S. 12AB : Procedure for fresh registration-Cancellation of registration-Withdrawal of registration cannot be done retrospectively Commissioner Central has no jurisdiction to cancel the registration–Cancellation of registration was quashed-Alternative contentions became academic hence not dealt with. [S. 11, 12A, 12AB(4), 13]
The asseessee is a Charitable Trust which was set up vide trust deed dated April 21 , 1988 . The Trust was granted registration under section 12A of the Act vide certificate dated July 21, 1989. One of the objects of the Trust is to hold seminars in the field of medical education. Due to search on Pharmaceutical companies which had given donation to the assessee the survey was conducted on the assessee . The assessment of the Trust was transferred to Central Circle. For the assessment year 2021-22 the assessee had filed its return in the status of Association of Persons (AOP) without claiming the exemption under section 11 of the Act . In the course of the assessment proceedings the Assessing Officer made reference to the PCIT (Central ) to cancel the registration . On the basis of the reference the PCIT (Central ) cancelled the registration retrospectively from the Assessment year 2016-17. In the appeal before the Tribunal the assesee contended that, the PCIT (Central) is not prescribed authority hence has no jurisdiction to cancel the Registration of Trust. The assessee had not applied for a fresh registration under section 12AB of the Act and hence the registration could only be cancelled under section 12AA(3) of the Act, the reference made by the Assessing Officer (Central) to the PCIT (Central) for AY. 2021-22 is bad in law as the assessee ceased to be a charitable organisation and filed its return as an AOP, there is no specific violations committed by the assessee Trust, the Registration of the Trust cannot be cancelled retrospectively, the decision of the Honourable Supreme Court in the case of Apex Laboratories Pvt. Ltd. v. DCIT (2022) 442 ITR 1 (SC) pertains to disallowance under section 37(1) of the Act is not applicable to the facts of the assessee which is carrying on the activities of charitable in nature. Allowing the appeal of the assessee, the Tribunal held that PCIT (Central) has no jurisdiction to cancel the registration and withdrawal of registration cannot be done retrospectively. Accordingly, the cancellation of registration was quashed. As regards alternative contentions have become academic hence not dealt with. (ITA No. 1524/Mum/2023 dt. 27-7-2023)
Heart Foundation of India v. CIT (Mum.)(Trib.) www.itatonline.org
(Coram : Hon’ble Shri Vikas Awasthy (JM) and Hon’ble Ms. Padmavathy S. (AM)