MADHYA PRADESH MADHYAM Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE petitioner is assailing the issuance of show-cause notice as to why registration be not cancelled under the provisions of Section 12a read with Section 12aa of the Income-tax Act, 1961. The petitioner was granted registration as charitable institution. The petitioner is an undertaking of the State of Madhya Pradesh According to the petitioner, it is undertaking charitable activities in the very nature which are defined in Section 2 (15) of the Income-tax Act, 1961.

(2.) THE petitioner submits that this question was adjudicated by the Income-tax Department whether the petitioner can avail of such an exemption ; considering the nature of the activities while passing the assessment order for the year 1994-95, an order was passed by the Income-tax Appellate Tribunal, Indore Bench, Indore (annexure P/5), in which the view was taken that till registration stands, the authorities are bound by it and cannot take a different view as to the nature of the activities. On the facts also an examination appears to have been made of the expression "any other object of general public utility" and it was found that it is difficult to hold that the object of the assessee/institution was not for general public utility. The petitioner submits that once this finding was recorded by the Income-tax Appellate Tribunal, it was not open to issue a show-cause notice annexure P/4 which was issued on January 23, 2002, by the Government of India, Ministry of Finance (Department of Revenue), office of the Commissioner of Income-tax, Bhopal, it is quoted below :

(3.) THE above activities are clearly in the nature of commercial activities intended to earn profit and, therefore, you were/are not entitled for registration under Section 12a of the Income-tax Act, 1961. Your claim before the authorities below that you are like a State Government Department is also not correct because you are registered as a society under the Madhya Pradesh Societies Registration Act, 1973, and, therefore, you are an independent entity covered within the definition of 'person' in terms of the provisions of Section 2 (31} of the Income-tax Act, 1961. In the circumstances, I propose to cancel the registration under Section 12a of the Income-tax Act, 1961, granted to you on January 29, 1986.