Allahabad H.C : Registration granted to a trust under section 12A for a period prior to insertion of sub-section (3) of section 12AA could not be withdrawn by invoking sub-section (3) of section 12AA

High Court Of Allahabad

CIT vs. Manav Vikas Avam Sewa Sansthan

Section : 12A

Rakesh Tiwari And Anil Kumar, JJ.

ITA No. 161 Of 2009

February 24, 2010

JUDGMENT

Anil Kumar, J. – By means of the present appeal under section 260A of the Income-tax Act, 1961, the appellant has challenged the order July 10, 2009, passed by the Income-tax Appellate Tribunal, Bench Lucknow, in appeal No. I. T. A. No. 304/LKO/2009.

2. Heard Shri D. D. Chopra, learned counsel for the appellant.

3. The brief facts of the present case are that the assessee M/s. Manav Vikas Avam Sewa Sansthan, Lucknow was granted registration certificate under section 12A of the Income-tax Act, 1961 vide order dated September 29, 2003, with effect from April 1, 2003, when the assessee was originally having 10 objects.Subsequently 14 objects were added thereby increasing the numbers of objects to 24 and the registration on the basis of modified objects was granted by the Registrar of Societies for a period of five years with effect from December 18, 2007.

4. In view of the said developments, the assessee applied for recognition under section 80G of Income-tax Act, 1961. The Commissioner of Income-tax-II, Lucknow, was of the opinion that the assessee, after modification of the objects, could have applied for fresh registration and in the absence of any such application, the procedure contained under section 12AA(1) for examination of the objects could not be set in motion.

5. Accordingly, the Commissioner of Income-tax declared the earlier registration invalid by order dated March 13, 2009 and withdrew the same with effect from October 25, 2007.

6. Aggrieved by the order dated March 13, 2009, the assessee preferred an appeal before the Income-tax Appellate Tribunal, Lucknow and the same was allowed by order dated July 10, 2009, and while allowing the appeal the Tribunal has held as under :

“Having given our thoughtful consideration to the facts and circumstances and the reasons for cancelling the registration in the case before the hon’ble Allahabad High Court-Lucknow Bench, Oxford Academy for Career Development v. Chief CIT [2009] 315 ITR 382 (All) as well as the facts and circumstances and the reasons for cancellation of registration in the case before us, first of all we are of the opinion that so far as the applicability of the law laid down by the hon’ble High Court of Allahabad-Lucknow Bench in the case of Oxford Academy for Career Development [2009] 315 ITR 382 (All) is concerned, the hon’ble High Court having held the provisions of section 12AA(3) as prospective, will be applicable only to the cases where registration under section 12AA has been granted after the coming of the provisions of section 12AA(3) on the statute, i.e., October 1, 2004 ; and not to cases where registration had been granted either under section 12A or under section 12AA of the Act but prior to October 1, 2004.

So far as the assessee’s case is concerned, we, after having gone through the facts and circumstances, have found that registration in the assessee’s case was granted as per the order dated September 11, 2000 but with effect from April 1, 1999, i.e., prior to the coming of the provision of section 12AA(3) of the Act on the statute.

So far as the question as to whether registration was granted under section 12A or under section 12AA of the Act, the copy of the registration certificate placed on record goes to show that it was granted under section 12A and if this was the case then there was no question of the Commissioner of Income-tax having jurisdiction to cancel the registration even after the coming of the provision of section 12AA(3) of the Act on the statute.

The only instance for cancelling the registration by the learned Commissioner of Income-tax could, therefore, be if the registration granted to the assessee is presumed to have been granted under section 12AA of the Act, but still, since we have already observed that the provisions of section 12AA(3) were not applicable in view of the decision of the hon’ble Allahabad High Court-Lucknow Bench in the case of Oxford Academy for Career Development v. Chief CIT [2009] 315 ITR 382 (All) to cases where registration under section 12AA had been granted prior to the coming of the provisions of section 12AA(3) of the Act on the statute, the assessee’s case squarely falls outside the ambit of the provisions of section 12AA(3) of the Act. Consequently, respectfully following the aforesaid decision of the jurisdictional High Court, we quash the order of the learned Commissioner of Income-tax dated December 15, 2008 cancelling the registration granted to the assessee as per order dated September 11, 2000.”

7. Aggrieved by the order dated March 10, 2009 passed by the Income-tax Appellate Tribunal, the present appeal under section 260A of the Act has been filed by the Income-tax Department on the following substantial question of law :

“Whether the registration granted under section 12A of the Income-tax Act, 1961 can be withdrawn for a period prior to insertion of sub-section (3) of section 12AA of the Act, which had come into force from October 1, 2004.”

8. The sole argument which is raised by the learned counsel for the appellant, Shri D. D. Chopra in the present case that is to the effect that the Commissioner of Income-tax even in the absence of the amended provisions of sub-section (3) of section 12AA of the Act, was empowered to cancel the registration of the assessee as per the provisions provided under section 21 of the General Clauses Act, 1897.

9. We have heard the learned counsel for the appellant and perused the record, the sole argument which is advanced by the learned counsel for the appellant is wholly misconceived and contrary to the judgment and order passed by a Division Bench of this court vide judgment and order dated December 4, 2008 in Writ Petition No. 1417 of 2004 (M/B) Oxford Academy for Career Development [2009] 315 ITR 382 (All) wherein this court has held that (page 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 provision 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 Boys’ School Society v. CBDT [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 reported in 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 institution. The same is not applicable retrospectively and in the assessee’s case for the assessment years under consideration. The object of this provision is not clarificatory or explanatory, so prior to that date, the authorities granting registration had no inherent power to withdraw or revoke the registration already granted. The order cancelling the registration granted to a trust or institution under section 12AA of the Act being a quasi-judicial order does not fall within the category of orders mentioned under section 21 of the General Clauses Act, 1897, which provides that the power conferred on an authority empowers to issue orders including the power to rescind such orders and the Commissioner would not have power to rescind the order passed by the Commissioner earlier granting the registration to a trust or institution. Even assuming, the Commissioner has power to rescind the order of registration on the ground that the registration had been obtained by practising fraud or forgery, there was nothing in the show-cause notice or in the impugned order dated March 9, 2004 alleging that the petitioner had obtained the registration by practising fraud or forgery.”

10. Further admittedly in the present case, sub-section (3) of section 12AA of the Act has came into force, with effect from October 1, 2004 by the Finance (No. 2) Act, 2004. As such while passing the order dated March 13, 2009, the Commissioner of Income-tax-II, Lucknow had no power whatsoever to review or recall the order dated September 29, 2003 by which the assessee was granted registration under section 12A of the Income-tax Act, 1961.

11. It is well settled proposition of law that the judicial/quasi-judicial authority cannot review its own order, unless the power of review is expressly conferred on it by the statute under which it derives its jurisdiction (see Dr. Smt. Kuntesh Gupta v. Management of Hindu Kanya Mahavidyalaya reported in AIR 1987 SC 2186) and the Full Bench decision of this court in the case of Smt. Anarkali v. Deputy Director of Consolidation reported in 1997(15). So the order passed by the Commissioner of Income-tax-II, Lucknow dated March 13, 2009 is without jurisdiction and void ab initio and the appeal (I. T. A. No. 304/LKO/209) filed by the assessee before the Income-tax Appellate Tribunal, Lucknow Bench, Lucknow was correctly and rightly allowed by the said authority by order dated July 10, 2009.

12. For the foregoing reasons, the substantial question of law as raised in the present case filed by the appellant (Income-tax Department) is answered in the negative.

13. Accordingly, the present appeal filed by the appellant lacks merit and is dismissed. No order as to costs.

[Citation : 336 ITR 250]

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