PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION, MUMBAI V. DIT (E), MUMBAI

ITA 496/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75484 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A C TEJPAL
• Assessee Lawyers: FIROZE B ANDHYARAJINA
• Keywords: Business income; Charitable institution; Opportunity of being heard; Cancellation of registration
• Section: 12A; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C , MUMBAI . . , , , BEFORE SHRI N.K.SAINI , AM AND SHRI SANJAY GARG , JM ITA NO . 496 /MUM/20 1 2 : ASST.YEAR 2009 - 20 1 0 PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNATION PRITHVIRAJ THEATRE, JANKI KUTIR JUHU CHURCH ROAD, JUHU MUMBAI 400 049. PAN : AAATP3508 / VS. THE DIRECTOR OF INCOME - TAX (EXEMPTION) MUMBAI. ( / APPEL LANT) ( / RESPONDENT) / APPELLANT BY : SHRI FIROZE B.ANDHYARAJINA / RESPONDENT BY : SHRI A.C.TEJPAL / DATE OF HEARING : 04. 02 .201 4 / DATE OF PRONOUNCEMENT : 0 4 .0 2 .20 1 4 / O R D E R PER N.K.SAINI (AM) : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 16.12.2011 OF THE DIRECTOR OF INCOME - TAX (EXEMPTION), MUMBAI. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: - 1. THE ACTION OF THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTION), MUMBAI ( THE LD.D.I.T. ) IN CANCELING REGISTRATION GRANTED UNDER SECTION 12A OF THE INCOME TAX ACT, 1961 ( THE ACT ) IS WITHOUT JURISDICTION, AS THE REGISTRATION SO GRANTED CANNOT BE CANCELLED / WITHDRAWN UNDER SECTION 12AA(3) OF T HE ACT. 2. THE LD.DIT ERRED COMING TO THE CONCLUSION THAT THE APPELLANT IS DIRECTLY HIT BY THE PROVISO TO SECTION 2(15) OF THE ACT WHICH WAS INSERTED WITH EFFECT FROM A.Y. 2009 - 10. ITA NO. 496 /MUM/2012. PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION. 2 2.2 WHILE DOING SO, THE LD.DIT ERRED IN : (A) HOLDING THAT THE APPELLANT HAS BECOME NON GENUINE AND THE REGISTRATION ALLOWED UNDER SECTION 12A OF THE ACT BE CANCELLED / WITHDRAWN; (B) COMING TO THE CONCLUSION THAT THE APPELLANT TRUST LOSES ITS CHARITABLE CHARACTER AND THERE IS CHANGE IN THE STATUS OF THE APPELLANT. 2.3 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, NO SUCH CANCELATION / WITHDRAWAL WAS CALLED FOR. 3. FROM THE ABOVE GROUNDS IT IS GATHERED THAT THE GRIEVANCE OF THE ASSESSEE RELATES TO THE CANCELLATION OF REGISTRATION ALREADY G RANTED U/S 12A OF THE INCOME - TAX ACT, 1961 (HEREAFTER REFERRED TO AS ACT ). 4. FACTS OF THE CASE IN BRIEF ARE THAT THE DIRECTOR OF INCOME - TAX (EXEMPTION) [ DIT(E) FOR SHORT] RECEIVED A PROPOSAL FROM THE INCOME TAX OFFICER (EXEMPTION) [ ITO(E) FOR SHOR T] FOR CANCELLATION OF REGISTRATION GRANTED TO THE ASSESSEE ON THE GROUND THAT THE ASSESSEE WAS CARRYING ON THE ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS ETC. AND GROSS RECEIPTS THERE FROM WERE IN EXCESS OF RS.10 LACS. ACCORDINGLY, THE PROVIS IONS OF SECTION 2(15) OF THE ACT WAS ATTRACTED FROM ASSESSMENT YEAR 2009 - 2010. THE DIT(E) THEREAFTER ISSUED A NOTICE TO THE ASSESSEE TO SHOW CAUSE AS TO WHY THE REGISTRATION GRANTED TO IT SHOULD NOT BE WITHDRAWN BY INVOKING THE PROVISIONS OF SECTION 12AA(3 ) OF THE ACT. THE SHOW CAUSE NOTICE CONTAINED THAT THE ACTIVITIES AS CARRIED OUT BY THE ASSESSEE WERE IN THE NATURE OF TRADE, COMMERCE, BUSINESS ETC. AND THE DETAILS OF INCOME IN INCOME & EXPENDITURE ACCOUNT REVEALED THAT THE ASSESSEE HAD EARNED ITA NO. 496 /MUM/2012. PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION. 3 INCOME BY WAY OF THEATRE HIRE CHARGES OF R S .27,90,439.68. THE ASSESSEE SUBMITTED THAT THE TRUST WAS PRESERVING AND MAINTAINING PRITHVI THEATRE , A THEATRE WHERE DRAMA, MUSIC SHOWS AND OTHER ARTISTIC RELATED ACTIVITIES WERE CONDUCTED ON IT. THEREFORE, THE ACTIVITIES WERE OF CHARITABLE IN NATURE AND IN ACHIEVING THE OBJECT OF THE ASSESSEE - TRUST OF PROVIDING FACILITIES OF STAGE AND AUDITORIUM TO PROMOTE CULTURAL ACTIVITIES, THE CULTURAL PERFORMERS COLLECTED TICKET MONIES FROM THE PUBLIC AUDIENCE FROM WHICH THE PERFORME RS MADE CONTRIBUTION TOWARDS THE RUNNING COST OF THE STAGE AND AUDITORIUM. HOWEVER, THE CONTRIBUTION DID NOT COVER THE RUNNING COSTS ENTIRELY AND THEREFORE, THE ASSESSEE INCURRED AN AVERAGE LOSS OF OVER RS.1 LAC PER MONTH. IT WAS FURTHER STATED THAT THE TH EATRE HIRE CHARGES WERE CHARGED FOR THE PERFORMING GROUPS AGAINST VARIOUS FACILITIES PROVIDED TO THEM AND ALSO AGAINST THE EXPENSES INCURRED BY THE TRUST FOR THE MAINTENANCE OF THEATRE. FURTHER, TO MAINTAIN THE DAY - TO - DAY AFFAIRS OF THE TRUST AND TO GIVE T HE PROPER SERVICES AND OTHER ALLIED REQUIREMENT FOR PERFORMING THE STAGE SHOWS THE TRUST HAS INCURRED HEAVY EXPENDITURE AND IF THE TRUST DID NO T RECOVER PART OF ITS EXPENDITURE FROM THE PERFORMING GROUP, IT WILL INCUR HEAVY LOSSES AND WILL NOT BE ABLE TO C ARRY ON THE CHARITABLE ACTIVITIES. 5. THE LEARNED DIT(E) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE PROVISO TO SECTION 2(15) OF THE ACT PROVIDES THAT IF ANY TRUST / INSTITUTION WHOSE MAIN OBJECT IS FOR ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY CARRIES OUT ANY ACTIVITIES WHICH ARE IN THE NATURE OF ANY TRADE, COMMERCE OR ITA NO. 496 /MUM/2012. PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION. 4 BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION IT BRINGS ALL ACTIONS OF A TRUST WHICH WERE RESULTING IN RECEIPTS AS PART OF ITS EARNINGS UNDER THE AMBIT OF AFORESAID PROVISO. HE FURTHER OBSERVED THAT THE INCOME RECEIVED BY THE ASSESSEE WAS TOWARDS COMMERCIAL EXPLOITATION OF ITS PROPERTY IN A SYSTEMATIC MANNER WHICH WAS NOTHING BUT A BUSINESS INCOME. RELIANCE WAS PLACED ON THE DECISION OF TH E HON BLE CALCUTTA HIGH COURT IN THE CASE OF CIT V. SHAMBHU INVESTMENT PVT. LTD. [(2001) 249 ITR 47 (CAL.)] WHICH WAS AFFIRMED BY THE HON BLE SUPREME COURT IN THE CASE OF SHAMBHU INVESTMENT PVT. LTD. V. CIT [(2003) 263 ITR 143 (SC)] . 6 . THE DIT(E) WAS OF THE VIEW THAT THE ASSESSEE - TRUST WAS DIRECTLY HIT BY THE PROVISIONS OF SECTION 2(15) WHICH HAD BEEN INTRODUCED FROM ASSESSMENT YEAR 2009 - 2010 AND ONCE A CHARITABLE TRUST / INSTITUTION WAS HIT BY THE AFORESAID PROVISO, THEN THERE WAS DEEMING PROVISION THAT SUCH ENTITY SHALL NOT BE FOR CHARITABLE PURPOSES AND THE PROVISIONS OF SECTION 12AA(3) OF THE ACT GET ATTRACTED. ACCORDINGLY THE REGISTRATION ALLOWED IN THE EARLIER YEARS U/S 12AA OF THE ACT WAS CANCELLED. NOW THE ASSESSEE IS IN APPEAL. 7 . THE LEARNED C OUNSEL FOR THE ASSESSEE CONTENDED THAT THE OBJECTS OF THE ASSESSEE - TRUST ARE CHARITABLE IN NATURE WHICH IS CLEAR FROM THE PREAMBLE OF THE ASSESSEE - TRUST THAT THE TRUST IS FOUNDED FOR THE PROMOTION OF ARTS AND CULTURE AMONGST THE MEMBERS OF THE GENERAL PUBL IC IRRESPECTIVE OF THEIR CASTE, COMMUNITY OR RELIGION AND FOR THAT PURPOSE THE SETTLER OF THE ASSESSEE - TRUST ACQUIRED AND MAINTAINED THE PREMISE FOR PROVIDING INSPIRATION, KNOWLEDGE AND OPPORTUNITY TO THE ITA NO. 496 /MUM/2012. PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION. 5 MEMBERS OF THE GENERAL PUBLIC. IT WAS SUBMITTED THA T THE OBJECTS OF THE ASSESSEE WERE CHARITABLE IN NATURE, THEREFORE, THE REGISTRATION EARLIER GRANTED WAS WRONGLY CANCELLED BY THE DIT(E). IT WAS FURTHER SUBMITTED THAT THE CBDT HAS ISSUED A CIRCULAR NO.1/2011 DATED 06.04.2011 STATING THEREIN THAT THE REGIS TRATION GRANTED U/S 12A OF THE ACT CAN BE CANCELLED BY INVOKING THE AMENDED PROVISIONS OF SECTION 12AA(3) OF THE ACT FOR THE ASSESSMENT YEAR 2011 - 2012 AND SUBSEQUENT ASSESSMENT YEARS. IT WAS EMPHASIZED THAT THE REGISTRATION IN THIS CASE WAS GRANTED U/S 12A ONLY, THEREFORE, THE CANCELLATION OF REGISTRATION U/S 12AA(3) OF THE ACT FOR THE ASSESSMENT YEAR 2009 - 2010 WAS NOT JUSTIFIED. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE ITAT, AGRA BENCH IN THE CASE OF AGRA DEVELOPMENT AUTHORITY V. CIT - 1 [ITA NO.166/A GRA/2012 ORDER DATED JANUARY 11, 2013 ] . COPY OF THE SAID ORDER WAS FURNISHED, WHICH IS PLACED ON RECORD. IN HIS RIVAL SUBMISSION, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LEARNED DIT(E). 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE IT IS AN ADMITTED FACT THAT THE REGISTRATION WAS EARLIER GRANTED TO THE ASSESSEE U/S 12A OF THE ACT AND THE LEARNED DIT(E) BY INVOKING THE PROVISIONS OF SECTI ON 12AA(3) OF THE ACT CANCELLED THE REGISTRATION CONSIDERING THE ACTIVITY OF THE ASSESSEE IN THE NATURE OF COMMERCE AND TRADE. IN THIS REGARD THE CBDT HAS ISSUED A CIRCULAR NO.1/2011 DATED 06.04.2011 STATING THERE IN AS UNDER: - ITA NO. 496 /MUM/2012. PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION. 6 SECTION 12AA PROVIDES THE PROCEDURE RELATING TO REGISTRATION OF A TRUST OR INSTITUTION ENGAGED IN CHARITABLE ACTIVITIES. SECTION 12AA(3) PREVIOUSLY PROVIDED THAT IF THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE FOUND TO BE NON - GENUINE OR ITS ACTIVITIES ARE NOT IN ACCORDANCE WITH THE OBJECTS FOR WHICH SUCH TRUST OR INSTITUTION WAS ESTABLISHED, THE REGISTRATION GRANTED UNDER SECTION 12AA CAN BE CANCELLED BY THE COMMISSIONER AFTER PROVIDING THE TRUST OR INSTITUTION AN OPPORTUNITY OF BEING HEARD. THE POWER OF CANCELLATION OF REGIST RATION IS INHERENT AND FLOWS FROM THE AUTHORITY OF GRANTING REGISTRATION. HOWEVER, JUDICIAL 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 UNDE R PROVISIONS OF SECTION 12A AS IT IS NOT SPECIFICALLY MENTIONED IN SECTION 12AA. THEREFORE, SECTION 12AA HAS BEEN AMENDED TO PROVIDE THAT THE COMMISSIONER CAN ALSO CANCEL THE REGISTRATION OBTAINED UNDER SECTION 12A AS IT STOOD BEFORE AMENDMENT BY FINANC E (NO.2) ACT, 1996. APPLICABILITY THIS AMENDMENT HAS BEEN MADE APPLICABLE WITH EFFECT FROM 1 ST JUNE, 2010 AND SHALL ACCORDINGLY APPLY FOR ASSESSMENT YEAR 2011 - 12 AND SUBSEQUENT ASSESSMENT YEARS. 9 . FURTHER, THE ITAT AGRA BENCH IN THE CASE OF AGRA D EVELOPMENT AUTHORITY V. CIT - 1 (SUPRA) , BY CONSIDERING THE PROVISIONS OF SECTION 12AA(3) OF THE ACT, WHICH WERE BROUGHT ON THE STATUTE WITH EFFECT FROM 01.06.2010, HELD AS UNDER : - 20. IN THE LIGHT OF ABOVE DISCUSSION,. IF WE CONSIDER THE FACTS OF THE C ASE UNDER CONSIDERATION AS DISCUSSED ABOVE, ITA NO. 496 /MUM/2012. PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION. 7 WE FIND THAT 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 FOLLOWING 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 INSTITUTIONS 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 CANCELLED ONLY ON THOSE CASES WHERE THE REGISTRATION HAS BEEN GRANTED UNDER SECTION OF THE ACT. BEFORE 01.06.2010 THIS SECTION 12AA(3) NOWHERE EMPOWERS THE CIT TO CANCEL OR WIT HDRAW REGISTRATION UNDER SECTION 12A OF 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 BE INCORPO RATED 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 EXPLAINS THAT THIS AMENDMENT WILL APPLY FOR A.Y. 2011 - 12 AND SUBSEQUENT YEARS. WHEREAS, IN THE CASE UNDER CONSIDERATION, THE CIT CA NCELLED REGISTRATION UNDER SECTION 12A OF THE ACT FOR A.Y. 2009 - 10 WHICH IS NOT IN ACCORDANCE WITH THE LAW. THIS VIEW IS FORTIFIED BY THE JUDGMENT OF HON BLE DELHI HIGH COURT IN THE CASE OF DIT(E) V. MOOL CHAND KHAIRATI RAM TRUST (SUPRA) AND ORDER OF I.T. A.T. IN THE CASE OF N.H. KAPADIA EDUCATION TRUST (SUPRA) WHEREIN THE I.T.A.T., AHMEDABAD HAS FOLLOWED THE JUDGMENT OF HON BLE DELHI HIGH COURT. (II) EVEN OTHERWISE ALSO, AS WE NOTICE THAT REGISTRATION UNDER SECTION 12A/12AA CAN BE CANCELLED IN THE CIRCU MSTANCES PROVIDED IN SECTION 12AA(3) OF THE ACT OF WHICH DETAIL HAS BEEN DISCUSSED ABOVE IN PARA NO 19 OF THIS ORDER. IF WE APPLY THE SAID CONDITION STIPULATED IN ITA NO. 496 /MUM/2012. PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION. 8 SECTION 12AA(3), WE FIND THAT THERE IS NO FINDING OF THE CIT THAT ACTIVITIES OF THE ASSESSEE, AGRA DEVELOPMENT AUTHORITY ARE NON - GENUINE OR NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF THE ASSESSEE, AGRA DEVELOPMENT AUTHORITY. EVEN FOR THE SAKE OF ARGUMENT IF WE ACCEPT THE VIEW OF CIT. THERE MAY BE A CASE OF ACTIVITIES WHICH ARE NOT CHAR ITABLE BUT IT CANNOT BE SAID THAT THOSE ACTIVITIES OF THE ASSESSEE, AGRA DEVELOPMENT AUTHORITY, ARE NON - GENUINE OR NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF THE ASSESSEE. THE ACTIVITIES AND OBJECTS OF THE ASSESSEE, AGRA DEVELOPMENT AUTHORITY A RE THE SAME WHICH WERE THERE AT THE TIME OF GRANTING REGISTRATION U NDER SECTION 1 2A OF THE ACT AND AT THE TIME WHEN CIT CANCELLED THE REGISTRATION GRANTED UNDER SECTION 12A W.E. FROM 2009 - 2010. THUS, WE FIND THAT THIS CONDITION OF CANCELLATION OF REGISTRAT ION ALREADY GRANTED UNDER SECTION 1 2A HAS NOT BEEN SATISFIED. WHERE THE CONDITION STIPULATED UNDER SECTION 12AA (3) IS NOT SATISFIED, THE CIT CANNOT CANCEL OR WITHDRAW REGISTRATION GRANTED UNDER SECTION 12A OF THE ACT. IN THE CASE UNDER CONSIDERATION, THE CONDITION STIPULATED IN SECTION 12AA(3), THAT ACTIVITIES OF THE ASSESSEE, AGRA DEVELOPMENT AUTHORITY ARE NON - GENUINE OR NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF THE ASSESSEE, AGRA DEVELOPMENT AUTHOR IS NOT SATISFIED. THE CIT BY HIS OWN MOTION ADDED ONE MORE CONDITION IN SECTION 12AA (3) THAT THE OBJECT OF THE ASSESSEE, AGRA DEVELOPMENT AUTHORITY IS NOT CHARITABLE AS PER AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT FOR WHICH THE CIT IS NOT EMPOWERED TO ADD SUCH OWN CONDITION IN THE STATUTE. S IMILAR VIEW HAS BEEN TAKEN BY THE I.T.A.T., AHMEDABAD IN THE CASE OF AHMADABAD URBAN DEVELOPMENT AUTHORITY V. DIT, ITA NO.754/AHD/ 2010, ORDER DATED 21.5.2010. 10 . IN THE PRESENT CASE ALSO THE REGISTRATION WAS GRANTED U/S 12A OF THE ACT . A S PER THE CIRC ULAR ISSUED BY THE CBDT, WHICH IS BINDING ON THE INCOME - TAX DEPARTMENT, THE REGISTRATION ALREADY GRANTED U/S 12A ITA NO. 496 /MUM/2012. PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION. 9 OF THE ACT CAN BE CANCELLED ONLY FOR ASSESSMENT YEAR 2011 - 2012 AND SUBSEQUENT ASSESSMENT YEARS BY CONSIDERING THE AMENDED PROVISION WHICH IS AP PLICABLE FROM 01.06.2010 . HOWEVER, THE ASSESSMENT YEAR INVOLVED IN THIS CASE IS ASSESSMENT YEAR 2009 - 2010, THEREFORE, THE REGISTRATION CANCELLED BY THE DIT(E) WAS NOT JUSTIFIED. FURTHER MORE, THE CHARITABLE PURPOSE HAS BEEN DEFINED IN SECTION 2(15) OF THE ACT, WHICH READS AS UNDER: - 2(15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. 11 . THE ABOVE PROVISIONS ARE SUBSTITUTED BY THE FINANCE (NO.2) ACT, 2008 WITH EFFECT FROM 01.04.2009, WHICH READ AS UNDER: - 2(15) `CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OB JECTS OF ARTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF 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. ITA NO. 496 /MUM/2012. PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION. 10 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. 1 2 . FROM THE ABOVE PR OVISIONS, IT IS CLEAR THAT THE CHARITABLE PURPOSES INCLUDE THE OBJECTS OF ARTISTIC OR HISTORIC INTEREST . IN THE INSTANT CASE ALSO THE ASSESSEE - TRUST WAS FOUNDED TO ACQUIRE ART MUSEUM AND ART THEATRE FOR THE PROMOTION OF ART AND CULTURE AMONGST THE MEMBERS OF THE GENERAL PUBLIC. THEREFORE, THE ACTIVITY OF THE ASSESSEE ARE CHARITABLE IN NATURE IS AS PER THE PROVISIONS CONTAINED IN SECTION 2(15) OF THE ACT. IN THE INSTANT CASE, AS WE HAVE ALREADY MENTIONED, THAT THE ASSESSEE - TRUST WAS ESTABLISHED TO MAKE IT AV AILABLE THE ART MUSEUM AND ART THEATRE FOR THE MEMBERS OF THE GENERAL PUBLIC , IRRESPECTIVE OF THEIR CAST, COMMUNITY OR RELIGION, THEREFORE, THE ACTIVITY OF THE ASSESSEE - TRUST IS CHARITABLE IN NATURE AS PER THE PROVISIONS OF SECTION 2(15) OF THE ACT. WHEREA S, THE PROVISO INSERTED BY THE FINANCE (NO.2) ACT, 2009 BY THE CBDT CIRCULAR NO.1/2011 DATED 06.04.2011, SHALL NOT BE APPLICABLE IN THE INSTANT CASE FOR THE YEAR UNDER CONSIDERATION . WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREINA BOVE, ARE OF THE VIEW THAT THE LEARNED DIT(E) WAS NOT JUSTIFIED IN CANCELLING REGISTRATION ALREADY GRANTED TO THE ASSESSEE - TRUST U/S 12A OF THE ACT BY INVOKING THE PROVISIONS OF SECTION 12AA(3) OF THE ACT. IN THAT VIEW OF THE MATTER, THE IMPUGNED ORDER IS SET ASIDE AND THE REGISTRATION U/S 12A ALREADY GRANTED TO THE ASSESSEE IS RESTORED. ITA NO. 496 /MUM/2012. PRITHVIRAJ KAPOOR MEMORIAL TRUST & RESEARCH FOUNDATION. 11 1 3 . IN THE RESULT, THE APPEAL IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 0 4 TH DAY OF FEBRUARY , 201 4 . 04 , 2014 SD/ - SD/ - ( SANJAY GARG ) ( N.K.SAINI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 0 4 TH FEBRUARY , 201 4 . DEVDAS* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT , MUMBAI. 4. DIT (E) , MUMBAI. 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI