ITO (E) 1(2), MUMBAI vs. CANCER AID & RESEARCH FOUNDATION, MUMBAI

Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order

dated 27/11/2015 of the Ld. First Appellate Authority,

Mumbai, holding that there was no contravention of the

provisions of section 13 of the Income Tax Act, 1961

(hereinafter the Act), ignoring the fact that BMW car was

purchased in the name of trustee, whereby the funds of the

trust were diverted and used for the benefit of excluded

person as covered within the provisions of section 13(1(c)(ii)

and section 13(2)(g) r.w.s. 13(3)(cc) of the Act and no log

book was produced to show that the car was used only for

the work of the trust and further holding that the trust was

entitled to benefit of exemption u/s 11 and deleting the

additions made on account of donations received of

Rs.3,85,23,511/-, income from other sources of

Rs.9,32,319/- and income of Rs.5,41,508/- received on

account of investment ignoring the provision of section 13

of the Act.

advanced arguments, which is identical to the ground

3 ITA No.733/Mum/2016 Cancer Aid & Research Foundation raised. On the other hand, Shri Vijay Mehta, ld. counsel for

the assessee contended that the impugned issue is covered

by the decision of the Tribunal, which was upheld by

Hon'ble Delhi High Court (ITA No.505 of 2015) (pages 38 to

42 of the paper book) and also order of the Tribunal in its

own case for Assessment Year 2009-10 (ITA

No.4789/Mum/2013) and another order (ITA

No.1782/Mum/2014). All these orders were made available

by the assessee in its paper book. This factual matrix was

not controverted by Ld. CIT-DR.

2.1. We have considered the rival submissions and

perused the material available on record. In view of the

above, we are reproducing hereunder the relevant portion

of the order of the Tribunal dated 13/11/2015 for

Assessment Year 2009-10 (ITA No.4789/Mum/2013) for

ready reference and analysis:-

“This appeal, filed by the Revenue, being ITA No. 4789/Mum/2013, is directed against the order dated 31-03- 2013 passed by the ld. Commissioner of Income Tax (Appeals)- 1 , Mumbai (Hereinafter called “the CIT(A)”), for the assessment year 2009-10. 2. The Revenue has raised the following grounds of appeal in the memo of appeal filed:-

4 ITA No.733/Mum/2016 Cancer Aid & Research Foundation “1. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that there was no contravention of provisions of Section 13 ignoring the fact that BMW car was purchased in the name of the trustee whereby the funds of the trust were diverted and used for the benefit of excluded person as covered within the provision of Section 13( 1 )(c)(ii) & Section 13(2)(g) r.w.s. 13(3)(cc) of the Income Tax Act, 1961 and no log Book was produced to show that the said car was used only for the work of the trust. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the assessee was entitled to benefit of exemption u/s 11 and deleting the additions made on account of donations received of Rs. 3,34,58,111/-, income from other sources of Rs. 16,16,4021- and income of Rs. 5,13,384/- received on account of investment, ignoring the fact that there was contravention of provisions of Section 13 of the Income Tax Act, 1961. 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 4. The appellant, therefore, prays that on the grounds stated above, the order of the CIT (A)-I, Mumbai may be set aside and that of the Assessing Officer be restored.” 3. The brief facts of the case are that the assessee trust is registered as charitable organization with DIT (E), Mumbai u/s 12A of the Income Tax Act, 1961 (Hereinafter called “the Act”) and also registered with the Charity Commissioner, Mumbai. The assessee trust case was selected for scrutiny under the selective scrutiny norms and notices u/s 143(2) & 142(1) of the Act along with questionnaire were issued. It was observed by the Ld. Assessing officer (Hereinafter called “the AO”) that the objects of the assessee trust is to provide monetary, medical and other assistance and help to the needy, deserving and poor people who are suffering from cancer in particular and other diseases in general and cannot afford the medical/surgical treatment recommended by the specialist and thereby help them , as far as possible , to lead a healthy and normal life. During the course of assessment proceedings, the AO observed that the assessee trust has purchased BMW Car from the funds of the trust in the personal name of the trustee Shri Abdul Qadir Kazi vide bill dated 20.3.2009 from M/s Navnit Motors for Rs. 32,20,000/- for which the payment has been made by the trust from the funds of the trust. Hence, in the opinion of the A.O., the funds of the trust amounting to Rs.

5 ITA No.733/Mum/2016 Cancer Aid & Research Foundation 32,20,000/- have been diverted and used for the benefit of excluded persons as covered within the provisions of section 13(1)(c)(ii) and section 13(2)(g) read with section 13(3)(cc) of the Act for which notice dated 25th November 2011 was issued u/s 142(1) of the Act to the assessee trust asking to furnish a reply as to why it should not be concluded that funds of the trust amounting to Rs. 32,20,000/- have been diverted and used for the benefit of excluded persons as covered within the provisions of section 13(1)(c)(ii) and section 13(2)(g) read with section 13(3)(cc) of the Act. 4. The assessee trust in reply to notice dated 25th November 2011 to AO submitted that the purchase of the car was for the benefit and use of the assessee trust and for the use of the chairman, trustees and influential donors in their role and activities as office bearers/well wishers of the trust. The assessee trust submitted that Prof.(Retd.) A.A. Kazi is the chairman of the assessee trust and entitled to such facilities that are provided by the assessee trust to do the work for the trust. The chairman does not draw any salary from the assessee trust although he is devoting his full time to the activities of the trust. The chairman is entirely devoted to the activities of the assessee trust and the BMW car was used only for official activities including meeting doctors, donors, social personalities, organizing/attending events to raise awareness and meeting government officials for approvals required for the activities of the trust. The BMW car was purchased after a resolution approving the purchase was passed by the trustees in their Board meeting held on March, 07, 2009. The BMW car was financed by availing loan from the ICICI bank. The loan was approved as a purchase for the assessee trust and on the basis of the financial position of the assessee trust but the BMW car was erroneously registered in the name of Prof. A.A. Kazi due to gap in communication between the office staff of the assessee trust and the seller of the car and when it was discovered during the audit process , the error was immediately brought to the attention of Navnit Motors Pvt. Ltd, the sellers of the car and steps were taken to get the car

6 ITA No.733/Mum/2016 Cancer Aid & Research Foundation transferred in the name of the trust. The auditors of the trust in the Notes to accounts for the financial year ended 31-3-2009 has clearly pointed out that the trust has purchased the motor car during the year for the object of the trust which is presently registered in the name of one of the trustee on account of mistake on the part of vendor and necessary steps has been initiated by the assessee trust to get the BMW car transferred in the name of trust. The purchase of car was capitalized and reflected in the financial accounts for the year 2008-09 and since the operating expenses of the car were very high , it was decided to sell the car. The sale proceeds were credited directly to the assessee trust bank accounts and corresponding changes were made in the assessee trust balance sheet. The car had a large logo of the assessee trust stuck on each side to indicate that it belonged to the trust. The car was driven by an official driver employed by the trust. It was also submitted by the assessee trust that the activities of the assessee trust are genuine and in accordance with its mission to fight cancer. The assessee trust submitted that it has played a pivotal role in the battle against the dreaded disease of cancer and the same is recognized by leading national and international agencies. The assessee trust also submitted that the ICICI bank loan account statements clearly mentioned that the assessee trust is the applicant and the asset was always intended to be the official property of the assessee trust and loan has been availed by the assessee trust. 5.The A.O. after considering the contentions of the assessee trust referred to section13(1)(c)(ii),13(2)(g) and 13(3)(cc) of the Act and held that the funds of the assessee trust was utilized for purchase of BMW car which is registered in the name of the Prof A A Kazi , trustee of the assessee trust which amounts to diversion of trust funds to the trustee and it is not a small amount and the justification given by the assessee trust to justify the purchase of car was not genuine. Nothing stopped the trust to purchase a decent car in the range of Rs. 10-12 lacs such as Honda City or Toyota corolla instead of buying a luxury BMW car costing Rs. 32,20,000/-. Utilization of such

7 ITA No.733/Mum/2016 Cancer Aid & Research Foundation huge funds for buying BMW car instead of using the same for charitable purposes for which said funds are raised and lying with the assessee trust refutes the basic concept of charity. Accordingly, the A.O. rejected the contentions of the asessee trust and held that the usage of BMW car, a luxurious car will create a doubt about the genuineness of the activities of the assessee trust. The A.O also held that no log book or any other evidence is produced to justify that the BMW car is used only for the work of the trust during the year and not for personal use by the trustee and hence the trust has diverted the funds and used for the benefit of excluded persons covered by provisions of section 13(1)(c)(ii), 13(2)(g) and 13(3)(cc) of the Act and in view of this , the exemption u/s 11 of the Act is denied to the assessee trust by the AO vide orders dated 28.12.2011 u/s 143(3) of the Act and accordingly additions were made to the income of the trust on account of donations received of Rs. 3,34,58,111/-, income from other sources of Rs. 16,16,4021- and income of Rs. 5,13,384/- received on account of investment. 6. Aggrieved by the assessment orders dated 28.12.2011 u/s 143(3) of the Act passed by AO, the assessee trust preferred an appeal before the CIT(A) and the assessee trust reiterated its submissions as made before the AO. The CIT(A) called for remand report from A.O. as the assessee trust submitted that the details submitted vide letter dated 2-12-11, 7-12-11 and 13-12-11 were not considered by the A.O. The A.O. in his remand report dated 05.12.2012 submitted that the contentions of the assessee trust were duly considered before passing the order dated 28.12.2011 u/s 143(3) of the Act. In reply to the remand report, the assessee trust once again reiterated its submissions as made earlier and also submitted as under:- “5.3.1 Regarding Purchase of BMW Car: The AO had proposed cancellation of exemption u/s. 11 on account of applicability of section 13 for purchase of BMW Car from the funds of the Trust in the personal name of the trustee. A. O. has also observed that Trust funds to the extent of Rs. 32,20,000/- have been diverted and used for the benefit

8 ITA No.733/Mum/2016 Cancer Aid & Research Foundation of excluded persons. Accordingly after considering the submissions made by the assessee vide letter dated 02.12.2011 and 13.12.2011, it is held that the provisions of section 13(1)(c)(ii) and section 13(2)(g) r.w.s. 13(3)(cc)are attracted to the Trust. Against the same, Assessee, through its authorized representatives had submitted vide letter no. UA/08/JUNE/IT/2012 dated 26th June, 2012 that the Learned Assessing Officer had erred in withdrawing the exemption granted to the trust u/s 11. Further, as per the provisions of Section 12AA of the Income Tax Act clearly state that the registration u/s 12 AA granted to a trust can only be revoked by the Commissioner of Income Tax or Director of Income Tax (Exemption), if he is satisfied that the activities of the trust or institution to whom registration was granted are not genuine or are not being carried out according to the objects of the trust, by passing an order on writing cancelling the registration of such trust or institution. However, such order for cancelling the registration can only be passed after giving the assessee a reasonable opportunity of being heard.” The assessee trust further submitted in its same reply that the payment for BMW car was made from bank account of the assessee trust, the car loan was obtained in the assessee trust name,the repayment of bank loan from ICICI bank is made from the assessee trust bank account, the sale proceed of BMW car was credited in the assessee trust bank account. The car was registered in the name of trustee by mistake and the BMW car was purchased keeping in view the size and scale of the assessee trust activities. …… ……” And also in support in reply to remand report of AO, the assessee trust also relied upon the decision in the case of CIT v. Dilip Singh Sardarsingh Bagga (1993) 201 ITR 995 (Bom) and Addl. CIT vs. U.P. State Agro Industrial Corporation Ltd.(1981) 127 ITR 97(All). 7. The CIT(A) after considering the submission of the assessee trust allowed the appeal of the assessee trust vide orders dated 31.03.2013 by holding there is no contravention of Section13

9 ITA No.733/Mum/2016 Cancer Aid & Research Foundation of the Act and the assessee trust is entitled to exemption u/s11 of the Act by observing as under:- “ 8. I have carefully considered the facts of case, assessment order and submissions of the appellant. 8.1 As regards the objection that the AO cannot deny exemption u/s 11 for violation of section 13 without the DIT(E) cancelling the registration, there is no substance in this objection. Section 13 starts with a non obstante clause which stipulates that where there is any violation of section 13 then the benefit of section 11 will not be available. 8.2 As regards the other objections however, I find substance in them. The appellant stated that the car was purchased for the purpose of the trust and not for the personal user of the trustee. The loan was applied in the name of the trust. The loan was also granted in the name of the trust. It is only by mistake the car dealer mentioned the trustee as the purchaser. The AO had also not conducted any independent inquiries as regards the actual user of this vehicle. He merely depended on one fact i.e. the name mentioned in the invoice raised by M/s Navnit Motors. Further, the AO states that buying of such luxury car for the use of influential donor is against the basic concept of charity and nothing stopped the assessee trust from purchasing a decent car in Rs. 10-12 lacs range such as a Honda City or Toyota Corolla, for the use of the trust and its guests/ donors. The AO's advice may apparently appear to be very sound but in the context of exemption u/s 11 is not relevant for the reason that there is no bar in buying such cars except that the user should be for the purposes of the trust. The A.O. has not given any finding that the car was used for non- trust purposes. In view of the Hon. Bombay High Court decision in CIT v. Dilip Singh Sardarsingh Bagga (1993) 201 ITR 995 wherein it was held that registration under the Motor Vehicles Act is not an essential pre-requisite for the acquisition of ownership of the motor vehicles and in view of the fact that the loan for purchasing the car was taken in the name of the trust and not in the name of the trustee, I am of the considered view that there is no contravention of provisions of section 13. 8.3 Therefore, following the above discussion, ground No. 1 and 2 are allowed.”

10 ITA No.733/Mum/2016 Cancer Aid & Research Foundation 8. Aggrieved by the above decision of the CIT(A), the Revenue is in further appeal before the Tribunal. 9. The ld. D.R. submitted that the assessee trust had purchased BMW car for Rs. 32,20,000/- in the name of the trustee which is a diversion of fund and violation of section 13(1)(c)(ii) and section 13(2((g) r.w.s. 13(3)(cc) of the Act., hence the A.O. has rightly disallowed the exemption u/s 11 of the Act vide orders of assessment dated 28.12.2011 and he relied upon the orders of the A.O.. 10. On the other hand, the assessee trust submitted that the BMW car is purchased by the trust but by mistake registered in the name of Prof. A.A. Kazi, the trustee and chairman of the assessee trust. The assessee trust reiterated its submissions before us as made before the authorities below which are not repeated for sake of brevity. The assessee trust further submitted that the registration u/s 12AA of the Act was cancelled by the Revenue and one of the grounds, inter-alia, for cancellation of registration of the assessee trust was the registration of the afore-stated BMW car in the name of the Mr A A Kazi, the chairman and trustee of the assessee trust and the Mumbai Tribunal in ITA No. 1782/Mum/2014 vide orders dated 16-07- 2014 has restore the registration of the trust u/s 12AA of the Act by holding as under : “18. The second objection of the learned DIT(E) is that the assessee had purchased BMW 325i car in personal name of the trustee Mr. A.A. Kazi, vide bill dated 20th March 2009. The car was purchased out of the funds of the trust. The learned DIT(E) held that nothing has been brought on record to show the need of buying such a luxury car. As brought on record, this issue was subject matter of scrutiny in the The Cancer Aid & Research Foundation assessment year 2009–10, wherein the Assessing Officer has invoked the provisions of section 13 to deny the exemption to the assessee trust. The matter had travelled up to the stage of first appellate proceedings, wherein the learned Commissioner (Appeals) has reversed the findings and the conclusion of the Assessing Officer by holding that the car was used for the purpose of the trust only and after recording detail reasons, he decided the

11 ITA No.733/Mum/2016 Cancer Aid & Research Foundation issue in favour of the assessee trust by holding that there is no violation of section 13. It has also been brought on record that the said car was sold in the next year. Such an objection of the learned DIT(E) in the present case, cannot be the subject matter of cancellation of registration under section 12AA(3), firstly, it is still a dabatable matter which is subjudice, whether there is any violation of section 13 or any misuse of trust fund; secondly, even if the car has been purchased in the name of the trustee, then at the most, it needs to be examined within the scope of section 13, and if at all there is any violation, then the income of the previous year in which such a violation took place, gets excluded from the exemption provided under section 11 i.e., surplus income becomes taxable for that year. If there is any kind of misuse of trust funds by the trustee or a related person of the trustee, then the statute provides enough power to the Assessing Officer to forfeit the exemption and tax the surplus. However, in such a situation, it cannot be held that the entire activities of the trust have been rendered non– genuine or its activities are not carried out in accordance with the objects of the trust. Similar issue had also come up for consideration before the Bangalore Bench of the Tribunal in Krupanidhi Educational Trust (supra), (as relied upon by the learned Counsel for the assessee), wherein on similar purchase of the BMW car purchased in the name of the trustee, the Tribunal held that it cannot be the basis for cancellation of registration under section 12AA(3), at The Cancer Aid & Research Foundation the most, it can be a violation of provisions of section 13. Thus, this objection of the learned DIT(E) cannot be held to be sufficient ground for cancellation of the registration. …… ……. …… 20. In view of the aforesaid discussion, we find that none of the objections and the grounds which have been taken by the learned DIT(E) in the impugned order for cancelling the registration can be held to be sustainable either on facts or in law, so as to hold that the activities of the trust are either not genuine or they are not being carried out in accordance with the objects within the scope of section 12AA(3). Moreover, nothing has been brought on record to show that the application of the income of the trust from year–to–year has not been made towards attainment of the objects i.e., for the

12 ITA No.733/Mum/2016 Cancer Aid & Research Foundation charitable purposes. If no discrepancy has been found in the income and expenditure account and there is a proper application of income towards the objects in accordance with the provisions of section 11, then neither the charitable nature of the trust should be doubted nor it can be held that its activities are not genuine or are not in accordance The Cancer Aid & Research Foundation with the objects for which registration was granted. Accordingly, we reverse the findings of the learned DIT(E) and hold that the registration granted to the assessee cannot be cancelled under section 12AA(3) on the ground stated by the learned DIT(E) in the impugned order. The grounds thus raised by the assessee are allowed. 21. ऩरयणधभ�ननधधारयती क�अऩीर वीक ◌◌ृत क�जधती है। 20. In the result, assessee’s appeal is allowed.” The assessee trust reiterated that one of the grounds for cancelling of the assessee’s registration u/s 12AA(3) of the Act was purchase of the aforestated BMW car for Rs.32,20,000/- in the name of the trustee instead of the assessee trust using the funds of the assessee trust and Mumbai Tribunal in ITA appeal 1782/Mum/2014 has held that the registration of the assessee trust cannot be cancelled u/s 12AA(3) of the Act on the grounds stated by DIT(E) which, inter-alia, included this purchase of BMW car in the name of Mr A A Kazi, chairman cum trustee of the assessee trust . The assessee trust also submitted that depreciation on the said BMW car was also taken by the assessee trust under the Act and the car was ultimately sold in subsequent year and the sale proceeds were credited in the bank account of the assessee trust . The loan re-payments to ICICI bank was also paid from the bank account of the assessee trust as well as payment of the initial funds for the purchase of the BMW car was also paid from the bank account of the assessee trust and these all evidences that the said BMW car was purchased by the assessee trust for its activities and was owned by the assessee trust. The assessee trust submitted in paper book which is placed on record the following documents which inter-alia includes following documents and also duly certified

13 ITA No.733/Mum/2016 Cancer Aid & Research Foundation by the assessee trust to be placed before the authorities below during the relevant proceedings relating to the assessee trust: 1. The copy of amended trust deed of the assessee trust 2. Audited accounts of the assessee trust for the financial year 2008-09 3. copies of ledger accounts of the assessee trust evidencing that the BMW car is capitalized in the books of accounts and also copies of ledger account of the ICICI Bank car loan reflecting that the repayments of loan are from the assessee trust bank account 4. Affidavit dated 16.12.2011 by Prof . (Retd) Abdulqadir Abdulla Kazi , the chairman cum trustee of the assessee trust whereby he solemnly affirmed in nutshell that he is devoting his full time to the activities of the trust without drawing any salary and about the activities of the trust in spreading awareness about prevention and early detection of cancer as well providing financial aid to cancer patients etc as well that the said BMW car was purchased pursuant to Board Resolution and the car was utilized thereafter for activities of the assessee trust only. 11. We have considered the rival contentions and perused the material available on record. We have observed that the assessee trust had purchased the BMW car for Rs. 32,20,000/- which is registered in the name of Prof. (Retd ) Abdulqadir Abdulla Kazi , chairman and trustee of the assessee trust although the said car has been capitalized and reflected in the Balance sheet of the assessee trust and also in the audited accounts. The depreciation on the afore-stated BMW car was also availed by the assessee trust as provided under the Act. The assessee trust has also availed the loan facility from ICICI bank in the name of the assessee trust for which repayments of loan has been made from the asseseee trust bank accounts and ultimately the car has been sold in the subsequent year and sale proceeds were credited in the bank account of the assessee trust. The assessee trust has also submitted before us that there was a mistake inadvertently committed by the staff

14 ITA No.733/Mum/2016 Cancer Aid & Research Foundation of the assessee trust in getting the same registered in the name of trustee of the assessee trust while buying the BMW car instead of getting it registered in the name of the assessee trust and it has been stated in the audited accounts for the financial year 2008-09 of assessee trust in ‘Schedule P -Notes forming part of Accounts’ as under : “4. The trust purchased a motor car for Rs.32,34,853/- during the year for the object of the Trust which is presently registered in the name of one of the trustee on account of mistake on the part of vendor. The trust has initiated necessary formalities to transfer the said motor car in the name of the Trust. Pending such transfer formalities in the name of the Trust said motor car has been shown as fixed asset in the books of accounts.” The audited accounts for the financial year 2008-09 was signed on 17th September 2009 in which above note was incorporated and signed by the Trustees and the auditors of the assessee Trust. This clearly evidences on the touch stone of preponderance of probabilities that there was a mistake happened at the time of purchase of the BMW car whereby it got registered in the name of the trustee instead of the assesssee trust although it was purchased by the assessee trust and once the mistake was detected , the steps were initiated to correct the mistake and to transfer the motor car in the name of the assessee trust. We have also observed that the registration of the assessee trust u/s 12AA of the Act was cancelled by the Revenue and one of the grounds for cancellation of registration of the assessee trust was the registration of the afore-stated BMW car in the name of the trustee and the Mumbai Tribunal in ITA No. 1782/Mum/2014 vide orders dated 16-07-2014 has restored the registration of the trust u/s 12AA of the Act by holding as under : “18. The second objection of the learned DIT(E) is that the assessee had purchased BMW 325i car in personal name of the trustee Mr. A.A. Kazi, vide bill dated 20th March 2009. The car was purchased out of the funds of the trust. The learned DIT(E) held that nothing has been brought on record

15 ITA No.733/Mum/2016 Cancer Aid & Research Foundation to show the need of buying such a luxury car. As brought on record, this issue was subject matter of scrutiny in the The Cancer Aid & Research Foundation assessment year 2009–10, wherein the Assessing Officer has invoked the provisions of section 13 to deny the exemption to the assessee trust. The matter had travelled up to the stage of first appellate proceedings, wherein the learned Commissioner (Appeals) has reversed the findings and the conclusion of the Assessing Officer by holding that the car was used for the purpose of the trust only and after recording detail reasons, he decided the issue in favour of the assessee trust by holding that there is no violation of section 13. It has also been brought on record that the said car was sold in the next year. Such an objection of the learned DIT(E) in the present case, cannot be the subject matter of cancellation of registration under section 12AA(3), firstly, it is still a dabatable matter which is subjudice, whether there is any violation of section 13 or any misuse of trust fund; secondly, even if the car has been purchased in the name of the trustee, then at the most, it needs to be examined within the scope of section 13, and if at all there is any violation, then the income of the previous year in which such a violation took place, gets excluded from the exemption provided under section 11 i.e., surplus income becomes taxable for that year. If there is any kind of misuse of trust funds by the trustee or a related person of the trustee, then the statute provides enough power to the Assessing Officer to forfeit the exemption and tax the surplus. However, in such a situation, it cannot be held that the entire activities of the trust have been rendered non– genuine or its activities are not carried out in accordance with the objects of the trust. Similar issue had also come up for consideration before the Bangalore Bench of the Tribunal in Krupanidhi Educational Trust (supra), (as relied upon by the learned Counsel for the assessee), wherein on similar purchase of the BMW car purchased in the name of the trustee, the Tribunal held that it cannot be the basis for cancellation of registration under section 12AA(3), at The Cancer Aid & Research Foundation the most, it can be a violation of provisions of section 13. Thus, this objection of the learned DIT(E) cannot be held to be sufficient ground for cancellation of the registration. …… …….

16 ITA No.733/Mum/2016 Cancer Aid & Research Foundation …… 20. In view of the aforesaid discussion, we find that none of the objections and the grounds which have been taken by the learned DIT(E) in the impugned order for cancelling the registration can be held to be sustainable either on facts or in law, so as to hold that the activities of the trust are either not genuine or they are not being carried out in accordance with the objects within the scope of section 12AA(3). Moreover, nothing has been brought on record to show that the application of the income of the trust from year–to–year has not been made towards attainment of the objects i.e., for the charitable purposes. If no discrepancy has been found in the income and expenditure account and there is a proper application of income towards the objects in accordance with the provisions of section 11, then neither the charitable nature of the trust should be doubted nor it can be held that its activities are not genuine or are not in accordance The Cancer Aid & Research Foundation with the objects for which registration was granted. Accordingly, we reverse the findings of the learned DIT(E) and hold that the registration granted to the assessee cannot be cancelled under section 12AA(3) on the ground stated by the learned DIT(E) in the impugned order. The grounds thus raised by the assessee are allowed. 21. fu/kkZfjfr fd vihy Lohdqr fd tkrh gSA 20. In the result, assessee’s appeal is allowed.” Nothing contrary has been brought to our notice by Revenue to controvert the contentions of the assessee trust. In our considered view based on our above findings , the CIT(A) has rightly allowed the exemption u/s 11 of the Act to the assessee trust by passing a well reasoned order. We find no infirmity in the orders of the CIT(A) and accordingly we uphold the same and hold that the assessee trust is entitled for exemption u/s 11 of the Act . We order accordingly. 12. In the result, the appeal filed by the Revenue is dismissed.” It is further noticed that in the aforesaid order, the Tribunal

has made an elaborate discussion with respect to purchase

of BMW car and similar observation was made by the

17 ITA No.733/Mum/2016 Cancer Aid & Research Foundation Revenue for Assessment Year 2009-10 also and finally, the

appeal of the assessee was allowed directing the DIT(E) that

the registration granted u/s 12AA of the Act cannot be

denied to the assessee. It is also noted that the order of the

Tribunal was affirmed by Hon'ble High Court of Bombay

vide order dated 25/07/2017 (ITA No.505 of 2015). No

contrary facts/decision were brought to our notice by either

side and more specifically the Revenue, therefore,

considering the decision of the coordinate Bench of this

Tribunal and following the decision from Hon'ble

jurisdictional High Court, we find no infirmity in the order

of the Ld. Commissioner of Income Tax (Appeal),

resultantly, the appeal of the Revenue is dismissed.

Finally, the appeal of the Revenue is dismissed.

This Order was pronounced in the open court in the

presence of ld. representatives from both sides at the

conclusion of the hearing on 30/11/2017.

Sd/- Sd/- (G. Manjunatha) (Joginder Singh) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated : 30/11/2017 f{x~{tÜ? P.S/.�न.स.,

18 ITA No.733/Mum/2016 Cancer Aid & Research Foundation आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील�य अ�धकरण, मुंबई / ITAT, Mumbai