TaxTMI 
TaxTMI 
2024 (8) TMI 819
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....s, challenging the order dated 30.09.2023 passed by the Ld. PCIT, Central-2, Delhi, which is pending in appeal in ITA No.3241/Del/2023. Vide this stay petition, the ld. AR requested to stay the order dated 30.09.2023 passed under Sec.12A r.w.s. 12AA and 12AB(4) of the IT Act, cancelling the registration of the assessee trust with retrospective effect for Assessment Years. 2014-15 To 2022-23, 2023-24 onwards, pending disposal of the appeal and pass such further or other order or orders as the Tribunal may deem fit and proper in the circumstances of the case and thus render justice. 2. Brief facts of the case:- The Legal Initiative for Forest and Environment' Trust (LIFE) was formed by Shri Ritwick Dutta, Shri Rahul Chaudhary and Shri Priyabrata Satapathy on 20th May, 2008. It was stated by the assessee vide its reply dated 09.03.2023 to the PCIT, Central-2 New Delhi, during the cancellation proceedings initiated by him that it was formed with the main objective of serving environmental issues like bringing transparency and accountability in the environmental decision-making process, providing information, creating awareness by holding conferences, seminars, symposiums, conduc....
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....r give donations to and financially or otherwise, to aid educational, social, charitable and other institutions, works, activities of any other society association or organization with all or any of the objects of the society of whose objects contain objects similar to that of the Society. xvi) To train personnel to work at the grass-root level. xvii) To carry out consultancy and related works for other organizations, etc. xviii) General to do all such things as may be incidental or conductive to the attainment of the main object of the Foundation." 2.2. Further, the PCIT noted that in the case of LIFE Trust, a survey action was carried out by the Investigation Wing of the Income Tax Department in N-71LGF, Greater Kailash, New Delhi on 07.09.2022. Materials collected during the survey were shared by the Investigation Wing with the Assessing Officer (AO), i.e., DCIT, Central Circle-14, New Delhi, where the case was transferred u/s 127(2) of the Act vide order dated 10.11.2022 from the jurisdiction of ITO(Exemption)-1(4), New Delhi. The said information/material was shared by the DCIT, Central Circle-14, New Delhi with his PCIT on 17.01.2023. According t....
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....ome under Indian intelligence organization' scanner. Mail is; 'My view is that Earth Justice is likely to be put under the scanner of Indian intelligence organization just like Sierra Club and Greenpeace. As of now the Indian Government is not much aware of Earth Justice, however, this may change if they find that there is a positive response to the call given by Earth Justice. This is my personal opinion. The actual reaction may be different. However, the probability of the above reaction is quite high. (iii) The assessee trust is receiving majority of fund as foreign aid. The details are as under:- Trust Financial Year Domestic Contributions (Rs.) % to Total Foreign Contributions (Rs.) % to Total Total Contributions (Rs.) LIFE 2015-16 1,625,000 29.61% 3,863,245 70.39% 5,488,245 LIFE 2016-17 1,660,000 13.89% 10,291,754 86.11% 11,951,754 LIFE 2017-18 639,000 5.65% 10,663,125 94.35% 11,302,125 LIFE 2018-19 1,500,000 10.76% 12,434,426 89.24% 13,934,426 LIFE 2019-20 1,470,000 13.06% 9,783,029 86.94% 11,253,029 LIFE 2020-21 740,000 5....
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....and not being carried out in accordance with the objects of the trust. He, therefore, cancelled the registration granted to the assessee u/s 12AB from FY 2021-22 onwards. 2.6. The PCIT, in view of the finding in Para No. 10.11 of his order held that rent payment by assessee trust to Smt. Amita Dutta, mother of Shri Ritiwick Dutta is covered u/s 13(3) rws 13(1)(c)(ii). He, therefore, cancelled the registration granted to the assessee u/s 12A/12AA from F.Y 2018-19 and u/s 12AB from FY 2021-22 onwards. 2.7. The PCIT, in view of the finding in Para No. 11.3 of his order held that payment to Mr. Kaustav Dhar, an employee of the assessee trust by the assessee Trust for litigation is not as per the objects of the trust. Therefore, he held that the activities of the assessee trust are not genuine and not being carried out in accordance with the objects of the trust. He, therefore, cancelled the registration granted to the assessee us 12AB from FY 2021-22 onwards. 2.8. The PCIT, in view of the finding in Para No. 13.3 in his order held that rent payment by the assessee trust for LIFE LLP is covered u/s 13(3) rws 13(1)(c)(ii). He, therefore, cancelled the registration granted to the....
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....ves as the registered office of the assessee trust. 3.2. It was further submitted that the present proceedings arise out of a survey under Section 133A of the IT Act conducted on 07.09.2022 at the office of the assessee trust located at N-71LGF, Greater Kailash, New Delhi. In the course of the survey proceedings, the assessee fully cooperated with the Department and provided all the documents as sought for by the Department. However, the department, for reasons best known to it cloned the computers and phones of the trustees that held privileged attorney-client communications received in their individual capacities as advocates. No reasons for impounding the material were shared with the assessee. 3.3. The assessee submitted that it had fully co-operated and furnished all the information, explanations and documents as demanded in response to the show cause notices issued by the PCIT. The Ld. AR submitted that without considering the detailed submissions furnished during the course of the above proceedings, the impugned order dated 30.09.2023 under Section 12A rws 12AA & 12AB(4) of the IT Act was passed by the Pr. CIT (Central)-2, New Delhi cancelling the registration of the a....
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....ioner of Income Tax (Exemptions), Delhi wherein only the jurisdiction of the Assessing Officer from Ward (Exemp.)-1(4), Delhi has been transferred to Central Circle-14, Delhi and therefore, such transfer is only limited to conducting of assessment. Without such necessary transfer of jurisdiction, the impugned order is illegal and bad in law as the power to cancel registration in terms of Section 12AB(4) continues to remain with the prescribed authority. It was further submitted that even otherwise, Section 127(2) of the Act specifies that if there is a transfer of jurisdiction from one Assessing Office to another who is not subordinate to the same Principal Chief Commissioner, then the concerned commissioner must record consent from both the transferor commissioner and the transferee commissioner. Alternatively, such transfer of jurisdiction must be notified by the CBDT. The current order, issued under section 127(2), which transfers jurisdiction from the Assessing Officer under the Principal Chief Commissioner (Exemption) to the Assessing Officer under the Principal Chief Commissioner (Central), does not mention the required consent of the Principal Chief Commissioner (Exemption).....
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....9;s Case Compilation; Pacific Academy of Higher Education and Research Society v PCIT (Central) ITA No. 04/JODH/2020 @ Para 6.8-6.9 @ Page 94-98 of Assessee's Case Compilation; Wholesale Cloth Merchant Association v PCIT(Central) ITA No. 688/JP/2019 @ Para 19-21 @ Page 133-139 of Assessee's Case Compilation.] (ii) That the impugned order could not have retrospectively cancelled the registration granted u/s 12A/12AA of the Act from AY 2014-15 CIT v. Vatika Township (P) Ltd. (2015) 1 SCC 1 @ Para 28-31 @ Page 188-189 of Assessee's Case Compilation; Oxford Academy For Career Development v CCIT /2009/ 315 ITR 382 (Allahabad) @ Para 21 @ Page 204 of Assessee's Case Compilation; ACIT v Agra Development Authority [2018/ 407 ITR 562 (Allahabad) @ Para 50-52 @ Page 220 of Assessee's Case Compilation; Auro Lab v ITO /2019] 411 ITR 308 (Madras) @ Para 20-21 @ Page 249 of Assessee's Case Compilation; Pacific Academy of Higher Education and Research Society v PCIT (Central) ITA No. 04/JODH/2020 @ Para 6.9 @ Page 94-98 of Assessee's Case Compilation; Wholesale Cloth Merchant Association v PCIT(Central) ITA No. 688/JP/2019 @ Para 30-31 @ Page 153-155....
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....er are vested with the Commissioner of Income Tax (Exemption), Delhi-2 by the said notification. In such light, the Assessee humbly submits that the jurisdiction to grant or revoke registration lies solely with the Commissioner of Income Tax (Exemption), Delhi-2 who is the prescribed authority. Hence, the assumption of jurisdiction being erroneous, the order of cancellation is prima facie bad in law and liable to be set aside. 2. Further, even if it is contended that the jurisdiction was transferred on account of survey conducted on the Petitioner on 07.09.2022, it is submitted that even in that case, only the jurisdiction of the Assessing Officer of the Assessee Trust to conduct assessment in the case of the Assessee Trust was transferred and not the jurisdiction of the prescribed authority for grant or revocation of registration under Section 12A/12AA/12AB. This is also made evident from the order dated 10.11.2022 passed under Section 127(2) of the Act by the Commissioner of Income Tax (Exemptions), Delhi wherein only the jurisdiction of the Assessing Officer from Ward (Exemp.)-1(4), Delhi has been transferred to Central Circle-14, Delhi and therefore, such transfer is o....
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....e may be, he shall pass an order in writing cancelling the registration of such trust or institution. Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard." "12AB. Procedure for fresh registration. (1) .... (4) Where registration or provisional registration of a trust or an institution has been granted under clause (a) or clause (b) or clause (c) of sub-section (1) or clause (b) of sub-section (1) of Section 12AA, as the case may be, and subsequently,- (a) the Principal Commissioner or Commissioner has noticed occurrence of one or more specified violations during any previous year; or (6) the Principal Commissioner or Commissioner has received a reference from the Assessing Officer under the second proviso to sub-section (3) of section 143 for any previous year; or (c) such case has been selected in accordance with the risk management strategy, formulated by the Board from time to time, for any previous year; * the Principal Commissioner or Commissioner shall,- (i) call for such documents or information fro....
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....trospectively, the cancellation cannot operate from a past date." [emphasis supplied] THE ASSESSEE HAS ALWAYS ACTED IN ACCORDANCE WITH ITS OBJECTS 7. It is submitted that the Pr. CIT has adopted an arbitrary view of the operations of the Assessee Trust and has cancelled the registration of the Assessee on frivolous grounds without establishing any finding of omission or discrepancy in the functioning of the Trust. The Assessee Trust has always genuinely carried out activities in furtherance of its main objects. B. THE HON'BLE HIGH COURT OF DELHI HAS GRANTED STAY IN SIMILAR CASES 8. The Hon'ble High Court of Delhi, while hearing a similar, challenge to a cancellation of registration u/s. 12A, 12AA and 12AB [with retrospective effect] in WP (C) 11270/2023 passed order dated 25.08.2023 staying such cancellation on the ground that the Assessee therein would suffer irreversible harm if such cancellation was not stayed and that the balance of convenience was in favour of the Assessee. The said order was duly cited and followed in two other identical challenges being W.P. (C) No. 15787/2023 and W.P. (C) No. 15364/2023 in order dated 18.01.2024 a....
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....ed that the Assessee is dependent on the donations of its contributors for its day to day functioning and achievement of its objects. The . employees engaged by the Assessee and its work depend on these contributions and irreparable harm would be caused to the Assessee if the cancellation of registration is not stayed. E. PRAYERS 12. In these circumstances, the Assessee prays that this Hon'ble Tribunal be pleased to: a. Stay the order dated 30.09.2023 passed under Sec.12A r.w.s. 12AA and 12AB(4) of the IT Act, cancelling the registration of Assessee Trust with retrospective effect for Assessment Years. 2014-15 To 2022-23, 2023-24 Onwards, pending disposal of the Appeal and; b. Pass such further or other order or orders as the Hon'ble Tribunal may deem fit and proper in the circumstances of the case and thus render justice." 6. On the other hand, the ld. DR submitted that the petition of the assessee was not maintainable because the only provision empowering ITAT to grant stay during the pendency of the appeal is first proviso to section 254(2A) by which, the Tribunal can pass an order of stay in any proceedings in cases wherein there i....
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...., Delhi to pass impugned order, it was submitted that the Central Board of Direct Tax vide its Notification No. 52/2014 dated 22.10.2014 had created a jurisdiction of CIT (Exemption) over all cases of persons in the territorial area assigned to him/her, claiming exemption under section 11, 12 of the Act and assessed or assessable by an Income Tax authority specified in the Notification No. 50/2014 dated 22.10.2014. As regards the decision relied upon by the Ld. AR to conclude that it is the charge of CIT(Exemption), which alone can exercise the jurisdiction to cancel registration granted under 12A and 12AA, the ld. DR submitted that all decisions relied upon by the assessee have failed to take note of the Notification No.70/2014 dated 13.11.2014 issued by CBDT in exercise of power conferred by sub-section (1) and (2) of Section 120 of the Act and vide para (b) makes it clear that the CIT(Exemptions) does not exercise jurisdiction in respect of persons claiming exemption under section 11, section 12 of the Act which have been assigned to the Assessing Officers subordinate to PCIT, Central, under Section 127 of the Act. Therefore, by virtue of clause (b) of the Notification dated 13.....
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....by the assessee on the Notification No. 30/2021 dated 01.04.2021 in the rejoinder, is also misplaced for the following reasons:- "a. Notification No. 30/2021 was further amended by Notification No. 52/2022 dated 09.05.2022, whereby in the opening paragraphs, the words "and Commissioner of Income Tax (Exemption), Bengaluru" were omitted. Therefore, this is in contradiction to the submission of the assessee that CIT (Exemption) is only empowered to cancel registration u/s 12A/12AA/12AB. b. Also, as per the submission of the assessee, Director of Income Tax (Centralized Processing Centre), Bengaluru or CIT (Exemption), Bengaluru becomes the sole authority for ascertaining the genuineness of the activities in terms of the objects of the trusts, for assessee situation across India, which cannot be intent of the Board. c. Notification No. 30/2021 nowhere mentions the grant of power to cancel registration granted u/s 12A/12AA/12AB. d. Notification No. 30/2021 only deals with cancellation of approval granted in Form 10AC and Unique Registration Number (URN) under various rules. Rule 17(6) provides that if it is noticed that Form No. 10A (application form....
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....e case of Care India Solutions for Sustainable Development vs PCIT, Central, Delhi WP(C) No. 15364/2023, the Ld. DR submitted that interim order dated 25.05.2023, passed in the case of the assessee was issued in the context of reassessment proceedings initiated for AY 2016-17. The interim protection was granted by the Hon'ble High Court on the grounds of misalignment between the purportedly escaped income as indicated in notice u/s 148A(b) and the order passed u/s 148A(d) and the same could not have any bearing on the present case. It was further submitted that interim order dated 25.08.2023, issued in the case of another assessee i.e. Centre for Policy Research was passed primarily on the issue of violation of principles of natural justice. It was further submitted that the interim order dated 18.01.2024 in case of Oxfam India and Care India Solutions for Sustainable Development was passed keeping in view the similar facts forming ground for interim order dated 25.08.2023. It was submitted that in the present case, the assessee has no where pleaded violations of principles of natural justice and therefore, the said interim orders are of no assistance to the assessee. In additi....
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.....2023 and the assessee has failed to substantiate its submission on irreparable loss/injury being caused to it as a result of the impugned order. Mere bald averments regarding the assessee being dependent on donations for day to day functioning has been made in the stay application. 6.12. The ld. DR also filed a written submission on 16.07.2021, wherein, in addition to the abovementioned submissions argued during the course of hearing, made a new submission that in deciding a matter relating to stay, public interest is a vital consideration in grant of interim injunctions. The ld. DR submitted that even though the assessee has not chosen not to make submissions on merits in support of its application for stay, it is humbly submitted that the impugned order dated 30.09.2023, clearly records that the assessee has received substantial funding (87% of total contributions on average) from entities situated outside India with the purpose of engaging in agitation/litigation beyond their stated objects. It is seen and noted in the impugned order as to how the foreign funding is influencing the working of the assessee and these trusts/institutions are indulging in activities contrary to ....
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.....w.s. 12A and 12AA of the Act was issued on 04.02.2023. After considering the replies filed by the assessee, the conclusion was arrived at by the Respondent is contained in para 16 of the impugned Order dated 30.09.2023, which held that that working of the Assessee Trust is not as per the objects of the trust, including it's association between Assessee and Earth Justice. 5. The assessee has filed the present stay application on 19.04.2024 seeking stay of the impugned order dated 30.09.2023 passed under section 12A r.w.s. Section 12AA & 12AB(4) of the Act passed by Respondent. 6. Section 254(1) provides that the Ld. ITAT may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. However, the only provision empowering Ld. ITAT to grant a stay during the pendency of the appeal is first proviso to Section 254(2), which provides that the Ld. ITAT may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed subject to the condition that the assessee deposits not less than twenty per cent of the amount of tax, interest, f....
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....elhi to pass impugned order: 11. Central Board of Direct Tax vide its Notification No. 52/2014 dated 22.10.2014 had created * a jurisdiction of CIT (Exemption) over all cases of persons in the territorial area assigned to him/her, claiming exemption under section 11, 12 of the Act and assessed or assessable by an Income Tax authority specified in the Notification No. 50/2014 dated 22.10.2014. 12. Multiple Tribunal decisions [Refer: Aggarwal Vidya Pracharni Sabha v. PCIT Central Gurgaon (ITA No. 1308/DEL/2023), Pacific Academy of Higher Education and Research Society vs. PCIT Central (ITA No. 04/JODH/2020), Wholesale Cloth Merchant Association vs. PCIT Central (ITA No. 688/JP/2019)] relied upon by the assessee have relied on the said notification to conclude that that it is the charge of CIT (Exemption), which alone can exercise the jurisdiction to cancel registration granted under 12A and 12AA. 13. However, all the aforementioned decisions have failed to take note of the Notification No.70/2014 dated 13.11.2014 issued by CBDT in exercise of power conferred by sub-section (1) and (2) of Section 120 of the Act. Vide Para (b) of the notification, it has been....
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....on dated 22.10.2014 or that further jurisdiction u/s 12AB of the Act could be transferred to other authorities as per this Notification. The query was left unsatisfied and no other Notification or Circular was brought to our notice." 16. The assessee in the present case, pursuant to order u/s 127 dated 10.11.2022, is now being assessed under DCIT, Central Circle 14. As per the following Explanation to Section 127, once the 'case' of the assessee is transferred from one AO to another, all proceedings under the Act also stand transferred to that particular charge: Explanation.-In section 120 and this section, the word "case", in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 17. Therefore, a bare reading of the Section 127 along with Notification dated 13.11.2014, would clearly indicate that once....
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....ncel the registration in Form No. 10AC and Unique Registration Number (URN), and such registration or such Unique Registration Number (URN) shall be deemed to have never been granted or issued. Jurisdiction to cancel registration of the Petitioner retrospectively: 20. Petitioner has relied upon various high court judgments of [Refer: Oxford Academy for Career Development vs. CCIT [2009] 315 ITR 382 (Allahabad), ACIT vs. Agra Development Authority [2018] 407 ITR 562 (Allahabad), Auro Lab vs. ITO [2019] 411 ITR 308 (Madras)], to contest that the Respondent Department does not have the power to cancel registration of the Petitioner retrospectively. 21. Vide the impugned order dated 30.09.2023, the Respondent has cancelled the registration granted to the assessee u/s 12A/12AA from FY 2013-14 to FY 2020-21 and u/s 12AB from FY 2021-22 onwards. 22. The aforesaid judgments relied upon are clearly distinguishable on facts and not applicable to the present case. In the case of Oxford Academy (Supra), vide order dated 09.03.2004, registration granted on 01.04.1999 was cancelled. Hon'ble High Court held that the power to cancel registration in the form ....
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....nce of order/notice. To the same effect, there is another judgment of Hon'ble Rajasthan High Court in the case of Indian Medical Trust vs. PCIT, 414 ITR 296 ... 121. .. Nowhere, the Statute envisages that the cancellation cannot be retrospective or it has to be necessarily prospective. What it provides that the Commissioner has statutory powers to cancel the registration u/s. 12A/12AA if he finds reason to believe that the activities of the assessee are not in line with its objects or the activities carried out by the assessee are not genuine in nature. If from the date when registration has been granted, the assessee has not carried out any activity in line with its objects or the activities carried out are not genuine, then from that date itself, the registration can be cancelled because it is only when the knowledge of such breach come to the notice of the Commissioner, then he has the power to cancel the registration from the date he notices the infringement...." 25. Also, the aforementioned high court judgments relied upon by the assessee are not in the context of Section 12AB(4) and thus distinguishable on this ground alone. Clause (ii) of Secti....
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....ha, (2009) 5 SCC 694 (Para 21)] 30. It is also submitted that the Hon'ble High Court in the case of the managing trustee of the assessee i.e. Ritwick Dutta vs. DCIT, Central Circle 14 [WPC No. 8079/2024] vide order dated 29.05.2024 while dismissing the writ petitions, has taken due note of the allegations against the assessee and it's managing trustee in relation to diversion of funds being received from Earth Justice to avoid scrutiny from various government agencies. The order passed by the Hon'ble High Court clearly establishes that there cannot be a prima facie in favour of the assessee. 31. Further, reliance on various decisions to contend that the Respondent does not have the jurisdiction to cancel registration is also unsustainable as it has been clearly established that these decisions do not lay down the correct law in view of the Notification No. 70/2014 dated 13.11.2014. Any decision which is per-incuriam, cannot be the basis to state existence of reasonable belief for claiming prima facie case. Whereas, the Delhi Bench decision in the case of Young Indian (Supra) constitutes a binding precedent for the purposes of the present matter. ....
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.... the Hon'ble Supreme Court had held that considerations which weight with the court hearing the application or petition for the grant of injunctions includes whether the grant of or refusal of injunction will adversely affect the interest of the general public which can or cannot be compensated otherwise. 38. The Hon'ble Supreme Court in Mahadeo Savlaram Shelke & Ors. v. Pune Municipal Corporation & Anr., (1995) 3 SCC 33 @ Para 14 has held that public interest is one of the material and relevant considerations in either exercising or refusing to grant ad interim injunction. 39. In view of the aforesaid submissions, it is humbly submitted that the assessee has failed to establish prima facie case, balance of convenience and irreparable loss, in case an interim protection is not granted till the disposal of the appeal." 7. In rejoinder, the ld. AR submitted on the issue of maintainability that the Department's reliance on Rule 35A of the Income Tax Appellate Tribunal Rules is misplaced because Rule 35A specifically deals with an application for a stay of recovery of demand and does not state that an order on the application of stay cannot be passed in....
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....e only via Section 120 of the Act, which is not the case in the present matrix. Further it was submitted that the list submitted by the Department enumerating the different functions of the PCIT itself does not contain the power of the PCIT to grant/revoke registration u/s 12A of the Act, because the power to grant/revoke registration is de hors the Assessing Officer of the assessee trust since such a power is not guided by who the Assessing Officer is but rests solely with DIT(CPC), Bengaluru, by virtue of Notification No. 30/2021 dated 01.04.2021. Further, the Hon'ble High Court of Delhi, in assessee's own case, i.e., Legal Initiative For Forest and Environment Trust v DCIT W.P. (C) 7324/2023, has for AY 2016-17, granted a stay on the operation of Section 148 notice issued by the Department. 7.2. As regards retrospectivity, it was submitted that the judgment relied on by the Department in the case of Young Indian (supra), the Tribunal noted the judgements of the Hon'ble High Courts and the Hon'ble Supreme Court, however it does not deal with any of those judgements in the operative portion of the judgment and therefore, the order in Young Indian (supra) is per ....
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....construed as having retrospective effect. Since Section 12AA(3) and 12AB(4) of the Act do not provide for cancellation with retrospective effect, no cancellation for previous assessment years could have been ordered. [Refer: CIT v. Vatika Township (P) Ltd. (2015) 1 SCC 1 @ Para 28-31 @ Page 188-189 of Assessee's Case Compilation; Oxford Academy For Career Development v CCIT /2009/ 315 ITR 382 (Allahabad) @ Para 21 @ Page 204 of Assessee's Case Compilation; ACIT v Agra Development Authority [2018/ 407 ITR 562 (Allahabad) @ Para 50-52 @ Page 220 of Assessee's Case Compilation; Auro Lab v ITO /2019] 411 ITR 308 (Madras) @ Para 20-21 @ Page 249 of Assessee's Case Compilation; Pacific Academy of Higher Education and Research Society v PCIT (Central) ITA No. 04/JODH/2020 @ Para 6.9 @ Page 94-98 of Assessee's Case Compilation; Wholesale Cloth Merchant Association v PCIT(Central) ITA No. 688/JP/2019 @ Para 30-31 @ Page 153-155 of Assessee's Case Compilation.] Irreparable loss 4. It is submitted that if the operation of the Impugned Order is not stayed then the Assessee will suffer irreparable loss and injury. In this regard, the Assessee submits: ....
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....grant of an interim order of stay, the balance of convenience lies in the favour of the Assessee. In this regard, the Assessee submits the following: a. That if an interim stay on the operation of the Impugned Order is not granted to the Assessee, they will be unable to receive any funds through donations. Consequently, due to lack of funding all the operations of the Assessee shall come to a standstill, including the inability to pay the salaries of its employees. b. In fact, the Hon'ble High Court of Delhi in Centre for Policy Research (supra) and Oxfam India (supra) have observed that cancelling the registration of the assessee trusts will disable them from receiving donations. Since the assessee trusts survive solely on the donations received, the balance of convenience will stand in favour of the assessee trusts. 6. Therefore, the Assessee submits that it meets all the necessary conditions- namely, a prima facie case, irreparable loss, and the balance of convenience-for an order granting an interim stay on the operation of the Impugned Order. 7. Further, during the course of the arguments, a challenge was raised on the maintainability of....
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....ntral). ii. Therefore, when the CBDT, through Notification No. 30/2021, has clearly provided that DIT(CPC) Bengaluru will have the power to grant/revoke registration, PCIT(Central) could never have revoked registration by way of transfer u/s 127 order when CIT(Exemption) itself was not empowered to grant/revoke the registration. iii. The Department's reliance on Order dated 10.11.2022 passed under Section 127 of the Act granting the PCIT the power to grant/revoke registration is misplaced since the transfer was made solely for administrative convenience and assessment purposes. The order u/s 127 reads, 'Accordingly, the transfer is effective as per the table mentioned below for the purpose of administrative convenience, coordinated investigation and meaningful assessment.' Further, Section 127 of the Act does not envisage the transfer of jurisdictions from CIT(E) to PCIT(Central). Such a power to transfer rests solely with the CBDT, which can be done only via Section 120 of the Act, which is not the case in the present matrix. iv. The list submitted by the Department enumerating the different functions of the PCIT itself does not contain the p....
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.... challenged by the assessee by way of an appeal before the Tribunal and the hearing of which was in progress before the Tribunal. The Hon'ble High Court in para 21 of its order held as under:- "21. So far as the order of the Tribunal passed on 21.05.2010 is concerned, it is well settled by the judgment of the Supreme court in ITO v. Mohd. Kunhi, (1969) 71 ITR 815 that the Tribunal, while exercising its appellate powers under the Income Tax Act has also the power to ensure that the fruits of success are not rendered futile or nugatory and for this purpose it is empowered, to pass appropriate orders including orders of stay. In ITO v. Khalid Mehdi Khan, (1977) 110 ITR 79 the Andhra Pradesh High Court, applying the rule laid down in Mohd. Kunhi (supra), stayed the assessment proceedings pending before the Assessing Officer consequent to the directions of the CIT given in orders passed under Section 263 of the Act. The stay order passed by the Tribunal on 21.05.2010 is, therefore, supported by ample authority. It is part of the exercise of the appellate power of the Tribunal under Section 254 (1). The object of the order is twofold: the first is to prevent multiplicit....
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....the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal if successful from being rendered nugatory." 8.2. In the case of ITO v. Khalid Mehdi Khan (supra), on similar facts as in the case of CIT vs ITAT (supra), the Tribunal vide an order dated 2nd April, 1976 had granted stay of the assessment proceedings, which was initiated in pursuance of order u/s 263 of the Act passed on 27.02.1976, wherein assessment order for Assessment years 1971-72 and 1972-73 was set-aside by the CIT. In this case, the Revenue had challenged the order by way of Writ on the ground that even if the Income-tax Appellate Tribunal is presumed to have the power to grant stay of operation of the order appealed against, as held by the Supreme Court in Income-tax Officer v. M.K. Mohammed Kunhi [1969]71 ITR 815 (SC), even then, by virtue of the introduction of Sub-section (2A) in Section 153 of the Act by the Taxation Laws (Amendment) Act, 1970, with effect from April 1, 1971, the said power of the Tribunal becomes curtailed ....
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....e Civil Procedure Code and that, therefore, the power to grant stay is necessarily implied. However, it was observed that the said power shall not be exercised by the Tribunal in a routine manner or as a matter of course, but will be exercised only where a strong prima facie case is made out and after considering the several relevant circumstances, and only on being satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory if the proceedings sought to be stayed are allowed to continue during the pendency of the appeal. XXXXXXXX 7. Now, it would be seen that neither Sub-section (2A) nor any other provision in the Act expressly qualifies or abridges the power of the Tribunal to pass all necessary orders under Section 254(1) of the Act. Does it do so by necessary implication? It is, no doubt, true that Clause (ii) in Explanation 1 may not help the department in seeking to exclude the period during which the stay granted by a Tribunal is in operation, since the Tribunal is, admittedly, not a court, yet we are not convinced that Subsection (2A) has the effect of depriving or abridging the power of the Tribunal to grant appropriate interim ....
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....e assessee succeeds in the appeal at a later stage. Therefore, we do not agree with the plea of the department that the Tribunal does not have power to grant stay as contended by it and it is held that the Tribunal has powers under section 254(1) of the Act to grant stay in the appropriate cases. 9. Further, it was submitted that the re-assessment proceedings initiated against the assessee, are an independent set of proceedings governed by different set of provisions and cannot be said to be a consequence of the impugned order cancelling registration granted to the assessee and that the notice u/s 148 for AY 2016-17 was issued on 04.05.2023, which is prior to the passing of the impugned order and further the order dated 25.05.2023 passed in WPC 7324/2023 passed by Hon'ble High Court, clearly records that the cancellation proceedings are on-going and final order is yet to be passed. Further, it was submitted that in the other reassessment proceedings/notices initiated/issued after 30.09.2023, the factum of cancellation of registration u/s 12A/12AA/12AB has been noted for the purpose of completeness. However, we do not agree with it. It is a fact that the notice u/s 148 of the....
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.... also submitted that balance of convenience was in favour of the assessee and if the stay is not granted, there will be irreparable loss/injury to the assessee. The detailed submissions of the assessee, its rejoinder and the submission of the Department have already been discussed in detail earlier in this order. 9.3. While deciding this stay application, we are of the view that for grant of stay, the assessee has to satisfy all the three conditions i.e. prima facie case in favour of the assessee, balance of convenience and irreparable loss/injury to become eligible for stay and if the assessee fails to pass any of these tests, the assessee will not be entitled for stay. 9.4. The assessee has relied upon three decisions namely Aggarwal Vidya Pracharni Sabha v PCIT (Central) Gurgaon (supra), Pacific Academy of Higher Education and Research Society v PCIT (Central) (supra), Wholesale Cloth Merchant Association v PCIT(Central)(supra) to submit that the PCIT(Central)-2, Delhi lacked jurisdiction to pass the order dated 30.09.2023 as according to the assessee, only the assessment jurisdiction of the case had been transferred to DCIT (Central) Circle-14, New Delhi and the jurisdict....
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....which were assigned to AO sub-ordinate to him, under section 127 of the Act. 9.6. On a careful perusal of the three case laws relied by the assessee, it is seen that the above three case laws have not considered the said Board Notification No.70/2014 dated 13.11.2014 In fact, the Delhi Tribunal in the case of Aggarwal Vidya Pracharni Sabha v PCIT (Central) Gurgaon (supra) para no.14.5 of its order had specifically mentioned that when a query was made to the CIT-DR to produce any further notification by virtue of which the power exercised by the PCIT u/s 124B(4) of the ACT , which had come into effect from 01.04.2021 would also be exercised or that further jurisdiction u/s 12AB of the Act could be transferred to other authorities as per this notification was left unsatisfied and no other Notification or Circular was brought to the notice. The relevant observation of the Tribunal in para 14.5 is reproduced as under:- "14.5 The Rule 17A, as clarified by Circular dated 3rd June 2022 provides that in addition to the 'specified violations', the power of cancellation has also been granted under sub-rule (5) of rule 17A and sub-rule (5) of rule 2C of the Income tax Rules, 1962 ....
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....spective effect, i.e., prior to the date of issuance of order/notice. To the same effect, there is another judgment of Hon'ble Rajasthan High Court in the case of Indian Medical Trust vs. PCIT, 414 ITR 296 ... 121. .. Nowhere, the Statute envisages that the cancellation cannot be retrospective or it has to be necessarily prospective. What it provides that the Commissioner has statutory powers to cancel the registration u/s. 12A/12AA if he finds reason to believe that the activities of the assessee are not in line with its objects or the activities carried out by the assessee are not genuine in nature. If from the date when registration has been granted, the assessee has not carried out any activity in line with its objects or the activities carried out are not genuine, then from that date itself, the registration can be cancelled because it is only when the knowledge of such breach come to the notice of the Commissioner, then he has the power to cancel the registration from the date he notices the infringement...." 10. In view of the above facts, we are of the view that we cannot hold that the Pr. CIT(Central-2), Delhi had no jurisdiction to cancel the regi....
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.... Central-2, Delhi, which will be separately decided in the appeal filed by the assessee. 11.4. However, some findings of the PCIT, Central Circle-2, New Delhi, in his order is taken to show the apparent contradiction in the claim made by the assessee and facts emerging out of the survey and the proceedings for cancellation of registration initiated by Pr. CIT, Central-2, Delhi. In its reply dated 14.03.2023 in respect of queries in point no. 6.1.2 of the order, the assessee submitted that it had neither received any money from M/s Earth Justice nor had made any expenditure in relation to any activity, which can be construed as prohibitory in nature and violating any conditions of registration u/s 12AA of the Act. However, the facts shown on in the table as reproduced on page 16 of the order, shows that the assessee trust had receipts from M/s Earth Justice during FY 2013-14 and FY 2014-15. Further, in the second table on pages-16-17 of the order, it is seen that certain bills dated 13.03.2019 have been raised by the Hotel Astor, Kolkata in the name of the assessee trust in respect of persons belonging to Earth Justice. This apparent contradiction prima facie show lack of transpa....