Registration cancellation under Section 12AB challenged as beyond delegated authority; cancellation quashed for lack of jurisdiction

Whether the PCIT could cancel a taxpayer's registration under Section 12AB turned on delegated authority and the effect of administrative transfers. The CBDT notification designating the Commissioner (Exemption) as the competent authority for exemption registrations governs who may grant or cancel registrations; a transfer of a case between assessing officers under the transfer mechanism does not itself reassign that statutory authority. Because the transfer relied on did not transfer power to decide registration or cancellation, the cancellation order was without jurisdiction and was quashed in favour of the assessee.

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Issues: (i) Whether PCIT, Central, Kanpur had jurisdiction to cancel the assessee's registration under Section 12AB(4) of the Income-tax Act, 1961 by relying on a transfer under Section 127 of the Income-tax Act, 1961.

Analysis: The question requires examination of (a) the statutory allocation of authority to grant or cancel registration under Section 12A/12AB and (b) the scope and effect of transfers under Section 127 and notifications/circulars issued by the CBDT. The CBDT notification dated 22.10.2014 designates the Commissioner (Exemption) as the authority for matters of exemption under Sections 10, 11, 12 and related provisions for the territorial classes specified therein. Section 127 provides for transfer of cases between Assessing Officers and contemplates agreement between jurisdictional Principal Commissioners where officers are not subordinate to the same superior authority; it does not itself confer power to transfer the statutory power to grant or cancel registrations vested in the prescribed authority under the CBDT notification. Where a transfer under Section 127 was limited to assessment coordination, that transfer does not, by itself, reallocate the statutory power to decide registration or cancellation under Section 12A/12AB. Relevant co-ordinate decisions applying these principles were considered in reaching the view on jurisdiction.

Conclusion: The cancellation order passed by PCIT, Central, Kanpur under Section 12AB(4) was without jurisdiction and is quashed; issue decided in favour of the assessee.

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