2022 (7) TMI 1043 - AT - Income Tax

Exemption u/s 11 - registration u/s 12A Cancelled - as submitted assessee had been carrying on charitable activities by running, schools, engineering colleges and medical colleges - evidences collected during search - Appeals were allowed by Tribunal, the order of ITAT is not accepted by the Income Tax Department and the appeals against the same is filed before Hon’ble High Court of Karnataka - HELD THAT:- The pending of the appeal before Hon’ble High Court cannot be reason to cancel the registration u/s 12A of the Act. The Tribunal is the higher forum, which has considered the entire issue and deleted various additions and decided issue in favour of assessee. The Ld. Principal CIT is bound to follow the order of the Tribunal being lower in hierarchy and he is not expected to pass such comments unless the order of the Tribunal is reversed by due process of law. The Ld. Principal CIT cannot sit in judgement over the order of Tribunal.

Principal CIT considered the seized material collected by search conducted on 10.10.2019 and assessment completed on 30.9.2021. In our opinion, second search is a different proceeding that materials cannot be imported for cancellation of the registration granted u/s 12A of the Act, when the issue was restored to him by order of the Tribunal - Being so, the Principal CIT is not expected to place reliance on material gathered in second search and he cannot be considered it so as to cancel registration at this point of time. Accordingly, we restore the registration granted to the assessee w.e.f. 20.1.1992. Appeal of assessee allowed.