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The learned DIT(E) invoked amended provisions of Section 2(15) of 1961 Act which were amended w.e.f. 01-04-2009 by Finance Act , 2008 and Finance Act, 2010 . The ld. DIT(E) observed that assessee has shown income of Rs. 4,35,12,773/- on account of reimbursement of handling, carting and custom expenses as recovered from its members , against which payment of Rs. 69,87,555/- was made to MMTC which act as custodian and to the custom authorities of Rs. 1,74,13,599/-. It was observed by ld. DIT(E) that the assessee makes payment to MMTC which has acted as clearing and forwarding agent on behalf of members. It was held by ld. DIT(E) that the activities of the assessee are in the nature of business which is being carried on by the assessee and there is no concept of mutuality as contended by assessee. Thus, ld DIT(E) held that activities of the assessee are in the nature of business and receipts of the assessee exceeded the monetary limit specified by second proviso to Section 2(15) of 1961 Act which has come into effect from assessment year 2009-10. Thus, the assessee has lost its charitable character. Thus, the trust becomes non genuine for the purposes of Section 7 ITA 884/M/2012 , 2789/M/2011 4437/M/2011, 2790/M/2011 4852/M/2011, 2791/M/2011 6591/M/2011, 3004/M/2013 3127/M/2015 11 of 1961 Act as it looses its charitable status and hence provisions of Section 12AA(3) of 1961 Act gets attracted, was the observation of ld. DIT(E). The learned DIT(E) thus cancelled/withdrew the registration as allowed to the assessee in earlier years u/s 12AA of 1961 Act w.e.f. assessment year 2009-10 and the assessee was held to be non-charitable trust/institution by ld. DIT(E), vide orders dated 27.12.2011 passed u/s 12AA(3) of 1961 Act.

3. Aggrieved by the orders dated 27.12.2011 passed by learned DIT(E) u/s 12AA(3) of 1961 Act cancelling / withdrawing the registration as allowed to the assessee in earlier years u/s 12AA of 1961 Act w.e.f. assessment year 2009-10, the assessee filed first appeal before the tribunal.

4. The assessee has reiterated its submissions as were made before learned DIT(E) which are not repeated for sake of brevity. The assessee also contended that the activities of the assessee were held to be charitable by Hon'ble Apex Court in the assessee's own case in DIT v. Bharat Diamond Bourse (2003) 259 ITR 280(SC) vide orders dated 16.12.2002. wherein Lordships held as under:

14 ITA 884/M/2012 , 2789/M/2011 4437/M/2011, 2790/M/2011 4852/M/2011, 2791/M/2011 6591/M/2011, 3004/M/2013 3127/M/2015

5. With the introduction of Chapter XII-EB in the Act vide Finance Act, 2016, prescribing special provisions relating to tax on accreted income of certain trusts and institutions, cancellation of registration granted u/s 12AA may lead to a charitable institution getting hit by sub-section (3) of section 115TD and becoming liable to tax on accreted income. The cancellation of registration without justifiable reasons may, therefore, cause additional hardship to an assessee institution due to attraction of tax-liability on accreted income. The field authorities are, therefore, advised not to cancel the registration of a charitable institution granted u/s 12AA just because the proviso to section 2(15) comes into play. The process for cancellation of registration is to be initiated strictly in accordance with section 12AA(3) and 12AA(4) after carefully examining the applicability of these provisions.

There were also further amendments in Section 2(15) of 1961 Act by Finance Act, 2011 and Finance Act, 2015. The assessee's activities are predominantly in the nature of advancement of objects of general public utility which activities appears prima-facie to be connected to trade, commerce or business, or an activity of rendering any service in relation to trade, commerce or business of gem , diamond and jewellery business and also the assessee turnover is exceeding the maximum threshold limit for availing exemption. However, there is a need for AO to evaluate the activities of the assessee in context of amended definition of Section 2(15) of 1961 Act at the stage of framing assessment. So far so good, the provisions of Section 12AA(3) of 1961 Act as it stood now empowers learned Principal Commissioner or Commissioner to cancel the registration u/s 12AA of 1961 Act on either of the two grounds namely the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects