M/S RAJASTHAN GAU SEWA SANGH, Jaipur V. ITO, Jaipur

ITA 85/JPR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82837 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 24-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Keywords: Sale consideration of property below Jantri Value; Charitable institution; Opportunity of being heard; Cancellation of registration
• Section: 12A; 12AA; 12; 11

Judgement Text

ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 85/JP/2012 U/S 12AA / 12A OF I.T. ACT, 1961 PAN : AAATR 0809 E M/S. RAJASTHAN GAU SEWA SANGH VS. THE ITO DURGAPURA, TONK ROAD WARD- 6(2) JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANISH AGARWAL DEPARTMENT BY: SHRI A.K. KHANDELWAL DATE OF HEARING: 23-09-2014 DATE OF PRONOUNCEMENT: 28 -11-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT- II, JAIPUR DATED 29-12-2011 CHALLENGING THE REGISTR ATION U/S 12AA(3) R.W.S. 293 OF THE I.T. ACT, 1961 BY FOLLOWING GROUNDS:- (I) THE LD. CIT HAS ERRED ON FACTS AND IN LAW IN WI THDRAWING REGISTRATION U/S 12AA OF THE ACT. (II) THAT THE PROVISO TO SECTION 2(15) IS NOT APPLI CABLE TO THE ASSESSEE'S CASE. ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 2 (III) THE ASSESSEE IS ENGAGED ON THE ACTIVITIES IN THE NATUE OF TRADE, COMMERCE OR BUSINESS. (IV) THE LD. CIT FAILED TO CONSIDER THAT THE ASSESS EE PROVIDES RELIEF TO THE POOR WHICH IS COVERED UNDER THE MINIM UM CHARITABLE ACTIVITIES AS DEFINED U/S 2(15) OF THE A CT. (V) THE REGISTRATION HAS BEEN WITHDRAWN WITHOUT CON SIDERING THE EVIDENCE AND MATERIAL BROUGHT ON RECORD BY THE ASSESSEE. 2.1 THE ASSESSEE VIDE HIS APPLICATION DATED 5-08-20 14 HAS FILED AN ADDITIONAL GROUND OF APPEAL AS UNDER:- THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E CIT, JAIPUR II HAS ERRED IN WITHDRAWING REGISTRATION U/ S 12AA(3) OF THE I.T. ACT , 1961 FOR ASSESSMENT YEAR 2009-10 AND ONWARDS, WITHOUT APPRECIATING THAT HE WAS NOT EMPOWERED UNDE R THE SAID SECTION TO WITHDRAW THE REGISTRATION GRANTED TO APP ELLANT U/S 12A(1)(A) IN THE YEAR 1974 AS THE EMPOWERING PROVIS ION I.E. SECTION 12AA(3) WAS MADE OPERATIVE W.E.F. 01-06-201 0 I.E. ASSESSMENT YEAR 2011-12 ONWARDS ONLY WITH PROSPECTI VE EFFECT AS HELD BY CBDT AS WELL AS VARIOUS COURT. THUS THE ORDER OF THE LD. CIT (ADMIN.) CANCELING THE REGISTRATION W.E .F. A.Y. 2009- 10 ONWARDS DESERVES TO BE HELD BAD IN LAW. 2.2 AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT INADVERTENTLY THIS GROUND REMAINED TO BE INCORPORAT ED IN FORM NO. 36. THE GROUND IS PURELY LEGAL IN NATURE AND IT DOES NOT RE QUIRE ANY VERIFICATION OF FACTS. THUS IT IS PLEADED THAT THE SAME MAY BE ADM ITTED AS ADDITIONAL GROUND. ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 3 2.3 THE LD. DR RELIED ON LETTER DATED 20-08-2014 FR OM THE OFFICE OF CIT - 2, JAIPUR RELYING ON THE CASE OF SINHAGAD TECHNICAL EDUCATIONAL SOCIETY VS. CIT (2012) 343 ITR 23 (BOM.) AND OPPOSED THE REQUES T OF THE ASSESSEE TO DISMISS THE ADDITIONAL GROUND. LD. DR IS HEARD ON T HE ISSUE OF ADDITIONAL GROUND. 2.4 AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE ADDITIONAL GROUND BEING LE GAL IN NATURE DOES NOT REQUIRED ANY FRESH VERIFICATION OF FACTS. THE OBJEC TION RAISED BY THE LD. DR PERTAINS TO MERITS OF THE ADDITIONAL GROUND. THUS I N VIEW OF THE FACTS AND CIRCUMSTANCES, WE ARE INCLINED TO ADMIT THE ADDITIO NAL GROUND OF THE ASSESSEE. HENCE, THE ADDITIONAL GROUND OF THE ASSES SEE IS ADMITTED. 3.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A REGISTERED SOCIETY CLAIMING TO BE A PUBLIC CHARITABLE SOCIETY ENGAGED IN THE OBJECTS WHICH INTER ALIA INCLUDE PROTECTION AND PROMOTION OF COWS; MEDI CAL, EDUCATIONAL AND OTHER ACTIVITIES FOR PROTECTION OF ENVIRONMENT AND VARIOUS OTHER CHARITABLE ACTIVITIES AS DESCRIBED IN THE MEMORANDUM OF ASSOCI ATION ENCLOSED ON THE PAPER BOOK. THE SOCIETY WAS GRANTED REGISTRATION U/ S 12AA OF THE ACT W.E.F. 6-12-1974 AND THE SUCCESSIVE ASSESSMENTS HAVE BEEN FRAMED TREATING THE ASSESSEE AS CHARITABLE INSTITUTION. ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 4 3.2 THE LD. CIT BY THE IMPUGNED DETAILED ORDER DATE D 29-12-2011 PASSED U/S 12AA(3) READ WITH SECTION 293C OF THE ACT, WITH DREW THE REGISTRATION OF THE REGISTERED SOCIETY VIDE W.E.F 1-4-2009. BY FOLL OWING OBSERVATIONS: 5. THE ASSESSEE MAY TAKE PLEA THAT U/S 12AA(3),REGISTRATION CAN BE WITHDRAWN ONLY IN TWO C ONDITIONS:- (1) THE ACTIVITIES ARE NOT GENUINE OR (2) THE ACTIV ITIES ARE NOT AS PER THE OBJECTS OF THE ASSESSEE. SINCE NONE OF THES E CONDITIONS IS ATTRACTED IN THIS CASE, REGISTRATION CANNOT BE WITH DRAWN U/S 12AA(3). THIS PLEA WILL NOT BE TENABLE AS WHEN THE ACTIVITIES DO NOT REMAIN CHARITABLE IN VIEW OF THE PROVISO OF SEC TION 2(15) OF THE INCOME TAX ACT 196L, IT IS IMPLIED THAT THE INS TITUTION DOES NOT REMAIN CHARITABLE AND REGISTRATION GRANTED EARL IER IS DEEMED TO BE WITHDRAWN. WITHOUT PREJUDICE TO THIS, REFERENCE IS MADE TO PROVISIONS OF SECTION 293C OF I.T. ACT 1961 . AS PER THE PROVISIONS OF THIS SECTION, COMMISSIONER OF INCOME- TAX CAN WITHDRAW ANY APPROVAL GIVEN UNDER ANY PROVISION OF INCOME TAX ACT 1961 NOTWITHSTANDING THAT A PROVISION TO WI THDRAW SUCH APPROVAL HAS NOT BEEN SPECIFICALLY PROVIDED FO R IN SUCH PROVISION. THUS, A GENERAL POWER HAS BEEN GIVEN TO THE COMMISSIONER TO WITHDRAW ANY APPROVAL GRANTED UNDER THE ACT. THIS POWER IS SQUARELY APPLICABLE ON THE REGISTRATI ON GRANTED U/S 12AA 12A OF THE I.T. ACT 1961. SO, EVEN IF IT I S HELD BY APPELLATE AUTHORITIES LATER ON THAT WITHDRAWAL ON R EGISTRATION ON ACCOUNT OF PROVISO TO SECTION 2(15) CANNOT BE MA DE U/S 12AA(3), THEN ALSO IT CAN ALWAYS BE WITHDRAWN U/S 2 93C. 6. WITH THE ABOVE LEGAL INTERPRETATION, THE CASE OF THE ASSESSEE HAS BEEN EXAMINED AND IT HAS BEEN SEEN THA T THE ASSESSEE IS IN THE RECEIPTS OF FOLLOWING SPECIES OF INCOME WHICH CAN BE CONSIDERED AS RECEIPTS ARISING OUT OF ASSESS EE ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS:- A.SALE OF GHEE B. SALE OF MILK C. SALE OF CATTLE FEED D .COMMISSION ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 5 THUS IT IS CLEAR THAT THE TOTAL VALUE OF RECEIPTS W HICH CAN BE CONSIDERED TO BE IN THE NATURE OF TRADE, COMMERC E OR BUSINESS IS MUCH MORE THAN 10 LAKHS AND IN VIEW OF SPECIFIC MANDATE OF PROVISO OF SECTION 2(15), THE ASSESSEE I NSTITUTIONS OBJECTS CANNOT BE CONSIDERED AS CHARITABLE FROM A.Y . 2009-10 AND ONWARDS. 6.1 IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD TH AT THE ASSESSEE IS CARRYING OUT ACTIVITIES IN THE NATURE O F TRADE, COMMERCE OR BUSINESS AND BECAUSE OF THIS, ITS ACTIV ITIES AND OBJECT DO NOT REMAIN CHARITABLE IN VIEW OF THE PROV ISO TO SECTION 2(15) OF I.T. ACT , 1961. THEREFORE, THE REGISTRAT ION GRANTED U/S 12AA/12A EARLIER VIDE ORDER DATED 06.12.1974 IS HER EBY WITHDRAWN U/S 12AA(3) R.W. SECTION 293C OF THE I.T. ACT, 1961 W.E.F. 01.04.2009 I.E. ASSESSMENT YEAR 2009-10 ONWA RDS. 3.3 AGGRIEVED, THE ASSESSEE IS BEFORE US. 3.4 LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE REGISTRATION AS CHARITABLE TRUST WAS GRANTED 40 YEARS BACK AND ASSE SSMENTS HAVE BEEN ACCORDINGLY. THUS THE OBJECTS AND ACTIVITIES REMAIN SAME AS IN EARLIER YEARS. ASSESSEE SOCIETY IS A PUBLIC CHARITABLE SOCIETY HAV ING ITS KEY OBJECTS LIKE PROTECTION AND PROMOTION OF COWS FOR BETTER PRODUCT IVITY OF MILK AND ITS PRODUCTS, WHICH INCLUDES THE IMPROVEMENT OF THEIR B REEDING, NOURISHMENT, ESTABLISHMENT OF SCHOOLS AND RESEARCH IN THIS FIELD . VARIOUS OTHER MAIN OBJECTS INCLUDE VARIOUS ACTIVITIES IN OTHER CHARITA BLE AREAS LIKE AGRICULTURAL REFORMS, PROMOTION OF KHADI GRAMODYOG AND PROTECTIO N OF ENVIRONMENT ETC. ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 6 3.5 BEFORE PROCEEDINGS TO THE MERITS, LD COUNSEL C ONTENDS THAT RELEVANT PROVISION OF I T ACT IN THIS BEHALF READ AS UNDER: PROCEDURE FOR REGISTRATION. 12AA (1) THE 350B [*****] COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER CLAUSE (A) 350C [OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A, SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GEN UINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE 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 ORDE R IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT : PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. 350D [(1A) ALL APPLICATIONS, PENDING BEFORE THE CHIEF CO MMISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE THE 1ST DAY OF JUNE, 1999, SHALL STAND TRANSFERRED ON THAT DAY TO THE CO MMISSIONER AND THE COMMISSIONER MAY PROCEED WITH SUCH APPLICATIONS UNDER THAT SUB-S ECTION FROM THE STAGE 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 EXPIRY OF SIX MONTHS FRO M THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) [OR C LAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A.] 350E [(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANT ED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) 350F [OR HAS OBTAINED REGISTRATION AT ANY TIME UNDER SEC TION 12A {AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2 ) ACT, 1996 (33 OF 2009)}] AND SUBSEQUENTLY THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIE D OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MA Y BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST O R INSTITUTION: ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 7 PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD.] CHARITABLE PURPOSE HAS DEFINED AND AMENDED WEF 1-4- 2009 AS UNDER: SEC 2(15) DEFINITIONS- CHARITABLE PURPOSE- INCLUDES RELI EF OF POOR, EDUCATION MEDICAL RELIEF, [PRESERVATION OF ENVIRONM ENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST,] AND T HE ADVANCEMENT OF ANY OTHER OBJECTS OR GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT IN VOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COM MERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIV E OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY MEMORANDUM OF EXPLANATION BY FINANCE MINISTER READS AS UNDER: 5.1 SUB-SECTION (15) OF SECTION 2 OF THE ACT DEFI NES CHARITABLE PURPOSE TO INCLUDE RELIEF OF THE POOR, EDUCATION, M EDICAL RELIEF, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY. IT HAS BEEN NOTICED THAT A NUMBER OF ENTITIES OPERATING ON COMMERCIAL L INES ARE CLAIMING EXEMPTION ON THEIR INCOME EITHER UNDER SUB-SECTION (23C) OF SECTION 10 OR SECTION 11 OF THE ACT ON THE GROUND THAT THEY ARE C HARITABLE INSTITUTIONS. THIS IS BASED ON THE ARGUMENT THAT THEY ARE ENGAGED IN T HE ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY AS IS INCLUDED IN THE FOURTH LIMB OF THE CURRENT DEFINITION OF CHARITABLE PURPOSE. SUCH A CLAIM, WHE N MADE IN RESPECT OF AN ACTIVITY CARRIED OUT ON COMMERCIAL LINES, IS CONTRA RY TO THE INTENTION OF THE PROVISIONS. 5.2 WITH A VIEW TO LIMITING THE SCOPE OF THE PHRAS E ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY, SUB-SEC TION (15) OF SECTION 2 HAS BEEN AMENDED TO PROVIDE THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PU RPOSE, 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 T O ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERAT ION, IRRESPECTIVE OR THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY. ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 8 SCOPE OF THIS AMENDMENT HAS FURTHER BEEN EXPLAINED BY THE CBDT VIDE ITS CIRCULAR NO. 11/2008, DATED 19 TH DECEMBER, 2008. 2.3 FURTHER SECOND PROVISO WAS INSERTED BY FINANCE ACT, 2010 RETROSPECTIVELY W.E.F. 01/04/2009 AS UNDER:- PROVIDED FURTHER THAT THE PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TEN LAKH RUPEES OR LESS IN THE PREVISIONS YEAR. VIDE FINANCE ACT, 2011 W.E.F. 01/04/20012, THE LIM IT OF RS. 10 LAKH WAS RAISED TO RS. 25 LAKH. 2.4 IT HAS BEEN HELD THAT AS PER NEWLY ADDED PROVI SO TO SECTION 2(15), THE ADVANCEMENT OF ANY OTHER OBJECT OF GENER AL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYIN G ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, FOR A CESS O R FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OR THE NATURE OF USE OR APPLICATION, OR RETENTION OF THE INCOME FROM SUCH ACTIVITY, IF SUCH RECEIPTS EXCEEDS RS. 10/25 LAKH. SEC. 293C FOR OTHER POWER OF WITHDRAWALS BY CIT RE ADS AS UNDER: POWER TO WITHDRAW APPROVAL WHERE THE CENTRAL GOVERNMENT OR THE BOARD OR AN INC OME-TAX AUTHORITY, WHO HAS BEEN CONFERRED UPON THE POWER UNDER ANY PRO VISION OF THIS ACT TO GRANT ANY APPROVAL TO ANY ASSESSEE, THE CENTRAL GOV ERNMENT OR THE BOARD OR SUCH AUTHORITY MAY NOTWITHSTANDING THAT A PROVISIO N TO WITHDRAW SUCH APPROVAL HAS NOT BEEN SPECIFICALLY PROVIDED FOR IN SUCH PROVISION, WITHDRAW SUCH APPROVAL AT ANY TIME :' PROVIDED THAT THE CENTRAL GOVERNMENT OR BOARD OR IN COME-TAX AUTHORITY SHALL, AFTER GIVING A REASONABLE OPPORTUNITY OF SHO WING CAUSE AGAINST THE PROPOSED WITHDRAWAL TO THE ASSESSEE CONCERNED, AT A NY TIME, WITHDRAW THE APPROVAL AFTER RECORDING THE REASONS FOR DOING SO.] ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 9 3.6 IN THE BACKDROP OF THESE PROVISIONS, IT IS PLE ADED THAT THE LEGISLATIVE SCHEME FOR REGISTRATION OF TRUST, SUBSEQUENT ASSESS MENTS AND WITHDRAWAL OF REGISTRATION HAS CLEAR DEMARCATIONS: I. THE REGISTRATION U/S 12 AA IS GRANTED BY THE CIT AFTER A SATISFACTION ABOUT THE GENUINENESS OF THE OBJECTS AND ACTIVITIES OF THE TRUST; THERE IS NO DISPUTE THAT THEY REMAIN THE SAME AS EARLIER. II. THE ASSESSMENTS OF THE TRUST ARE FRAMED BY THE AO AFTER VERIFYING THE ACTIVITIES AND HOLDING WHICH OF THEM ARE CHARIT ABLE AND THEREAFTER BENEFITS OF SECTIONS 11 AND 12 ARE GIVEN BASED ON H IS VERIFICATION AND SATISFACTION OF CONDITIONS IN THIS BEHALF. III. THE PROCEDURE OF WITHDRAWAL OF REGISTRATION IS SPECIFICALLY PROVIDED IN SEC. 12 AA ITSELF. CONSEQUENTLY THE RES IDUARY POWER CONTAINED IN SEC 293C IS NOT APPLICABLE AS PER THIS SEC. ITSE LF. THE POWER OF CIT TO WITHDRAW THE REGISTRATION GRANTED IS STIPULATED BY SEC 12AA SUBJECT TO THE SATISFACTION OF COMMISSIONER THAT ACTIVITIES OF SUC H TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDA NCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE. THE LEGIS LATURE HAS RESTRICTED THE POWER OF WITHDRAWAL OR REGISTRATION ON THESE TWO CO NDITIONALITYS ONLY. HOWEVER THE WITHDRAWAL ORDER OF LD CIT REVEALS THAT HE HAS COMMENTED ADVERSELY AND HELD THAT I. ASSESSES ACTIVITIES ARE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AND II. ITS ACTIVITIES AND OB JECTS DO NOT REMAIN CHARITABLE IN VIEW OF THE PROVISO TO SEC. 2(15).WHE REAS THIS PROVISO HAS NOT EXCLUDED OR CARVED OUT ANY CHARITABLE OBJECTS. IT HAS ONLY CLARIFIED T HAT IF THE OBJECTS ARE ADVANCEMENT OF ANY OTHER OBJECTS OF GEN ERAL PUBLIC UTILITY; THEN IT SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES T HE CARRYING ON OF ANY ACTIVITY ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 10 IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR AN Y ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS, 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. THUS AS LONG AS ACTIVITIES AND OBJECTS ARE SAME, THE GRANTING OF BENEFITS OF SEC. 11 AND 12 WILL BE SUBJECT MATTER OF ASSESSMENT, DURING THE COURSE WHEREOF THE AO WILL SEE THE OVERALL OBJECTS, WORK OUT THE CHARITABLE AND OTHER OBJECTS OF GENERAL PUBLIC UTILITY. AMOUNT OF TURNOVER, SEGREGATION OF INCOME ETC.. THE TRUST HAS MULTIFARIOUS OBJECTS; IN ONE YEAR ONE MAY BE LES AND OTHER MAY B E MORE. IT IS NOT FOR THE CIT TO RECOURSE TO A PROCESS OF VERIFICATION IN SUC H A MANNER TO TANTAMOUNT TO ALMOST AN ASSESSMENT AND WITHDRAW OR CANCEL THE REGISTRATION FOR FUTURE YEARS. THIS ACTION DOES NOT FIT IN THE LEGISLATIVE SCHEME WHICH IS DEMARCATED AND DEFINES THE BROAD POWERS OF ASSESSMENT AND WITH DRAWAL OF REGISTRATION ONLY IN TWO LIMITED EVENTUALITIES. BESIDES WITHDRAW AL OF REGISTRATION BEING A DRASTIC ACTION AMOUNTING TO CUTTING OF LIFE LINE OF A TRUST MUST ADHERE TO LETTER OF LAW AND NOT ON COMMON PERCEPTION. 3.7 IT IS PLEADED THAT THE DEFINITION OF CHARITABLE PURPOSE IN AN INCLUSIVE ONE AND NOT EXCLUSIVE IN NATURE. LEGISLATURE HAS NO WHERE PROVIDED ANY STRAIGHT JACKET MEANING OF CHARITABLE PURPOSE AS IT HAS ATTRIBUTES OF DYNAMISM AND THE NATURE AND SCOPE THEREOF CHANGES W ITH EFFLUX OF TIME AND EVOLUTION OF HUMANITY. IT IS EVIDENT THAT THE DEFIN ITION MENTIONS THE WORDS INCLUDES AND FURTHER INCLUDES. BESIDES CONSERVATION AND PROTECTION COWS AND PROVIDENCE OF NUTRITIONAL FOOD TO PUBLIC IS PART OF DIRECTIVE PRINCIPLES OF ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 11 STATE POLICY AND SOME OF THE FUNDAMENTAL RIGHTS OF RIGHT TO LIFE AND PRESERVATION OF CULTURE. LD. CIT WITHOUT APPRECIATI NG THE BROADER CONNOTATIONS OF THE WORD CHARITABLE HAS ADOPTED TOO NARROW A VIEW AND ACTED MORE LIKE AN AO TO WITHDRAW THE REGISTRATION WHICH WAS ENJOINED TO THE TRUST SINCE 40 YEARS AND THE AMENDMENT OF INSER TION OF PROVISO TO SEC. 2(15) IN ANY WAY HAS NOT DILUTED THEM. IT PROVIDES ONLY A RESTRICTION ON COMMERCIAL ACTIVITIES INCIDENTAL TO ACHIEVING OF OT HER OBJECTS OF GENERAL PUBLIC UTILITY. ASSESSEE CASE IS SQUARELY COVERED BY THE JUDGEMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF DIT (EXE MPTION) VS. SABARMATI ASHRAM GAUSHALA TRUST ; 2014 362 ITR 539 WHEREIN UN DER COMPLETELY IDENTICAL SET OF FACTS AND CIRCUMSTANCES HON'BLE GUJARAT COURT HAS HELD AS UNDER:- THE MAIN OBJECTIVES OF THE TRUST ARE TO BREED THE CATTLE AND ENDEAVOUR TO IMPROVE THE QUALITY OF THE COWS AND OX EN IN VIEW OF THE NEED OF GOOD OXEN AS INDIA IS PROMINENTLY AN AGRICU LTURAL COUNTRY ; TO PRODUCE AND SALE THE COW MILK ; TO HOLD AND CULTIVA TE AGRICULTURAL LANDS ; TO KEEP GRAZING LANDS FOR CATTLE KEEPING AN D BREEDING ; TO REHABILITATE AND ASSIST RABARIS AND BHARWADS ; TO M AKE NECESSARY ARRANGEMENTS FOR GETTING INFORMATICS AND SCIENTIFI C KNOWLEDGE AND TO DO SCIENTIFIC RESEARCH WITH REGARD TO KEEPING AND BREEDING OF THE CATTLE, AGRICULTURE, USE OF MILK AND ITS VARIOUS P REPARATIONS, ETC. ; TO ESTABLISH OTHER ALLIED INSTITUTIONS LIKE LEATHER WO RK AND TO RECOGNISE AND HELP THEM IN ORDER TO MAKE THE COW KEEPING ECO NOMICALLY VIABLE ; TO PUBLISH STUDY MATERIALS, BOOKS, PERIODICALS, MONTHLIES, ETC., IN ORDER TO PUBLICISE THE OBJECTS OF THE TRUST AS ALS O TO OPEN SCHOOLS AND HOSTELS FOR IMPARTING EDUCATION IN COW KEEPING AND AGRICULTURE HAVING REGARD TO THE TRUST OBJECTS. ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 12 ALL THESE WERE THE OBJECTS OF THE GENERAL PUBLIC U TILITY AND WOULD SQUARELY FALL UNDER SECTION 2(15) OF THE ACT . PROFIT MAKING WAS NEITHER THE AIM NOR OBJECT OF THE TRUST. IT WAS NOT THE PRINCIPAL ACTIVITY. MERELY BECAUSE WHILE CARRYING OUT THE ACTIVITIES FO R THE PURPOSE OF ACHIEVING THE OBJECTS OF THE TRUST, CERTAIN INCIDEN TAL SURPLUSES WERE GENERATED, WOULD NOT RENDER THE ACTIVITY IN THE NAT URE OF TRADE, COMMERCE OR BUSINESS. THE ASSESSEE WAS ENTITLED TO EXEMPTION U/S 11. 3.8 IT IS FURTHER CONTENDED THAT CHARITABLE PURPOSE BEING AN INCLUSIVE DEFINITION AND NOT EXCLUSIVE DEFINITION THE SAME IS TO BE VIEWED IN LARGER FRAMEWORK. THE LD. CIT HAS HARBORED AN IMPRESSION T HAT CHARITABLE PURPOSE MEANS ONLY FEW ACTIVITIES WHICH ARE SPECIFICALLY ME NTIONED IN SEC. 2(15). FROM THIS ANGLE, IT IS TO BE SEEN WHETHER THE INCLU SIVE DEFINITION OF THE WORD CHARITABLE PURPOSE EXCLUDES THE ACTIVITIES CARRIE D OUT BY THE ASSESSEE. THE COW HAS BEEN REGARDED AS BASIS OF RURAL ECONOMY AS IT PROVIDES SUSTENANCE TO THE RURAL FOLKS AS WELL AS URBAN MASSES. THE PRE SERVATION OF COW TO ENSURE BETTER BREED AND BETTER QUALITY AND QUANTITY OF MIL K HAS BEEN REGARDED AS CHARITABLE PURPOSE SINCE LONG TIMES AND NO LAW HAS BEEN MADE TILL NOW WHICH INCLUDING THE AMENDMENT OF BRINGING THE PROVI SO TO SECTION 2(15) WHICH SPECIFICALLY LAYS DOWN THAT CONSERVATION OF C OW AND BETTER BREED IS NOT A CHARITABLE ACTIVITY. SIMILARLY ENVIRONMENT ME ANS NOT ONLY THE EXTERNAL CONDITION INFLUENCING THE DEVELOPMENT OR GROWTH OF PEOPLE, BUT ENVIRONMENT IN ITS TRUST SENSE MEANS THE INTER-RELATIONS WHICH EXISTS BETWEEN WATER, AIR , ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 13 LAND ON SIDE AND HUMAN BEINGS, LIVING CREATURES SUC H AS PLANTS AND ANIMALS AND THE OTHER SIDE. THE DEFINITION OF ENVIRONMENT A S PROVIDED U/S 2(A) OF THE ENVIRONMENT (PROTECTION) ACT, 1986 READS AS FOLLOWS : ENVIRONMENT INCLUDES, WATER, AIR AND LAND AND THE INTER- RELATIONSHIP WHICH EXISTS AMONG AND BETWEEN WATER, AIR, AND LAND HUMAN BEINGS, OTHER LIVING CREATURES, PLANTS, MICRO- ORGANISM AND PROPERTY. THUS WORKING FOR THE PROTECTION OF ANIMALS AND PLAN TS IS AN ACT TOWARDS PROTECTING THE ENVIRONMENT. PRESERVATION OF ENVIRON MENT HAS BEEN THE PRIME CONCERN OF THE WORLD AND ASSESSEE HAS BEEN ALSO WO RKING DILIGENTLY TO CONTRIBUTE TO THESE ENDS AS NUMBER OF ACTIVITIES BE ING UNDERTAKEN BY THE SOCIETY TOWARDS PRESERVATION OF ENVIRONMENT. THEY A RE NOT REVENUE GENERATING ACTIVITIES AND INVOLVE EXPENDITURE. IT I S EVIDENT FROM THE PERUSAL OF THE OBSERVATION OF THE HON'BLE GUJARAT HIGH JUDG MENT THAT FACTS OF THE CASE OF ASSESSEE ARE COVERED BY THE AFORESAID JUDGM ENT IN TERMS OF BOTH THE FACTS AND SECONDLY EVEN IF SOME ACTIVITIES ARE FOUN D AS OTHER OBJECTS OF PUBLIC UTILITY THEN ALSO CIT CANNOT CANCEL THE REGI STRATION. IT WILL BE FOR THE AO TO VERIFY THE FACTS, FIGURES AND DECIDE THE ABOU T THE EXTENSION OF BENEFITS OF SEC 11 AND 12.THUS IT IS THE FUNCTION OF AO TO D ECIDE IN ASSESSMENT AND NOT FOR THE LD. CIT TO WITHDRAWAL THE REGISTRATION. THEREFORE, IN THE LIGHT OF ABOVE SUBMISSION AND CASE LAW, THE LD. AR SUBMITTED THAT LD. CIT (ADMN.) ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 14 ACTION IN WITHDRAWING U/S 12AA(3) THE REGISTRATION OF ASSESSEE TRUST IS NOT TENABLE AND BEING NOT IN CONFORMITY OF THE ENABLING PROVISIONS DESERVES TO BE QUASHED AND THE REGISTRATION OF ASSESSEE GRANTED U/S 12A DESERVES TO BE RESTORED. VARIOUS OTHER CASE LAWS ARE RELIED ON AS MENTIONED IN WRITTEN SUBMISSIONS. 3.9 LD. DR SUPPORTED THE ORDER OF LD. CIT WITHDRAWI NG THE REGISTRATION. IT IS CONTENDED THAT ASSESSES ACTIVITIES WERE FOUND TO BE EXCLUSIVELY IN THE NATURE OF OTHER OBJECTS OF GENERAL PUBLIC UTILITIES . BESIDES IT WAS FOUND THAT THE ACTIVITIES AMOUNT TO CARRYING ON TRADE OR COMME RCE, THEREFORE, REGISTRATION HAS BEEN RIGHTLY WITHDRAWN. 3.10 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE ARGUMENTS OF THE LD COUNSE L ABOUT THE LEGISLATIVE SCHEME OF PROVISIONS WITH REGARD TO REGISTRATION OF TRUST U/S 12AA, WIDER MEANING OF CHARITABLE OBJECT; POWER OF WITHDRAWAL O F REGISTRATION U/S 12AA(3) HAVE SOME MERIT. THE CONCLUSION OF ORDER OF LD. CIT IN WITHDRAWING THE REGISTRATION DOES NOT APPEAR TO CON FORM TO THE SPECIFIC CONDITIONS LAID DOWN IN SEC 12AA(3). AN ORDER WITHD RAWING THE REGISTRATION OF TRUST IS A DRASTIC ACTION AND THE LAW PROVIDED A STATUTORY MECHANISM OF ASSESSMENT, VERIFICATION OF TRUST ACTIVITIES, AND A PPORTIONMENT OF INCOME AND EXPENDITURE OF VARIOUS ACTIVITIES OF THE TRUST. BEN EFITS OF SEC 11 AND 12 CAN ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 15 BE EXTENDED ON THE BASIS OF SCRUTINY AND VERIFICATI ON BY THE AO. LD. CIT HAS NOT POINTED OUT ANY SPECIFIC INSTANCE OF ANY ACTIVI TY, INCOME OR EXPENDITURE BEING NONGENUINE. SEC. 293C IS NOT APPLICABLE TO AP PROVALS WHICH SPECIFICALLY PROVIDE MANNER OF WITHDRAWAL OF APPROV AL AS HELD BY THIS BENCH OF ITAT IN THE CASE OF JAIPUR DEVELOPMENT AUTHORITY VS. CIT IN ITA NO.182/JP/2012 VIDE ORDER DATED 30-09-2014 AS UNDER :- THE LEARNED CIT ALSO ERRED IN APPLYING THE PROVISIO NS OF SECTION 293(C) OF THE ACT, IN THIS CASE, WHICH APPL IED WITHDRAWAL OF APPROVAL GRANTED UNDER ANY PROVISION OF THIS ACT, N OTWITHSTANDING THAT A PROVISION TO WITHDRAW SUCH APPROVAL HAS NOT BEEN SPECIFICALLY PROVIDED FOR IN SUCH PROVISION. FOR CANCELLATION OF REGISTRATION, THE SPECIFIC PROVISION U/S 12AA IS PROVIDED. 3.11 IN VIEW OF ENTIRETY OF FACTS, CIRCUMSTANCES AN D CASE LAWS, WE ARE OF CONSIDERED OPINION THAT THE IMPUGNED ORDER OF LD. C IT (ADMN.) WITHDRAWING THE REGISTRATION U/S 12AA(3) IS NOT IN CONFORMITY W ITH THE LANGUAGE OF THIS SECTION. WE ARE OF THE VIEW THAT LD. CIT(ADMN) SHO ULD REVISIT THE ISSUE OF WITHDRAWAL OF REGISTRATION AFRESH AFTER TAKING INTO CONSIDERATION THE LEGISLATIVE SCHEME OF POWERS, INCORPORATION OF PR OVISO, INCLUSIVE DEFINITION OF THE CHARITABLE OBJET AS INTERPRETED B Y PLETHORA OF JUDICIAL DECISIONS AND DECIDE THE ISSUE OF REGISTRATION AFT ER GIVING THE ASSESSEE AN ITA NO. 85/JP/2012 M/S. RA JASTHAN GAU SEWA SANGH VS. ITO, WARD- 6(2) JAIPUR 16 OPPORTUNITY OF BEING HEARD. SINCE WE HAVE SET ASIDE THE ISSUE, THE ADDITIONAL GROUND AS ADMITTED BY US WITH OTHER PLEADINGS FOR P ROPER DISPOSAL OF THE SAME SHALL BE CONSIDERED BY LD. CIT. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 -11-2014. SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 28 TH NOV. 2014 *MISHRA COPY FORWARDED TO:- 1. M/S. RAJASTHAN GAU SEWA SANGH, JAIPUR 2. THE ITO , WARD- 6 (2), JAIPUR 3. THE LD. CIT II, JAIPUR 4. THE LD. CIT 5.THE LD. DR 6.THE GUARD FILE (IT NO. 85/JP/2012) BY ORDER AR ITAT, JAIPUR