TaxTMI 
TaxTMI 
2022 (8) TMI 441
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....stration under section 12A. In the impugned order granting registration, the learned CIT(A) has held that "after considering the application of the appellant and the material available on record, the applicant is hereby granted registration with effect from the assessment year mentioned at serial no. 8 (i.e. 2022-23 to 2026-27), subject to the conditions mentioned in row number 10". This order further states, inter alia, that "this order is liable to be withdrawn by the prescribed authority if it is subsequently found that the activities of the applicant are not genuine or if they are not carried out in accordance with all or any of the conditions subject to which it is granted, if it is found that the applicant has obtained the registration by fraud or misrepresentation of facts, or if it found that the applicant has violated any condition prescribed in the Income Tax Act, 1961". Learned Commissioner then goes on to list these elaborate conditions as follows: a. As and when there is a move to amend or alter the objects/rules and regulations of the applicant, prior approval of the Commissioner of Income Tax shall be sought along with the draft of the amended deed and no such amen....
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..../to be carried on and the target group(s) (indented beneficiaries) shall be duly displayed at the Registered/Designated Office of the Organization. i. The Trust/Institution shall furnish a return of income every year within the time limit prescribed under the Income Tax Act, 1961. j. Separate accounts in respect of profits and gains of business incidental to attainment of objects shall be maintained in compliance to section 11(4A) of Income Tax Act, 1961. k. The registered office or the principal place of activity of the applicant should not be transferred outside the jurisdiction of Jurisdictional Commissioner of Income Tax except with the prior approval. l. No asset shall be transferred without the knowledge of Jurisdictional Commissioner of Income Tax to anyone, including to any Trust/Society/Non Profit Company etc. m. The registration so granted is liable to be cancelled at any point of time if the registering authority is satisfied that activities of the Trust/Institution/Non Profit Company are not genuine or are not being carried out in accordance with the objects of the Trust/Institution/Non Profit Company. n. If it is found later on that the registration has bee....
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....pulously. Learned Departmental Representative points out that form no. 10AC, as prescribed under the Income Tax Rules 1962, specifically provides for conditions, if any, subject to which registration is granted, and, as such, it cannot be said that the law does not visualize conditions being put to the grant of registration under section 12A. On merits also, learned Departmental Representative justifies and supports each of the condition subject to which registration is granted. He further submits that non-compliance with these conditions deserves to be visited with cancellation of registration. We are thus urged to confirm the action of the learned Commissioner and decline to interfere in the matter. 5. We have heard the rival contentions, perused the material on record, and duly considered the facts of the case in the light of the applicable legal position. 6. Section 12AB, dealing with the procedure for registration of charitable institutions, provides as follows: Procedure for fresh registration 12AB. (1) The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall,-- (a) where the application i....
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....re 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 after affording a reasonable opportunity of being heard. (5) Without prejudice to the provisions of sub-section (4), where registration of a trust or an institution has been granted under clause (a) or clause (b) of sub-section (1) and subsequently, it is noticed that-- (a) the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13; or (b) the trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (i) of clause (b) of sub-section (1), and the order, direction or decree, by whatever name called, holding that such non-compliance has occurred, has either not been disputed or has attained finality, then, the Principal Commissioner or the Commissioner may, by an order in writing, after affording a reasonable opportunity of....
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....ocess at the point of time when the registration application under section 12A comes up for consideration of the Commissioner, the grant of registration under section 12A can be subject to the FCRA registration being obtained by the applicant. There can also be many other examples as well. Therefore, to say that the law does not visualize conditional registration does not appear to be correct, and we must leave that issue open for adjudication in a fit case. 8. However, on a perusal of conditions subject to which the registration is granted, we find these conditions are with respect to the conduct of the trust and the circumstances in which the registration granted to the appellant can be cancelled. These are the matters which are regulated by the specific provisions of law, and the observations of the learned Commissioner, no matter how well intended, cannot have the independent force of law. If the conditions set out in the registration order have the sanction of the law, irrespective of these conditions being attached to the registration of the trust or not, the law has to take its course, but when the scheme of the law does not visualize these conditions being part of the sche....