TaxTMI 
TaxTMI 
2021 (4) TMI 1224
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.... 01.06.2010 retrospectively, which is impermissible. 4. The learned Senior Counsel, appearing on behalf of the writ petitioner, mainly contended that the writ on hand rest on the jurisdiction with reference to the amended Finance Act of the year 2010, which was given effect to from 01.06.2010. The learned Senior Counsel solicited the attention of this Court with reference to Section 12A of the Act regarding conditions for applicability of Sections 11 and 12 of the Act. 5. The writ petitioner-Institution was registered on 09.07.1984 under Section 12A(a) of the Act, vide C.No.2039(18)/84. Accordingly, the petitioner-Institution was extended certain benefits as permissible under the provisions of the Act. While-so, Section 12AA of the Act deals with "procedure for registration". Sub clause (3) contemplates the "procedure to be followed for cancellation of registration under Section 12A of the Act". 6. Learned Senior Counsel for the petitioner distinguished Section 12AA(3) of the Act by stating that a specific clause has been inserted through Finance Act 2010, which came into force with effect from 01.06.2010. 7. As far as the case of the petitioner is concerned, the regist....
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....ce with the objects of the Trust. 13. On 08.01.2008, first show cause notice was issued to the petitioner-Institution under Section 12AA(3) of the Act, to show cause as to why registration under Section 12A should not be cancelled by invoking Section 12AA(3) of the Act. 14. The writ petitioner-Institution submitted their reply on 29.01.2008, inter alia, stating that Section 12AA(3) can be invoked only where Trust has been granted registration after 01.04.1997 under Section 12AA(1)(b) of the Act, and cannot be invoked where the Trust was granted registration under Section 12A prior to 01.04.1997. Thereafter, the respondent sent a second show cause notice on 06.02.2008 to the writ petitioner under Section 12AA(3) of the Act. 15. The petitioner-Institution again submitted their reply on 25.02.2008. The third show cause notice was issued to the writ petitioner on 03.03.2008 under Section 12AA(3) of the Act. For the said show cause notice also the petitioner submitted their reply on 06.03.2008. Thereafter, on 13.03.2008, the impugned order of cancellation of registration was issued by the respondent under Section 12AA(3) of the Act, by overruling the objections raised with refe....
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.... The provision existing in Section 52 of the Income Tax Act before the amendment [which has now been re-numbered as sub-section (2)] enables the computation of capital gains arising on transfer of a capital asset with reference to its fair market value as on the date of its transfer, ignoring the amount of the consideration shown by the assessee, only if the following two conditions are satisfied: (a) the transferee is a person who is directly or indirectly connected with assessee, and (b) the Income Tax Officer has reason to believe that the transfer was effected with object of avoidance or reduction of the liability of assessee to tax on capital gains. In view of these conditions, this provision has a limited operation and does not apply to other cases where the tax liability on capital gains arising on transfer of capital assets between parties not connected with each other, is sought to be avoided or reduced by an understatement of the consideration paid for the transfer of the asset." The circular also drew the attention of the Income Tax authorities to the assurance given by the Finance Minister in his speech that sub-section (2) was ....
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....ute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the statute is plain and unambiguous. This rule has been succinctly and felicitously expressed in Crawford on Statutory Construction, (1940 Edn.) where it is stated in para 219 that "administrative construction (i.e. contemporaneous construction placed by administrative or executive officers charged with executing a statute) generally should be clearly wrong before it is overturned; such a construction, commonly referred to as practical construction, although non-controlling, is nevertheless entitled to considerable weight; it is highly persuasive". The validity of this rule was also recognised in Baleshwar Bagarti v. Bhagirathi Dass [ILR 35 Cal. 701] where Mookerjee, J., stated the rule in these terms: "It is a well-settled principle of interpretation that courts in construing a statute will give much weight to the interpretation put upon it, at the time of its enactment and since, by those whose duty it has been to construe, execute and apply it." and this statement of the rule was quoted with approval by this Court in D....
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.....2) Act 2004 with effect from 01.10.2004. Thus, the order passed by the Competent Authority is having jurisdiction and there is no infirmity as such. 21. The learned Senior Standing Counsel, appearing on behalf of the respondent, reiterated by stating that the insertion by the Finance Act 2010 with effect from 01.10.2010 inserting new words "or has obtained registration and at any time under Section 12A [as it stood before its amendment by the Finance (No.2) Act, 1996 (33 of 1996)]" is only a clarificatory amendment and cannot be construed as an amendment made conferring power on the Commissioner for the first time. The Commissioner was vested with the power to cancel the registration granted under Section 12A of the Act in Finance Act 2004, which came into force from 01.10.2004. Thus, it is clarificatory amendment and therefore, such clarificatory amendment issued would not take away the power originally conferred on the Commissioner to cancel the registration under Finance (No.2) Act 2004 with effect from 01.10.2004. Thus, the Commissioner gets power to cancel the registration on the ground stipulated under the provisions with effect from 01.10.2004 and the 2010 insertion is c....
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....ing himself with the objects of the Trust or Institution and the genuineness of its activities as required under sub-clause(b) to sub-section (1) of Section 12AA of the Act comply with the requirements under sub-clause "he (1) shall pass order in writing registration of Trust or Institution (2) shall if he is not so satisfied shall pass order with reference to Registration of Trust or Institution and a copy of the order shall be sent to the applicant". 25. Cogent reading of Section 12A along with clause (b) of sub-section (1) to Section 12AA would reveal that Section 12A deals with conditions for applicability of Sections 11 and 12 and sub-clause (b) of subsection (1) to Section 12AA "procedure for registration". Thus, Section 12AA sub-clause (b) first portion denotes procedures under which the registration is made and the same shall include the conditions for applicability of Sections 11 and 12 with reference to the registration made under Section 12A of the Act. In other words,Sections 11 and 12, 12A and 12AA are to be read cogently and each Section cannot be dissected for the purpose of diluting the purpose and object of the amendments providing power of cancellation to the C....
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....Commissioner or Commissioner is empowered to cancel the registration if they are satisfied that the activities of such Trusts or Institutions are not genuine or are not being carried out in accordance with the objects of the Trust or Institution, as the case may be. 29. Section 11 of the Act enumerates "income from property held for charitable or religious purposes". Section 12 deals with "income of Trusts or Institutions from contributions". Section 12A provides "conditions for applicability of Sections 11 and 12". 30. Section 12A contemplates conditions for applicability of Sections 11 and 12. 31. It is pertinent to note that the last insertion made to sub- clause (a) of sub-section (1) to Section 12A is substituted by the Finance (No.2) Act 1996 with effect from 01.04.1997). The said insertion "whichever is later" and such Trust or Institution registered under Section 12AA also denotes that Section 12A is to be read cogently along with Section 12AA of the Act. 32. These provisions cannot be read in isolation as all the registrations are done under Section 12A of the Act. The said provision contemplates the conditions for applicability of Sections 11 and 12 regarding ....