TaxTMI 
TaxTMI 
2005 (10) TMI 66
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....under section 12AA of the Act, the petitioner society was entitled to the benefits under sections 11 and 12 of the Act. As per section 11, income derived from property held under trust for charitable or religious purposes was liable to be excluded from the total income of the previous year of the person in receipt of the income. As per section 12, any voluntary contribution received by a trust created wholly for charitable or religious purposes or by an institution established wholly for charitable or religious purposes shall for the purposes of section 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section shall apply. As per section 12A, the provisions of sections 11 and 12 shall not apply in relation to the income of any trust or institution unless the trust or institution is registered under section 12AA. Thus, on the basis of the registration granted to the petitioner society under section 12AA of the Act, the income derived from any property held under trust by the petitioner society wholly or in part for charitable or religious purposes as well as any voluntary contributions received by ....
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....he petitioner, the entire surplus was credited to the general fund which could be utilised only for the purpose of education and could not be diverted anywhere else. The petitioner asserted that the assessee was a charitable institution existing solely for education and not for the purpose of profits. The petitioner denied the allegation that the income of the institution was not from property held under trust for charitable purposes, but was by way of fees from students. It was contended that income from fees realised by the petitioner from the students was income from property held under trust for charitable purposes. With regard to the allegation that no income was received by way of voluntary contributions, it was stated by the petitioner that the receipt of voluntary contributions was not a pre-condition for grant or continuance of registration under section 12AA and that an institution can retain the character of a charitable institution even without receiving voluntary contributions. The petitioner also questioned the power and jurisdiction of the Commissioner of Income-tax to withdraw the registration already granted. According to the petitioner, there was no provision unde....
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....spondent held that the power to issue registration under section 12AA of the Act included the power to rescind the order granting registration. Aggrieved by annexure 6 order passed by the second respondent, the petitioner society has filed this writ petition praying for quashing annexure 6 order and for a direction to the respondents to restore to the petitioner the registration under section 12AA of the Act. The petitioner has challenged annexure 6 order on the ground that the second respondent had no power and jurisdiction to withdraw registration as well as on the ground that the reasons stated by the second respondent for withdrawing registration are not factually correct or legally valid. A counter affidavit has been filed on behalf of the respondents justifying and defending annexure 6 order and reiterating the reasons stated in the said order. We have heard Mr. C. Mukund, learned counsel for the petitioner, and Mr. Pitamber Maulekhi, learned counsel for the respondents. The first and the basic question that arises for consideration is whether the petitioner is right in contending that the second respondent-Commissioner of Income-tax had no power and jurisdiction to withdr....
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....iety was found to be not carrying on any charitable activity, the second respondent could only deny the benefits of sections 11 and 12 of the Act to the petitioner society at the time of assessment. Faced with the above position, learned counsel for the respondents contended that though there was no specific provision in the Act conferring the power to withdraw or revoke a registration already granted under section 12AA, the authority granting such registration had inherent power to withdraw or revoke the registration. This contention is only to be rejected, as it has no legal basis. If the authority granting registration had such inherent power, there was no necessity to amend section 12AA for incorporating sub-section (3) which reads as follows: "3. Where 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 carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order u....
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....ules or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction, and conditions (if any), to add to, amend, vary or rescind any notifications, orders, rules or bye-laws so issued." Admittedly, what is rescinded by the Commissioner as per annexure 6 order is not any notification, rule or bye-law. What is rescinded is a quasi-judicial order which had been passed by the Commissioner of Income-tax under section 12A of the Act. Such a quasi-judicial order does not fall in the category of "orders" mentioned in section 21 of the General Clauses Act, 1897. In Ghaurul Hasan v. State of Rajasthan reported in AIR 1967 SC 107, a Constitution Bench of the hon'ble Supreme Court considered whether apart from the power under section 10(2) of the Citizenship Act, the Collector having power to grant the registration certificate under the Citizenship Act, had the power to cancel it by virtue of section 21 of the General Clauses Act. The hon'ble Supreme Court rejected the contention that by virtue of section 21 of the General Clauses Act the Collector had such power. According to the hon'ble Supreme Court, the orders mentioned in sectio....
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....ereignty, unity and integrity of India so as to comply with the provisions of section 29A(5) of the Act; and (c) any like ground where no enquiry is called for on the part of the Commission. Relying on the above observations of the hon'ble Supreme Court, learned counsel for the respondents contended that even in the absence of specific power conferred by the statute, the Commissioner of Income-tax had power to rescind the order granting registration under section 12AA of the Act, if such registration was obtained by practising fraud or forgery. Even assuming that the Commissioner has power to rescind the order of registration on the ground that registration was obtained by practising fraud or forgery, in this case, either in the show-cause notice or in the impugned order, the second respondent has not alleged that the petitioner had obtained the registration by practising fraud or forgery. Learned counsel for the respondents also contended that this writ petition is not maintainable for the reason that the petitioner has not exhausted the alternate remedy of filing an appeal under section 253(1)(c) of the Act against the impugned order. The availability of an alternate remedy do....