2010 (2) TMI 882 - HC - Income Tax

Cancellation of registration under section 12A of the Act - Whether the registration granted under section 12A of the Income-tax Act, 1961 can be withdrawn for a period prior to insertion of sub-section (3) of section 12AA of the Act, which had come into force from October 1, 2004. - held that - It is well settled proposition of law that the judicial/quasi-judicial authority cannot review its own order, unless the power of review is expressly conferred on it by the statute under which it derives its jurisdiction - So the order passed by the Commissioner of Income-tax-II, Lucknow dated March 13, 2009 is without jurisdiction and void ab initio and the appeal filed by the asses-see before the Income-tax Appellate Tribunal, Lucknow Bench, Lucknow was correctly and rightly allowed by the said authority by order dated July 10, 2009.

Summary

Issues:
Challenge to order of Income-tax Appellate Tribunal regarding cancellation of registration under section 80G of Income-tax Act, 1961.

Analysis:
1. The appellant challenged the order of Income-tax Appellate Tribunal, Lucknow, regarding the cancellation of registration under section 80G of the Income-tax Act, 1961. The appellant, M/s. Manav Vikas Avam Sewa Sansthan, Lucknow, had initially obtained registration under section 12A of the Act with 10 objects. Subsequently, 14 more objects were added, totaling 24, and registration was modified by the Registrar of Societies for five years from December 18, 2007.

2. The Commissioner of Income-tax-II, Lucknow, declared the earlier registration invalid due to the modified objects, withdrawing it from October 25, 2007. The Tribunal, considering relevant case law, held that the provisions of section 12AA(3) were prospective and not applicable to cases registered before October 1, 2004. The Tribunal found the appellant's registration was granted under section 12A, not 12AA, and therefore, the Commissioner had no jurisdiction to cancel it post the enactment of section 12AA(3).

3. The Income-tax Department appealed, questioning whether registration under section 12A could be withdrawn pre-insertion of section 12AA(3) effective from October 1, 2004. The appellant argued the Commissioner had the authority to cancel registration under section 21 of the General Clauses Act, 1897, even without the amended provisions of section 12AA(3).

4. The High Court dismissed the appeal, emphasizing that the Commissioner lacked the power to cancel the registration granted under section 12A before the enactment of section 12AA(3) on October 1, 2004. Citing legal precedents, the Court reiterated that a quasi-judicial authority cannot review its own order unless expressly authorized by the statute. Therefore, the Commissioner's order canceling the registration was deemed void ab initio, and the Tribunal's decision to allow the appeal was upheld.

5. The Court's ruling affirmed that the Commissioner's action was without jurisdiction, and the appeal lacked merit, leading to its dismissal. No costs were awarded in the matter. The judgment clarified the legal position regarding the cancellation of registration under the Income-tax Act, emphasizing the importance of statutory provisions and legal precedents in determining the validity of administrative actions.