TMI Blog2008 (9) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT to withdraw or cancel the registration granted. We may also add that provisions of sub-s. (3) of s. 12AA were brought on the statute book w.e.f. 1st Oct., 2004 by Finance. The provisions of this section are substantive in nature since the same affect the valuable right of the assessee and therefore, in our opinion are prospective and cannot be given retrospective effect, in view of the decision of the Supreme Court in the case of Sedco Forex International Drill Inc. Ors. vs. CIT [ 2005 (11) TMI 25 - SUPREME COURT] wherein it has been held that even the provisions of an Explanation cannot be given retrospective effect unless specifically provided by the statute. It is not the case of the Revenue that legislature specifically provided the retrospective effect of such provision. Therefore, it is also to be held that even on this ground the provisions of s. 12AA(3) cannot be applied to the registration granted u/s.12A of the Act. When the Hon'ble Supreme Court in the case of Smt. Tarulata Shyam Ors. vs. CIT [ 1977 (4) TMI 3 - SUPREME COURT] declines to supply casus omissus even in a case where their Lordships have noted that the provisions in question are extr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut appreciating the correct facts and the position of law. 5. The appellant craves leave to add, alter, amend or delete any of the above grounds." 3. One of the issues raised before us is that powers conferred on the CIT, under s. 12AA(3), did not extend to cancellation of registration granted under s. 12A. A line of demarcation is drawn between the registrations granted under s. 12A and registrations granted under s. 12AA. It is also claimed that this issue is no longer res integra inasmuch as there are decisions of Co-ordinate Benches, in favour of the assessee, on this issue. 4. Let us address ourselves to this jurisdictional issue first. 5. Briefly, the material facts, so far as relevant to this issue, are as follows. The assessee trust was granted registration under s. 12A vide certificate of registration dt. 13th Sept., 1973 issued by the CIT, Pune. The trust deed of the assessee records the name of the institution as 'Bhartiya Vidyapeeth' and that it was established on 10th May, 1964. The objects of the trust, which were to impart education, as evident from the trust deed which records "the noble object of bringing about social and intellectual transformation in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2AA(3) was introduced by the Finance (No. 2) Act, 2004 w.e.f. 1st Oct., 2004, which provided that when a trust has been granted registration under cl. (b) of sub-s. (1) of s. 12AA and subsequently the CIT is satisfied that the activities of such trust are genuine or are not being carried in accordance with the object of the trust, the CIT shall pass an order in writing cancelling the registration of such trust. It is emphasized that the CIT has the jurisdiction of cancellation only if registration has been granted under sub-s. (1) of s. 12AA, whereas in the present case the registration was granted earlier under s. 12A. On this basis, a line of distinction is drawn between the registrations granted under s. 12A and registrations granted under s. 12AA. It is contended that while registration under s. 12AA(1) can be cancelled under s. 12AA(3) there is no such enabling provision in the case of registrations granted under s. 12A. It is further submitted that this issue is no longer res integra as there are large number of decisions by various Co-ordinate Benches of the Tribunal, wherein this basic legal proposition is accepted. In particular, our attention was invited to the decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments as also on the basis of arguments on merits, which we do not consider appropriate to refer at this stage, we are urged to set aside the impugned cancellation order passed by the learned CIT. Shri M.K. Dubey has supported the orders of the CIT, cancelling the registration. Apart from a strong reliance on findings of the CIT on merits to the effect that the activities of the trust were not within the framework of law, learned Departmental Representative has taken us through the wordings of s. 12A and argued that the said provision neither speaks about the granting of registration nor it has specifically provided any clause for the cancellation of the registration. It was submitted that if an authority has a power for granting a registration then naturally the legal consequence should be that the said authorities also have an inherent power of cancellation of the same. He has emphasized that this legal and natural corollary cannot be ignored. He has further advanced his argument that by the introduction of s. 12AA(3), it was meant to see the correctness of the registration of such institutes who have been earlier granted registration under s. 12A. If such power is envisaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the action of the assessment authorities in accordance with the law. We were once again urged to vacate the order of the CIT. 7. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position. 8. The plea of the assessee meets our approval. In our considered view, a registration granted under s. 12A of the Act cannot be withdrawn or cancelled by the CIT by invoking the provisions of s. 12AA(3) of the Act. Sec. 12AA(3) provides that "where a trust or an institution has been granted registration under cl. (b) of sub-s. (1) and subsequently the CIT is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be. he shall pass an order in writing cancelling the registration of such trust or institution". A plain reading of this provision shows that s. 12AA empowers the CIT to grant the registration in those cases where the assessee applies for such registration under sub-s. (1) of s. 12AA. Sec. 12AA(1), on the other hand, provides that the CIT, on receipt of an applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, in our opinion are prospective and cannot be given retrospective effect, in view of the decision of the Supreme Court in the case of Sedco Forex International Drill Inc. Ors. vs. CIT (2005) 199 CTR (SC) 320 : (2005) 279 ITR 310 (SC) wherein it has been held that even the provisions of an Explanation cannot be given retrospective effect unless specifically provided by the statute. It is not the case of the Revenue that legislature specifically provided the retrospective effect of such provision. Therefore, it is also to be held that even on this ground the provisions of s. 12AA(3) cannot be applied to the registration granted under s. 12A of the Act. We also find that the issue in appeal is squarely covered by a number of decisions on this issue by various Co-ordinate Benches and there is no contrary decision available, so far as this aspect of the matter is concerned. 9. Learned Departmental Representative has stated that such a view will make the provisions of the Act unworkable and that the only way to make these provisions workable is to construe the scope of s. 12AA(3) in such a manner so as to extend its scope also to the registrations granted under s. 12A. We a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
