TMI Blog2013 (8) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... see. - ITA No.13/Agra/2013 - - - Dated:- 19-7-2013 - Shri Bhavnesh Saini And Shri A. L. Gehlot,JJ. For the Appellant : Shri G. P. Agarwal, C.A. For the Respondent : Shri S. L. Maurya, Jr. D.R. ORDER Per A. L. Gehlot,Accountant Member: This is an appeal filed by the assessee against the order dated 09.11.2012 passed by the learned CIT -I, Agra. 2. The grounds raised in this appeal are reproduced as below:- "1. That having regard to the facts and circumstances of the case, the Ld. CIT has erred in cancelling the registration U/S 12AA(3) and that too retrospectively from A.Y. 2009-10. 2. That in any view of the matter and in any case action of Ld. CIT in passing the impugned order u/s 12AA(3) cancelling the registration is bad in law and against the facts and circumstances of the case. 3. That having regard to the facts and circumstances of the case, Ld. CIT grossly erred both in law and fact by cancelling registration u/s 12AA(3) in the light of change in definition of charitable purpose [u/s 2(15) of Income Tax Act. 1961 w.e.f. A.Y. 2009-10]. 4. That having regard to the facts and circumstances of the case, the Ld. CIT has erred in holding that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny activity of rendering any service in relation to any trade, commerce or business for a cess for a fee or any other consideration. On perusal of income and expenditure statement, the CIT noted that the activities of the assessee, Mathura Vrindavan Development Authority, are in nature of trade, commerce or business and attract provisions of section 2(15) as such. The CIT rejected the assessee's submission on the ground that the object of the assessee, Mathura Vrindavan Development Authority, clearly falls in the fourth limb i.e. advancement of any other object of general public utility as it is neither relief to poor, nor education nor health. The activities carried on by the assessee are in the nature and trade, commerce or business. Thus, the assessee is hit by proviso to 4 ITA No.13/Agra/2013 section 2(15) of the Act as inserted by Finance Act, 2008. The CIT cancelled the registration of the assessee under section 12A/12AA of the Act as under :- (Page 9) "8. In addition to above, another noteworthy fact is that statutory bodies with similar objects and activities like Punjab Urban Development Authority, Haryana Urban Development Authority, Indore Development Authority, Jaland ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Authority shall be to promote and secure the development of the development area according to plan and for that purpose the Authority shall have the power to acquire, hold, manage and dispose of land and other property, to carry out building, engineering, mining and other operations, to execute works in connection with the supply of water and electricity, to dispose of sewage and to provide and maintain other services and amenities and generally to do anything necessary or expedient for purposes of such development and for purposes incidental thereto. 5. The ld. Authorised Representative submitted that grounds no.1, 2, 3, 7 are in respect of challenging cancellation of registration under sedition 12AA of the Act. The grounds no.4, 5, 6 are on merit of the case. Ground no.8 is general in nature. 6. The ld. Departmental Representative, on the other hand, relied upon the order of CIT. 7. We have heard the ld. Representatives of the parties and records perused. The admitted facts of the case are that registration under section 12AA of the Act has been granted to the assessee, Mathura Vrindavan Development Authority, w.e.f. 01.04.2002 vide order dated 18.02.2008. The power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aa) of sub-section (1)] of section 12A, shall-- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. [(1A) All applications, pending before the Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Commissioner and the Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.] (2) Every order granting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of a charitable or religious trust or institution is available only if the conditions specified in that section are satisfied. One of these conditions if that the person in receipt of the income shall make an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Chief Commissioner or Commissioner of Income-tax within the specified time. However, there was no provision in the Income-tax for processing of such an application and granting or refusal of registration to the concerned trust or institution. Finance (No. 2), Act, 1996 19.2 Hence the Act now provides for a procedure to be followed for grant of registration to a trust or institution. According to this procedure, the Chief Commissioner or Commissioner shall call for documents and information and conduct enquiries to satisfy about the genuineness of the trust or institution. After he is satisfied about the charitable or religious nature of the objects and genuineness of the activities of the trust or institution, he will pass an order granting registration. If he is not so satisfied, he will pass an order refusing registration. However, an opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (All.), wherein it was held as under :--(Page No. 390) "Regarding cancellation of registration which was granted on April 1, 1999, under section 12A of the Act, it is true that there was no express pro vision in section 12A of the Act for cancellation of the registration. The applicability of section 21 of the General Clauses Act, 1897, was discussed by the Uttaranchal High Court in the case of Welham Boy's School Society [2006] 285 ITR 74 (Uttaranchal), where it was observed that any order passed by the Commissioner of Income-tax under section 12A is a quasi-judicial order, which does not fall in the category of "orders" mentioned in section 21 of the General Clauses Act, 1897, by relying the ratio laid down in the case of Ghaurul Hasan v. State of Rajasthan, AIR 1967 SC 107. The High Court observed that by virtue of section 21 of the General Clauses Act, the Commissioner of Income-tax had no power to rescind the order passed earlier by the Commissioner granting registration to the petitioner's society. It may be mentioned that section 12AA(3) was incorporated with effect from October 1, 2004, to empower the Commissioner to cancel the registration granted to a trust or instituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from 01.10-2004. There is no dispute with regard to this fact that the provision regarding cancellation of registration came to be introduced for the first time by virtue of sub-section (3) in section 12AA with effect from 1-10-2004. This sub-section (3) provides that when a trust or an institution has been granted registration under clause (b) of sub-section (1) and subsequently the Commissioner 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. From the conjoint reading of sub-section (1) clause (b) and sub-section (3) of section 12AA, it would be seen that the cancellation of the registration was provided where the registration was granted under clause (b) of sub-section (1). Further cancellation under sub-section (3) was also provided where the registration was obtained at any time under section 12A [may be under clause (a) or clause (aa) of sub-section (1) of section 12A]. But this power of cancellation of registration obtained under section 12A came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explains that this amendment will apply for A.Y. 2011-12 and subsequent years. Whereas, in the case under consideration, the CIT cancelled registration under section 12A of the Act for A.Y. 2009-10 which is not in accordance with the law. This view is fortified by the judgment of Hon'ble Delhi High Court in the case of DIT(E) vs. Mool Chand Khairati Ram Trust, 339 ITR 622 (Delhi) and order of I.T.A.T. in the case of Director of Income-tax (Exemption), Ahmadabad vs. N.H. Kapadia Education Trust, 136 ITD 111 (Ahd) wherein the I.T.A.T., Ahmedabad has followed the judgment of Hon'ble Delhi High Court. ii) Even otherwise also, as we notice that registration under section 12A/12AA can be cancelled in the circumstances provided in section 12AA(3) of the Act of which detail has been discussed above in Para no 19 of this order. If we apply the said condition stipulated in section 12AA(3), we find that there is no finding of the CIT that activities of the assessee, Agra Development Authority are non-genuine or not being carried out in accordance with the object of the assessee, Agra Development Authority. Even for the sake of argument if we accept the view of CIT, there may be a case of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny vested aright nor does it create new obligation in respect of past actions. The Court did not express their opinion on merit of the case. Thus, we find that the CIT wrongly applied the said judgement to the facts of the case under consideration. 21.1. The CIT and ld. Departmental Representative relied upon certain orders of I.T.A.T. where in the issue was different. The issue in those cases were pertaining to grant fresh registration under section 12AA of the Act and not cancellation of registration under section 12A of the Act under section 12AA (3) of the Act. Some of the decisions of I.T.A.T. are contrary to the judgement of Hon'ble Delhi High Court in the case of Director of Income Tax (Exemption) vs. Mool Chand Khairati Ram Trust, 339 ITR 622 (Delhi). Therefore, those decisions are distinguishable on facts and did not help to revenue. 21.2. The ld. Departmental Representative relied upon the Orders of I.T.A.T. in the cases of Jammu Development Authority vs. CIT (ITAT, Amritsar Bench), Jalandhar Development Authority vs. CIT. (ITAT, Amritsar Bench), Indore Development Authority vs. CIT. (ITAT, Indore Bench) Moradabad Development Authority vs. ITO (ITAT, Delhi Bench) af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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