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2019 (6) TMI 781 - AT - Income TaxRegistration u/s 12AA - jurisdiction of the CIT vested in section 12AA(3) in cancelling registration - CIT cancelling the registration w.e.f A.Y. 2001-02, originally granted to the assessee u/s. 12A of the Act dated 22.01.1979 - HELD THAT:- In the present case, the case sought to be made out by the Commissioner is that the violation carried out by the assessee would lead to denial of exemption u/s. 11 & 13 and, therefore, the pre-requisite of section 12AA(3) is satisfied. Commissioner records that the violation of section 11 & 13 would result in forfeiture of exemption not only for the year in which such transactions occur but also for the years when such arrangement continues to be in force. In our considered opinion, such an approach of the CIT is quiet misdirected and is inconsistent with the legal position on the subject contemplated u/s. 12AA(3) so as to cancel registration already granted. On the preliminary point itself, we find that the impugned order of the CIT cancelling the registration u/s. 12AA(3) is bereft of a valid jurisdiction. Violation of section 13 - The situation sought to be covered by section 12AA(4) revolves around the manner in which activities are carried out, including a case where the income or property of the trust is applied for specific persons like author of trust, trustees, etc; or investment of funds in prohibited modes, etc. The aforesaid are areas, which are contained in section 13 which disentitles an assessee from the exemptions contained in section 11 and 12. Violation of section 13 is also sought to be covered by the Legislature by insertion of sub-section (4) to section 12AA as a ground for cancellation of registration. So however, the said provision is effective from 01.10.2014. Pertinently, we are dealing with the impugned order of the CIT dated 28th March 2014 and, therefore, the provisions of section 12AA(4) inserted w.e.f. 01.10.2014 would have no application. In fact, the insertion of section 12AA(4) of the Act on a subsequent date reinforces the legal position noted by us in earlier paras that in the impugned case what the Commissioner was required to satisfy the then existing conditions contained in section 12AA(3) in order to cancel the registration. Thus, the impugned reasons advanced by the CIT do not give him jurisdiction to invoke section 12AA(3) at the relevant point of time. Therefore, we conclude by holding that having regard to the facts and circumstances of the case the CIT has wrongly invoked section 12AA(3) in as much as the requisite conditions contained therein are not fulfilled - we set-aside the order of the CIT and restore the registration originally granted to the assessee u/s. 12AA on 22.01.1979 - Decided in favour of assessee.
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