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April 2023

Charitable purpose — Registration — Cancellation of registration — Condition precedent for cancellation — Registration granted after considering genuineness of the institution — Cancellation of registration on same provisions in trust deed — Not valid.

By K. B. Bhujle, Advocate
Reading Time 6 mins
1 Sri Ramjanki Tapovan Mandir vs. CIT(Exemption)
[2023] 451 ITR 458 (Jhar)
Date of order: 3rd November, 2022
Section 12AA of ITA 1961:

Charitable purpose — Registration — Cancellation of registration — Condition precedent for cancellation — Registration granted after considering genuineness of the institution — Cancellation of registration on same provisions in trust deed — Not valid.

The assessee was registered under section 12AA of the Income-tax Act, 1961. By order dated 4th September, 2018 the CIT (Exemptions), Ranchi cancelled the registration. This was upheld by the Tribunal.

On appeal by the assessee the Jharkhand High Court framed the following substantial questions of law:

“(1)    Whether the registration once granted under section 12AA of the Income-tax Act, 1961 could be cancelled on the basis of same set of provision of the trust which were examined earlier ?

(2)    Whether the Income-tax authorities have the jurisdiction under section 12AA(3) of the Income-tax Act, 1961 to question the legality and propriety of the trust deed of the assessee or its inquiry is limited to the conditions stipulated under section 12AA(3) namely,—

(i)    that the activities of the trust are not genuine, or

(ii)    are not being carried out in accordance with the objects of the trust?

(3)    Whether in th
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