Shree Swatma Bodh Satsang, Kolhapur V. Commissioner of Income-tax - II,

ITA 661/PUN/2014

• Counselvise Citation: 66124514 RSA 2014
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 07-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Cancellation of registration
• Section: 11A; 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO.661/PN/2014 [ORDER UNDER SECTION 12AA OF THE ACT] SHREE SWATMA BODH SATSANG, 56, RAMKAMAL, NAGALA PARK, KOLHAPUR. . / APPELLANT PAN: A AATS5430N VS. THE COMMISSIONER OF INCOME TAX - II, KOLHAPUR . / RESPONDEN T / APPELLANT BY : SHRI S.N. PURANIK / RESPOND ENT BY : SMT. PUSHPALATA SRIVASTAV / RESPOND ENT BY : SMT. PUSHPALATA SRIVASTAV / DATE OF HEARING : 13 .0 4 .2015 / DATE OF PRONOUNCEMENT: 08 .07.2015 / ORDER PER SU SHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT - I I, KOLHAPUR DATED 18 . 0 2 .201 4 PASSED U NDER SECTION 12AA( 3 ) R.W.S. 254 OF THE INCOME - TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . COMMISSIONER OF INCOME TAX II, KOLHAPUR HAS ERRED IN CONFIRMING THAT REGISTRATION DATED 24.08.1999 OF THIS TRUST STANDS CANCELLED ITA NO. 66 1 /PN/201 4 SHREE SWATMA BODH SATSANGH 2 APPELLANT PRAYS FOR GRANT OF REGISTRATION 2 . APPELLANT CLAIM FOR JUST AND EQUITABLE RELIEF / DECISION ON REGISTRATION. 3 . APPELLANT PRAY S FOR CANCELLATION OF CITS ORDER U/S 12AA(3) R.W.S. 254 DATED 18.02.2014 AND RESTORATION OF ORDER U/S 12A DATED 31.10.1996 . 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE ORDER OF COMMISSIONER PASSED UNDER SECTION 12AA(3) R.W.S. 254 OF THE ACT, UNDER WHICH THE ORDER UNDER SECTION 12A OF THE ACT DATED 31.10.1996 GRANTING REGISTRATION TO THE ASSESSEE TRUST WAS CANCELLED. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS GRANTED APPROVAL UNDER SECTION 12 AA OF THE ACT FROM 31.10.1996 UNDER NO. S - 588/59/153/96 - 97 . SUBSEQUENTLY, THE COMMISSIONER ON VERIFICATION OF THE RECORDS NOTED THAT THE EXPENDITURE INCURRED UNDER THE HEAD MISCELLANEOUS EXPENSES FOR THE YEAR ENDING 31.03.2007 TO 31.03.2010 WERE ON ACCOUNT OF PRINTING OF BODH CARDS, RENT FOR SATSANG PROGRAMME, GURU PO O RNIMA / MAHASHIVRATRI UTSAV, RENT FOR SATSANG PROGRAMME, GURU PO O RNIMA / MAHASHIVRATRI UTSAV, DHARMADHAYA VARGANI, PUJA PRASAD, ETC. THE COMMISSIONER WAS OF THE VIEW THAT THE SAID EXPENDITURES WERE RELIGIOUS IN NATURE AND ALSO THAT THE PERCENTAGE OF SUCH EXPENDITURE FOR ALL THE YEARS EXCEEDED 5% OF THE TOTAL EXPENDITURE, MAKING IT INELIGIBLE FOR GRANT OF REGISTRATION UNDER SECTION 12AA OR APPROVAL UNDER SECTION 80G(5)(VI) OF THE ACT . FURTHER, THE COMMISSIONER ALSO NOTED THAT IN NONE OF THE THREE YEARS THERE WERE RECEIPTS ON ACCOUNT OF SUBSCRI PTION FROM ANY OF THE MEMBER S , IN THE ABSENCE OF WHICH, THE E XISTENCE OF GENUINE SOCIETY REMAINED IN DOUBT. IN VIEW THEREOF, THE COMMISSIONER VIDE LETTER DATED 02.01.2012 G AVE AN OPPORTUNITY TO THE ASSESSEE AS TO WHY REGISTRATION GRANTED UNDER SECTION 12A A OF THE ACT SHOULD NOT BE CANCELLED. THE ASSESSEE FAILED TO FILE ANY REPLY BEFORE THE COMMISSIONER AND IT WAS HELD BY THE COMMISSIONER THAT THE SOCIETY WAS NOT A CHARITABLE INSTITUTION WITHIN THE ITA NO. 66 1 /PN/201 4 SHREE SWATMA BODH SATSANGH 3 MEANING OF SECTION 2(15) OF THE ACT, AS THE SOCIETY HAD IN CURRED EXPENDITURES WHICH WERE OF RELIGIOUS NATURE BEING EXCESS OF 5% AND HENCE, VIOLATED THE PROVISIONS OF SECTION 80 G(5B) OF THE ACT. FURTHER, THE EXISTENCE OF THE GENUINE SOCIETY IN THE ABSENCE OF ANY PROOF OF PAYMENT OF MEMBERSHIP BY THE MEMBERS WAS A LSO IN DOUBT AND HENCE, IT WAS HELD THAT THE SOCIETY WAS NOT ELIGIBLE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. CONSEQUENTLY, THE COMMISSIONER PASSED AN ORDER DATED 31.01.2012 CANCELLING THE ORDER GRANTING REGISTRATION UNDER SECTION 12A OF THE ACT D ATED 31.01.1996 . THE ASSESSEE CHALLENGED THE SAID ORDER BEFORE THE TRIBUNAL, WHICH VIDE APPEAL IN ITA NO.347/PN/2012 , DATED 16.05.2013 SET - ASIDE THE ORDER PASSED BY THE COMMISSIONER CANCELLING THE REGISTRATION GRANTED UNDER SECTION 12A OF THE ACT AND REST ORED THE MATTER BACK TO THE FILE OF COMMISSIONER FOR DECIDING THE SAME AS PER FACT AND LAW, AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN COMPLIANCE TO THE NOTICE ISSUED BY THE COMMISSIONER, THE ASSESSEE FILED WRITTEN SUBMISSIONS ALONG WITH ACCOUNTS EXTRACTS. THE CONTENTION OF THE FILED WRITTEN SUBMISSIONS ALONG WITH ACCOUNTS EXTRACTS. THE CONTENTION OF THE ASSESSEE WAS THAT CERTAIN EXPENSES WERE OF CHARITY ALONE AND CLAIMED THAT BODH CARD WAS A NEWS LETTER MAINLY CONVEYING CHARITABLE ACTIVITIES AND ON ACCOUNT OF APPLICATION OF TRUST FUNDS. FURTHER, THE RENT FOR SATSANG PROGRAMME WAS STATED TO BE INCURRED FOR CONDUCTING MEDITATION TRAINING . AS PER THE EXPENDITURE ON DHARMADHAYA VARGANI, THE SAID EXPENDITURE INCURRED TOWARDS PAYMENT TO CHARITY COMMISSIONER AND THE EXPENDITURE ON PUJA PRASAD WAS DISTRIBUTION OF FOOD AMONGST PEOPLE IRRESPECTIVE OF CASTE AND CREED. FURTHER, EVIDENCE REGARDING EXPENDITURE TOWARDS CONTRIBUTION TO PM NATIONAL RELIEF FUND, CM RELIEF FUND, ETC. WERE ALSO FURNISHED BEFORE THE COMMISSIONER. AS PER THE ASSESSEE, WHERE THE EXPENDITURE WA S CHARITABLE IN NATURE AS IT INVOLVED DISTRIBUTION OF FOOD TO PEOPLE IRRESPECTIVE OF CASTE AND CREED, THE ASSESSEE WAS ENTITLED TO REGISTRATION UNDER SECTION 12A OF THE ACT. THE ITA NO. 66 1 /PN/201 4 SHREE SWATMA BODH SATSANGH 4 COMMISSIONER VIDE PARA 8 HAS TABULATED THE INCOME OF THE RESPECTIVE THREE YEA RS AND ALSO THE EXPENDITURE WHICH WAS TREATED TO BE RELIGIOUS AND HAS COMPUTED THAT THE PERCENTAGE OF EXPENDITURE VIS - - VIS THE TOTAL RECEIPTS WAS WELL OVER THE PRESCRIBED LIMIT OF 5% OF TOTAL INCOME. HOWEVER, AFTER CONSIDERING THE DOCUMENTS AND SUBMISSIO NS OF THE ASSESSEE, THE COMMISSIONER ACCEPTED THE CONTENTION OF THE ASSESSEE TO THE EXTENT OF ABOVE ITEMS EXCEPT ON VASTUSHANTI MAHAPRASAD I.E. ONLY DAKSHINA AND MAHA - SHIVRATRI AND FOUND THAT THE PERCENTAGE ON EXPENDITURE TO THE TOTAL RECEIPTS EVEN AFTER E XCLUDING THE EXPENDITURE INCURRED FOR DISTRIBUTION OF FOOD WAS ABOVE THE PRESCRIBED LIMIT OF 5% . THE COMMISSIONER THUS, HELD AS UNDER: - 14. I HAVE ALSO PERUSED THE ADDITIONAL SUBMISSION DATED 25 - 11 - 2013 , AND THE DOCUMENTS ENCLOSED ALONGWITH. IT IS NOTIC ED THAT THE ASSESSE E HAS NOT SUBSTANTIATED ANYTHING NEW OTHER THAN THAT ALREADY ADVANCED THROUGH HIS EARLIER SUBMISSIONS, AND HAS MERELY REPEATED THAT THE CEREMONIES INVOLVE DISTRIBUTION OF FOODS. DUE TO THE REASONS MENTIONED IN THE PRECEDING PARAS, THIS C ONTENTION HAS ALREADY BEEN CONSIDERED. AS REGARDS TO THE PHOTO - COPIES OF THE LISTS AND SELF MADE VOUCHERS ENCLOSED ALONGWITH THIS LETTER, IT IS SEEN THAT THE SAID LISTS HAVE NO EVIDENTIAL VALUE, DUE TO THE OBVIOUS REASON THAT THEY CANNOT BE SAID TO BE PART OF REGULAR BOOKS/BILLS, ETC MAINTAINED BY THE ASSESSEE, AND ARE MERELY SELF MADE DOCUMENT. ALSO QUITE A FEW ITEMS ASSESSEE, AND ARE MERELY SELF MADE DOCUMENT. ALSO QUITE A FEW ITEMS INCLUDED IN THE LIST ARE INDISPUTABLY OF RELIGIOUS / DUEL SIGNIFICANCE, VIZ. FLOWERS & GARLAND, BANANAS & FRUITS, QH EE,KAPOOR, ASH T A G ANDH, RA NG OLI, POOJA, PRA V ACH ANDA R, POOMA - AHUTI, COCONUT, PRASAD, DAKSHINA, ETC. IT IS ALSO SEEN THAT QUITE A FEW O F THE DOCUMENTS E N CL O SED AS EVI DENCE CONTAINS NOTHING BUT A FEW NUMBERS JOTTED DOWN WITHOUT ANY, NARRATION , DATE, ETC. THEREFORE, THESE DOCUMENTS SE RVE NO PURPOSE I N THE ASSESSEE S DEFENSE . 15. IN VIEW OF THE ABOVE, I HOLD THAT THE CONCLUSION DRAWN BY THE THEN CIT - II, KOLHAPUR, THAT THE ASSESSEE HAS INCURRED EXPENDITURE ON RELIGIOUS PURPOSES IN EXCESS OVER 5% OF TOTAL RECEIPTS, STANDS REVIEWED AS PER THE DIRECTIONS OF THE HON.ITAT, PUNE ISSUED VIDE ORDER DATED 16 - 05 - 2013. ON REVIEW, AND AFTER TAKING INTO CONSIDERATION THE SUBMISSION OF THE ASSESSEE, IT IS FOUND THAT THE EXPENDITURE INCURRED ON RELIGIOUS PURPOSES STILL EXCEED THE PRESCRIBED LIMIT OF 5% OF TOTAL RECEIPTS. THEREFORE, I ARRIVE AT THE CONCLUSION THAT MY PREDECESSOR IN OFFICE WAS RIGHT IN CANCELLING THE REGISTRATION GRANTED U/S 12 AA ON 24 - 08 - 1996 U/S 12AA(3) DT. 21 - 11 - 20 11 . CONSEQUENTLY THE REGISTRATION DATED 24 - 08 - 199 6 OF THE TRUST STANDS CANCELLED. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF COMMISSIONER. 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE REGISTRATION GRANTED TO THE ASSESSEE UNDER SECTION 12A OF THE ACT WAS ITA NO. 66 1 /PN/201 4 SHREE SWATMA BODH SATSANGH 5 WITHDRAWN BY PASSING AN ORD ER UNDER SECTION 12AA(3) OF THE ACT. IT WAS FURTHER POINTED OUT BY HIM THAT THE SAID WITHDRAWAL WAS ON ACCOUNT OF EXPENDITURE ON RELIGIOUS ACTIVITIES BEING MORE THAN 5%. OUR ATTENTION WAS DRAWN TO THE OBSERVATIONS OF COMMISSIONER IN PARAS 14 AND 15 OF TH E ORDER PASSED UNDER SECTION 12AA(3) OF THE ACT. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER REFERRING TO THE PROVISIONS OF THE ACT, POINTED OUT THAT SUCH WITHDRAWAL OF REGISTRATION COULD BE MADE ONLY WHERE THE ACTIVITIES OF THE TRUST W ERE NOT GENUINE OR WERE NOT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE OBJECTS OF THE TRUST, WHICH ARE PLACED AT PAGE 11A OF THE PAPER BOOK AND REFERENCE WAS MADE TO THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. DAWOODI BOHRA JAMAT (2014) 364 ITR 31 (SC) . FURTHER, REFERENCE WAS MADE TO THE RATIO S LAID DOWN BY CHENNAI BENCH OF TRIBUNAL IN SHINE EDUCATIONAL AND SOCIAL WELFARE TRUST VS. CIT (2015) 38 ITR (TRIB) 634 (CHENNAI) , PUNE BENCH OF TRIBUNAL IN SHRI JAIN SHWETAMBER MURTIPUJAK SANGH VS. CIT & ANOTHER IN ITA NOS.1353/PN/2014 AND 1890/PN/2014 , ORDER DATED 31.03.2015 AND HONBLE HIGH COURT OF ALLAHABAD IN CIT VS. SRI RADHA RAMAN NIWAS TRUST (2014) 42 TAXMANN.COM 7 7 (ALLAHABAD) . 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACING RELIANCE ON THE ORDER OF COMMISSIONER POINTED OUT THAT WHERE THE ACTIVITIES WERE NOT CARRIED OUT AS PER THE OBJECTS OF THE TRUST, NO REGISTRATION COULD BE CONTINUED TO BE GI VEN TO THE ASSESSEE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE TRUST WAS GRANTED REGISTRATION UNDER SECTION 12A OF THE ACT BY THE ORDER OF COMMISSIONER DATED 31.10.1996 W.E.F. 01.04.1996. SIMULTANEOUSLY, ITA NO. 66 1 /PN/201 4 SHREE SWATMA BODH SATSANGH 6 THE APPROVAL WA S ALSO GRANTED UNDER SECTION 80G(5) OF THE ACT FROM TIME TO TIME. HOWEVER, ON A LATER DATE, THE COMMISSIONER CANCELLED THE REGISTRATION OF THE TRUST VIDE ORDER DATED 31.01.2012 AS THE PERCENTAGE OF EXPENDITURE FOR THE YEARS EXCEEDED 5% OF THE TOTAL RECEIP TS. ON THE MATTER BEING SET - ASIDE BY THE TRIBUNAL VIDE ORDER DATED 16.05.2013, THE COMMISSIONER WHILE PASSING THE ORDER UNDER SECTION 12AA(3) R.W.S. 254 OF THE ACT DATED 18.02.2014 CONFIRMED THE CANCELLATION OF REGISTRATION UNDER SECTION 12AA(3) OF THE AC T FOR THE REASON THAT EVEN AFTER EXCLUDING CERTAIN EXPENDITURE BEING FOR CHARITABLE PURPOSES, THE BALANCE EXPENDITURE INCURRED ON RELIGIOUS PURPOSE STILL EXCEEDED THE PRESCRIBED LIMIT OF 5% TO TOTAL RECEIPTS AND CONSEQUENTLY, THE ORDER CANCELLING THE REGIS TRATION UNDER SECTION 12AA(3) OF THE ACT WAS PASSED. THE ISSUE ARISING BEFORE US IS AGAINST SUCH CANCELLATION OF REGISTRATION BY INVOKING THE PROVISIONS OF SECTION 12AA(3) OF THE ACT. 10. UNDER SUB - SECTION (3) TO SECTION 12AA OF THE ACT, IT IS PROVIDED THAT WHERE A TRUST OR AN INSTITUTION HAD BEEN GRANTED REGISTRATION UNDER SUB - SECTION WHERE A TRUST OR AN INSTITUTION HAD BEEN GRANTED REGISTRATION UNDER SUB - SECTION (1B) OR UNDER SECTION 12A OF THE ACT AS IT STOOD BEFORE THE AMENDMENT BY THE FINANCE (NO.2) ACT, 1996 AND SUBSEQUENTLY, THE PRINCIPAL COMMISSIONER OR COMMISSIONER IS SATI SFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT 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 CANCELLING THE REGISTRATION OF SUCH TRUST OR INSTITUTION. UNDER THE SAID PROVISION, THE COMMISSIONER ON SATISFACTION THAT THE ACTIVITIES OF THE TRUST WERE NOT GENUINE OR WERE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS, IS EMPOWERED TO CANCEL THE REGISTRATION OF SUCH TRUST OR INSTITUTION , BY AN ORDER IN WRITING. 1 1 . THE ASSESSEE HAS FILED A MEMORANDUM OF ASSOCIATION, UNDER WHICH THE OBJECTS OF THE SOCIETY / TRUST ARE ENLISTED, WHICH READ AS UNDER: - ITA NO. 66 1 /PN/201 4 SHREE SWATMA BODH SATSANGH 7 3] OBJECTS OF THE SOCIETY : A] MAKE HUMAN LIFE HAPPY, PROSPEROUS AND RICH BY THE WAY OF BH A KTI MARG UPASANA . B] CANVASS AND SPREAD BHAKTI MARG THROUGH THE MEDIUM OF PRAVACHAN, KIRTAN, BHAJAN, LECTURES, SEM INARS, MEDITATION, SATSANG ETC. C] PURCHASE MOVEABLE AND IMMOVABLE PROPERTY / IES FOR CANVASSING AND SP READING OF BHAKTI MARG UPASANA . D] TO ARRANGE NECESSARY PROGRAMES AS PER THE NEED OF THE TIMES TO CANVASS AND SPREAD BHAKTI MARG UPASANA. E] TO MAKE ALL TYPES OF EFFORTS ON BEHALF OF SATSANG. TO PROMOTE PEACE, NATIONAL INTEGRITY, HARMONY AMONG ALL RELIGION, HONESTY, PHILANTHROPY , F EE L ING OF LOVE AND AFFECTION AMONGST EACH OTHER OF THE PEOPLE OF THE COMMUNITY. SO ALSO TO MAKE ALL EFFORTS FOR THE GRO W TH OF SUCH QUALITY. F] ARRANGE O N BEHALF OF SATSANG LECTURES, PRAVACHAN, BHAJAN, KIRTAN AT THE TIME OF PUBLIC FESTIVALS AND GUIDE TH E PEOPLE AND SPREAD KNOWLEDGE AND IMPORTANCE OF ADHYATAM. G] TO PROVIDE ALL TYPES OF INFORMATION TO NEEDY, POOR, AND CLEVER STUDENTS, DISABLED, OLD AND SHELTERLESS AND I MPART EDUCATION, FINANCIAL, MEDICAL FACILITIES ON BEHALF OF SATSANG. H] TO - CELEBR ATE NATIONAL AND CULTURAL FESTIVAL ON BEHALF OF SATSANG AND GUIDE THE PEOP L E FOR THEIR IMPORTANCE. G] TO REMOVE BLIND RELIGIOUS FAITH , BAD AND HARMFUL CUSTOMS, TRADITIONS [ACCEPTANCE, PAYMENT OF DOWRY, OFFERING KILLING OF HUMAN BODY, REM OV ING TRADITION OF DEVDASI, CUSTOMS OF REMOVING THEIR HEIRS], REMOVING HABITS OF DRINKING, DRUG ADDICTION AND PROMOTE, CONDUCT, SPONSOR ADULT EDUCATION PROGRAMME, WOMEN WELFARE PROGRAMME, FAMILY PLANNING PROGRAMME ETC. PLANNING PROGRAMME ETC. H] CONSTRUCT A BID HALL FOR CULTURAL PROGRAMMES AN D CONDUCT ALL TYPES OF CULTURAL PROGRAMMES THEREIN. I] GRANT HELP TO POOR AND NEEDY AND DESERVING PERSON, IN TERMS OF NATURAL CALAMITY LIKE FLOOD, FAMINE, EARTH QUAKE ETC. ON BEHALF OF SATSANG. J] HONOURING , DESERVING WISE PEOPLE OF SOCIETY, TO CREAT E MONUMENTS OF NATIONAL LEADERS, AND ARRANGE EDUCATIONAL AND HEALTH CAMP, ARRANGE LECTURES OF STUDIOUS PEOPLE ON BEHALF OF SATSANG. K] TO CONDUCT SANSKAR CLASS AND SPREAD T HE PHILOSOPHY OF NON - VIOLENCE AMONGST THE PEOPLE. L] TO PROVIDE SHELTER FOR HEL PLESS DESTITUTES, WIDOW AND ALSO ARRANGE SHELTER FOR OLD AND SICK PEOPLE ON BEHALF OF SATSANG. 1 2 . THE SAID OBJECTS WERE FOUND TO BE CHARITABLE IN NATURE, CONSEQUENT TO WHICH, THE ASSESSEE WAS GRANTED REGISTRATION BY THE COMMISSIONER VIDE ITS INITIAL ORD ER DATED 31.10.1996 W.E.F. 01.04.1996 . IT IS NOT THE CASE OF COMMISSIONER THAT THE OBJECTS OF THE TRUST HAVE NOT BEEN CARRIED OUT AND IT IS ALSO NOT THE CASE OF THE COMMISSIONER THAT THE ASSESSEE HAS NOT CARRIED OUT ITA NO. 66 1 /PN/201 4 SHREE SWATMA BODH SATSANGH 8 ITS ACTIVITIES IN LINE WITH ITS OBJECTS . THE OBJECTION RAISED BY THE COMMISSIONER WHILE WITHDRAWING REGISTRATION GRANTED UNDER SECTION 12A OF THE ACT IS THAT THE ASSESSEE HAD INCURRED EXPENDITURE ON RELIGIOUS PURPOSE IN EXCESS OVER 5% OF THE TOTAL RECEIPTS. THE PERUSAL OF THE PROVISIONS OF SE CTION 11 OF THE ACT REFLECT S THAT THE INCOME FROM PROPERTY HELD FOR CH ARITABLE OR RELIGIOUS PURPOSES CAN BE EXEMPTED FROM TAX, SUBJECT TO FULFILLMENT OF CERTAIN CONDITIONS AND ONE SUCH CONDITION IS THE REGISTRATION TO BE OBTAINED BY WAY OF MAKING AN APPLIC ATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRESCRIBED FORM AND IN THE PRESCRIBED MANNER UNDER SECTION 12A OF THE ACT. ON RECEIPT OF SUCH APPLICATION FOR REGISTRATION OF TRUST OR INSTITUTION MADE UNDER SECTION 12A OF THE ACT, THE COMMISSIONE R IS TO CALL FOR SUCH DOCUMENTS OR INFORMATION, AS HE THINKS NECESSARY, IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTITUTION AND AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR THE INSTITUTION AND GENUI NENESS OF THE ACTIVITIES, THE COMMISSIONER IS TO PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION. IN CASE, HE IS SO NOT SATISFIED, THEN THE COMMISSIONER SHALL PASS AN ORDER REFUSING TO REGISTER THE TRUST OR INSTITUTION. IN THE CASE OF THE A SSESSEE AS REFERRED TO BY US IN THE PARAS HEREINABOVE, THE ASSESSEE WAS GRANTED REGISTRATION UNDER SECTION 12A OF THE ACT . IN OTHER WORDS, THE COMMISSIONER WAS SATISFIED ABOUT THE OBJECTS OF THE TRUST AND ALSO THE GENUINENESS OF THE ACTIVITIES CARRIED ON BY THE TRUST. ONCE SUCH REGISTRATION HAS BEEN GRANTED TO A TRUST, THE SAME CAN BE CANCELLED BY THE COMMISSIONER IN EXERCISE OF THE POWERS UNDER SUB - SECTION (3) TO SECTION 12AA OF THE ACT, WHERE HE HAS TO BE SATISFIED THAT THE ACTIVITIES OF THE TRUST OR IN STITUTION WERE NOT GENUINE OR WERE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. SECTION 13 THEREUNDER , LAYS DOWN THE CONDITIONS WHERE THE PROVISIONS OF SECTION 11 ARE NOT TO BE APPLIED IN CERTAIN CASES I.E. THE CONDITI ONS TO BE LOOKED INTO BY THE ASSESSING OFFICER WHILE GRANTING THE DEDUCTION TO THE TRUST OR ITA NO. 66 1 /PN/201 4 SHREE SWATMA BODH SATSANGH 9 THE INSTITUTION, WHILE COMPUTING THE INCOME IN THE HANDS OF THE SAID TRUST, WHICH IS REGISTERED BY THE COMMISSIONER UNDER SECTION 12A OF THE ACT. THE ROLE OF THE C OMMISSIONER WHILE GRANTING THE REGISTRATION OR WHILE CANCELLING THE REGISTRATION IS LIMITED TO BE SATISFIED THAT THE ACTIVITIES OF THE TRUST ARE GENUINE AND ARE BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION . IN THE FACTS OF THE PRESENT CASE BEFORE US, THE REASON FOR CANCELLING THE REGISTRATION IS THE FINDING OF THE COMMISSIONER THAT THE ASSESSEE HAD OVER THE PERIOD OF THREE YEARS INCURRED EXPENDITURE ON RELIGIOUS PURPOSE, IN EXCESS OVER 5% OF TOTAL RECEIPTS. CERTAIN EXPENDIT URE WAS FOUND TO HAVE BEEN INCURRED BY THE ASSESSEE IN LINE WITH THE ACTIVITIES TO BE CARRIED ON BY THE SAID TRUST. IN VIEW OF THE POWERS CONFERRED UPON THE COMMISSIONER BY SECTION 12AA(3) OF THE ACT, WHERE THE SATISFACTION HAS TO BE RECORDED BY THE COMMI SSIONER THAT THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE NOT GENUINE AND WERE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST, MERELY BECAUSE CERTAIN EXPENDITURE WAS INCURRED ON RELIGIOUS PURPOSE, DOES NOT WARRANT CANCELLATION OF REGIS TRATION GRANTED TO THE SAID TRUST OR INSTITUTION. WE FIND NO MERIT IN THE ORDER OF THE COMMISSIONER PASSED IN THIS REGARD. THE CHENNAI BENCH OF TRIBUNAL IN SHINE EDUCATIONAL AND SOCIAL WELFARE TRUST VS. CIT (SUPRA) ON INTERPRETATION OF THE PROVISIONS OF SECTION 12AA(3) OF THE ACT HAD HELD AS UNDER: - 4 . WE HAVE HEARD BOTH SIDES AND PERUSED THE CASE FILE. THE COMMISSIONER OF INCOME - TAXS ORDER HAS BEEN PASSED EX PARTE. THE ASSESSEE SUBMITS NOT TO HAVE RECEIVED THE COMMISSIONER OF INCOME - TAXS NOTICE PRO POSING CANCELLATION OF REGISTRATION. HE HAS PROCEEDED TO CANCEL ITS REGISTRATION FOR NON - FILING OF RETURN. A PERUSAL OF SECTION 12AA(3) MAKES IT CLEAR THAT SUCH A POWER CAN BE EXERCISED ONLY IF THE CONCERNED CHARITABLE TRUSTS OR INSTITUTIONS ACTIVITIES NOT GENUINE OR ARE NOT BEEN CARRIED OUT IN ACCORDANCE WITH ITS OBJECTS AS THE CASE MAY BE. NEEDLESS TO SAY, NON - FILING OF A RETURN DOES NOT FIND A MENTION AS A CAUSE FOR CANCELLATION OF SECTION 12AA REGISTRATION. ITA NO. 66 1 /PN/201 4 SHREE SWATMA BODH SATSANGH 10 1 3 . IN VIEW THEREOF, WE REVERSE THE OR DER OF COMMISSIONER AND HOLD THAT THE REGISTRATION GRANTED TO THE ASSESSEE VIDE ORDER DATED 31.10.1996 CONTINUES AND THE ASSESSEE CONTINUES TO BE REGISTERED UNDER SECTION 12A OF THE ACT. 1 4 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER P RO NOUNCED ON THIS 8 TH DAY OF JULY , 201 5 . SD/ - SD/ - ( R.K. PANDA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 8 TH JU LY , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / T HE APPELLANT ; 2. / THE RESPONDENT; 3 . / THE CIT II, KOLHAPUR ; 4 . , , / DR A , ITAT, PUNE; 5 . / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE