Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2007 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (10) TMI 318 - AT - Income TaxCancellation of registration u/s 12AA - Society registered as a Charitable trust - certain papers and documents impounded - diversion of funds of the institution for personal benefits of the founder members of the trust - Whether the CIT should have waited till the final assessment is completed or not - HELD THAT:- Despite the facts that the assessee has disclosed a sizeable amount for reasons best known to them, simply should not be a basis for immediate cancellation of registration without final determination/assessment in the search and seizure proceedings. We consider the same to be premature and in clear cut judicial terms it is like hanging a person before pronouncement of a judgment. Even otherwise going through the cancellation order of the CIT it transpires that the basis of cancellation as has been adopted by the CIT is on the search and seizure assessment proceeding alone. No other finding have been depicted in his order. His apprehension and argument that continuance of registration will have a bearing on the search and seizure assessment proceedings is equally vital as on the other hand cancellation of registration will also have a bearing to the assessment proceeding. In our considered opinion both the cancellation as well as continuance of registration will have an effect and a bearing on the assessment proceeding. It does not mean that the assessment proceeding being a quasi judicial proceeding should be interfered like the present one. Rather in all fairness the CIT should have taken precaution to complete the assessment expeditiously and then should have arrived at the conclusion of proposed cancellation of registration. The present act of the CIT amounts to interruption in the assessment proceeding. The power under s. 12AA(3) has been enunciated under the Act is an unbridled power in the hands of CIT to safeguard the interest of Revenue as and when he is satisfied to do so. It does not mean that this unbridled power given by the Act after much deliberation in the Parliament should be utilized without clear cut satisfaction. As per strict judicial discipline we consider that power of punishment is a unbridled power like the present power of cancellation envisaged under s. 12AA(3). But such unbridled power should be utilized quite cautiously and consciously. With the aforesaid findings we are of the considered opinion that the order of the CIT is a prematured one which has been utilized at a prematured stage in haste. Accordingly the assessee succeeds in its appeal regarding continuance of registration. Before parting with our order it will not be out of place to mention here that our order has nothing to do with the search and seizure assessment proceedings. The concluding finding in the search and seizure assessment proceeding may be utilized by the Revenue or by the assessee in their respective favour accordingly. In the result, the appeal filed by the assessee is allowed as stated above.
|