M/s Mumbai Port Trust Vs DIT (Exemption) (ITAT Mumbai)
Under the scheme of the Act for cancelling registration is clear. The status of registration under section 12AA will not be affected as recognized under sub-section (8) of section 13, on the availability of receipts in excess of prescribed limit. The assessee will be disentitled for exemption under section 11, if the income of the assessee from the activities is hit by the proviso to section 2(15) in any Assessment Year. We are of the view that the cancellation of registration under section 12AA of the Act, can only take place, when the activities of the trust or institution are not genuine and/or not carried in consonance with its object.
The Circular No.21/2016 issued by CBDT came in rescue to the assessee-trust in the present case. The submission of ld. DR that activities of the Trust is not genuine because it is hit by proviso to section 2(15) of the Act, is in fact negatived by this Circular. The Circular clearly provides that mere receipt on account of business receipt in excess of limit in the proviso would not result in cancellation of registration granted under section 12AA, unless there is change in the nature of activities of the assessee.
