INCOME TAX ACT, 1961

Section 12AA(3)

Charitable trust - Cancellation of registration under section 12AA - Cancellation on apprehension that assessee's activities would get covered under amended proviso to section 2(15) -

Assessee, a Statutory Corporation established under Goa, Daman and Diu Industrial Development Corporation Act, 1965 (GIDC Act) with the object of securing orderly establishment in industrial areas and industrial estates and industries for rapid and orderly establishment, growth and development of industries in Goa, was registred under section 12A. CIT in the context of proviso to section 2(15) introduced with effect from 1-4-2009, took the view that assessee was carrying on business for profit so as to attract proviso to section 2(15) and accordingly, CIT cancelled registration under section 12A. Held: In terms of Circular No. 21/2016 process of cancellation of registration has to be initiated strictly in accordance with section 12AA(3) and after carefully examining the application of said provisions. There were no categorical findings that activities of assesse were not genuine or not in accordance with objects of the institution. Merely because, by reference to amended provisions in section 2(15), it might be possible to apprehend that activities of assessee would get covered under the proviso, that, by itself, could not render activities of assesse as non-genuine so as to entitle CIT to exercise powers under section 12AA(3).

REFERRED :

FAVOUR : in assessee's favour

A.Y. :

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