2022 (1) TMI 843 - HC - Income Tax

Exemption u/s 11 - cancellation of registration granted to the appellant trust u/s 12AA - anonymous donation within the meaning of Section 115BBC - Tribunal justification in holding that no proper opportunity was afforded to the assessee as required under section 12AA 3 of the Act ? - Whether the Commissioner of Income Tax, Central-III, Kolkata could have cancelled the registration granted to the appellant trust u/s 12AA on 31.10.2005 on grounds which were not contained in the show cause notice dated 30.12.2008? - HELD THAT - The assessee stated that all the activities of the trust are in accordance with the objects of the trust as mentioned in the deed of trust dated 05.08.1999. The Commissioner while proceeding to pass the order dated 31.12.2008 and cancelling the registration took into account certain issues which were not subject matter of the allegations in the show cause notice. The question was whether the Commissioner could have done so. In our considered view, the Tribunal rightly took note of the facts and pointed out that the Commissioner exceeded his jurisdiction by making certain observations, which were not subject matter of allegations in the show cause notice. Thus, in our considered view, the Tribunal after noting the facts has granted relief to the assessee. Thus, we find no question of law much less substantial questions of law arising for consideration in this appeal. Accordingly, the appeal fails and is dismissed.

Summary

Issues:
1. Delay in filing the appeal.
2. Justification of the Income Tax Appellate Tribunal's decisions.
3. Validity of the cancellation of registration under Section 12AA of the Income Tax Act.

Analysis:
1. The appellant filed an application to condone a 42-day delay in filing the appeal. The court allowed the application based on the reasons provided in the affidavit, and the delay was condoned accordingly.

2. The appeal was against the Income Tax Appellate Tribunal's order dated 20.03.2009 for the assessment year 2006-07. The appellant raised substantial questions of law regarding the Tribunal's decisions. The first issue was whether the Tribunal provided a proper opportunity to the assessee as required under section 12AA[3] of the Act. The second issue was whether the Tribunal was justified in holding that the issue of Capitation Fees was not raised by the Commissioner of Income Tax in the notice initiating the cancellation proceedings.

3. The main issue in this appeal was whether the Commissioner of Income Tax had the authority to cancel the registration of the appellant trust under Section 12AA of the Act based on grounds not mentioned in the show cause notice. The show cause notice alleged that the trust accepted an anonymous donation, which was the basis for the cancellation. The trust explained that the donation was received before the relevant provision applied. The court held that the Commissioner exceeded jurisdiction by considering issues not included in the notice. As a result, the Tribunal rightly granted relief to the assessee, leading to the dismissal of the appeal as no substantial questions of law arose.

In conclusion, the appeal was dismissed, affirming the Tribunal's decision regarding the cancellation of registration under Section 12AA of the Income Tax Act.