TaxTMI 
TaxTMI 
2025 (10) TMI 1011
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.... 2. Brief facts of the case are that the assessee M/s Sushila Devi Centre for Professional Studies and Research was granted registration u/s 12A r.w.s 12AB of the Act vide order dated 10.02.2004 by PCIT, Dehradun which was subsequently renewed on 23.09.2021 up to Assessment Years 2026-27. A seach and seizure actions u/s 132 of the Act was carried on 22.11.2023 by Investigation Wingh, Dehradun and in terms of the order passed u/s 127(2)(a) of the Act by the CIT(E), Lucknow, the jurisdiction over the assessee was transferred from Exemption Circle, Ghaziabad to DCIT/ACIT, Central Circle, Dehradun for the purpose of completing the assessments as a result of search. The assessee had filed an application for registration u/s 12A of the Act on 23.09.2021 before the Ld. CIT(E), Lucknow at MRT. The PCIT, Central Kanpur vide his impugned order dt. 30.6.2025 has rejected the application for registration and cancelled the registration gratned earlier from AY 2014-15 to AY 2024-25. Aggrieved by the said order, present appeal is filed by the assessee by taking following grounds of appeal: 1. That on the facts and in the circumstances of the case and in law, the impugned order dated 30....
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....n to Section 12AB(4) of the Act, inasmuch as no cogent material has been brought on record to show non-genuineness of activities or deviation from the stated charitable objects of the Assessee Society, 10. That in view of facts and circumstances of the case and in law the Principal Commissioner of Income Tax, Central, Kanpur has failed to prove that the activities of the Assessee Society are not genuine or that the activities of the Assessee Society are not in consonance with its objects, which is the foremost consideration for cancellation of registration granted u/s 12A of the Act 11. That the Principal Commissioner of Income Tax, Central, Kanpur has erred in holding that the Assessee Society diverted funds by purchasing land from related persons without establishing that such transactions were not at arm's length or that any undue benefit accrued to any person under Section 13(3) of the Act. 12. That the Principal Commissioner of Income Tax, Central, Kanpur has failed to appreciate that the land purchases were made to meet the statutory requirement of the Indian Council of Agricultural Research (ICAR) for affiliation and that all acquisitions were ....
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....fed over the cases of States of Uttar Pradesh and Uttarakhand and thus, the PCIT, Central, Kanpur had no jurisdiction over the assessee to cancel the registration granted u/s 12A of the Act. The Ld. AR further submits that the order passed u/s 127(2), for the purpose of transfer of jurisdiciton over the assessee from one Assessing Officer to another Assessing Officer was only to assess the income and through such order jurisdiction cannot be assumed by the PCIT Central, Kanpur in the case of specific assessee for whom jurisdiction was notified by the CBDT itself. Moreover, the said order u/s 127(2) of the Act was passed by the CIT(E), Lucknow at MRT and, therefore, this order could not transfer the jurisdictionl to PCIT, Central, Kanpur unless there is a specific order by the CBDT u/s 120 of the Act. The Ld. AR also submits a written submissions which reads as under: "1. The Assessee, Sushila Devi Centre Professional Studies and Research, was registered under Section 12AA read with Section 12A of the Income Tax Act, 1961 ("the Act') vide order dated 10.02.2004 passed by Commissioner of Income Tax, Dehradun. Thereafter, the registration was granted on 23.09.2021 under S....
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.... Trust Society v. PCIT(Central), [2025] 175 taxmann.com 671 (Delhi Trib.) [16-06-2025] at Page Nos: 315-328 of the Case Law Compilation. c. Meenakshi Foundation v. PCIT, [2025] 175 taxmann.com 990 (Delhi-Trib.) (23-05-2025) at Page Nos. 329-342 of the Case Law Compilation. 5. The order passed under Section 127(2)(a) of the Act dated 04.07.2024 is for the purpose of transferring the case to one assessing officer to another assessing officer. The said order also specifies that it is passed to transfer the case from one assessing officer to another assessing officer. It is not open to the PCIT, Central, Kanpur to assume jurisdiction on the basis of said order passed under Section 127 of the Act. which has transferred the assessment from one assessing officer to another assessing officer. Hence, the PCIT, Central, Kanpur lacks the jurisdiction to pass the impugned order under Section 12(AB)(4)(ii) of the Act to cancel the registration granted by the CIT(Exemption), Lucknow who has the valid jurisdiction. The reliance is placed on the above mentioned judgements and the copy of the same are in the Case Law Compilation. 6. It is further submitted that the order ....
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....ing the registration, the PCIT (Central), Kanpur, has treated certain acts of the Assessee as 'specified violation' as defined in subclause (f) of the explanation to Section 12AB (4) of the Act. The said provision is introduced in the Act on 01.04.2022. It is submitted that the specified violation' itself came into statute on 01.04.2022, and as such, the same could not have occurred prior to 01.04.2022. The PCIT Central has wrongly applied the same to AY 2014-15, 2015-16, 2016-17, 2018-19, 2019-20, 2020-21 and 2021-22 respectively. Even otherwise, there is no specified violation by the assessee in all the assessment years mentioned in the impugned order and as such the impugned order is illegal, bad in law. 10. The invocation of the provision of Sections 12A, 12AA & 12AB(4) of the Act to cancel the registration on the allegation of 'specified violation for AYs 2014-15. 2015-16, 2016-17, 2018-19, 2019-20, 2020-21 and 2021-22 is not permissible as the same has seen the light of the day on 01.04.2022. 11. Hence, the alleged 'specified violation' could not have occurred prior to 01.04.2022 i.e.. AY 2022-23 and earlier years. The reliance is pla....
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....red from Exemption Circle-Ghaziabad to AC/DC, Central Circle Dehradun who has fallen under the jurisdiction of PCIT, Central, Kanpur and, therefore, all the adminstrative approvals are to be given by the PCIT, Central, Kanpur inlcuding granting/withdrawal of registration u/s 12A of the Act. The Ld. CIT-DR further submits that assessee was engaged in the activities which are in violation to the provisions of section 11, 12 and 13 and, therefore, the Ld. PCIT, Central, Kanpur has rightly cancelled the registration w.e.f Assessment Year 2014-15 which is the year from which the evidences of such violations were found during the search. He thus, submits with the order of Ld. PCIT, Central, Knapur cancelling the regisration be upheld. 7. Heard both the parties and perused the materials available on record. The sole issue in the grounds of appeal No.1 to 7 of the assessee are with respect to the cancellation of the registration by the PCIT, Central, Kanpur without having jurisdiction and further the cancellation was made with retrospective effect. Before going further, we first examine the jurisdiction of an Officer as provided u/s 120 of the Act. As per section 120 sub-section (1) and....
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....the Central Circle- Dehradun was to complete the assessments due as a result of search carried for better and proper co-ordination of the cases which does not mean that the jurisdiction of the CIT(E) at Lucknow was transferred to PCIT, Central, Kanpur. 10. The identical issue came up before the Co-ordinate Bench of the Tribunal in the case of Aggarwal Vidya Pracharni Sabha Vs. PCIT, Central Gurgaon wherein ITA No. 1308/Del/2023 vide order dated 08.01.2024 the Co-ordinate Bench has held as under: "14. Having considered the aforesaid, it comes up that the order of transfer u/s 127 dated 26.10.2020 is shown to be passed under sub-clause (a) to sub-section (2) of section 127 of the Act which gave powers to CIT(E) Chandigarh to pass order of transfer qua such 'Assessing Officers' who are subordinate to other the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Thus when we consider the definition of "Assessing officer" u/s 2(7A) of the Act, certainly PCIT, Gurgaon, who has passed the impugned order is not an 'assessing officer', and order passed dated 26.10.2020, under sub-clause (....
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....nducting inquiry about 'specified violations', cancelling registration or refusing to cancel registration. 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 to the Principal Commissioner or Commissioner authorised by the Board. The authorisation u/s 12AB or Rule 17A if have to be construed, by virtue of Board's Notification dated 22.10.2014, then we pointed out during the hearing, to ld. DR that this Notification dated 22.10.2014 does not mention specifically that the powers which can be exercised by ld. PCIT u/s 12AB(4) of the Act and which have come into effect from 01.04.2021 would also be exercised by virtue of this Notification 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. 15. Thus, at one end, in the absence of any specific reference of section 12AB in the Notification date....
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....id assessing officer was completed in September, 2021, so, before the letter dated 23.08.2022 the assessment proceedings stood culminated. Thus, there was no occasion for concerned AO to invoke 'reference' powers under second proviso to sub-section (3) of section 143 of the Act. To that extent Ld. PCIT observations are correct. 16.1 However, what is relevant here is that in any case the 'reference' by jurisdictional AO was to be made not to the PCIT or Commissioner, to whom this AO was subordinate but one authorised by board for the purpose of Section 12AB. The one who could grant or cancel the registration as per amended provisions which is not PCIT, Gurgaon, but, would be CIT(E), Chandigarh. Thus assumption of jurisdiction for cancellation of registration u/s 12AB(4) of the Act by virtue of aforesaid transfer of jurisdiction order u/s 127 of the Act is not conceivable. 17. At the same as we observed above that the assessment by said assessing officer was completed in September, 2021, thus, there was no occasion for concerned AO to invoke 'reference' powers under second proviso to sub-section (3) of section 143 of the Act. It appears that when confronted with the....
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....ts or information under clause (i) of sub-section (4) of Section 12AB, Ld. PCIT, Gurgaon had actually 'noticed' one or more of such 'specified violation.' 17.3 In this context further if the final show cause notice dated 14.03.2023 available at pages 7 to 37 of the paper book is considered, it shows in para 4.10 a reference is made to what sort of information was called by letter dated 08.09.2022:- "4.10 In the light of above facts of the case, it appears that the assessee trust has made specified violation in terms of explanation to Section 12AB(4) of the Income Tax Act, 1961. As such, following information from the assessee trust was called for under Section 12AB of the Act vide this office letter dated 08.09.2022 to examine the activities of the Aggarwal Vidya Pracharni Sabha with a view to ascertain whether the same are covered under the clause of explanation to the provisions of Section 12AB(4) of the Act and other provisions of the Act. Details of information called for the relevant period i.e. AY 2014-15 to 2020-21 is as under: * Copy of registration u/s 12AA/12AB(1) of the Act. * Coy of memorandum of association containing the objects for....
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.... first making conclusive notice of the alleged 'specified violation' is not sustainable. 20. We have also taken into consideration the order of the Jaipur Bench of the in the case M/s Wholesale Cloth Merchant Association vs. Pr. CIT (Central), Jaipur in ITA No.688/JP/2019 where this issue of jurisdiction u/s 127 of the Act has been considered and the findings support out aforesaid view on the facts before us. It will be appropriate to reproduce the relevant paras No.14 and 15:- "14. We found that the above facts and proceedings of power of transfer U/s 127 was only for a limited purpose of Co-Ordinate Assessment. Neither any search & Seizure action nor any notice u/s 153A or 153C of the Act or assessment u/s 153A or 153C of the Act in the case of assessee were initiated and there was only a survey u/s 133A of the Act in the case of assessee. The assessment has been completed u/s 148/143(3) of the act vide order dated 19.12.2018. As the assessment has been completed, the purpose of transfer u/s 127A has also been completed. Although No notices regarding the transfer of the cases u/s 127 have been sent to the assessee for the purpose of Co-ordinate assessment and th....
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.... 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 cancelled the same. 20. 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 of Exemption cases or 12A registration a Separate Commissioner of Income Tax has been Authorized for whole of Rajasthan by the CBDT by its Notification dated 22.10.2014. In support of the above contention, the ld AR has relied ....
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.... for proper co-ordinated investigation--Impugned order was made by Principal CIT under sub-section 2 of section 127 by which case of assessee was transferred to DCIT--Held, in Noorul Islam Educational Trust it was held that as Income-tax/assessment file of assessee had been transferred from one AO in Tamil Nadu to another AO in Kerala and two AO were not subordinate to same Director General or Chief Commissioner or Commissioner of Income Tax u/s 127(2) (a) agreement between Director General, Chief Commissioner or Commissioner, as case might be, of two jurisdictions was necessary-- Counter affidavit filed on behalf of Revenue did not disclose that there was any such agreement--In fact, it had been consistently and repeatedly stated in said counter affidavit that there was no disagreement between two Commissioners--Existence of agreement between two jurisdictional Commissioners was condition precedent for passing order of transfer--Clause (b) of sub-section (2) of section 127 provides for consequences when there was no such agreement--When jurisdiction to pass order of transfer under clause (a) of sub-section (2) of Section 127 could be exercised only when there was such agreement, f....
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.... was placed on a document dated 2 7th November 2016. It is on the basis of the written document that a finding was recorded that there was an agreement between the Jurisdictional Commissioners of Ranchi and Delhi. In the present case, even going by the case made out by the respondent, no such agreement is spelt out. In absence of any such agreement, the first respondent had no jurisdiction to pass the order of transfer. 11. As the impugned order cannot be sustained on above ground, it is not necessary to into other challenges. 12. Accordingly, for the reasons quoted above, we pass following order: Impugned order dated 25th May 2 017 (Exhibit-H to the petition) is hereby quashed and set aside. Rule is made absolute on above terms with no order as to costs. The Hon'ble Supreme Court in the case of Ajantha Industries & Ors.vs. Central Board of Direct Taxes & Ors. (1976) 102 ITR 0281 has been held that: "The CBDT sent a notice to the appellants under s. 127 proposing to transfer their case files "for facility of investigation" from the respective ITO at Nellore to the ITO, B Ward, Special Circle II, Hyderabad. By this notice they were al....
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....ce of disagreement cannot tantamount to agreement as visualized under Section 127(2) (a) which contemplates a positive state of mind of two jurisdictional Commissioners of Income Tax which is conspicuously absent--Transfer of Income-tax/assessment file of assessee from Assessing Officer, Tamil Nadu to Assessing Officer, Kerala is not justified--High Court order set aside--Special appeal allowed. Although, the ld DR has relied upon the decision of Hon'ble Rajasthan High Court in the case of Lalit Hans Vs PCIT DP Special Appeal (Writ) 249/2015 but the facts of the above case are entirely different. Hence, the said judgment is of no help to the Revenue on the facts of the present case. Thus, keeping in view our above discussions, we are of the view that the ld. PCIT had no jurisdiction to pass order U/s 12AA(3) & 12AA(4) of the Act and the same is not sustainable in the eyes of law and accordingly stands quashed." 21. In the light of the aforesaid discussion and the law cited before us, we are of the considered view that the impugned order has been passed by Ld. PCIT, Gurgaon, without jurisdiction in context to territorial powers and subject matter as well not in....
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....ity at serial numbers 131 to 14 specified in the notification of Government of India bearing number S.O. 2752 dated the 22nd October, 2014. Thus, in this way from Oct, 2014 Ld. CIT (Exemption) has been constituted separately for these class or type of cases. Hence, the case of the assessee admittedly falls in the jurisdiction with the Id. CIT (Exemption). 6.3. We found from perusal of the record that a search and seizure operation has been carried out in the case of Pacific Group of Udaipur on 26.08.2015. Warrant of authorization under section 132(1) of the Act was also issued and duly executed in respect of the assessee trust being part of the Pacific Group. The Notification referred above does not provide that Id. CIT (E) can transfer his power or jurisdiction to other CIT or PCIT. In the said notification the CBDT has authorized the CIT (E) to issue order in writing for the exercise of powers and functions by the Addl. CIT or JCIT or TRO who are subordinate to him, and has authorized the Addl. CIT to issue order in writing for the exercise of powers by the Assessing Officer who are subordinate to him. In section 124 jurisdiction of Assessing Officer has been given, not ....
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....hief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in Chief Commissioner or Chief Commissioner or Principal Commissioner o agreement, then the Principal Director General or Director General or Principal Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order, (b) where the Principal Directors General or Directors General or Principal Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorize in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without conc....
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....ns 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) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed concurrently by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, 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 higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply. (6) Notwithstanding anything contained in any direction or order is....