Can registration of Trust be retrospectively Cancelled?
Case: Urmila Devi Charitable Trust vs. CIT, Delhi ITAT
The registration of Urmila Devi Charitable trust under Section 12AA was cancelled, nullifying the tax exemptions which it had been getting for the past 6 years.
CIT alleged that the assessee received a donation of Rs. 85 lakhs in cash, on its basis, the CIT presumed that the trust was carrying out some business which was not following the objects of the society.
- The entire order of the CIT was based upon presumptions and suspicion without giving any specific instance or finding to prove it.
- Notice for cancellation was issued in January 2016 but the registration was retrospectively cancelled from April 2010.
- Based on doubts about the genuineness of one donation in one year, genuineness of all the activities of the assessee could not be doubted.
- A conclusion could not be drawn that the activities of the society were not being carried out in accordance with the objects of the society.
- The CIT order was cancelled as the assessee’s registration u/s 12-AA of the Act if at all can be cancelled, could be done only prospectively and not retrospectively.
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