TaxTMI 
TaxTMI 
2023 (8) TMI 1063
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....ized in Pune vide order dated March 07, 2022. The assessee had been filing the return of income in the status of charitable trust upto the A.Y. 2020-21. The assessee for the assessment year 2021-22 filed a return of income on October 11,2022 in the status of Association of Persons (AOP) declaring a total income of Rs.3,75,070/-. The return was filed in the status of AOP for the reason that the assessee had not applied for the registration of the trust under the new provision i.e. section 12AB of the Act due to Covid lockdown and its impact on the medical industry. The case of the assessee was selected for scrutiny and the Assessing Officer made a reference under the Second Proviso to section 143(3) of the Act to PCIT (Central) Pune alleging that the assessee has made specific violation as per Explanation (e) and (f) to section 12AB(4) of the Act. It was alleged in the said reference that the assessee trust as provided freebies to doctors which are in violation of the Indian Medical Council (Professional Conduct & Ethics) Regulations, 2002. The assessee was issued notice under section 12AB of the Act by the PCIT(Central), Pune. The assessee made its submissions before the PCIT. Howe....
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....d on the decision of the Jodhpur Bench of the Tribunal in the case of Pacific Academy of Higher Education and Research Society vs. PCIT (Central) ITA 04-05/Jodh/2020 dated January 25, 023 (Jdh)(Trib) where a similar jurisdictional issue is considered and it was held that the PCIT (central) is not correct authority for cancellation of registration issued under section 12A. The Ld.AR further relied on the decision of Jaipur Bench in the case of wholesale Cloth Merchants Association vs PCIT (Central) ITA 688/Jp/2019 order dated January 06, 2021 where a similar view has been expressed. Accordingly, it was prayed that the cancellation of registration of the trust by the PCIT(Central) is void of jurisdiction and contrary to CBDT Circular and hence, may be quashed. 5. The Ld.AR presented without prejudice arguments to submit that the cancellation of the registration of the trust cannot be done retrospectively. The Ld.AR in this regard relied on the decision of Rajasthan High Court in the case of Indian Medical Trust vs PCIT (2019) 414 ITR 296 (Raj) and the judgement of the Hon"ble Madras High Court in the case of Auro Lab vs ITO (2019) 411 ITR 308 (Mad). The Ld.DR submitted that in above....
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....hat the activities of the trust are neither genuine nor being carried out in accordance with the objects of the trust. It was further held that the assessee has violated other laws while carrying out the activities which are in the nature of specific violations specified in clause (e) and clause (f) of Explanation below section 12AB(4). The PCIT accordingly withdrew and cancelled the registration granted to the assessee with effect from A.Y. 2016-17. With regard to the contention that the PCIT (central) does not have the jurisdiction to cancel the registration and that too retrospectively, we notice that as per serial no.12 of the CBDT notification Nos 52 & 53, the jurisdiction for all cases in Greater Mumbai and Navi Mumbai, claiming exemption under sections 11 and 12 lies with the Commissioner of Income-tax (Exemption) Mumbai. Therefore we see merit in the submissions of the ld AR that the PCIT (Central) does not have jurisdiction to cancel the registration under section 12AB. It is also noticed that the Jodhpur Bench of the Tribunal in the case of Pacific Academy of Higher Education & Research (supra) has considered a similar issue and held that - "6.3. We found from perusal o....
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....ter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,- (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being h....
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....ipal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director, and, where any order is made under this clause, references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply. (5) The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class....
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....writing and an opportunity of being heard is to be given to the assessee before transferring the case whereas all these are absent in the present case and nothing has been demonstrated by the department. 6.7 We further observe that Sec. 127 of the Act empower to transfer cases among Assessing Officers but not to Commissioners of Income Tax as CIT is not an Assessing Officer. In our view, to pass an order u/s 12A for registration or cancellation is not within the jurisdiction or power of an Assessing Officer. Hence registration u/s. 12A can be withdrawn only by the "Prescribed Authority' who has been empowered to grant the same and by the Notification dated 22.10.2014 the ld.CIT(Exmp.) has empowered for the same, hence the Pr.CIT (Central) cannot cancel the same. 6.8 In assessee's case, the case u/s 127 was transferred to the Central Circle for limited purpose of Co-Ordinate assessment admittedly which do not mean that the Section 12A proceeding has been transferred to the Pr. CIT(Central) automatically, when both the proceedings are separately or independent and also has to be done or conducted by the different rank Authorities. More particularly when for the purpose ....
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....egislation with retrospective effect. When no power has been conferred by the act on the competent authority to withdraw the approval retrospectively, then the withdraw of the approval u/s 10(23C)(vi) of the Act can only be prospective. Hence such of approval gentled under section 12A from back date are also not according to the law and facts of the case and at the worst after the year of notice it can be done if any." , In the case of Indian Medical Trust V/s PCIT (Central) 2019 (6) TMI 996 (Rajasthan) it has been held that: 28. Indisputably, the order dated 16th Jan, 2018, made by the Commissioner of Income Tax thereby canceling the registration granted under section 12A and withdrawing the approval given under section 10 (23C) (v) & 10 (23A) (via) of the Act of 1961, to the petitioner Trust with retrospective effect from the date of 01st April, 2006, was arbitrary in the face of the provisions of the Act of 1961; and therefore, cannot be deemed to be in consonance with any possible interpretation to be valid or legal. This court is of the opinion that the provisions of section 12AA (3) of the Act of 1961, empowers the Commissioner of Income Tax to initiate steps for cancel....
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....o the petitioner's society under Section 12A of the Act, is quashed. Consequently, the registration granted to the petitioner's society on 1st April, 1999, stands restored for the assessment years under consideration Thus, keeping in view the above discussion, we are of the opinion that in the present case the Id. Pr.CIT(Central) has no jurisdiction to pass the impugned order. Accordingly, we quash the same. Even otherwise we are also of the view that no retrospective cancellation could be made as neither in the Sec. 12AA(3) nor in Sec. 12AA(4) it has been provided or is seen to have explicitly provided to have a retrospective character or intend. Therefore, without a specific mention of the amended provisions to operate retrospectively no cancellation for the past years could be ordered. In this regard, the Hon'ble Madras High Court on the question as to whether the cancellation will operate from a retrospective date has dealt in the case of Auro Lab vs. ITO (2019) 411ITR 0308 (Mad) 20 wherein it was held as under: The amendment to Section 12AA(3) is prospective and not retrospective in character. The courts reasoned that even when the parliament had plenary powers ....