2026 (3) TMI 136 - SCH - Income Tax

Registration under Section 12AA: long standing grant left undisturbed; Revenue may seek withdrawal only after due process.

Where a society registered under Section 12AA is alleged to have breached registration conditions, the appropriate remedy is withdrawal of registration ... Registration of educational charitable institution under Section 12AA - power to withdraw registration for breach of conditions after due process - judicial restraint from reopening long-standing registration without fresh proceedings Whether the Court should reopen or interfere with the grant of registration to the respondent-society which has been in existence for over a decade? - HELD THAT: - The Tribunal had allowed the respondent's appeal against the rejection by the Commissioner (Exemption) and granted registration, a decision thereafter upheld by the High Court. The registration has been in force since the impugned order of grant and is presently valid upto the Assessment Year 2026-27. The Court recorded that where a registrant under Section 12AA is found to have violated conditions of registration, the appropriate remedy is withdrawal of registration following due process. Given the long-standing nature of the registration and the availability of statutory remedies to the Revenue to investigate and initiate withdrawal proceedings if violations are found, the Court declined to re-examine the merits of the original grant in the present appeal and exercised restraint from interfering. The appeal was disposed of without adjudicating the merits of the grant of registration; the Revenue is left free to initiate appropriate proceedings to withdraw registration if violations of the terms for grant are discovered following due process. Final Conclusion: The Supreme Court declined to disturb the existing registration of the respondent-society, refraining from deciding the merits of the grant, and left the Revenue free to pursue withdrawal of registration by following the prescribed statutory procedure if violations are established. Outcome: Appeal dismissed [No detailed order].