TaxTMI 
TaxTMI 
TaxTMI 
2011 (4) TMI 563
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....06-2007, when the assessee filed return seeking exemption under sections 11 and 12 of the Act, that the Additional Director of Income-tax (Exemptions), while proceeding to make assessment under section 143(3), denied the claim of exemption. The assessee preferred appeal against the said order before the Commissioner, Income-tax (Appeals) [for short CIT(A)], which is stated to be pending. On 23rd March, 2008, assessee was served with a show-cause notice under section 12AA(3) of the Act as to why the registration granted under section 12A of the Act vide order dated 4th December, 1974 should not be cancelled. The assessee filed detailed reply contending therein inter alia the action of cancellation to be without jurisdiction. However, the Director of Income-tax (Exemptions) (for short "DIT") cancelled the registration under section 12AA(3) with effect from December 2002-2003 vide his order dated 30th June, 2009. The Director while passing such an order, reasoned as under:- "10. In view of the facts mentioned above, I hold that the activities of the trust are not in accordance with the object of the trust and therefore, the registration granted vide Regn. No. DLI(IT68)/74-75 dated 4.....
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.... of power vested in the Commissioner under section 12AA(3) of the Act. The order which was passed by the DIT was under section 12AA(1)(b) read with section 12A of the Act. For proper appreciation of the rival submissions based on the interpretation of sections 12A and 12AA(1)(b) and 12AA(3), it would be useful to reproduce relevant parts of these sections, which are as under: "12A. [Conditions for applicability of sections 11 and 12.] - The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely: (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, [whichever is later and such trust or institution is registered under section 12AA] : "12AA. Procedure for registration. - (1) The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a....
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....ation of the registration once granted. It is also pertinent to note that the words "such trust or institution is registered under section 12AA" were also substituted in this section with effect from 1st April, 1997. In fact, this section even now nowhere stipulates about the cancellation or withdrawal of the registration, once granted under the said section. It is only under section 12AA, which came in the statute book with effect from 1st April, 1997 that a fresh procedure for registration of the trust or institution is prescribed. Even under this section 12AA, there was no provision for cancellation of registration once granted till the enactment of sub-section (3) with effect from 1st October, 2004. There is no dispute with regard to this fact that the provision regarding cancellation of registration came to be introduced for the first time by virtue of sub-section (3) in section 12AA with effect from 1st October, 2004. This sub-section (3) provides that when a trust or an institution has been granted registration under clause (b) of sub-section (1) and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being c....
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.... in the case of Lucknow Bench in Oxford Academy for Career Development v. Chief Commissioner of Income-tax, Lucknow, [2009] 315 ITR 382 (All.), wherein it was held as under:- "Regarding cancellation of registration which was granted on 01.04.1999 under section 12A of the Act, it is true that there 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 (supra), 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 AIR 1987 SC 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 w.e.f. 1.10.2004 to empower the C....