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| The Tax Publishers2020 TaxPub(DT) 3563 (Del-Trib) INCOME TAX ACT, 1961
Section 12AA
Where assessee-charitable trust engaged in providing education through medical college was facing legal action on allegation of having inadequate infrastructure, PCIT cancelled registration granted to assessee, considering that entire order of PCIT was based on appraisal report of DDIT (Inv.) only and PCIT did not consider applicability to any of provisions of section 2(15) and/or section 12AA(3) while revoking registration, order of PCIT was set aside.
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Charitable trust - Registration under section 12AA - Assessee-charitable trust engaged in providing education through medical college - Allegation of having inadequate infrastructure
Assessee was a charitable trust and was running medical college, i.e., educational institutions. Besides educational institutions, it was also running a hospital. Since objects of assessee were charitable within meaning of section 2(15), it was granted registration under section 12AA. PCIT passed order under section 12AA(3) and cancelled registration of assessee trust allegedly based on appraisal report of Investigation Wing. Assessee contended that aforesaid appraisal report was not prepared in case of the assessee but was allegedly prepared in case of certain other group. Case of assessee was that allegations of CBI, and revenue proceeded on allegation that assessee did not have requisite infrastructure, but Court subsequently discharged charges of criminal conspiracy. Held: PCIT did not have record of activities which were not in accordance with objects of trust. Entire order of PCIT was based on appraisal report of DDIT (Inv.) only. No mention of any material being referred by PCIT was found along with its applicability to any of the provisions of section 2(15) and/or section 12AA(3) while revoking the registration. The Act envisages where a trust or an institution has been granted registration under section 12AA(1)(b) or has been obtained registration at any time under section 12A Principal Commissioner can cancel the registration if the conditions mentioned therein are not satisfied or the activities of the trust are not genuine or the activities are not carried out in accordance with the objects of the trust. PCIT did not bring out any of conditions laid down as above. Therefore, order of PCIT cancelling registration, since inception, under section 12AA(3) was legally not valid.
REFERRED : Ketan Desai v. Central Bureau of Investigation [MC 2733/2018 vide Order, dated 12-2-2018] Asst. CIT-I v. Agra Development Authority (2018) 90 taxmann.com 282 (Allahabad) : 2018 TaxPub(DT) 0739 (All-HC)
FAVOUR : In assessee's favour
A.Y. :
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