×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
The instant appeal is directed against the order of the CIT Central-I (in short Commissioner) dated 28.03.2018 passed u/s. 12AA(3) of the Act, cancelling the registration w.e.f A.Y. 2001-02, originally granted to the assessee u/s. 12A of the Act dated 22.01.1979.
2. The appellant before us is a Public Charitable Trust incorporated on 05.07.1978, which is registered with the Charity Commissioner. The Trust is also registered u/s. 12A of the Act with the Commissioner of Income tax, Bombay, vide order dated 22.01.1979. By way of the impugned order, the Commissioner has invoked section 12AA(3) for cancelling the registration granted to the assessee on 22.01.1979. Such cancellation has been made effective from A.Y. 2001-02. The appellant has raised multiple Grounds of appeal (revised), which read as under, assailing the impugned action of the Commissioner:-
“The Commissioner of Income Tax (Central) - 1 erred:-
1. in cancelling the registration granted u/s 12A of the Income Tax Act, 1961 (the Act) to the appellant Trust vide an order passed on 28 th March 2014
2. in not appreciating the activities carried on by the Appellant Trust were not of the nature that would make Section 12AA(3) of the Act applicable. She failed to appreciate that a registration could be cancelled only for the reasons mentioned in Section 12AA(3) of the Act and not for any other reasons.
3. In not correctly appreciating the nature of activities that were carried on by the Appellant Trust which were not found to be not genuine.
4. in holding that there was a diversion of income of the Trust for purposes other than the objects of the Trust and in holding the same tantamount to a violation of Section 11 and Section 13 of the Act.
5. In not appreciating that a violation of Section 13, if at all, was not a valid ground for cancellation of registration u/s 12AA(3) of the Act.
6. In not adequately appreciating the findings of the Hon'ble ITAT in the appellant's case for A Y 2001-02 and 2002-03 on advances given which were not held to be violative of Section 13 of the Act and the subsequent orders of the Hon'ble High Court upholding the said order of the Hon'ble ITAT.
7. In holding various advances given as investments made in violation of the provisions of Section 11(5) of the Act.
8. In holding that the payments to M/s Empire Chemists were covered by the provisions of Section 13(2)(c) and hence would lead to cancellation of registration u/s 12AA.
9. In holding that credit card payments were for personal expenses and were covered by the provisions of Section 13(2)(c) and hence would lead to cancellation of registration u/s 12AA.
10. In placing undue reliance on an order of the Joint Charity Commissioner notwithstanding that the same stayed by the Bombay Civil Court vide their order dated 4 th November 2009.
11. In cancelling the said registration with effect from Assessment Year 2001-02.”
Before we proceed to deal with the reasoning advanced by the Commissioner and the arguments of the appellant, it would be appropriate to briefly touch upon the history of the Trust and the activities that are being carried out since inception. For the said purpose, following discussion is relevant.
3. As noted earlier, the Trust has been set up vide registration of Trust Deed on 05.07.1978 and the objects of the Trust, which appear in clause 3 of the Trust deed read as under:
“(i) Affording medical relief and spread of medical science in such manner as the Trustees may think fit including:-
(a) Establishment and maintenance and support of Hospitals Health Centres and Dispensaries with or without Medical Schools and Nursing Institutions or any of them for treatment of patients suffering from diseases or accidents.
(b) Establishment acquisition and maintenance and support to Hospitals, Dispensaries, Maternity Homes, Homes Sanatoria, Research Centres, Laboratories. Preventive Health Centres, Hospice's, Diagnostic Centres, Medical Colleges and Medical Schools.
(c) Grant of subscription and donation to Hospitals, Dispensaries, Convalescent Homes, Asylums, Hospices, Health Centres, Baby Clinics, Nursing Homes and other Public Institutions for administering medical