Section 12AA(3) of the Income Tax Act
The decision most relied on for Section 12AA(3) is Parshuram Pottery Works Ltd. v. ITO (264 ITR 276), cited in 73 of the 256 judgments on BharatTax that turn on this section.
Leading authorities on Section 12AA(3)
An Assessing Officer is bound by the rule of consistency and cannot make a 'U-turn' in their assessment unless the revenue brings contrary facts on record.
Cancellation of registration under Sections 12AA and 80G of the Income-tax Act is justified when a trust misuses its status by returning substantial donations in cash to donors.
A donor cannot be held responsible for the utilization of their donation by a donee institution once the statutory conditions for claiming a deduction are met. Subsequent withdrawal of approval for the donee institution cannot retrospectively deny the donor the deduction.
Authorities cannot reject an application for registration under section 12A or recognition under section 80G solely on the ground of absence of activities when the trust has approached for registration within a reasonable time after its formation. The objects of the trust must be examined.
Application of income for charitable purposes 'in India' is the relevant criterion, not whether the expenditure was incurred within or outside India. If income is applied for charitable activities outside India, it does not automatically mean the charitable activities themselves were conducted outside India.
Registration under Section 12A cannot be cancelled solely on grounds that were or could have been considered at the time of granting registration. The benefit of Section 12A registration is not available if the assessee's case falls under the first proviso to Section 2(15).
Violation of Section 13 provisions does not empower the Commissioner to cancel registration under Section 12AA(3); such violations are grounds for forfeiting exemptions under Sections 11 and 12 during assessment.
