TaxTMI 
TaxTMI 
2010 (12) TMI 218
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....tion of Hon. ITAT amounts not only to contempt of court, but also violating principle of Natural Justice as contention put by letter dated 20-7-2009 are not considered. (c)The order passed by DIT(E) Ahd... (i) When department has filed appeal against, the original order of Hon. ITAT dated 18-8-2006 WITH Gujarat High Court. (ii) In 2nd round of appeal filed by department against CIT(A)'s order u/s. 143(3) it is dismissed by the Tribunal, is unjustified & bad in law. Without Prejudice on Merits (2) The order passed by DIT(E) Ahmedabad is without jurisdiction as only Commissioner of Income-tax could have passed order cancelling registration u/s. 12AA. The DIT(E) has no authority to pass impugned order. (3) The DIT(E) erred in cancelling registration with effect from 1-4-2000 (i.e., AY 2000-01) while in original order u/s 12AA. Dated 14-3-2005 registration is cancelled w.e.f. 30-3-2004. Section 12AA(3) which enables him to cancel registration has come into the Statute book from 1-10-2006. The impugned order is illegal and without jurisdiction. (4) The DIT(E) Ahmedabad erred in passing order, on the same line of original order....
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....ssed on 14-3-2005 and the consequential order is passed on 16-11-2009. Thus, both the orders have been passed before powers were conferred upon the DIT(Exem.) and hence the same should be quashed as illegal and these powers are held to prospective and not retrospective as held in case of Ajit Education Trust v. CIT [2010] 46 DTR 482 (Ahd.) of this Tribunal and by Hon'ble Allahabad High Court in the case of Oxford Academy For Career Development v. Chief CIT [2009] 315 ITR 382 (All). 4. Secondly, the Ld. counsel for assessee stated that Hon'ble Tribunal had in the earlier order had vide paras 31-32 specifically directed DIT(E) to enquire into the activities carried out during the financial year 2003-04, but it is noticed from the impugned order that only the activities relating to financial year 2000-01 have been relied upon and no adverse finding is given for financial year 2003-04. Ld. counsel for assessee stated that assessee-trust submits that DIT(Exem.) has cancelled registration in the impugned order by relying upon the activities of financial year 2001-02 was carried in appeal to Tribunal and vide order dated 4-9-2009 in ITA No. 1860/Ahd./2009 the order passed by CIT(A) has....
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....at any stretch of imagination, the trust enjoying registration under section 12AA of the Act cannot misuse its status for benefits to persons connected with the Managing Trustee and such violations have taken place during the year end 31st March, 2001. He further stated that this is also corroborated by the cross-examination of the Trustee of MDNT in which Shri Mahesh Verma was also the trustee. As regards the directions of this Tribunal to consider the activities during the year ended 31st March, 2004, he stated that the provisions of section 12(3) of the Act have been invoked and the assessment proceedings for assessment year 2004-05 are in appeal before Tribunal. In any case, the activities during the year ended 31st March, 2004 cannot absolve the violations committed during the year ended 31st March, 2001 and assessee committing mismanagement, misappropriation of funds and illegality of transactions cannot be at a premium to escape without any appeal as otherwise it would send a wrong message that the trust registered for carrying out a charitable activities can do activities/transactions which are not sanctioned by law. Accordingly, he stated that it is for the control of ille....
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....ospective. For this, we have now to go through the relevant provision as introduced by the Finance Act, 2010. It is seen that by Amendment of section 12AA of the Act, in sub-section (3), after the word, brackets and figure "sub-section (1)", the words, figures letter and brackets "or has obtained registration at any time under section 12A" [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] shall be inserted with effect from the 1st day of June, 2010. The Note on Clauses of Finance Bill, 2010 has clarified that Clause (7) of the Bill amended section 12AA of the Act w.e.f. 1-6-2010 and relevant note on clauses as reported in (2010) 321 ITR 83 (St.), which reads as under:- "This amendment will take effect retrospectively from 1st April, 2010. Clause 7 of the Bill seeks to amend section 12AA of the Income-tax Act relating to procedure for registration of a trusts or institution. Under the existing provision contained in sub-section (3) of the aforesaid section, if the activities of the trust or institution referred to in sub-section (1) which has been granted registration under sub-section (1), are not genuine or are not being carried out in accordan....
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.... was no express provision in section 12A of the Act for cancellation of the registration. The applicability of section 21 of the General Clauses Act, 1897, was discussed by the Uttaranchal High Court in the case of Welham Boy's School Society [2006] 285 ITR 74 (Uttaranchal), where it was observed that any order passed by the Commissioner of Income-tax under section 12A is a quasi-judicial order, which does not fall in the category of "orders" mentioned in section 21 of the General Clauses Act, 1897, by relying the ratio laid down in the case of Ghaurul Hasan v. State of Rajasthan, 107. The High Court observed that by virtue of section 21 of the General Clauses Act, the Commissioner of Income-tax had no power to rescind the order passed earlier by the Commissioner granting registration to the petitioner's society. IT may be mentioned that section 12AA(3) was incorporated with effect fromOctober 1, 2004, to empower the Commissioner to cancel the registration granted to a trust or institution. The same is not applicable retrospectively and in the assessee's case for the assessment years under consideration. The object of this provision is not clarificatory or explanatory, so prior to ....
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....ng provided in the said section 12A whether a registration once granted could ever be revoked by DIT(E) or not. It is now stream-lined that an application for seeking registration is to be moved as prescribed in section 12A and thereafter the procedure of registration is to be followed as recommended in section 12AA. Due to this enactment at present no ambiguity exists that if a registration granted, the same can be cancelled as well if necessitated. Thus the scope of both the sections 12AA(1) and 12AA(3) are wide enough to cover all those registration so far been granted either under section 12A or under s. 12AA(1)(b) by this very section. We further noted that the provision for refusal of registration of application under section 12A was already inexistence vide section 12AA(1)(b)(ii) then still there was lawful requirement to again mention the same in the same statute by introducing the afore-quoted "or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)". Now the anomaly is that whether for the purpose of refusal of a registration granted by section 12A is it to be dealt with in two sub-sections....