Tribunal overturns cancellation of registration under section 12A, citing lack of jurisdiction

The Tribunal allowed the appeal, setting aside the order of the CIT (Exemptions) canceling the registration under section 12A. It held that the CIT (Exemptions) lacked jurisdiction to cancel the registration while the matter was pending before the Settlement Commission. Other grounds raised by the assessee were considered academic and not addressed.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Validity of the cancellation of registration under section 12A of the I.T. Act by CIT (Exemptions).
3. Jurisdiction of the Settlement Commission versus the CIT (Exemptions) during the pendency of the application before the Settlement Commission.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The assessee filed an appeal against the order of the Pr. CIT (Central), Lucknow, dated 20/03/2019, which was served on the assessee on 25/03/2019. The appeal should have been filed by 23/05/2019. However, the assessee, on professional advice, initially filed a writ petition in the Allahabad High Court on 24/04/2019, which delayed the appeal filing by 216 days. The Tribunal condoned the delay, finding the explanation plausible and without objection from the CIT, D.R.

2. Validity of the Cancellation of Registration under Section 12A:
The assessee, a public charitable trust registered under section 12A/80G, was engaged in running educational and medical institutions. Following a search on 18/09/2014, cash was found, which the assessee claimed as gifts from students. The Pr. CIT (Exemptions) canceled the registration on 20/03/2019, based on findings from the search.

The Tribunal examined whether the CIT (Exemptions) had the authority to cancel the registration while the matter was pending before the Settlement Commission. The Tribunal referred to section 245F of the I.T. Act, which grants exclusive jurisdiction to the Settlement Commission once an application is admitted. The Tribunal concluded that since the application was admitted on 17/01/2017, the CIT (Exemptions) did not have the jurisdiction to cancel the registration on 20/03/2019.

3. Jurisdiction of the Settlement Commission versus the CIT (Exemptions):
The Tribunal analyzed the provisions of section 245F, which state that the Settlement Commission has exclusive jurisdiction over all matters related to the case once an application is admitted. The Tribunal relied on the Delhi High Court's decision in Tahiliani Design Pvt. Ltd. vs. JCIT, which held that the Settlement Commission's jurisdiction extends to all matters arising from the search, including those not explicitly covered in the application.

The Tribunal found that the cancellation of the registration by the CIT (Exemptions) was based on the same search that led to the Settlement Commission proceedings. Therefore, the CIT (Exemptions) overstepped its jurisdiction, as the Settlement Commission had exclusive jurisdiction over the case.

Conclusion:
The Tribunal allowed the appeal, setting aside the order of the CIT (Exemptions) canceling the registration under section 12A. The Tribunal held that the CIT (Exemptions) did not have the jurisdiction to cancel the registration while the matter was pending before the Settlement Commission. All other grounds raised by the assessee were deemed academic and not adjudicated.

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