TMI Blog2023 (8) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... duties. In case, if it is necessary to do so then there has to be proper proceedings in writing. In assessee's case the facts are identical where the assessment is centralized and there was no proceeding or communication to the assessee that the CIT(Exemptions) has transferred his power to PCIT. Therefore respectfully following the ratio laid down in the above decision by the Jothpur Bench of the Tribunal and considering the facts of the present case we hold that the PCIT does not have the jurisdiction to cancel the registration u/s 12 AB. Thus the cancellation of registration retrospectively from AY 2016-17 under section 12AB(4) by the PCIT is not valid. Decided in favour of assessee. - VIKAS AWASTHY ( JUDICIAL MEMBER ) AND MS. PADMAVATHY S. ( ACCOUNTANT MEMBER ) For the Assessee : Dr. K Shivram A/w Mr. Sashi Bekal For the Department : Smt.Madhumalti Ghosh, CIT DR ORDER PER : MS PADMAVATHY S. (AM) This appeal is against the order of the Principal Commissioner of Income-tax (Central), Pune (in short, PCIT ) dated 06/03/2013 passed under section 12AB(4) of the Income-tax Act,1961 ( the Act ). 2. The assesse is a charitable trust set up v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passing an order under section 12AB(4) of the Income-tax Act, 1961 (Act) cancelling the registration of the assessee-trust without jurisdiction. Hence the cancellation is bad in law. In support of the admission of the additional ground, the ld A.R. submitted that it involved only adjudication of pure legal issue and no fresh facts were required to be examined. The learned DR opposed the admission of additional ground. Taking into consideration the entire conspectus of the facts and circumstances of the case and the additional ground raised before us we are convinced that its adjudication does not require any fresh investigation of facts and involves pure legal issue. Respectfully following the judgement of the Hon ble Supreme Court in the case of National Thermal Power Company Ltd. Vs. CIT [(1998) 229 ITR 383 (SC)] we admit this additional ground for adjudication. Accordingly we will first proceed to adjudicate the legal objection raised through additional ground. 4. The Ld.AR in this regard submitted that the PCIT, Central Circle is not the prescribed authority and is not the authority for granting registration or cancellation of the registration. It is submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, and subsequently, (a) to (c) ****** (i) ****** (ii) pass an order in writing, cancelling the registration of such trust or institution, after affording a reasonable opportunity of being heard, for such previous year and all subsequent previous years, if he is satisfied that one or more specified violations have taken place; 6. The Ld.DR, on the other hand, submitted that the PCIT is an authority above the CIT and, therefore, has jurisdiction over the CIT(Exemption). Accordingly, the Ld.DR submitted that the jurisdiction of the PCIT cannot be questioned. Further, the Ld.AR submitted that section 12AB(4) provides that a reference can be made to the PCIT or the CIT and that when the language of the section gives jurisdiction to the PCIT, the notification cannot override the powers of the PCIT. Accordingly, the Ld.DR submitted that the PCIT has correctly exercised his jurisdiction in passing the order cancelling the registration of the assessee trust. 7. We heard the parties and perused the materials on record. There was a search in the case of M/s.Emcure Pharmaceuticals group and its associate concerns on 16.12.2020. Simultaneously there was a survey und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the exercise of powers by the Assessing Officer who are subordinate to him. In section 124 jurisdiction of Assessing Officer has been given, not the jurisdiction of Commissioner. Further, in section 127 power of transfer of cases has been given from one Assessing Officer to other Assessing Officer and not from CIT to CIT. Therefore, registration under section 12A or approval under section 10(23C)(vi) can be withdrawn only by the prescribed authority who is empowered to grant the same. Notification No. 52/2014 and 53/2014 dated 22.10.2014 only empower the CIT (E) to withdraw the registration/approval. The Pr. CIT has not been given power to withdraw/cancel the registration/approval. 6.4 Further, in the said notification, there is no mention where CIT(E) can transfer to other CIT or Pr.CIT. The said notification of CBDT has authorized the CU(E) to issue order in writing for the exercise of the powers and functions by the Addl.CIT or JCT or TRO who are subordinate to them and has authorised the Addl.CIT to issue order in writing for the exercise of the powers by the Assessing Officer who are the subordinate to them. In section 124 of the Act, the jurisdiction of Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation. In section 120 and this section, the word case , in relation to any person whose name is specified in any order or direction issued there under, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 6.6 Sec. 120 (4) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er authority and any provision of this Act requiring approval or sanction of any such authority shall not apply. (6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification. We also observe that as per Sec. 120(6) of the Act, the CBDT by its Notification No. 52/2014 and 53/2014 dated 22.10.2014 has given power to CIT(Exemption) Jaipur for the State of Rajasthan for all cases of persons in the territorial area specified in column (4) claiming exemption under clauses (21), (22), (22A), (22B), (23), (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46) and (47) of section 10, section 11, section 12, section 13A and section 13B of the Act and assessed or assessable by an Income-tax authority at seria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atil Group Assessee objected that such notice did not referred to any agreement being reached by officers of equal rank at Mumbai and Ko/hapur These objections were however overruled and assessee's case was transferred High Court quashed purported transfer u/s 127 Held, Centralisation Committee which took decision for transfer of jurisdiction, is not authority envisaged u/s 127(2) Counter-affidavit filed on behalf of Revenue does not disclose that there was any agreement between authorities of equal rank, as a pre-condition for invoking powers u/s 127 Absence of dissenting note from officer of equal rank who has to agree to proposed transfer would not constitute agreement, envisaged u/s 123(2)(a) -Assessee's petition allowed. 6.9 We further observe that the Id. Pr.CIT (Central) cancelled such approval from A. Y. 2014-15, though the assessee has already assessed from A.Y. 2014-15 under section 143(3)/148 of the Act. It is also settled legal position of law that Registration cannot be cancelled from retrospective effects. In this regard, the Id AR has relied on the decision of the Hon'ble Supreme Court in case of State of Rajasthan and others vs Basant Agrotech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emy for Career Development Vs. Commissioner of Income Tax: (2009) 315 ITR 382, it was thus observed that 16. In the instant case, the petitioner is a registered society, which was earlier granted registration under Section 12A on 1-4-1999. A survey was conducted at the business premises on 20-9-2002, from where documents were impounded. The registration was cancelled for the assessment years 2000-01 and 2001-02 for the reasons that the surplus was quite heavy. In the impugned order, it was mentioned by the CJT that there was an unusual huge margin and the petitioner was engaged in the commercial activities rather than charitable. As per the balance-sheet, huge amount from the student was charged. The profit margin embodied in the charges taken from the students are so huge and it proves the profit motive of the petitioner. The funds were misused by the president and his family members of the petitioner. 20. The expression charitable purpose is defined in Section 2(15) of the IT Act, 1961. It is of inclusive nature as revealed in the language. Earlier the words the advancement of any other object of general public utility in this definition were succeeded by the word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has serious civil consequences and the amended provision is held to have only a prospective effect the effect of cancellation, in the event the pending Tax Appeal is decided in favour of the Revenue, will operate only from the date of the cancellation order, that is 30.12.2010. In other words, the exemption cannot be denied to the petitioner for and up to the Assessment Year 2010-11 on the sole ground of cancellation of the certificate of registration. Also refer Indian Medical Trust v/s Pr. CIT Ors 182 DTR 252(Raj.) is held that cancellation of registration with retrospective effect is invalid. Therefore, in view of the decision of Hon'ble High Court, we are also of the view that cancellation of registration with retrospective effect is invalid in the present case. 8. The ratio laid down by the Hon'ble Tribunal is that in the search case when the case is centralized it is for the purpose of assessment only. The CIT(Exemption) who is having the jurisdiction to handle cases claiming exemption under section 11 and 12 cannot transfer or hand over or give his work or power or duties. In case, if it is necessary to do so then there has to be proper proceedings in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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