AURO LAB Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) Since the issue involved in all the Writ Petitions are one and the same, they are taken up together and decided by this common order.

(2.) Facts of the case projected by the petitioner in W.P(MD)Nos.12067 to 12070 of 2011:-

(3.) The respondent through their counter has stated that registration was granted to the petitioner's Trust under Section 12A of the Income Tax Act on 09.10.1992 erroneously and it was not based on any facts or materials. According to them, the Trust is manufacturing ophthalmic products as per objects clause (e) of the Trust Deed and profits generated year after year. Only a small portion of the surplus generated from the above activity got applied for charitable activity by way of donations mostly to organisations, in which, the same trustees were the founders. As nothing was performed in regard to the object clauses (a) to (d), which speaks about "medical relief", it was concluded that the object clause (e) fails together with the other four objects and therefore the registration granted to the petitioner's Trust under Section 12(A) of the Income Tax Act was cancelled by an order dated 09.10.1992 which was challenged before the Tribunal and it was dismissed stating that where the assessee has not carried on any charitable activities but only a business and even if a part of that business income is applied for charitable purposes, still the assessee could not be treated as an institution entitled for the benefit of Section 11 of the Act. But, in the present case, the assessee has converted the incidental objects as the main objects of the assessee being that of carrying on for full fledged business and chosen not to carry on the proclaimed main objects of the charitable activities and thus justified the cancellation of the registration of the petitioner company. According to them, such power of cancellation of registration is inherent and flows from the authority of granting registration. Section 12AA(3) of the Income Tax Act was amended only to provide clarity to the power of cancellation of the authority concerned. Therefore, it was contended that the reopening of the assessment is in order and prays for the dismissal of the writ petitions.