The Commissioner of Income Tax vs. Sri N. Giridhar Reddy,

Court No. - 35 Case :- INCOME TAX APPEAL No. - 324 of 2010 Appellant :- The Commissioner Of Income Tax And Another Respondent :- Swami Atulanand Rachna Parishad Counsel for Appellant :- Piyush Agarwal Counsel for Respondent :- Siddharth Pathak Hon'ble Bharati Sapru,J. Hon'ble Neeraj Tiwari,J. Heard Shri Piyush Agrawal, learned counsel for the appellant and Shri Siddharth Pathak, learned counsel for the respondent- assessee. This appeal under Section 260-A of the Income Tax, 1961(hereinafter referred to as the 'Act') has been filed by the department against the order of the Income Tax Appellate Tribunal dated 30.03.2010 for the assessment year 2007-08. The questions of law sought to be answered are as hereunder: "(1) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in coming to the conclusion that registration granted to the assessee has been cancelled u/s 12- AA(3) of the Act merely on the ground that approval u/s 10(23c) (vi) of the Act had been denied to the assessee by completely overlooking and ignoring the fact that the CIT had cancelled the registration after having satisfied himself that the acitivities of the assessee society were not charitable in nature ? (2) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the assessee is eligible for continued registration despite the fact that that the assessee does not fulfill the requirement of being a charitable institution?. (3) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in not taking into consideration the decisions relied upon by the CIT in his order u/s 12-AA(3) of the Act while cancelling the registration of the assesseee society." The Tribunal has conclusively come to the conclusion that merely because the CIT had cancelled the registration of the assessee for grant of exemption under Section 10(23c)(vi) of the Act on the grounds that the assessee had received some money from sale of milk would not lead to the inevitable conclusion that the registration under Section 12AA of the Act could be cancelled. The provisions for exemptions are completely different for that of registration under Section 12AA of the Act. The

assessee was an educational institution which used to provide milk to its students. During the vacations the milk was surplus and was therefore, sold. For this reason, it cannot be said that the objects of the charitable society itself had failed or that for this reason the registration could be cancelled. The Tribunal has rightly come to the conclusion that registration could not have been cancelled. The order of the Tribunal is upheld. In view of above, the questions of law are answered in favour of the assessee and against the department. The appeal is accordingly dismissed. Order Date :- 12.3.2018 pks