, 1973 PROVIDES OBJECTS OF THE AUTHORITY THE OBJECTS OF THE AUTHORITY SHALL BE TO PROMOTE AND SE CURE THE DEVELOPMENT OF THE DEVELOPMENT AREA ACCORDING TO PLAN AND FOR THAT PUR POSE THE AUTHORITY SHALL HAVE THE POWER TO ACQUIRE, HOLD, MANAGE AND DISPOSE OF L AND AND OTHER PROPERTY, TO CARRY OUT BUILDING, ENGINEERING, MINING AND OTHER OPERATI ONS, TO EXECUTE WORKS IN CONNECTION WITH THE SUPPLY OF WATER AND ELECTRICITY , TO DISPOSE OF SEWAGE AND TO PROVIDE AND MAINTAIN OTHER SERVICES AND AMENITIES A ND GENERALLY TO DO ANYTHING NECESSARY OR EXPEDIENT FOR PURPOSES OF SUCH DEVELOP MENT AND FOR PURPOSES INCIDENTAL THERETO. ITA NO.13/AGRA/2013 6 5. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT GROUNDS NO.1, 2, 3, & 7 ARE IN RESPECT OF CHALLENGING CANCELLATION OF REGISTRAT ION UNDER SEDITION 12AA OF THE ACT. THE GROUNDS NO.4, 5, & 6 ARE ON MERIT OF THE CASE. GROUND NO.8 IS GENERAL IN NATURE. 6. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, RELIED UPON THE ORDER OF CIT. 7. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT REGISTRATIO N UNDER SECTION 12AA OF THE ACT HAS BEEN GRANTED TO THE ASSESSEE, MATHURA VRINDAVA N DEVELOPMENT AUTHORITY, W.E.F. 01.04.2002 VIDE ORDER DATED 18.02.2008. THE POWER OF CANCELLATION OF REGISTRATION OBTAINED UNDER SECTION 12A/12AA IS PRO VIDED UNDER SECTION 12AA(3) OF THE ACT. THE REGISTRATION OF THE ASSESSEE, MATH URA VRINDAVAN DEVELOPMENT AUTHORITY, HAS BEEN CANCELLED BY THE CIT BY EXERCIS ING POWER UNDER SECTION 12AA(3) W.E.F. 2009-10. WE FIND THAT THE ISSUE IS COVERED BY THE ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF AGRA DEVELOPMEN T AUTHORITY IN ITA NO.166/AGRA/2012, ORDER DATED 11.01.2013. THE FIND ING OF THE I.T.A.T. IN THAT CASE IS REPRODUCED AS UNDER :- ITA NO.13/AGRA/2013 7 14. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES, RECORDS PERUSED AND GONE THROUGH THE DECISIONS CITED. SOME ADMITTE D AND OTHER IMPORTANT FACTS OF THE CASE ARE THAT THE ASSESSEE, AGRA DEVEL OPMENT AUTHORITY WAS GRANTED REGISTRATION UNDER SECTION 12A OF THE ACT W .E.F. 01.04.2003 VIDE ORDER DATED 24.09.2003. THE SAID REGISTRATION UNDE R SECTION 12A OF THE ACT HAS BEEN CANCELLED BY THE CIT BY THE IMPUGNED ORDER DATED 04.04.2012 W.E.F. 2009-10. BEFORE THAT, I.E. TILL 31.03.2003 THE ASSESSEE WAS CLAIMING EXEMPTION UNDER SECTION 10(20A) OF THE ACT WHICH HA S BEEN OMITTED BY THE FINANCE ACT, 2002 W.E.F. 01.04.2003. 15. UNDER THE FACTS AND CIRCUMSTANCES, THE ISSUE IS TO BE EXAMINED IN THE CASE UNDER CONSIDERATION THAT THE CIT WAS CORRECT I N CANCELLATION OF REGISTRATION ALREADY GRANTED UNDER SECTION 12A OF T HE ACT. TO EXAMINE THE RELEVANT SCHEME OF THE ACT, WE WOULD LIKE TO REFER RELEVANT SECTIONS OF THE ACT, RELEVANT C.B.D.T. CIRCULARS AND RELEVANT JUDGE MENTS WHICH ARE AS UNDER :- 12A. CONDITIONS FOR APPLICABILITY OF SECTIONS 11 A ND 12 . 12A (1) THE PROVISIONS OF SECTION 11 AND SECTION 12 SHALL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUST OR INSTITUTION UNLESS THE FOLLOWING CONDITIONS ARE FULFILLED, NAMELY : (A) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APP LICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRE SCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE COMMISSIONER BEFORE THE 1ST DAY OF JULY, 1973, OR BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE E STABLISHMENT OF THE INSTITUTION, WHICHEVER IS LATER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA. .. . PROCEDURE FOR REGISTRATION. 12AA. (1) THE [***] COMMISSIONER, ON RECEIPT OF AN APPLI CATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UND ER CLAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A, SHA LL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM TH E TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT ITA NO.13/AGRA/2013 8 THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTI TUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THI S BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN OR DER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLICANT : PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNI TY OF BEING HEARD. [(1A) ALL APPLICATIONS, PENDING BEFORE THE CHIEF C OMMISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE THE 1ST DAY OF JUNE, 1999, SHALL STAND T RANSFERRED ON THAT DAY TO THE COMMISSIONER AND THE COMMISSIONER MAY PR OCEED WITH SUCH APPLICATIONS UNDER THAT SUB-SECTION FROM THE S TAGE AT WHICH THEY WERE ON THAT DAY.] (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFORE THE EXPIR Y OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1) ] OF SECTION 12A.] [(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRAN TED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) [O R HAS OBTAINED REGISTRATION AT ANY TIME UNDER SECTION 12A [AS IT S TOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT, 1996 (33 OF 1 996)]] AND SUBSEQUENTLY THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NO T BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITING CANC ELLING THE REGISTRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A R EASONABLE OPPORTUNITY OF BEING HEARD.] ITA NO.13/AGRA/2013 9 16. SECTION 2(15) HAS BEEN SUBSTITUTED BY THE FINAN CE ACT, 2008, W.E.F. 01.04.2009 AS UNDER :- 2(15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRON MENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PR ESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTO RIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERA L PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, I F 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;] (IN OLD SECTION 2(15) THE PROVISO WAS NOT THERE IN STATUTE.) 17. THE C.B.D.T. HAS ISSUED SOME CIRCULARS EXPLAINI NG AMENDMENTS IN THE RELEVANT SECTIONS WHICH ARE AS UNDER:- FINANCE (NO. 2) ACT, 1996 - CIRCULAR NO.762, DATED 18.2.1998 REGISTRATION OF CHARITABLE AND RELIGIOUS TRUSTS 19.1 UNDER THE EXISTING PROVISIONS OF THE INCOME-TAX AC T, EXEMPTION FROM INCOME-TAX IN RESPECT OF THE INCOME OF A CHARI TABLE OR RELIGIOUS TRUST OR INSTITUTION IS AVAILABLE ONLY IF THE CONDITIONS SPECIFIED IN THAT SECTION ARE SATISFIED. ONE OF THESE CONDITIONS IF THAT THE PERSON IN RECEIPT OF THE INCOME SHALL MAKE AN APPLICATION FOR REGISTRATION O F THE TRUST OR INSTITUTION IN THE PRESCRIBED FORM AND IN THE PRESC RIBED MANNER TO THE CHIEF COMMISSIONER OR COMMISSIONER OF INCOME-TAX WI THIN THE SPECIFIED ITA NO.13/AGRA/2013 10 TIME. HOWEVER, THERE WAS NO PROVISION IN THE INCOME -TAX FOR PROCESSING OF SUCH AN APPLICATION AND GRANTING OR REFUSAL OF R EGISTRATION TO THE CONCERNED TRUST OR INSTITUTION. FINANCE (NO. 2), ACT, 1996 19.2 HENCE THE ACT NOW PROVIDES FOR A PROCEDURE TO BE FOLLOWED FOR GRANT OF REGISTRATION TO A TRUST OR INSTITUTION. AC CORDING TO THIS PROCEDURE, THE CHIEF COMMISSIONER OR COMMISSIONER SHALL CALL F OR DOCUMENTS AND INFORMATION AND CONDUCT ENQUIRIES TO SATISFY ABOUT THE GENUINENESS OF THE TRUST OR INSTITUTION. AFTER HE IS SATISFIED ABOUT T HE CHARITABLE OR RELIGIOUS NATURE OF THE OBJECTS AND GENUINENESS OF THE ACTIVI TIES OF THE TRUST OR INSTITUTION, HE WILL PASS AN ORDER GRANTING REGISTR ATION. IF HE IS NOT SO SATISFIED, HE WILL PASS AN ORDER REFUSING REGISTRAT ION. HOWEVER, AN OPPORTUNITY OF BEING HEARD SHALL HAVE TO BE PROVIDE D TO THE APPLICANT BEFORE AN ORDER OF REFUSAL TO GRANT REGISTRATION IS PASSED BY THE CHIEF COMMISSIONER OR COMMISSIONER. THE REASON FOR REFUSA L OF REGISTRATION SHALL ALSO HAVE TO BE MENTIONED IN THAT ORDER. THE ORDER GRANTING OR REFUSING REGISTRATION HAS TO BE PASSED WITHIN SIX M ONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION FOR REGISTRATION IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER AND A COPY OF SU CH ORDER SHALL BE SENT TO THE APPLICANT. INCOME-TAX : EXPLANATORY NOTES TO THE PROVISIONS O F THE FINANCE ACT, 2010 CIRCULAR NO. 1/2011 [F.NO. 142/1/2011-SO(TPL)], DAT ED 6-4-2011 ... 7. CANCELLATION OF REGISTRATION OBTAINED UNDER SEC TION 12A 7.1 SECTION 12AA PROVIDES THE PROCEDURE RELATING TO REG ISTRATION OF A TRUST OR INSTITUTION ENGAGED IN CHARITABLE ACTIVITI ES. SECTION 12AA(3) PREVIOUSLY PROVIDED THAT IF THE ACTIVITIES OF THE T RUST OR INSTITUTION ARE FOUND TO BE NON-GENUINE OR ITS ACTIVITIES ARE NOT I N ACCORDANCE WITH THE OBJECTS FOR WHICH SUCH TRUST OR INSTITUTION WAS EST ABLISHED, THE REGISTRATION GRANTED UNDER SECTION 12AA CAN BE CANC ELLED BY THE COMMISSIONER AFTER PROVIDING THE TRUST OR INSTITUTI ON AN OPPORTUNITY OF BEING HEARD. ITA NO.13/AGRA/2013 11 7.2 THE POWER OF CANCELLATION OF REGISTRATION IS INHERE NT AND FLOWS FROM THE AUTHORITY OF GRANTING REGISTRATION. HOWEVER, JU DICIAL RULINGS IN SOME CASES HAVE HELD THAT THE COMMISSIONER DOES NOT HAVE THE POWER TO CANCEL THE REGISTRATION WHICH WAS OBTAINED EARLIER BY ANY TRUST OR INSTITUTION UNDER PROVISIONS OF SECTION 12A AS IT IS NOT SPECIF ICALLY MENTIONED IN SECTION 12AA. 7.3 THEREFORE, SECTION 12AA HAS BEEN AMENDED TO PROVIDE THAT THE COMMISSIONER CAN ALSO CANCEL THE REGISTRATION OBTAI NED UNDER SECTION 12A AS IT STOOD BEFORE AMENDMENT BY FINANCE (NO.2) ACT, 1996. 7.4 APPLICABILITY - THIS AMENDMENT HAS BEEN MADE APPLICABLE WITH EFF ECT FROM 1ST JUNE, 2010 AND SHALL ACCORDINGLY APPLY FOR ASSESSMENT YEAR 2011-12 AND SUBSEQUENT ASSESSMENT YEARS. 18. THE ALLAHABAD HIGH COURT IN CIT V. MANAV VIKAS AVAM SEWA SANSTHAN [IT APPEAL NO. 161 OF 2007, DATED 24-2-201 0], WHEREIN RELIANCE WAS PLACED IN THE CASE OF LUCKNOW BENCH IN OXFORD A CADEMY FOR CAREER DEVELOPMENT V. CHIEF CIT [2009] 315 ITR 382 (ALL.) , WHEREIN IT WAS HELD AS UNDER :(PAGE NO. 390) REGARDING CANCELLATION OF REGISTRATION WHICH WAS GRANTED ON APRIL 1, 1999, UNDER SECTION 12A OF THE ACT, IT IS TRUE THAT THERE WAS NO EXPRESS PRO VISION IN SECTION 12A OF THE ACT FOR CANCELLATION OF THE REGISTRATION. THE APPLICABI LITY 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 OR DER, WHICH DOES NOT FALL IN THE CATEGORY OF 'ORDERS' MENTIONED IN SECTION 21 OF THE GENERAL CLAUSES ACT, 1897, BY RELYING THE RA TIO LAID DOWN IN THE CASE OF GHAURUL HASAN V. STATE OF RAJASTHAN, AIR 1967 SC 107. THE HIGH COURT OBSERVED THAT BY VIRTUE OF S ECTION 21 OF THE GENERAL CLAUSES ACT, THE COMMISSIONER OF INCOME -TAX HAD NO POWER TO RESCIND THE ORDER PASSED EARLIER BY THE COMMISSIONER GRANTING REGISTRATION TO THE PETITIONE R'S SOCIETY. IT MAY BE MENTIONED THAT SECTION 12AA(3) WAS INCORP ORATED WITH EFFECT FROM OCTOBER 1, 2004, TO EMPOWER THE ITA NO.13/AGRA/2013 12 COMMISSIONER TO CANCEL THE REGISTRATION GRANTED TO A TRUST OR INSTITUTION. THE SAME IS NOT APPLICABLE RETROSPECTI VELY AND IN THE ASSESSEE'S CASE FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. THE OBJECT OF THIS PROVISION IS NOT CLARIFICATORY OR EXPLANATORY, SO PRIOR TO THAT DATE, THE AUTHORIT IES GRANTING REGISTRATION HAD NO INHERENT POWER TO WITHDRAW OR R EVOKE THE REGISTRATION ALREADY GRANTED. THE ORDER CANCELLING THE REGISTRATION GRANTED TO A TRUST OR INSTITUTION UNDE R SECTION 12AA OF THE ACT BEING A QUASI-JUDICIAL ORDER DOES NOT FA LL WITHIN THE CATEGORY OF ORDERS MENTIONED UNDER SECTION 21 OF TH E GENERAL CLAUSES ACT, 1897, WHICH PROVIDES THAT THE POWER CO NFERRED ON AN AUTHORITY EMPOWERS TO ISSUE ORDERS INCLUDING THE POWER TO RESCIND SUCH ORDERS AND THE COMMISSIONER WOULD NOT HAVE POWER TO RESCIND THE ORDER PASSED BY THE COMMISSION ER EARLIER GRANTING THE REGISTRATION TO A TRUST OR INSTITUTION . 19. THE HEADING OF SECTION 12A CONDITIONS FOR APPL ICABILITY OF SECTIONS 11 AND 12 WAS SUBSTITUTED WITH EFFECT FROM 01.06-2 007 IN PLACE OF PREVIOUS TITLE CONDITIONS AS TO REGISTRATION OF THE TRUSTS ETC. IT MEANS THAT PRIOR TO 01.06.2007, THIS SECTION ITSELF PROVIDED CONDITIONS REGARDING REGISTRATION OF TRUST ETC. IT IS NOTED HERE BECAUSE WITH THE SUBST ITUTION OF THE PRESENT TITLE, THIS SECTION NO LONGER PROVIDES FOR REGISTRATION OF TRUST ETC. A SPECIAL PROVISION HAS BEEN ENACTED IN SECTION 12AA PROVIDIN G FOR PROCEDURE FOR REGISTRATION OF TRUST ETC., WITH EFFECT FROM 01.04. 1997. IT IS ALSO NOTED THAT SECTION 12A WAS INSERTED IN THE STATUTE BOOK BY THE FINANCE ACT, 1972 WITH EFFECT FROM 01.04.1973. IT WAS OMITTED AND WAS AGA IN RESTORED WITH EFFECT FROM 01.04.1989. SECTION 12A, AS IT STOOD AT THE T IME WHEN IT PROVIDED FOR REGISTRATION OF TRUST, NOWHERE PROVIDED FOR CANCELL ATION OF THE REGISTRATION ONCE GRANTED. IT IS ALSO PERTINENT TO NOTE THAT TH E WORDS SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA WERE ALSO SUBSTITUTED IN THIS SECTION WITH EFFECT FROM 01.04.1997. IN FACT, THIS SECTION EVEN NOW NOWHERE STIPULATES ABOUT THE CANCELLATION OR WITHDRAWAL OF THE REGISTRATION, ONCE GRANTED UNDER THE SAID SECTION. IT IS ONLY UNDER SE CTION 12AA, WHICH CAME IN THE STATUTE BOOK WITH EFFECT FROM 01.04.1997 THAT A FRESH PROCEDURE FOR REGISTRATION OF THE TRUST OR INSTITUTION IS PRESCRI BED. EVEN UNDER THIS SECTION 12AA, THERE WAS NO PROVISION FOR CANCELLATION OF RE GISTRATION ONCE GRANTED TILL THE ENACTMENT OF SUB-SECTION (3) WITH EFFECT F ROM 01.10-2004. THERE IS NO DISPUTE WITH REGARD TO THIS FACT THAT THE PROVISION REGARDING CANCELLATION OF REGISTRATION CAME TO BE INTRODUCED FOR THE FIRST TI ME BY VIRTUE OF SUB-SECTION (3) IN SECTION 12AA WITH EFFECT FROM 1-10-2004. TH IS SUB-SECTION (3) ITA NO.13/AGRA/2013 13 PROVIDES THAT WHEN A TRUST OR AN INSTITUTION HAS BE EN GRANTED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) AND SUBSEQUENTL Y THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INST ITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT S OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SHALL PASS AN O RDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST OR INSTITUTION. FROM THE CONJOINT READING OF SUB-SECTION (1) CLAUSE (B) AND SUB-SECTION (3) OF S ECTION 12AA, IT WOULD BE SEEN THAT THE CANCELLATION OF THE REGISTRATION WAS PROVIDED WHERE THE REGISTRATION WAS GRANTED UNDER CLAUSE (B) OF SUB-SE CTION (1). FURTHER CANCELLATION UNDER SUB-SECTION (3) WAS ALSO PROVIDE D WHERE THE REGISTRATION WAS OBTAINED AT ANY TIME UNDER SECTION 12A [MAY BE UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB-SECTION (1) OF SECTION 12A]. BU T THIS POWER OF CANCELLATION OF REGISTRATION OBTAINED UNDER SECTION 12A CAME TO BE INCORPORATED BY WAY OF AMENDMENT INTRODUCED BY THE FINANCE ACT, 2010 WITH EFFECT FROM 01.06.2010. THAT BEING THE INTERP RETATION OF SUB-SECTION (3), IT IS AMPLY CLEAR THAT THE POWER TO CANCEL THE REGISTRATION ONCE GRANTED WAS ONLY CONFINED TO THE REGISTRATION GRANTED UNDER CLAUSE (B) OF SUB-SECTION (1) OF SECTION 12AA TILL BEFORE 01.06.2010. OF COU RSE, NOW WITH EFFECT FROM 01.06.2010, THE POWER VESTS WITH THE COMMISSIONER E VEN TO CANCEL THE REGISTRATION GRANTED UNDER ANY OF THE CLAUSES OF SU B-SECTION (1) OF SECTION 12A. THUS, FOR EXERCISING POWER OF CANCELLATION OF REGISTRATION UNDER SECTION 12A/12AA AND UNDER SECTION 12AA(3) OF THE ACT BY TH E CIT ONLY ON THE FOLLOWING CONDITIONS:- I) THAT THE TRUST OR SOCIETY HAS ALREADY BEEN GRANT ED REGISTRATION UNDER SECTION 12AA(1)(B) OF THE ACT. OR II) W .E .F. 01.06.2010 - REGISTRATION HAS BEEN GRANTED AT ANY TIME UNDER SECTION 12A AS STOOD BEFORE ITS AMENDMENT BY THE (FINANCE NO.2) ACT 1996 III) THE CIT SUBSEQUENTLY FOUND AND SATISFIED THAT :- A) ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE, OR B) ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. ITA NO.13/AGRA/2013 14 20. IN THE LIGHT OF ABOVE DISCUSSION, IF WE CONSIDE R THE FACTS OF THE CASE UNDER CONSIDERATION AS DISCUSSED ABOVE, WE FIND THA T THE CIT IS NOT CORRECT IN CANCELLING THE REGISTRATION UNDER SECTION 12AA( 3) OF THE ACT WHICH HAS BEEN GRANTED UNDER SECTION 12A OF THE ACT ON THE FO LLOWING GROUNDS AND REASONS :- I) SECTION 12AA(3) OF THE ACT EMPOWERS THE CIT TO CANCEL SUCH REGISTRATION IF HE SATISFY THAT ACTIVITIES OF THE TRUST OR INSTI TUTIONS ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH OBJECTS OF THE TRUST OR INSTITUTION AS THE CASE MAY BE. THE COMBINED READING OF BOTH THE SECTIONS MAKES IT CLEAR THAT BEFORE 01.06.2010 REGISTRATION CAN BE CANCELLE D ONLY ON THOSE CASES WHERE THE REGISTRATION HAS BEEN GRANTED UNDER SECTI ON 12AA(1)(B) OF THE ACT. BEFORE 01.06.2010 THIS SECTION 12AA(3) NOWHERE EMPO WERS THE CIT TO CANCEL OR WITHDRAW REGISTRATION UNDER SECTION 12A O F THE ACT. IN ABSENCE OF SUCH POWER, THE REGISTRATION GRANTED UNDER SECTION 12A CANNOT BE WITHDRAWN OR CANCELLED BEFORE 1.6.2010. THE POWER OF CANCELLATION OF REGISTRATION UNDER SECTION 12A OF THE ACT CAME TO B E INCORPORATED BY WAY OF AMENDMENT INTRODUCED BY FINANCE ACT 2010 W.E.F. 01. 06.2010. THE C.B.D.T. CIRCULAR NO.1/2011 DATED 06.04.2011 EXPLAI NS THAT THIS AMENDMENT WILL APPLY FOR A.Y. 2011-12 AND SUBSEQUEN T YEARS. WHEREAS, IN THE CASE UNDER CONSIDERATION, THE CIT CANCELLED REG ISTRATION UNDER SECTION 12A OF THE ACT FOR A.Y. 2009-10 WHICH IS NOT IN ACC ORDANCE WITH THE LAW. THIS VIEW IS FORTIFIED BY THE JUDGMENT OF HONBLE D ELHI HIGH COURT IN THE CASE OF DIT(E) VS. MOOL CHAND KHAIRATI RAM TRUST, 3 39 ITR 622 (DELHI) AND ORDER OF I.T.A.T. IN THE CASE OF DIRECTOR OF IN COME-TAX (EXEMPTION), AHMADABAD VS. N.H. KAPADIA EDUCATION TRUST, 136 ITD 111 (AHD) WHEREIN THE I.T.A.T., AHMEDABAD HAS FOLLOWED THE JUDGMENT OF HONBLE DELHI HIGH COURT. II) EVEN OTHERWISE ALSO, AS WE NOTICE THAT REGISTRA TION UNDER SECTION 12A/12AA CAN BE CANCELLED IN THE CIRCUMSTANCES PROV IDED IN SECTION 12AA(3) OF THE ACT OF WHICH DETAIL HAS BEEN DISCUSS ED ABOVE IN PARA NO 19 OF THIS ORDER. IF WE APPLY THE SAID CONDITION STIP ULATED IN SECTION 12AA(3), WE FIND THAT THERE IS NO FINDING OF THE CIT THAT AC TIVITIES OF THE ASSESSEE, AGRA DEVELOPMENT AUTHORITY ARE NON-GENUINE OR NOT B EING CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF THE ASSESSEE, AGRA DE VELOPMENT AUTHORITY. EVEN FOR THE SAKE OF ARGUMENT IF WE ACCEPT THE VIEW OF CIT, THERE MAY BE A CASE OF ACTIVITIES WHICH ARE NOT CHARITABLE BUT IT CANNOT BE SAID THAT THOSE ACTIVITIES OF THE ASSESSEE, AGRA DEVELOPMENT AUTHOR ITY, ARE NON-GENUINE OR NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF THE ASSESSEE. THE ACTIVITIES AND OBJECTS OF THE ASSESSEE, AGRA DEVELO PMENT AUTHORITY ARE THE ITA NO.13/AGRA/2013 15 SAME WHICH WERE THERE AT THE TIME OF GRANTING REGIS TRATION UNDER SECTION 12A OF THE ACT AND AT THE TIME WHEN CIT CANCELLED T HE REGISTRATION GRANTED UNDER SECTION 12A W.E.F FROM 2009-2010. THUS, WE F IND THAT THIS CONDITION OF CANCELLATION OF REGISTRATION ALREADY GRANTED UNDER SECTION12A HAS NOT BEEN SATISFIED. WHERE THE CONDITION STIPULATED UNDER SEC TION 12AA (3) IS NOT SATISFIED, THE CIT CANNOT CANCEL OR WITHDRAW REGIST RATION GRANTED UNDER SECTION 12A OF THE ACT. IN THE CASE UNDER CONSIDER ATION, THE CONDITION STIPULATED IN SECTION 12AA(3), THAT ACTIVITIES OF T HE ASSESSEE, AGRA DEVELOPMENT AUTHORITY ARE NON-GENUINE OR NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF THE ASSESSEE, AGRA DE VELOPMENT AUTHOR IS NOT SATISFIED. THE CIT BY HIS OWN MOTION ADDED ONE MOR E CONDITION IN SECTION 12AA (3) THAT THE OBJECT OF THE ASSESSEE, AGRA DEVE LOPMENT AUTHORITY IS NOT CHARITABLE AS PER AMENDED PROVISIONS OF SECTION 2(1 5) OF THE ACT FOR WHICH THE CIT IS NOT EMPOWERED TO ADD SUCH OWN CONDITION IN THE STATUTE. SIMILAR VIEW HAS BEEN TAKEN BY THE I.T.A.T., AHMEDABAD IN T HE CASE OF AHMADABAD URBAN DEVELOPMENT AUTHORITY VS. DIT, ITA NO.754/AHD / 2010, ORDER DATED 21.5.2010. 21. NOW WE COME TO THE JUDGEMENTS RELIED UPON BY THE REVENUE. THE CIT & LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON A JUD GEMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SINHAGAD TECHNICAL EDUCATION SOCIETY VS. CIT WRIT PETITION NO.2545 OF 2011 JUDGEMENT DATED 01.02.2012. THE CIT WAS OF THE VIEW THAT AS PER THE SAID JUDGEMENT, THE CIT CAN CANCEL REGISTRATION UNDER SECTION 12A/12AA OF THE ACT EVEN FOR EARLIER YEARS. THE CIT IS NOT FULLY CORRECT IN READING THE SAID JUDGEM ENT, FIRSTLY THE FACTS AND ISSUE BEFORE THE COURT WAS WHETHER POWERS GRANTED B Y CIT UNDER SECTION 12AA(3) OF THE ACT WAS VALID AS PER THE CONSTITUTI ON. THE COURT HELD THAT POWER UNDER SECTION 12AA(3) CAN BE EXERCISED BY THE COMMISSIONER IN RESPECT OF TRUSTS REGISTERED PRIOR TO 01.06.2010. NOWHERE HAS IT BEEN HELD BY THE COURT THAT SAID POWER IS APPLICABLE TO EARLI ER YEARS/ASSESSMENT YEARS. THE COURT HAS ALSO HELD THAT AMENDMENT DOES NOT TAK E AWAY ANY VESTED ARIGHT NOR DOES IT CREATE NEW OBLIGATION IN RESPECT OF PAST ACTIONS. THE COURT DID NOT EXPRESS THEIR OPINION ON MERIT OF THE CASE. THUS, WE FIND THAT THE CIT WRONGLY APPLIED THE SAID JUDGEMENT TO THE F ACTS OF THE CASE UNDER CONSIDERATION. 21.1. THE CIT AND LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON CERTAIN ORDERS OF I.T.A.T. WHERE IN THE ISSUE WAS DIFFERENT . THE ISSUE IN THOSE CASES WERE PERTAINING TO GRANT FRESH REGISTRATION UNDER S ECTION 12AA OF THE ACT AND NOT CANCELLATION OF REGISTRATION UNDER SECTION 12A OF THE ACT UNDER SECTION 12AA (3) OF THE ACT. SOME OF THE DECISIONS OF I.T.A.T. ARE CONTRARY TO ITA NO.13/AGRA/2013 16 THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN THE CA SE OF DIRECTOR OF INCOME TAX (EXEMPTION) VS. MOOL CHAND KHAIRATI RAM TRUST, 339 ITR 622 (DELHI). THEREFORE, THOSE DECISIONS ARE DISTINGUIS HABLE ON FACTS AND DID NOT HELP TO REVENUE. 21.2. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF I.T.A.T. IN THE CASES OF JAMMU DEVELOPMENT AUTHORIT Y VS. CIT (ITAT, AMRITSAR BENCH), JALANDHAR DEVELOPMENT AUTHORITY VS. CIT. (ITAT, AMRITSAR BENCH), INDORE DEVELOPMENT AUTHORITY VS. C IT. (ITAT, INDORE BENCH) & MORADABAD DEVELOPMENT AUTHORITY VS. ITO (I TAT, DELHI BENCH) AFTER AMENDMENT IN SECTION 2(15), AS PER PROVISO TO SECTION 2(15) ASSESSEE DOES NOT REMAIN CHARITABLE W.E.F. 2009-10 DOES NOT HELP TO THE ASSESSEE AS WE HAVE NOT EXPRESSED ANY OPINION ON THE ISSUE. 21.3. ONE OF THE CONTENTION OF THE LD. DEPARTMENT AL REPRESENTATIVE THAT SECTION 12AA(3) HAS BEEN AMENDED W.E.F. 01.06.2010 WHEREIN POWER HAS BEEN GIVEN TO CANCEL REGISTRATION UNDER SECTION 12A (1) OF THE ACT. IN THAT CASE THE CIT CANCELLED REGISTRATION UNDER SECTION 1 2A OF THE ACT AFTER 01.06.2010, THEREFORE, THE FACT IS DIFFERENT THAN C ASE UNDER CONSIDERATION. THIS CONTENTION OF THE LD. DEPARTMENTAL REPRESENTAT IVE IS NOT ACCEPTABLE IN THE LIGHT OF ABOVE DISCUSSIONS THAT THE CIT CANCELL ED REGISTRATION UNDER SECTION 12A W.E.F. 2009-10 WHICH IS THE PERIOD PRIO R TO 01.06.2010. THE C.B.D.T. HAS ALSO CLARIFIED THAT THE AMENDMENT IN S ECTION 12AA(3) IS APPLICABLE FROM A.Y. 2011-12. 22. IN THE LIGHT OF ABOVE DISCUSSION, THE ORDER OF CIT IS NOT IN ACCORDANCE WITH LAW. WE, THEREFORE, SET ASIDE THE ORDER OF CI T AND RESTORE THE REGISTRATION UNDER SECTION 12A OF THE ACT WHICH HAS BEEN CANCELLED W.E.F. 2009-10. SINCE THE ISSUE RAISED IN GROUNDS NUMBER 1, 2 & 4 HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE ON THE BASIS AND REASONS DISCUSSED ABOVE, SO UNDER THE FACTS AND CIRCUMSTANCES, THE GROUNDS O N MERIT RAISED IN GROUNDS NUMBER 3, 5, 6, 7 & 8 WHEREIN THE CIT HELD THAT THE ACTIVITIES OF THE ASSESSEE, AGRA DEVELOPMENT AUTHORITY, IS NOT CH ARITABLE, WE ARE NOT EXPRESSING ANY OPINION ON THESE GROUNDS OF APPEAL. GROUNDS NUMBER 9 & 10 ARE GENERAL IN NATURE, REQUIRE NO INDEPENDENT FIND ING. ITA NO.13/AGRA/2013 17 8. ON PERUSAL OF ORDER OF I.T.A.T. IN THE CASE OF A GRA DEVELOPMENT AUTHORITY, WE NOTICE THAT THE CASE OF THE ASSESSEE IS COVERED BY THE DISCUSSION MADE IN ABOVE ORDER OF I.T.A.T. IN PARAGRAPH NO.19. IN THE SAID PARAGRAPH, IT HAS BEEN STATED THAT FOR EXERCISING POWER OF CANCELLATION OF REGISTRATIO N UNDER SECTION 12AA READ WITH SECTION 12AA(3) OF THE ACT BY THE CIT ONLY ON THE C ONDITION THAT THE CIT SUBSEQUENTLY FOUND AND SATISFIED THAT THE ACTIVITIE S OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE, OR ARE NOT BEING CARRIED OUT IN ACCORD ANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. IN THE CASE UNDER CONSIDERATION, W E FIND THAT THE CIT DID NOT GIVE ANY SUCH FINDING THAT THE ASSESSEES ACTIVITIES ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE T RUST AS THE ASSESSEE, MATHURA VRINDAVAN DEVELOPMENT AUTHORITY, CARRIED OUT ACTIVI TIES WHICH WERE EXISTING AT THE TIME OF ALLOWING REGISTRATION UNDER SECTION 12AA OF THE ACT. THUS, THE CASE OF THE ASSESSEE, MATHURA VRINDAVAN DEVELOPMENT AUTHORITY, IS COVERED BY THE ABOVE FINDING OF THE I.T.A.T. WE, THEREFORE, FOLLOW THE ABOVE FINDING OF THE I.T.A.T. GIVEN IN PARAGRAPH NO.19 OF THAT ORDER. IN THE LIG HT OF THE FACT, WE SET ASIDE THE ORDER OF CIT AND RESTORE THE REGISTRATION UNDER SEC TION 12AA OF THE ACT WHICH HAS BEEN CANCELLED W.E.F. 2009-10. SINCE THE LEGAL ISS UE RAISED IN GROUNDS NO.1, 2, 3 & 7 HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE, GROU NDS NO.4, 5 & 6 WHICH ARE ON MERIT OF THE CASE I.E. CHALLENGING ORDER OF CIT HOL DING THAT THE ACTIVITIES OF THE ITA NO.13/AGRA/2013 18 ASSESSEE, MATHURA VRINDAVAN DEVELOPMENT AUTHORITY, IS NOT CHARITABLE, ON THESE GROUNDS OF APPEAL, WE ARE NOT EXPRESSING ANY OPINIO N. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED, AS DISCUSSED ABOVE. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTA NT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY