REVOCATION OF A TRUST'S REGISTRATION of a TRUST UNDER SECTION 12 AA (1) (B)(II)

Once Commissioner grants registration to a trust under section 12AA(1)(b)(ii) after satisfying himself about activitiesof trust, such a registration cannot be cancelled by following very sameprovision of section 12AA(1)(b) to go into genuineness of activities of trust

HIGH COURT OF MADRAS

Commissioner of Income -tax-I, Madurai

v.

Sarvodaya Ilakkiya Pannai

Section 12AA of theIncome-tax Act, 1961 - Charitable or religious trust - Registration procedure -Assessment years 2008-09 to 2010-11 - Whether once Commissioner grantsregistration to a trust under section 12AA(1)(b)(ii) after satisfying himselfabout activities of trust, such a registration cannot be cancelled by followingvery same provision of section 12AA(1)(b) to go into genuineness of activities of trust - Held, yes - Whether, however, Commissioner is empowered to revokecertificate in terms of section 12AA(3) in event Commissioner is satisfied subsequently, i.e., after registration that activities of such trust orinstitution are not genuine or not being carried out in accordance with objectsof trust or institution as the case may be - Held, yes - Assessee-trust was formed with object of publishing and selling Sarvodaya Literature as also Gandhian and Sarvodaya ideologies - Commissioner granted registration toassessee-trust under section 12A - Subsequently, Commissioner passed an order under section 12AA(3) cancelling registration on ground that assessee wasengaged in purchase and sale of books which was a commercial activity - Onappeal, Tribunal set aside order of Commissioner holding that none ofconditions under section 12AA(3) were violated and therefore, satisfaction whichwas arrived at by Commissioner was not justified - Whether on facts and, having regard to aforesaid legal position, impugned order passed by Tribunal did not require any interference - Held, yes [In favour of assessee]