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2021 (10) TMI 878 - AT - Income TaxExemption u/s 11 - cancelling the registration granted to it u/s 12A - order cancelling the registration granted to the assessee u/s 12A has been passed by the Ld Principal CIT on the basis of findings noticed by the search officials and also by the AO during the course of assessment proceedings - HELD THAT - The fact remain that the Tribunal has now passed orders for AY 2010-11 to 2016-17 against the assessment orders passed for the above said years u/s 153A of the Act. There is no dispute that the Ld PCIT has also referred to the assessment orders passed u/s 153A of the Act. Now there is change in circumstances on account of passing of the orders by the Tribunal. Under these set of facts, we are of the view that the entire issues urged by the assessee before us require re-examination at the end of Ld. Principal CIT, who can take judicial view of the matters after considering the order passed by the Tribunal. Accordingly, we set aside the order passed by Ld. Principal CIT and restore all the issues to his file for examining the claims of the assessee. After affording adequate opportunity to the assessee, Ld. Principal CIT may take appropriate decision in accordance with law on all the issues. Appeal filed by the assessee is treated as allowed for statistical purposes.
Issues:
1. Jurisdiction of the Principal Commissioner of Income Tax to cancel registration under section 12AA(3) of the Act 2. Finding of alleged facts by the Principal Commissioner of Income Tax 3. Retrospective cancellation of registration under section 12AA(3) 4. Other grounds challenging the cancellation of registration Jurisdiction of the Principal Commissioner of Income Tax: The appeal challenged the jurisdiction of the Principal Commissioner of Income Tax in canceling the registration under section 12AA(3) of the Act. The appellant argued that only the Registering Authority has the authority to cancel registration, not the Principal Commissioner. The appellant contended that the order was without jurisdiction due to this reason. Finding of Alleged Facts: The appellant disputed the findings of the Principal Commissioner of Income Tax, claiming they were unsupported by evidence and contrary to the records. The appellant argued that the decision was based on statements without proper cross-examination and violated principles of natural justice. Additionally, the appellant contended that relying on provisional findings from assessment orders, which were under appeal, was erroneous. Retrospective Cancellation of Registration: The appellant objected to the retrospective cancellation of registration from the assessment year 2010-11 onwards. The appellant argued that section 12AA(3) does not allow for retrospective cancellation, challenging the legality of the decision made by the Principal Commissioner of Income Tax. Other Grounds: The appellant raised additional grounds, asserting that even if the alleged facts were true, the educational activities of the trust were being carried out. The appellant argued that any irregularities should lead to income disallowance under section 11, not cancellation of registration. Furthermore, the appellant contended that the Principal Commissioner erred in attributing actions to the trust without proper evidence. The Tribunal acknowledged that subsequent orders had overturned the findings of the assessment orders for the relevant years. Therefore, the Tribunal set aside the Principal Commissioner's order and directed a re-examination of all issues. The Tribunal emphasized the need for the Principal Commissioner to reassess the situation in light of the Tribunal's decisions, allowing for a fresh determination based on the current circumstances. In conclusion, the appeal was treated as allowed for statistical purposes, and the matter was remanded to the Principal Commissioner for a reevaluation in accordance with the law and the Tribunal's directions.
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