Bharat Jyoti, Lucknow V. CIT, Lucknow

ITA 723/LKW/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9091 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-03-2011
• Assessment Year: misc
• Appeal Filed On: 07-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANADI VERMA
• Keywords: Business income; Charitable institution; Cancellation of registration
• Section: 80G; 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A - BENCH, LUCKNOW. BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI, ACCOUNTANT MEMBER I.T.A.NO.723(LKW.)/2010 BHARAT JYOTI, VS. CIT-I, 46, DIAMOND DAIRY, LUCKNOW. KABIR MARG (CLAY SQUAR), LUCKNOW. PAN AAATB4208M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH GARG, ADVOCATE RESPONDENT BY : SHRI ANADI VERMA, SR.D.R. O R D E R PER N.K.SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE O RDER DATED 13.10.2010 OF THE LD.CIT(A)-I, KANPUR. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS A PPEAL: 01 BECAUSE THE COMMISSIONER OF INCOME TAX-I, LUCKN OW HAS ERRED ON FACTS AND IN LAW IN CANCELLING THE REGISTRATION GRANTED TO THE ASSESSEE SOCIETY U/S 12A OF THE ACT,(BEING REGISTRA TION NO. 135/98-99 DATED 01.04.1990) WHICH ORDER IS CONTRARY TO THE PROVISIONS OF LAW AND BE QUASHED. 02. BECAUSE THE COMMISSIONER OF INCOME TAX HAS FAIL ED TO APPRECIATE THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAS MISINTERPRETED THE PROVISIONS OF SECTION 12AA(3) OF THE I.T.ACT, 2 1961, THEREBY ERRONEOUSLY CANCELLING THE REGISTRATI ON GRANTED TO THE APPELLANT TRUST U/S 12A OF THE I.T. ACT, 196 1. 0.3 BECAUSE IT IS NOT THE CASE OF CIT THAT THE ACTI VITIES OF THE SOCIETY ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN AC CORDANCE WITH THE OBJECTS OF THE SOCIETY, HENCE THE ORDER PA SSED BY THE CIT, CANCELING THE REGISTRATION IS VOID AB INITIO. 04. BECAUSE THE COMMISSIONER OF INCOME TAX HAS ERRE D ON FACTS AND IN LAW IN ARBITRARILY HOLDING THAT THE OBJECTS OF THE TRUST ARE NOT CHARITABLE WHEREAS, THE ACTION U/S 12AA(3) CAN ONLY BE INVOKED WHEN THE ACTIVITIES ARE NOT IN ACCORDANCE W ITH THE OBJECTS. THE ORDER PASSED BY THE COMMISSIONER OF I NCOME TAX CANCELLING THE REGISTRATION IS ERRONEOUS, MISCONCEI VED, BAD IN LAW AND BE QUASHED. 05. BECAUSE THE ORDER PASSED BY THE CIT-I BE CANCE LLED AND THE CIT-I BE DIRECTED TO RESTORE THE REGISTRATION GRANT ED U/S 12A OF THE ACT, 1961. 3. FROM THE ABOVE GROUNDS, IT WOULD BE CLEAR THAT THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE CANCELL ATION OF REGISTRATION ALREADY GRANTED TO THE ASSESSEE UNDER SECTION 12A OF THE I. T.ACT,1961. 4. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE A SSESSEE IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT,18 60 AND WAS GRANTED REGISTRATION UNDER SECTION 12A OF THE I.T.ACT, 1961 W.E.F. 1.4.1990 VIDE ORDER DATED 9.2.1999. DURING THE COURSE OF PROCEEDI NGS UNDER SECTION 80G OF THE I.T.ACT, THE LD.CIT NOTICED THAT THE ASSESSE E-SOCIETY HAS CREDITED LIC COMMISSION TO THE INCOME AND EXPENDITURE ACCOUNT, WHICH WAS PROFESSIONAL INCOME, BUT NO SEPARATE BOOKS OF ACCOU NTS HAD BEEN MAINTAINED 3 FOR THE SAME. HE, THEREFORE, WAS OF THE VIEW THAT THE SAID ACTION OF THE ASSESSEE WAS IN CONTRAVENTION TO THE PROVISIONS O F SECTION 12A OF THE ACT. HE ALSO OBSERVED THAT THE ASSESSEE-SOCIETY REVISED SMRITI PATRA AND ITS OBJECTS WITH EFFECT FROM 1.4.2004 WITHOUT THE PERMI SSION OF THE DEPARTMENT. HE ALSO POINTED OUT THAT OBJECT AT CLAUSE 7 OF THE REVISED SMRITI PATRA OF THE ASSESSEE-SOCIETY WAS FOR WELFARE AND PROGRESS OF PERSONS BELONGING TO MINORITIES, SC/ST/OBCS ETC., THEREFORE, THE ASSESS EE-TRUST WAS CREATED FOR THE BENEFIT OF A PARTICULAR COMMUNITY. ON THE SAI D BASIS, THE LD.CIT PROPOSED TO WITHDRAW THE REGISTRATION GRANTED TO TH E ASSESSEE UNDER SECTION 12A ACCORDINGLY, HE ISSUED A NOTICE ON 19.8.2010 T O THE ASSESSEE ASKING IT TO EXPLAIN AS TO WHY THE REGISTRATION GRANTED UNDER SECTION 12A SHOULD NOT BE WITHDRAWN. IN RESPONSE TO THE SAID NOTICE, THE A SSESSEE VIDE WRITTEN REPLY DATED 6.10.2010 STATED AS UNDER : IN THE SHOW CAUSE NOTICE DATED 19.08.2010, TWO OBJ ECTIONS HAVE BEEN RAISED, FIRST, IT HAS BEEN MENTIONED THAT IT APPEAR S THAT NO SEPARATE BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED IN RESPECT O F INCOME EARNED FROM LIC COMMISSION. INCOME FROM LIC COMMISSION IS A BUSINESS INCOME AND NOT PROFESSIONAL INCOME AS CONSTRUED AND IS ACCOUNTED FOR SEPARATELY IN THE BOOKS OF ACCOUNT MAINTAINED. RATHER INCOME AND EXPENDITURE ACCOUNT AS MAINTAINED SEPARATELY IS BEI NG FILED HEREWITH. HOWEVER THE ACCOUNTS ARE AUDITED ON CONSOLIDATED BA SIS. IT IS SUBMITTED THAT SEPARATE BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED AND ARE BEING PRODUCED HEREWITH. ACCORDINGLY, IT IS PRA YED THAT THERE IS NO CONTRAVENTION OF THE PROVISIONS OF SECTION 12 OF TH E ACT. AS PER THE AMENDED SMRITI PATRA CLAUSES 6, 7 & 22 OF THE OBJECTS THE ACTIVITY OF THE SOCIETY IS TO HELP THE UNEMPLOYED P ERSONS IN CARRYING OUT EMPLOYMENT ON SELF EMPLOYMENT BASIS IRRESPECTIV E OF ANY CASTE, CREED AND RELIGION, HENCE IT CANNOT BE SAID THAT TH E SOCIETY IS CARRYING OUT ACTIVITY FOR A PARTICULAR RELIGION. ACCORDINGLY , THE EARNING OF COMMISSION FROM LIC IS INCIDENTAL TO THE OBJECTS OF THE SOCIETY. AS REGARDS THE PERMISSION FROM THE DEPARTMENT, BEFORE GOING IN FOR AMENDED SMRITI PATRA, THE ASSESSEE SOCIETY WAS UNDE R A BONAFIDE 4 BELIEF THAT NO PERMISSION WAS REQUIRED AND AT THE S AME TIME ONLY COMPLIANCE WITH THE REGISTRAR OF SOCIETY WAS TO BE DONE, SAID CLAUSE DOES NOT DEAL ONLY WITH ANY ONE PARTICULAR COMMUNIT Y. NEEDLESS TO MENTION THAT THERE CANNOT BE A PARTICULAR COMMUNIT Y CONSISTING OF ALL DIFFERENT CLASS OF PERSONS. A COMMUNITY IS A SECTI ON OF PUBLIC AND THE SOCIETY CREATED FOR GIVING MEDICAL AID, SOCIAL WEL FARE, UPLIFTING OF POOR MEMBERS OF A PARTICULAR COMMUNITY HAVE ALL BEE N HELD TO BE CHARITABLE AND ELIGIBLE OF EXEMPTION. 4.1 THE LD.CIT, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSEE SIDESTEPPED THE CENTRAL ISSUE RAISED IN THE SHOW CAUSE NOTICE AND HAD NOT GIVEN ANY REPLY FOR GETTIN G ITS OBJECTS CHANGED WITHOUT PERMISSION. HE FURTHER OBSERVED THAT IN THE REVISED OBJECT THE CLAUSE 7 IS MEANT FOR MINORITIES ALONGWITH THE OTHER COMM UNITIES, WHICH IS NOT IN A CHARITABLE NATURE. HE ALSO OBSERVED THAT THE ASSE SSEE HAD NOT MAINTAINED SEPARATE ACCOUNT WITH REGARD TO LIC COMMISSION (PRO FESSIONAL INCOME). ACCORDINGLY, REGISTRATION ALREADY GRANTED UNDER SE CTION 12A OF THE I.T.ACT WAS WITHDRAWN BY INVOKING THE PROVISIONS OF SECTION 12AA(3) OF THE I.T.ACT. RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION VS . CIT, GUJARAT, 82 ITR 704. 5. NOW, THE ASSESSEE IS IN APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE GOT THE REGISTRATION UNDER SECTION 12A WITH EFFECT FROM 1. 4.1990 VIDE ORDER DATED 9.2.1999. AT THE TIME OF THE GRANTING THE REGISTR ATION, THE LD.CIT WAS SATISFIED WITH THE ACTIVITIES OF THE ASSESSEE AND THERE IS NO FURTHER CHANGE IN 5 THE OBJECTS. IT WAS FURTHER SUBMITTED THAT THE OBJ ECTS OF THE ASSESSEE-SOCIETY REMAINED THE SAME EXCEPT THAT THE EARLIER MEMORAND UM WAS IN ENGLISH, BUT NOW HAS BEEN TRANSLATED INTO HINDI BUT THE OBJECTS REMAINED CHARITABLE IN NATURE. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE MAINTAINED SEPARATE BOOKS WITH REGARD TO INCOME FROM LIC COMMISSION AND THOS E BOOKS WERE PRODUCED BEFORE THE LD.CIT ALSO, WHO HAS NOT COMMEN TED ON THE WRITTEN SUBMISSIONS OF THE ASSESSEE WHEREIN THIS FACT WAS D ULY MENTIONED. IT WAS FURTHER SUBMITTED THAT THE LD. CIT INVOKED THE PRO VISIONS OF SECTION 12AA(3) OF THE I.T.ACT, WHICH RELATES TO THE OBJECT S OF THE ASSESSEE AND AS THE ACTIVITIES UNDERTAKEN BY THE ASSESSEE WERE IN ACCORDANCE WITH THE OBJECTS MENTIONED IN THE MEMORANDUM OF THE ASSESSEE , THEREFORE, THE LD.CIT WAS NOT JUSTIFIED IN CANCELLING THE REGISTRATION AL READY GRANTED TO THE ASSESSEE BY CONSIDERING THE SAME OBJECTS TO BE NON -CHARITABLE IN NATURE. IT WAS FURTHER SUBMITTED THAT THE LD.CIT WAS HAVING TH E POWERS TO SEE THE OBJECTS BUT NOTHING IS BROUGHT ON RECORD THAT THE OBJECTS OF THE ASSESSEE WERE NOT CHARITABLE IN NATURE AND THAT DOING THE WO RK FOR THE MINORITIES OF DIFFERENT CLASS OF PEOPLE WAS A CHARITABLE ACTIVITY NOT FOR A PARTICULAR COMMUNITY, BUT FOR PUBLIC AT A LARGE. HE, THEREFO RE, SUBMITTED THAT THE LD. CIT WAS NOT JUSTIFIED IN CANCELING THE REGISTRATI ON ALREADY GRANTED UNDER SECTION 12AA OF THE I.T. ACT. RELIANCE WAS PLACED O N THE FOLLOWING CASE LAWS: (I). CHATURVEDI HAR PRASAD EDUCATIONAL SOCIETY VS. CIT (2010) 46 DTR (LUCKNOW)(TRIB.) 121, (II). H.P.GOVERNMENT ENERGY DEVELOPMENT AGENCY VS. CIT (2010) 46 DTR (CH.)(TRIB.) 126. 6 7. IN HIS RIVAL SUBMISSIONS, THE LD.D.R. STRONGLY S UPPORTED THE ORDER OF THE LD.CIT AND FURTHER SUBMITTED THAT THE ASSESSEE CHANGED THE OBJECTS, THEREFORE, THE LD.CIT WAS FULLY JUSTIFIED IN WITHDR AWING THE REGISTRATION BY INVOKING THE PROVISIONS OF SECTION 12AA(3) OF THE I .T.ACT. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN TH E PRESENT CASE, IT APPEARS THAT THE LD. CIT CANCELLED THE REGISTRATION ALREADY GRANTED TO THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 12AA(3) OF THE I .T.ACT ON TWO GROUNDS- (I) THE ASSESSEE HAD NOT MAINTAINED SEPARATE BOOKS OF ACCOUNTS IN RESPECT OF LIC COMMISSION. (II) AS PER CLAUSE 7 OF THE MEMORANDUM, THE OBJECT OF THE ASSESSEE WAS MEANT FOR WELFARE AND PROGRESS OF PERSONS, WHO ARE DEAF AND DUMB, HANDICAPPED, BLIND, WIDOWS, OLD AGED, UNE MPLOYED HAVING NO-ONE TO SUPPORT, SCHEDULED CASTES, SCHEDUL ED TRIBES, MINORITIES, BACKWARDS, AND EXPLOITED PERSONS. THE ABOVE CLAUSE REPRESENTS A PARTICULAR COMMUNITY. AS REGARDS TO THE FIRST OBJECTION OF THE LD.CIT IS CONCERNED, THE ASSESSEE VIDE REPLY DATED 6.10.2010 CATEGORICALLY STATED TO THE LD.CIT THAT SEPARATE BOOKS OF ACCOUNTS HAD BEEN MAINTAINED IN RESPECT O F THE INCOME FROM LIC COMMISSION. THOSE BOOKS WERE PRODUCED BEFORE THE L D.CIT AND NO COMMENTS HAVE BEEN GIVEN ON THE SAID BOOKS. AS REG ARDS TO THE SECOND OBJECTION OF THE LD.CIT IS CONCERNED, THE PERSONS M ENTIONED IN CLAUSE 7 DO NOT BELONG TO A PARTICULAR COMMUNITY AND NOTHING HA S BEEN BROUGHT ON RECORD THAT THE ACTIVITIES OF THE ASSESSEE WERE NOT FOR THE WELFARE OF THOSE PERSONS. FURTHERMORE, THE REVENUE CANNOT TAKE A VE RY NARROW MEANING OF 7 THE WORD MINORITY AS HAS BEEN OBSERVED IN THE ORD ER DATED 23.6.2010 OF THE I.T.A.T., LUCKNOW BENCH B IN THE CASE OF M/S.R.B .N.SOCIAL & EDUCATIONAL SOCIETY VS. CIT, LUCKNOW IN ITA NO.169( LUC.)/2010, WHEREIN THE FOLLOWING OBSERVATIONS HAVE BEEN GIVEN IN PARAS 5 TO 7: 5. WE HAVE CAREFULLY CONSIDERED THE ISSUE IN VIEW OF THE MATERIAL PLACED ON RECORD AND RIVAL SUBMISSIONS. IN THE CAS E OF UMED CHARITABLE TRUST {UMED CHARITABLE TRUST VS. UNION O F INDIA AND OTHERS [2008] 307 ITR 226(RAJ.)},IT HAS BEEN HELD A S UNDER: (HEAD NOTE) THE LINE OF DISTINCTION BETWEEN RELIGIOUS PURPOSES AND CHARITABLE PURPOSES IS VERY THIN AND NO WATERTIGHT COMPARTMENT BETWEEN THE TWO ACTIVITIES CAN BE ESTABLISHED. UNLE SS THE OBJECTIVE OF THE CHARITABLE TRUST IN QUESTION ITSEL F IS TO SPEND ITS INCOME FOR A PARTICULAR RELIGION AND IT IS SO FOUND IN THE TRUST DEED, THE INCOME-TAX DEPARTMENT CANNOT REJECT THE R ENEWAL OF THE TRUST AS CHARITABLE TRUST UNDER SECTION 80G OF THE INCOME- TAX ACT, 1961, MERELY BECAUSE ONE PARTICULAR EXPEND ITURE IS FOR AN ACTIVITY WHICH MAY BE TERMED AS SPENDING FOR A P ARTICULAR RELIGION. 6. IN THE CASE OF SRI MARUDHAR KESARI STHANAKWASI J AIN JADGAR SAMITI TRUST (SUPRA) {SRI MARUDHAR KESARI STHANAKWA SI JAIN JADGAR SAMITI TRUST VS. UNION OF INDIA AND OTHERS [2005] 2 73 ITR 475} IT HAS BEEN HELD THAT THE MERE FACT THAT INSIGNIFICANT AM OUNT HAD BEEN SPENT ON RELIGIOUS CHARITY, DID NOT ENTIRE THE DONORS TO CLAIM DEDUCTION UNDER SECTION 80G. 7. THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE A SSESSEE THAT THE AFORESAID DECISIONS ARE NOT APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE CANNOT ALSO BE ACCEPTED FOR THE REASON THA T THE CIT HIMSELF HAD RELIED ON THE PROVISIONS OF EXPLANATION 3 TO S ECTION 80G OF THE ACT. IT IS VERY CLEAR FROM THE DECISION CITED ABOV E AND THE DECISION IN VARIOUS OTHER CASES REFERRED TO BY THE HON'BLE RAJA STHAN HIGH COURT THAT THE REVENUE CANNOT TAKE A VERY NARROW MEANING OF THE WORDS MINORITY STUDENTS USED IN THE OBJECT CLAUSE OF TH E ASSESSEE SOCIETY. THE OBJECT IS SUBSTANTIALLY FOR IMPARTING EDUCATI ON IN VARIOUS FIELDS TO THE POOR STUDENTS AND THE OBJECTS WERE NOT RES TRICTED TO THE BENEFIT 8 OF ONLY THE STUDENTS OF A PARTICULAR RELIGIOUS M INORITY. IT IS ALSO OBSERVED THAT THE SC/ST AND OBC CATEGORIES ARE MAI NLY HINDUS AND INCLUDING THE WORD MINORITY STUDENTS HAS MADE THE OBJECT LARGER TO COVER THE POOR STUDENTS OF ALL COMMUNITIES. IT WOUL D NOT ALSO PROPER TO GIVE A RESTRICTED MEANING TO THE WORDS MINORITY TO MEAN ONLY THE STUDENTS OF A PARTICULAR MINORITY COMMUNITY BECAUSE THE MINORITY STUDENTS MAY BELONG TO EVEN ETHNIC AND CULTURAL MIN ORITY. THUS, IN OUR CONSIDERED OPINION, THE SOCIETY IS FOR GENERAL PUBL IC UTILITY AND ITS OBJECTS ARE CHARITABLE IN NATURE AS PER THE PROVISI ONS OF SECTION 2(15)OF THE I.T.ACT. WE ARE, THEREFORE, OF THE CONS IDERED OPINION THAT THE RELIABLE ON EXPLANATION 3 TO SECTION 80G OF THE I.T. ACT BY THE LEARNED CIT IS NOT CORRECT AND, THEREFORE, HIS DECI SION TO REFUSE REGISTRATION TO THE ASSESSEE SOCIETY UNDER SECTION 12AA OF THE ACT CANNOT BE SUSTAINED. THE REVENUE IS DIRECTED TO GRA NT REGISTRATION TO THE SOCIETY UNDER SECTION 12AA OF THE ACT. THE APPE AL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 8.1 WE, THEREFORE, RESPECTFULLY FOLLOWING THE AFORE SAID REFERRED TO ORDER OF THE VIEW THAT THE PERSONS INCLUDED IN S.C.,S.T. AN D OBC CATEGORIES DO NOT BELONG TO A PARTICULAR COMMUNITY, RATHER REPRESENT MANY COMMUNITIES OF THE SOCIETY. FURTHERMORE, THE LD.CIT DID NOT BRING ANY MATERIAL ON RECORD TO SUBSTANTIATE THAT THERE WAS ANY CHANGE IN THE OBJE CTS OF THE ASSESSEE FROM THE DATE WHEN THE REGISTRATION WAS ALREADY GRANTED UNDER SECTION 12A OF THE I.T.ACT OR THAT THE ACTIVITIES WERE NOT IN ACCORDAN CE WITH THOSE OBJECTS, WHICH WERE ALREADY EXAMINED BY THE LD.CIT WHILE GRA NTING THE REGISTRATION UNDER SECTION 12A OF THE I.T.ACT. IN THE PRESENT CA SE, THE LD.CIT INVOKED THE PROVISIONS OF SECTION 12AA(3) OF THE I.T.ACT, WHICH PROVIDES THAT THE CIT HAS TO SATISFY HIMSELF ABOUT EITHER OF THE TWO COND ITIONS PRESCRIBED THEREIN, NAMELY, THAT THE ACTIVITIES WERE NOT GENUINE OR THA T THE ACTIVITIES WERE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR THE INSTITUTION, AS THE CASE MAY BE. HOWEVER, IN THE INSTANT CASE, T HE LD.CIT HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SUBSTANTIATE THAT THE ACT IVITIES OF THE ASSESSEE WERE 9 NOT GENUINE OR THAT THE ACTIVITIES WERE NOT BEING C ARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE ASSESSEE. ON A SIMILAR ISSU E, THIS BENCH OF THE TRIBUNAL VIDE ORDER DATED 30.8.2010 IN THE CASE OF CHATURVEDI HAR PRASAD EDUCATIONAL SOCIETY VS.CIT (2010) 46 DTR (LUCKNOW)( TRIB.) 121 HAS HELD AS UNDER : FROM S. 12AA(3), IT IS CLEAR THAT REGISTRATION GRA NTED TO ANY TRUST OR SOCIETY UNDER S.12AA(1)(B) CAN BE CANCELLED/WITHDRA WN SUBSEQUENTLY IF THE CIT IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION WERE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN AC CORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. IN THE INSTANT CASE, IT IS NOT THE CASE OF THE CIT THAT THE ACTIVITIES OF THE ASSESSEE SOCI ETY ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OB JECTS OF THE SOCIETY. THUS, BOTH THE CONDITIONS LAID DOWN IN SUB -S. (3) OF S. 12AA REGARDING CANCELLATION OF REGISTRATION ARE MISSING. OBJECT PER SE CANNOT BE REEXAMINED UNDER THE PROVISIONS OF SUB-S. (3) OF S. 12AA. AS PER THE PROVISIONS OF SUB-S. (3) OF S. 12AA, THE CI T SHOULD BE SATISFIED THAT THE ACTIVITIES OF THE ASSESSEE SOCIETY ARE NOT GENUINE OR ARE NOT BEING CARRIED ON IN ACCORDANCE WITH THE OBJECTS OF THE SOCIETY AND ONLY THEN THE CIT HAS POWER TO CANCEL THE REGISTRAT ION GRANTED TO THE ASSESSEE SOCIETY. CANCELLATION/WITHDRAWAL OF REGIST RATION BY THE CIT AMOUNTS TO REVIEWING ITS EARLIER ORDER. THE CIT HAS NO POWER TO REVIEW ITS OWN ORDER, EXCEPT ON TWIN CONDITIONS SPE CIFIED IN SUB-S. (3) OF S. 12AA. THEREFORE, THE CANCELLATION OF REGISTRA TION BY THE CIT AMOUNTS TO REVIEWING ITS EARLIER ORDER PASSED UNDER S. 12AA(1)(B)(I). UNDER THE IT ACT, THERE IS NO PROVISION THAT MAY IN DICATE THAT THE CIT HAS POWER TO REVIEW ITS EARLIER ORDER GRANTING REGI STRATION UNDER S.12AA(1)(B)(I) EXCEPT THE TWO CONDITIONS LAID DOWN IN SUB-S.(3) OF S.12AA. THE ACTION TAKEN BY THE CIT DOES NOT FALL W ITHIN THE PARAMETERS OF SUB-S. (3) OF S.12AA. HAVING ONCE GRA NTED THE REGISTRATION, THE CIT BECOMES FUNCTUS OFFICIO AND T HE IMPUGNED ORDER PASSED UNDER S.12AA(3) IS ILLEGAL AND UNSUSTAINABLE . IN VIEW OF THE ABOVE, THE ORDER OF THE CIT PASSED UNDER S.12AA(3) IS SET ASIDE. 8.2 IN THE INSTANT CASE ALSO, THE LD.CIT WITHOUT BR INGING ON RECORD THAT THE ACTIVITIES OF THE ASSESSEE WERE NOT GENUINE OR WERE NOT BEING CARRIED OUT IN 10 ACCORDANCE WITH THE OBJECTS OF THE ASSESSEE-SOCIETY , CANCELLED THE REGISTRATION WHICH AMOUNTS TO REVIEWING OF HIS EAR LIER ORDER WHEN THE REGISTRATION WAS GRANTED UNDER SECTION 12A OF THE A CT AFTER CONSIDERING AND ON BEING SATISFIED THAT THE CONDITIONS SPECIFIED WE RE FULFILLED BY THE ASSESSEE. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACT S, ARE OF THE VIEW THAT THE ACTION TAKEN BY THE LD.CIT DOES NOT FALL WITHIN TH E PARAMETERS OF SUB- SECTION (3) OF SECTION 12AA OF THE I.T.ACT. THERE FORE, HIS ACTION IN CANCELLING THE REGISTRATION BY INVOKING THE PROVIS IONS OF SECTION 12AA(3) OF THE I.T.ACT IS NOT SUSTAINABLE. IN THAT VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE LD. CIT PASSED UNDER SECTION 12AA(3)OF THE I.T.ACT AND ALLOW THE APPEAL OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 16.3.11. SD. SD. (H.L.KARWA) (N.K.SAINI) VICE PRESIDENT ACCOUNTANT MEMBER MARCH 16TH , 2011. COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A`.R.,ITAT, LUCKNOW. SRIVASTAVA.