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Income Tax Appellate Tribunal, “A ” BENCH, CHENNAI
Before: SHRI A.MOHAN ALANKAMONY & SHRI S.S. GODARA
आदेश / O R D E R
PER S.S. GODARA, JUDICIAL MEMBER This assessee’s appeal emanates from order dated 24.09.2014 passed by the Commissioner of Income Tax-I, I.T.A.No.2778/Mds/2014 :- 2 -:
Tiruchirapalli, in C.No. 6162E/CIT-I/TRY/2014-15, cancelling registration u/s. 12AA(3) of the Income Tax Act, 1961 [in short the “Act”].
Facts of the case are in a narrow compass. The assessee is a registered trust u/s. 12AA since 07.06.2010. There is no dispute about its objective being covered by the charitable purpose ‘’education’’. The CIT appears to have issued a notice for cancelling its registration for non filing of ‘return’. His order is silent on the date of notice. The assessee does not seem to have appeared. The CIT has cancelled its registration as under:-
“M/s. Shine Educational and Social Welfare Trust has been granted Registration u/s. 12AA of the Income-tax Act, 1961 vide this office C. No.6162E(82)/2009-10/CIT-I/TRY dated 07.06.2010. As per section 139(4A) of the Income-tax Act, the Trust has to file its return of income, if the total income without giving effect to provisions of section 11 & 12 exceeds the maximum amount which is not chargeable to tax. It is found from the details available with the department, that the trust has not filed its return of income till date from the grant of registration. Hence a show cause letter cited under reference 2 above was issued by the undersigned to the above trust requiring to state the reasons for non filing return of income of the trust. Further, the trust was also requested to file the receipts & payments and income and expenditure statement account and balance sheet for all AYs for which returns of income were not filed upto AY 2014-15 before 15.09.2014. It is also mentioned in that letter that, in case no reply is received and no information is furnished by the trust within the date mentioned, it would be presumed that trust does not have any objection for withdrawing the grant of registration u/s. 12AA of the Income-tax Act, 1961.
I.T.A.No.2778/Mds/2014 :- 3 -:
The above letter has been sent through Registered post to the address which was given, while making application requesting for grant of registration. However, the letter was returned unserved with the ‘’No such addressee, return to sender’’.
Therefore it is inferred that the trust is not in existence. As per section 12AA(3) of the I.T. Act, where a trust or an institution has been granted registration under clause (b) of sub section (1) and subsequently, the Commissioner if satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, Commissioner of Income tax shall pass an order in writing, cancelling the registration of such trust or institution.
Accordingly, the trust has to prove that the charitable activities for which the trust/institution/society was formed are genuinely carried out and therefore, based on the facts and circumstances of the case, it is construed that the Trust is not existing. Therefore, there is no point in allowing to continue the registration granted u/s. 12AA of the I.T. Act. Hence, the registration u/s. 12AA of the I.T. Act, 1961 granted to the Trust is hereby cancelled’’.
This leaves the assessee aggrieved.
We have heard both sides and perused the case file. The CIT’s order has been passed ex-parte. The assessee submits not to have received the CIT’s notice proposing cancellation of registration. He has proceeded to cancel its registration for non filing of return. A perusal of section 12AA (3) makes it clear that such a power can be exercised only if the concerned charitable trust’s or institution’s activities not genuine or are not been carried out in accordance with its objects as the case may be. Needless to say, non filing of a return does not find a mention as a cause for cancellation of section 12AA registration.
I.T.A.No.2778/Mds/2014 :- 4 -:
We make it clear that we are dealing with a tax statue wherein the powers of the Revenue have to be literally interpreted. The Revenue fails to quote any case law widening scope of section 12AA(3) in facts of the case. Therefore, we reject the assessee’s technical argument of non service of notice and reverse the CIT’s order on this legal aspect itself.
The assessee’s appeal is allowed.
Order pronounced on Friday, the 27th of February, 2015, at Chennai.