TaxTMI 
TaxTMI 
2010 (6) TMI 562
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....ts members only. Perusal of assessment record reveals that the Society generates positive income from year to year (for example it enjoys income from receipts from vendors, interest from banks etc., misc. income and by lease of MI Rooms etc.) but the basis on which the activities of the Society are claimed to be 'charitable' is not proved. The matter has been discussed in detail by my predecessor in his order dated 16-1-2004. It appears that the assessee has not filed an appeal against the same. In view of the above reasons, it is evident that the society is not carrying on any 'charitable activity'. Thus after going through the application dated 15-1-2008, 15-2-2008 and 19-5-2008 for rectification/cancellation/modification of the order of the Commissioner of Income-tax, Ghaziabad has been reviewed. After careful consideration of facts on record I find that order dated 16-1-2004 passed by the Commissioner of Income-tax, Ghaziabad is reasonable and justified. It needs no rectification/cancellation /modification. Hence application filed by the assessee is rejected." 2. Before us, the only argument of the ld. counsel for the assessee is that the power to cancel registration, ear....
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.... 3.3 Belatedly, the assessee filed an appeal against the order dated 16-1-2004 before the Tribunal, bearing ITA No. 3368(Del.)/2007. The said appeal has been dismissed in limine by "G" Bench of the Tribunal vide order pronounced in the open court on 16-11-2007, without adjudicating the issue involved therein, as the appeal was not found to be maintainable due to long delay in filing the same. 3.4 After receipt of the order dated 16-11-2007, the assessee filed an application before Commissioner of Income-tax, Ghaziabad on 15-1-2008 seeking rectification of order dated 16-1-2004 passed by his predecessor. The ground of rectification was that at the time when order dated 16-1-2004, cancelling the registration earlier granted by CIT, Meerut vide order dated 1-7-1997, was passed, there existed no provision in law for cancellation of registration, as sub-section (3) was inserted in section 12AA by Finance (No. 2) Act, 2004, with effect from 1-10-2004 only. 3.5 The said application was followed up by several reminders and finally a comprehensive petition dated 26-11-2009 was filed before the ld. CIT, Ghaziabad, in response to his letter dated 18-11-2009. The essence of the said s....
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....bject to any order which may be passed under section 12AA(3), to treat the petitioner society as an institution duly approved and registered under section 12AA and to recomputed its income by applying the provision of section 11 of the Act. Accordingly, a formal certificate of approval will be issued forthwith to the petitioner by the respondent No. 2." 4.1 In the case of Welham Boys' School Society (supra), the question before the court was whether the Commissioner of Income-tax has any inherent power to cancel the registration in case he comes to a conclusion that the assessee is not carrying on charitable activity? The Hon'ble Court inter alia mentioned that the registration was not obtained by any mis-representation or fraud. It has been further mentioned that the general principle of inherent power to undo something which an authority has power to do is not applicable when the powers are well regulated under a statute. Therefore, it has been held that the Commissioner of Income-tax did not have any power or jurisdiction to cancel the order of registration. The relevant portion of the order is reproduced below :-- "17. In the light of the discussion above, we hold that an....
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....earing and the date of passing the order. In this case, the changed position of law, embedded in section 12AA(3) has been communicated to the assessee in the course of hearing before us, and its views have been obtained through its learned counsel. These views have been already summarized by us. The relevant portion of the order of the Tribunal, contained in paragraphs 17 and 18 are reproduced below for ready reference :-- "17. After considering the rival submissions and perusing the relevant material on record we find that section 294 is not applicable in the present circumstances. This section provides that : "If on the 1st day of April in any assessment year provision has not yet been made by a Central Act for the charging of income-tax for that assessment year, this Act shall nevertheless have effect until such provision is so made as if the provision in force in the preceding assessment year or the provision proposed in the Bill then before Parliament, whichever is more favourable to the assessee, were actually in force." On a bare perusal of this section it is observed that the same refers to 'for the charging of income-tax for that assessment year'. When we consider the l....
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....e learned AM passed his order, the said Explanation to section 80-IA was merely a proposal in the Finance Bill and not enacted. It is observed that the Finance Bill, 2007 became Act on receiving the assent of the Hon'ble President of India on 11th May, 2007 [2007] 209 CTR (St) 85: (2007) 291 ITR (st) 1]. The learned AM passed his order on 21st May, 2007 i.e., after the enactment of Explanation below section 80-IA(13). It is, therefore, clear that when the learned AM passed his order, the Explanation to section 80-IA had already come into force with retrospective effect from 1st April, 2000. Thus it is evident that this issue has been needlessly dragged by the learned Authorised Representative, which otherwise has no legs to stand on." 5. We have considered the facts of the case and submissions made before us. Briefly, the facts are that the assessee had been granted registration by the Commissioner of Income-tax. This registration was withdrawn by an order dated 16-1-2004, when the provision contained in sub-section (3) of section 12AA was not there on the statute book. The assessee filed appeal before the Tribunal, which was dismissed on account of latches. Thereaft....