Charitable Trust Whether the Registration Once Granted Under Section 12AA can be Cancelled on the Basis of Same set of Provisions of the Trust on which Registration was Given?

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The Tax Publishers Income Tax--Charitable Trust Whether the Registration Once Granted Under Section 12AA can be Cancelled on the Basis of Same set of Provisions of the Trust on which Registration was Given? Akhilesh Kumar Sah The core issue that has been examined by the learned author in this article is whether registration once granted to a Trust or Institution as per procedure prescribed under Section 12AA of the Act can be cancelled even if the basis thereof remaining the same set of provisions of trust on which, after through examination, the so-called registration was granted by CIT (Exemptions). Such an issue, rather controversial one came before the High Court of Jharkhand in Sri Ramjanki Tapovan Mandir v. CIT (T.A. No 4 of 2020, decided on 13-11-2022). Section 12AA of the Act prescribes therein the procedure for registration to be granted to a Trust or Institution and Section 12AA(3) provides the circumstances under which registration granted under Section 12A of the Act to a Trust or Institution can be cancelled. The High Court having examined the findings of ITAT that the appellant failed to give satisfactory explanation regarding the sale proceeds, which was utilized for charitable object of the Trust, was perverse, allowed the appeal and set aside the order dated 30-10-2019 passed by ITAT, Ranchi, and consequently, the quashed and set aside the order dated 04-9-2018 passed by CIT (E) under Section 12AA(3) of the Act cancelling registration of the Appellant-Trust under Section 12A/12AA of the Act. 1. Introduction Recently, in Sri Ramjanki Tapovan Mandir v. CIT (Exemptions) & ITO (Exemptions) (TA No 04 of 2020) decided on 3-11-2022 by Jharkhand High Court, the substantial questions of law framed were that whether the registration once granted under Section 12AA of the Income Tax Act, 1961 (for short, 'the Act') could be cancelled on the basis of same set of provisions of the Trust which were examined earlier and whether the IT Authorities have the jurisdiction under Section 12AA(3) of the Act to question the legality and propriety of the Trust Deed of the assessee or its inquiry was limited to the conditions stipulated under Section 12AA(3), namely,- SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Charitable Trust

Whether the Registration Once Granted Under Section 12AA can be Cancelled on the Basis of Same set of Provisions of the Trust on which Registration was Given?

Akhilesh Kumar Sah

The core issue that has been examined by the learned author in this article is whether registration once granted to a Trust or Institution as per procedure prescribed under Section 12AA of the Act can be cancelled even if the basis thereof remaining the same set of provisions of trust on which, after through examination, the so-called registration was granted by CIT (Exemptions). Such an issue, rather controversial one came before the High Court of Jharkhand in Sri Ramjanki Tapovan Mandir v. CIT (T.A. No 4 of 2020, decided on 13-11-2022). Section 12AA of the Act prescribes therein the procedure for registration to be granted to a Trust or Institution and Section 12AA(3) provides the circumstances under which registration granted under Section 12A of the Act to a Trust or Institution can be cancelled. The High Court having examined the findings of ITAT that the appellant failed to give satisfactory explanation regarding the sale proceeds, which was utilized for charitable object of the Trust, was perverse, allowed the appeal and set aside the order dated 30-10-2019 passed by ITAT, Ranchi, and consequently, the quashed and set aside the order dated 04-9-2018 passed by CIT (E) under Section 12AA(3) of the Act cancelling registration of the Appellant-Trust under Section 12A/12AA of the Act.

1. Introduction

Recently, in Sri Ramjanki Tapovan Mandir v. CIT (Exemptions) & ITO (Exemptions) (TA No 04 of 2020) decided on 3-11-2022 by Jharkhand High Court, the substantial questions of law framed were that whether the registration once granted under Section 12AA of the Income Tax Act, 1961 (for short, 'the Act') could be cancelled on the basis of same set of provisions of the Trust which were examined earlier and whether the IT Authorities have the jurisdiction under Section 12AA(3) of the Act to question the legality and propriety of the Trust Deed of the assessee or its inquiry was limited to the conditions stipulated under Section 12AA(3), namely,-