TMI Blog2012 (3) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... hich operates in respect of a trust, which has already been registered in the past does not have a retrospective character. A law which operates with respect to an event which has occurred in the past is not necessarily retrospective - This cannot by any stretch of imagination, be regarded as a retrospective alteration of the law - WRIT PETITION NO2545 OF 2011 - - - Dated:- 1-2-2012 - DR. D.Y. CHANDRACHUD M.S.SANKLECHA, JJ. Mr.Jehangir D.Mistri, Senior Advocate with Mr.Niraj Sheth and Mr.Nitin Dhumal for the Petitioner. Mr.Vimal Gupta for the Respondents. ORAL JUDGMENT (PER DR.D.Y.CHANDRACHUD, J.) : A notice was issued to the Petitioner under Subsection (3) of Section 12AA of the Income Tax Act, 1961, on 31 July ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 by the Finance (No.2) Act, 2004 could not have retrospective effect. Consequently, the order of the Commissioner of Income Tax was set aside. The Revenue has filed an appeal against the decision of the Tribunal, which has been admitted by a Division Bench of this Court on 10 June 2009. 3. Section 12AA(3) has since been amended by the Finance Act of 2010 with effect from 1 June 2010. As amended, the provisions reads as follows: (3) Where a trust or an institution has been granted registration under clause (b) of sub section (1) or has obtained registration at any time under section 12A as it stood before its amendment by the Finance (No.2) Act, 1996 (33 of 1996) and subsequently the Commissioner is satisfied that the activities of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Act of 2004 with effect from 1 October 2004. Hence, it is submitted that the amendment which has been inserted by the Finance Act of 2010 cannot go behind the insertion of subsection (3) with effect from 1 October 2004. Reliance is sought to be placed on the judgment of the Supreme Court in Sedco Forex International Drill Inc.vs. Commissioner of Income Tax (2005) 279 ITR 310 (SC). 5. There is no merit in the challenge to the constitutional validity of the provision. As a result of the amendment, which has been brought about by the Finance Act of 2010, Subsection (3) of Section 12AA has been amended specifically to empower the Commissioner to cancel a registration obtained under Section 12A as it stood prior to its amendment by the Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it takes away a right which has vested or accrued in the past. The effect of the provision is to empower the Commissioner to cancel the registration of a trust where he is satisfied that the activities of the trust are not genuine or are not being carried out in accordance with the objects of the trust or institution. This cannot by any stretch of imagination, be regarded as a retrospective alteration of the law. In any event, Parliament has plenary powers as a legislative body to enact legislation either with retrospective or prospective effect subject only to the requirement that such legislation should not offend the provisions of Part III of the Constitution. Empowering the Commissioner to cancel the registration of a trust or institu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Supreme Court observed that the High Court had while dealing with the appeal from the decision of the Tribunal purported to give retrospective effect to the explanation introduced in 1999. This according to the Supreme court was not permissible as the explanation had not come into effect during the assessment years in question. The Supreme Court further held that a cardinal principle of tax Law is that the law to be applied is that which is in force during the relevant assessment years unless otherwise provided expressly or by necessary implication. In that view it was held that the explanation was not retrospective. 7. In the present case, the issue is not with regard to the assessment of income of the petitioners as in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y registration as a charitable trust under Section 12A prior to 2010 would not make the amendment retrospective in operation. The amendment does not take away any vested right nor does it create new obligations in respect of past actions. Therefore, the decision in Sedco Forex (supra) is inapplicable to the facts of the petitioner s case. 8. In the present case, by and as a result of the amendment by the Finance Act of 2010, the Commissioner has been empowered to initiate steps for the cancellation of the registration of a trust or institution where the activities of the trust/institution are not genuine or are not being carried out in accordance with the objects thereof even in relation to a trust which was registered under Section 12A a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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