MUMBAI PORT TRUST, MUMBAI V. DIT (E), MUMBAI

ITA 363/MUM/2012

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0419 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Assessee Lawyers: HARI RAHEJA WITH MANI JAIN
• Keywords: Business income; Charitable institution; Earning of tax free income; Question of law; Cancellation of registration
• Section: 12A; 12AA; 12; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B, MU MBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.363/MUM/2012 (ASSESSMENT YEAR- 2009-10) M/S MUMBAI PORT TRUST, PORT BHAWAN, SOORJI VALLABHDAS MARG, BALLARD ESTATE, MUMBAI-400001 PAN: AAATM5001D VS. DIT(EXEMPTION), 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400012 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HARI RAHEJA WITH MANI JAIN (AR) REVENUE BY : MS. S. PADMAJA (CIT-DR) DATE OF HEARING : 01.02.2018 DATE OF PRONOUNCEMENT : 23.02.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF INCOME TAX ACT IS DIRECTED AGAINST THE ORDER OF DIRECTOR OF INCOME TAX (EXEMPT IONS) MUMBAI, DATED 22 NOVEMBER 2011 FOR ASSESSMENT YEAR 2009-10. THE A SSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTION) ERRED IN CANCELL ING THE RESTORATION UNDER SECTION 12A OF INCOME TAX ACT WITH EFFECT FROM ASSE SSMENT YEAR 2009-10, HOLDING THAT APPELLANT IS NOT ENGAGED IN ACTIVITIES WHICH ARE COVERED WITHIN THE MEANING OF CHARITABLE PURPOSE APPEARING IN SECT ION 2 (15) OF THE INCOME TAX ACT. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE THE ASSES SEE IS CONSTITUTED UNDER THE PROVISIONS OF MAJOR PORT TRUST ACT 1963 AND AS PER OBJECT OF THE PORT TRUST. ITA NO. 363/MUM/2012 - M/S MUMBAI PORT TRUST 2 THE ACTIVITIES CARRIED OUT BY ASSESSEE TRUST IS OF GENERAL PUBLIC UTILITY WITHIN THE MEANING OF CHARITABLE PURPOSE AS DEFINED UNDER SECTION 2(15) OF THE INCOME-TAX ACT. THE ASSESSEE WAS GRANTED A REGI STRATION UNDER SECTION 12 AA WITH EFFECT FROM 1 APRIL 2002. THE REGISTRATI ON WAS WITHDRAWN /CANCELLED BY DIT (EXEMPTION) ON 29 TH OF AUGUST 2007. HOWEVER, ON APPEAL BEFORE TRIBUNAL THE SAME WAS RESTORED BY THE ORDER VIDE DATED 16 TH MARCH 2009 ORDER IN ITA 6352/M/2007. ACCORDINGLY, F RESH REGISTRATION CERTIFICATE UNDER SECTION 12AAWAS ISSUED ON 8 TH SEPTEMBER 2009. THE LEARNED DIT (EXEMPTIONS) ON THE PROPOSAL RECEIVED F ROM ADIT (EXEMPTIONS) MUMBAI, FOR CANCELLING THE REGISTRATI ON ON THE GROUND THAT THE ASSESSEE HAS CARRIED ACTIVITIES IN THE NATURE O F TRADE, COMMERCE OR BUSINESS ETC AND GROSS RECEIPTS THEREFROM ARE IN EX CESS OF RS. 10 LAKH. THUS THE PROVISION OF SECTION 2(15) OF THE INCOME-T AX ACT IS ATTRACTED FOR ASSESSMENT YEAR 2009-10. ACCORDINGLY, A NOTICE DATE D 14 OCTOBER 2011 WAS ISSUED TO THE ASSESSEE, TO SHOW CAUSE AS TO WHY THE REGISTRATION GRANTED UNDER SECTION 12AA SHOULD NOT BE WITHDRAWN BY INVOK ING THE PROVISION OF SECTION 12AA(3) OF THE ACT. THE ASSESSEE FILED ITS REPLY DATED 11.11.2011. THE ASSESSEE IN ITS REPLY CONTENDED THAT THE ASSESS EE IS DERIVING INCOME FROM VARIOUS SOURCES INCLUDING INCOME FROM BUSINESS & PROFESSION, CAPITAL GAIN AND INCOME FROM OTHER SOURCES. IT WAS FURTHER CONTENDED THAT THE PLAIN READING OF AMENDED PROVISO OF SECTION 2(1 5) IMPLIED THAT ONLY THE INCOME FROM BUSINESS & PROFESSION IS NOT ELIGIBLE F OR EXEMPTION UNDER ITA NO. 363/MUM/2012 - M/S MUMBAI PORT TRUST 3 SECTION 11 OF THE ACT, WHEREAS THE INCOME FROM OTHE R SOURCES IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11. THE REPLY OF ASSESS EE WAS NOT ACCEPTED BY THE LD. DIT(E). THE LD. DIT(E) OBSERVED THAT THE PR OVISO OF SECTION 2(15) MAKE IT CLEAR AND BRING ALL ACTION OF A TRUST WHICH ARE RESULTING IN RECEIPT AS A PART OF EARNING UNDER THE AMBIT OF SAID PROVISO. THE ASSESSEE EARNED INCOME OF RS. 446.21 CRORE UNDER THE HEAD CARGO HAN DLING AND THE STORAGE CHARGES, RS. 278.99 CRORE FROM PROT & DOCKY ARD CHARGES, RS. 10.36 CRORE FROM RAILWAY SUCH AS FREIGHT AND HAULGE , SIDING CHARGES, TERMINAL CHARGES AND RS. 73.19 CRORE AS RENTAL OF E STATE. THE ASSESSEE IS EXPLOITING ITS PROPERTY COMMERCIALLY AND IN A SYSTE MATIC MANNER REGULARLY. THE LD. DIT(E) WHILE REFERRING CIRCULAR NO.11 OF 20 08 DATED 19.12.2008 OBSERVED THAT ONCE TRUST/INSTITUTION IS ENGAGED IN THE ACTIVITY AS ENVISAGES IN THE PROVISO TO SECTION 2(15), THEN IT WOULD NOT BE ENTITLED TO CLAIM THAT ITS OBJECT IS FOR CHARITABLE PURPOSE. THE LD. DIT(E) CO NCLUDED THAT ASSESSEE- TRUST IS DIRECTLY HIT BY PROVISO TO SECTION 2(15) I NTRODUCED W.E.F. AY 2009- 10. THE ASSESSEE-TRUST/INSTITUTION ONCE LOOSES ITS CHARITABLE CHARACTER THAN THERE IS CHANGE IN THE STATUS OF ASSESSEE AND IT IS NO LONGER CAN BE HELD TO BE FOR CHARITABLE PURPOSE AND IT BECAME NON-GENUINE FO R THE PURPOSE OF SECTION 11 AND LOOSES ITS CHARITABLE STATUS AND ACCORDINGLY CANCELLED THE REGISTRATION UNDER SECTION 12AA W.E.F. AY 2009-10. THUS, AGGRIEV ED BY THE ORDER OF LD. DIT(E), THE ASSESSEE HAS FILED THE PRESENT APPEAL B EFORE US. ITA NO. 363/MUM/2012 - M/S MUMBAI PORT TRUST 4 3. WE HAVE HEARD THE LD. AR OF THE ASSESSEE AND LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. A R OF THE ASSESSEE SUBMITS THAT THE JURISDICTION OF DIT(E) FOR CANCELL ATION OF REGISTRATION ALREADY GRANTED IS VERY LIMITED. THE JURISDICTION F OR CANCELLING REGISTRATION UNDER SECTION 12AA CAN ONLY BE INVOKED IF THE ACTIV ITIES OF THE TRUST ARE NOT GENUINE AND THE ACTIVITIES OF THE TRUST OR INST ITUTION ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF THE TR UST. SECTION 12AA(3) SPECIFICALLY MANDATE THAT WHEN TWIN CONDITION ARE V IOLATED, THE DIT(E) CAN CANCEL THE REGISTRATION. THERE IS NO CHANGE IN THE OBJECT AND THE ACTIVITIES OF THE ASSESSEE-TRUST. THE LD. AR FURTHER SUBMITS THAT IN VIEW OF THE CIRCULAR NO.12 OF 2016 DATED 27.05.2016 ISSUED BY CENTRAL BO ARD OF DIRECT TAXES (CBDT) CLEARLY MANDATE THAT TEMPORARILY EXCESS RECE IPTS BEYOND THE SPECIFIED CUT OFF IN ONE YEAR MANY NOT NECESSARILY OUTCOME OF ALTERATION IN NATURE OF ACTIVITIES OF THE TRUST OR INSTITUTION FO R CANCELLING THE REGISTRATION ALREADY GRANTED. THE LD. AR FURTHER SUBMITS THAT SU B-SECTION (8) OF SECTION 13 AMENDED BY FINANCE ACT 2012 SPECIFICALLY PROVIDE THAT THE TRUST/ORGANIZATION WOULD NOT GET TAX BENEFIT OF EXE MPTION IN A PARTICULAR YEAR IN WHICH ITS RECEIPT FROM COMMERCIAL ACTIVITIE S EXCEEDS THE THRESHOLD LIMIT. IN SUPPORT OF ITS SUBMISSION, THE LD. AR OF THE ASSESSEE RELIED UPON THE CBDT CIRCULAR NO. 21/2016 DATED 27.05.2016, DEC ISION OF JURISDICTIONAL HIGH COURT IN DIT(E) VS. M/S. KHAR G YMKHANA ITA NO. 2349 OF 2013 DATED 06.06.2016, MADRAS HIGH COURT I N TAMIL NADU CRICKET ITA NO. 363/MUM/2012 - M/S MUMBAI PORT TRUST 5 ASSOCIATION VS. DIT(E) [2013] TAXMANN.COM 250 (MADR AS), DECISION OF MUMBAI TRIBUNAL IN BHAKTI KALA KSHETRA VS. DIT(E) [ 2017] 79 TAXMANN.COM 66 AND AMRITSAR TRIBUNAL IN KAPURTHALA IMPROVEMENT TRUST VS. CIT IN ITA NO. 732(ASR) OF 2013. ON THE OTHER H AND, THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF LD. DIT(E). IT WAS F URTHER SUBMITTED THAT THE ACTIVITIES CARRIED OUT BY ASSESSEE TRUST WITHIN THE NATURE OF TRADE AND COMMERCE. THE ASSESSEES RECEIPT FROM CARGO HANDLIN G AND THE STORAGE CHARGES IS RS. 446.21 CRORE, RS. 278.99 CRORE FROM PROT & DOCKYARD CHARGES, RS. 10.36 CRORE FROM RAILWAY SUCH AS FREIG HT AND HAULGE, SIDING CHARGES, TERMINAL CHARGES AND RS. 73.19 CRORE AS RE NTAL OF ESTATE. THE ASSESSEE IS EXPLOITING ITS PROPERTY COMMERCIALLY AN D IN A SYSTEMATIC MANNER REGULARLY. THE ASSESSEE IS DIRECTLY HIT BY THE PROV ISO OF SECTION 2(15) OF THE ACT. IN SUPPORT OF HER SUBMISSION, THE LD. DR RELIE D UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN DIT VS. NORTH INDIAN A SSOCIATION [2017] 79 TAXMANN.COM 410 (BOM) AND DECISION OF TRIBUNAL I N MIG CRICKET CLUB VS. DIT(E) IN ITA NO. 602/M/2012 & 4638/M/2013 DATE D 18.04.2017. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDER OF LD. DIT(E). THE LD. DIT(E) CAN CELLED/WITHDRAWN THE REGISTRATION GRANTED UNDER SECTION 12AA ON THE FACT THAT THE BUSINESS RECEIPT OF THE ASSESSEE DURING THE YEAR WERE EXCEED ED THAN THE PRESCRIBED LIMIT UNDER PROVISO TO SECTION 2(15). IN OUR VIEW, THE BASIC DISPUTE IN THE PRESENT APPEAL IS WHETHER IN VIEW OF THE AMENDED SE CTION 2(15), RESTRICTING ITA NO. 363/MUM/2012 - M/S MUMBAI PORT TRUST 6 THE DEFINITION OF CHARITABLE PURPOSE BY EXCLUDING C ARRYING ANY TRADE, COMMERCE AND BUSINESS IN RECEIPT OF AN AMOUNT IN EX CESS OF PRESCRIBED LIMIT WOULD ITSELF ENTITLE THE LD. DIT(E) TO CANCEL REGISTRATION UNDER SECTION 12AA OF THE ACT. THE CBDT HAS ISSUED THE FOLLOWING CIRCULAR NO. 21/2016 REGARDING CANCELLATION/WITHDRAWAL OF REGIST RATION, WHICH IS EXTRACTED BELOW: CIRCULAR NO.21/2016 [F.NO.197/17/2016-ITA-I], DATED 27-5-2016 SECTIONS 11 AND 12 OF THE INCOME-TAX ACT, 1961 ('AC T') EXEMPT INCOME OF CHARITABLE TRUSTS OR INSTITUTIONS, IF SUCH INCOME I S APPLIED FOR CHARITABLE PURPOSE AND SUCH INSTITUTION IS REGISTERED UNDER SECTION 12 AA OF THE ACT. 2. SECTION 2(15) OF THE ACT PROVIDES DEFINITION OF 'CH ARITABLE PURPOSE'. IT INCLUDES 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' PROVIDED IT DOES NOT INVOLVE CARRYING ON OF ANY ACTIVITY IN THE NATURE O F TRADE, COMMERCE OR BUSINESS ETC. FOR FINANCIAL CONSIDERATION. THE 2ND PROVISO T O SAID SECTION, INTRODUCED W.E.F. 1-4-2009 VIDE FINANCE ACT 2010, PROVIDES THAT IN CASE WHERE THE ACTIVITIES OF ANY TRUST OR INSTITUTION IS OF THE NATURE OF ADVANCEMEN T OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND IT INVOLVES CARRYING ON OF ANY A CTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS; BUT THE AGGREGATE VALUE OF RE CEIPTS FROM SUCH COMMERCIAL ACTIVITIES DOES NOT EXCEED RS. 25,00,000/- IN THE P REVIOUS YEAR, THE PURPOSE OF SUCH TRUST/INSTITUTION SHALL BE DEEMED AS 'CHARITAB LE' DESPITE IT DERIVING CONSIDERATION FROM SUCH ACTIVITIES. HOWEVER, IF THE AGGREGATE VALUE OF THESE RECEIPTS EXCEEDS THE SPECIFIED CUT-OFF, THE ACTIVIT Y WOULD NO LONGER BE CONSIDERED AS CHARITABLE AND THE INCOME OF THE TRUST/INSTITUTI ON WOULD NOT BE ELIGIBLE FOR TAX EXEMPTION IN THAT YEAR. THUS AN ENTITY, PURSUING AD VANCEMENT OF OBJECT OF GENERAL PUBLIC UTILITY, COULD BE TREATED AS A CHARI TABLE INSTITUTION IN ONE YEAR AND NOT A CHARITABLE INSTITUTION IN THE OTHER YEAR DEPE NDING ON THE AGGREGATE VALUE OF RECEIPTS FROM COMMERCIAL ACTIVITIES. THE POSITION R EMAINS SIMILAR WHEN THE FIRST AND SECOND PROVISOS OF SECTION 2(15) GET SUBSTITUTE D BY THE NEW PROVISO INTRODUCED W.E.F. 1-4-2016 VIDE FINANCE ACT, 2015, CHANGING THE CUT-OFF ITA NO. 363/MUM/2012 - M/S MUMBAI PORT TRUST 7 BENCHMARK AS 20% OF THE TOTAL RECEIPTS INSTEAD OF T HE FIXED LIMIT OF RS.25,00,000/- AS IT EXISTED EARLIER. 3. THE TEMPORARY EXCESS OF RECEIPTS BEYOND THE SPECIFI ED CUT-OFF IN ONE YEAR MAY NOT NECESSARILY 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) THEREI N TO PROVIDE THAT SUCH ORGANIZATION WOULD NOT GET BENEFIT OF TAX EXEMPTION IN THE PARTICULAR YEAR IN WHICH ITS RECEIPTS FROM COMMERCIAL ACTIVITIES EXCEE D THE THRESHOLD WHETHER OR NOT THE REGISTRATION GRANTED IS CANCELLED. THIS AMENDME NT HAS TAKEN EFFECT RETROSPECTIVELY FROM 1ST APRIL, 2009 AND ACCORDINGL Y 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 PRO VISO TO SECTION 2(15) OF THE ACT IS EXCEEDED IN A PARTICULAR YEAR WITHOUT THERE BEIN G 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 WOULD NOT BE MANDATORY UNLESS SUCH CANCELLATION BECOMES NECESSARY ON THE GROUND(S) PRESCRIBED UNDER THE ACT. 5. WITH THE INTRODUCTION OF CHAPTER XII-EB IN THE ACT VIDE FINANCE ACT, 2016, PRESCRIBING SPECIAL PROVISIONS RELATING TO TAX ON A CCRETED INCOME OF CERTAIN TRUSTS AND INSTITUTIONS, CANCELLATION OF REGISTRATION GRAN TED U/S 12AA MAY LEAD TO A CHARITABLE INSTITUTION GETTING HIT BY SUB-SECTION ( 3) OF SECTION 115TD AND BECOMING LIABLE TO TAX ON ACCRETED INCOME. THE CANC ELLATION OF REGISTRATION WITHOUT JUSTIFIABLE REASONS MAY, THEREFORE, CAUSE A DDITIONAL HARDSHIP TO AN ASSESSEE INSTITUTION DUE TO ATTRACTION OF TAX-LIABI LITY ON ACCRETED INCOME. THE FIELD AUTHORITIES ARE, THEREFORE, ADVISED NOT TO CANCEL T HE REGISTRATION OF A CHARITABLE INSTITUTION GRANTED U/S 12AA JUST BECAUSE THE PROVI SO TO SECTION 2(15) COMES INTO PLAY. THE PROCESS FOR CANCELLATION OF REGISTRATION IS TO BE INITIATED STRICTLY IN ACCORDANCE WITH SECTION 12AA(3) AND 12AA(4) AFTER C AREFULLY EXAMINING THE APPLICABILITY OF THESE PROVISIONS. 6. THE ABOVE MAY BE BROUGHT TO THE NOTICE OF ALL CONCE RNED. ITA NO. 363/MUM/2012 - M/S MUMBAI PORT TRUST 8 5. THE JURISDICTIONAL HIGH COURT IN CASE OF DIT(E) VS. KHAR GYMKHANA, WHILE HEARING A SIMILAR QUESTION OF LAW HELD THAT MERE RECEIPTS ON ACCOUNT OF BUSINESS BEING IN EXCESS OF LIMITS SPECIFIED IN PRO VISO TO SECTION 2(15) WOULD NOT RESULT IN CANCELLATION OF REGISTRATION GR ANTED UNDER SECTION 12AA UNLESS THERE IS A CHANGE IN NATURE OF ACTIVITI ES OF INSTITUTION. 6. THE HONBLE MADRAS HIGH COURT IN CASE OF TAMIL NADU CRICKET ASSOCIATION VS. DIT(E) (SUPRA) HELD THAT WHERE COMMISSIONER AFTER SATISFYING HIMSELF ABOUT GENUINENESS OF OBJECTS OF ASSESSEE, A CRICKET ASSOCIATION, GRANTED REGISTRATION TO IT UNDER SECTI ON 12AA ON 28-3-2003 AND LATER ON 19-7-2011 HE HAVING NOTICED THAT ASSESSEE WAS RECEIVING INCOME FROM HOLDING OF CRICKET MATCHES CANCELLED REGISTRAT ION, SINCE OBJECTS REMAINED AS THEY WERE IN YEAR 2003, CANCELLATION OF REGISTRATION WAS NOT JUSTIFIED. THE CO-ORDINATE BENCH OF MUMBAI TRIBUNA L IN BHAKTI KALA KSHETRA VS. DIT(E), MUMBAI (SUPRA) HELD THAT EVEN I F ASSESSEE TRUST WAS HIT BY MONETARY LIMITS CONTEMPLATED UNDER SECTION 2(15) WITH EFFECT FROM 1.4.2009, SAME WOULD ONLY ADVERSELY AFFECT ENTITLEM ENT OF ASSESSEE TOWARDS CLAIM OF EXEMPTION UNDER SECTION 11; HOWEVER, SAME COULD NOT LEAD TO CANCELLATION/WITHDRAWAL OF REGISTRATION GRANTED UND ER SECTION 12A/12AA. 7. IN OUR VIEW, UNDER THE SCHEME OF THE ACT FOR CANCEL LING REGISTRATION IS CLEAR. THE STATUS OF REGISTRATION UNDER SECTION 12AA WILL NOT BE AFFECTED AS RECOGNIZED UNDER SUB-SECTION (8) OF SECTION 13, ON THE AVAILABILITY OF ITA NO. 363/MUM/2012 - M/S MUMBAI PORT TRUST 9 RECEIPTS IN EXCESS OF PRESCRIBED LIMIT. THE ASSESSE E WILL BE DISENTITLED FOR EXEMPTION UNDER SECTION 11, IF THE INCOME OF THE AS SESSEE FROM THE ACTIVITIES IS HIT BY THE PROVISO TO SECTION 2(15) I N ANY ASSESSMENT YEAR. WE ARE OF THE VIEW THAT THE CANCELLATION OF REGISTRATI ON UNDER SECTION 12AA OF THE ACT, CAN ONLY TAKE PLACE, WHEN THE ACTIVITIES O F THE TRUST OR INSTITUTION ARE NOT GENUINE AND/OR NOT CARRIED INCONSONANCE WIT H ITS OBJECT. THE CIRCULAR NO.21/2016 ISSUED BY CBDT CAME IN RESCUE T O THE ASSESSEE-TRUST IN THE PRESENT CASE. THE SUBMISSION OF LD. DR THAT ACTIVITIES OF THE TRUST IS NOT GENUINE BECAUSE IT IS HIT BY PROVISO TO SECTION 2(15) OF THE ACT, IS IN FACT NEGATIVED BY THIS CIRCULAR. THE CIRCULAR CLEAR LY PROVIDES THAT MERE RECEIPT ON ACCOUNT OF BUSINESS RECEIPT IN EXCESS OF LIMIT IN THE PROVISO WOULD NOT RESULT IN CANCELLATION OF REGISTRATION GR ANTED UNDER SECTION 12AA, UNLESS THERE IS CHANGE IN THE NATURE OF ACTIVITIES OF THE ASSESSEE. THE LD. DIT(E) HAS NOT GIVEN ANY FINDING AS TO WHETHER THER E IS CHANGE IN THE NATURE OF ACTIVITIES OF THE ASSESSEE DURING THE REL EVANT ASSESSMENT YEAR, EXCEPT PLACING RELIANCE ON THE PROPOSAL OF ADIT(E). THE RATIO OF DECISION RELIED BY LD. DR IN CASE OF MIG CRICKET CLUB VS. DI T(E) (SUPRA) ARE NOT APPLICABLE ON THE FACT OF THE PRESENT CASE. IN MIG CRICKET CLUB VS. DIT(E) (SUPRA), ON INVESTIGATION IT WAS CONCLUDED THAT THE ACTIVITIES OF ASSESSEE WAS NOT GENUINE AND THE MATTER WAS RESTORED TO THE FILE OF LD. DIT(E) FOR DETERMINATION ABOUT GENUINITY OF ITS ACTIVITY. THE OTHER DECISION RELIED BY REVENUE IN DIT(E) VS. NORTH INDIA ASSOCIATION (SUPR A) IS IN FAVOUR OF ITA NO. 363/MUM/2012 - M/S MUMBAI PORT TRUST 10 ASSESSEE WHEREIN WHILE DISMISSING THE APPEAL OF REV ENUE, THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT MERELY BECAUSE IN ONE YEAR INCOME OF ASSESSEE-TRUST EXCEEDED PRESCRIBED LIMIT PROVIDED U NDER SECTION 2(15), BY ITSELF COULD NOT WARRANT THE CANCELLATION OF REGIST RATION OF TRUST. 8. IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL OF THE ASSESSEE IS ALLOWED, THE LD. DIT(E) IS DIRECTED TO RESTORE THE REGISTRATION CERTIFICATE GRANTED UNDER SECTION 12AA DATED 08.09.2009. THUS, WE ACCEPT THE PRESENT APPEAL OF THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DAY OF FEBRUARY 2018. SD/- SD/- (B.R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 23/02/2018 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGI STRAR) ITAT, MUMB AI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COP