Appeal granted for withdrawal of registration under Income Tax Act due to lack of applicable provision.

The Tribunal allowed the appeal of a development authority against the withdrawal of its registration under section 12A of the Income Tax Act by the Commissioner. The withdrawal was based on the authority's land transactions not aligning with charitable purposes due to a provision added in 2008. However, as the provision was not applicable during the withdrawal period in 2008, the Commissioner lacked the authority to withdraw the registration. The Tribunal found the withdrawal unjustified, unsustainable, and quashed the Commissioner's order, thereby allowing the authority's appeal.

---

---

Issues involved: Appeal against order u/s 12AA (3) of the Income Tax Act regarding withdrawal of registration u/s 12A of the Income Tax Act.

The assessee, a development authority constituted by the Govt. of Uttar Pradesh, appealed against the order of the Ld. Commissioner of Income Tax withdrawing its registration u/s 12A of the Income Tax Act. The Ld. Commissioner based the withdrawal on the view that the appellant's activities, involving procurement and sale of land on commercial principles, were not in line with charitable purposes. The proviso to section 2(15) of the Act, added by the Finance Act 2008, was cited in this regard.

Upon careful review with the assistance of the Ld. Representative, it was noted that the proviso to section 2(15) was made applicable from 1st April, 2009, while the registration was withdrawn w.e.f. 1st April, 2008. As the proviso was not in effect during the relevant period, the Ld. Commissioner lacked the authority to withdraw the registration based on this provision. The Tribunal held that without considering the nature of the assessee's activities, the withdrawal was unjustified. Consequently, the order of the Ld. Commissioner was deemed unsustainable and quashed, leading to the allowance of the assessee's appeal.

Separate Judgement: None.

---