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2025 (2) TMI 715 - HC - Income TaxAppeal maintainable against the communication/order amounting to a cancellation of BCCI s registration under Section 12A - Denial of benefit of registration granted u/s 12A available to the amended objects - Petitioner/BCCI is a society established under the Tamil Nadu Societies Registration Act with the aim of promoting sports particularly cricket - HELD THAT - Based on the contention that the impugned communication/order dated 28 December 2009 was not statutory and that it was only an advisory or further that the impugned communication/order dated 28 September 2012 was not an order cancelling or withdrawing the BCCI s registration the Revenue even persuaded the ITAT in holding that the BCCI s Appeal against the impugned communication/order was not maintainable. At the same time based on such advisory/non-statutory exercise the Revenue cannot proceed on the premise that the BCCI s registration stands cancelled or that the BCCI is not entitled to any exemption under Section 11 of the IT Act 1961. The impugned communication/order dated 28 December 2009 cannot be non-statutory or an advisory to defeat an assessee s right of appeal. Still based upon the same non-statutory order or advisory the assessee s rights cannot be affected or a situation created in which the assessee cannot claim an exemption or is liable to have its registration cancelled. The revenue cannot adopt such contradictory stances or blow hot and cold in the same breath. Again we emphasise that these matters could be independently considered whilst deciding the issue of exemption or even the issue of cancellation of registration. However decisions on such vital matters cannot be solely based on some advisory or non-statutory communication such as the impugned communication/order dated 28 December 2009. Revenue could not have issued the impugned communication/order which it agrees was only an advisory or a non-statutory exercise.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are: [A] Whether the ITAT, after determining that the communication/order dated 28 December 2009 did not amount to a cancellation of BCCI's registration under Section 12A of the IT Act, 1961, and further holding that no appeal was maintainable against this communication/order, was justified in examining the merits of the communication/order and recording observations that virtually upheld the reasons and conclusions within it. [B] Whether the Revenue could initiate any action to deny exemption or cancel Section 12A registration based solely on the impugned communication/order dated 28 December 2009, which was styled or accepted as an advisory or a non-statutory letter. ISSUE-WISE DETAILED ANALYSIS Issue [A]: Examination of the Merits by ITAT The ITAT concluded that the appeal against the communication/order dated 28 December 2009 was not maintainable, as it did not constitute a cancellation or withdrawal of registration under Section 12A. The ITAT accepted the Revenue's contention that the communication was merely advisory and not an exercise of statutory power. Despite this, the ITAT examined the merits of the communication/order and made observations that virtually upheld the DIT's view. The Court found that once the ITAT concluded the appeal was not maintainable, it exceeded its jurisdiction by evaluating the merits of the communication/order and making observations supporting it. Such actions were deemed without jurisdiction and could not be relied upon by the Revenue in related proceedings. The Court cited precedents from the Supreme Court, emphasizing that when a court or tribunal concludes it lacks jurisdiction, it cannot decide on the merits of the case. The ITAT's observations were thus declared without jurisdiction and should not influence subsequent proceedings regarding BCCI's registration or tax assessments. Issue [B]: Legality of Actions Based on Advisory The Court examined whether the Revenue could take action based on the impugned communication/order, styled as an advisory. The Revenue argued that the communication was legal and merely informed BCCI of the consequences of amending its objects without notifying the registering authority. However, the Court emphasized that statutory powers for assessment or cancellation of registration must be exercised as prescribed by law, and no statutory provision empowers authorities to issue advisories affecting an assessee's rights. The Court held that a non-statutory advisory could not be used to deny exemptions or cancel registration. The Revenue's contradictory stance-treating the communication as non-statutory for appeal purposes but using it to affect BCCI's rights-was rejected. The Court emphasized that decisions on exemption or cancellation must be made independently by statutory authorities, without reliance on the advisory communication. SIGNIFICANT HOLDINGS The Court held that the ITAT exceeded its jurisdiction by making observations on the merits of the impugned communication/order after concluding the appeal was not maintainable. These observations were declared without jurisdiction and should not influence related proceedings. The Court quashed the impugned communication/order dated 28 December 2009, emphasizing that it could not be used to affect BCCI's rights or to deny exemptions, as it was non-statutory and advisory in nature. The Court clarified that issues of exemption or cancellation of registration on merits remain open and must be decided by statutory authorities as prescribed by law, without influence from the impugned communication/order or the ITAT's observations. In conclusion, the Court disposed of the appeal and writ petition, emphasizing that statutory authorities must independently assess the merits of exemption and registration issues according to the law, without being influenced by the advisory communication or ITAT's jurisdictionally flawed observations.
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