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TMI Blog2021 (9) TMI 1227X X X X Extracts X X X X X X X X Extracts X X X X ..... The procedure of cancellation of the registration already enjoyed either under 12A regime or 12AA regime in the case of the petitioner, in view of the new regime having been introduced, shall take place only after disposing the application made by the trust or institution, under the new regime, as contemplated under Section 12AB(1)(a). Since it is the claim of the petitioner that the application has been made only through online and for which, acknowledgment number has also been generated and it is also printed and the same has been filed by way of hard copies before this Court, we cannot doubt the application submitted by the petitioner on 04.05.2021. Assuming that such application submitted by the petitioner has not reached the concerned authority of the Income Tax Department for taking action, still the petitioner has got time to make such an application, because, the original period of three months with effect from 01.04.2021 as provided under the new regime has been subsequently, extended by the notification issued in this regard by Central Board of Direct Taxes, Department of revenue, dated 25.06.2021, under which, the time period has been extended upto 31st August, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 16.03.2016 was issued for the assessment years 2009-10 to 2015-16. 2.3.In response to the said notice issued under Section 153 C of the Act, the petitioner filed IT returns electronically under Section 143 (3) read with 153 C of the Act on 03.08.2016 for the assessment years 2013-14, 2014-15 and 2015-16 and also filed manual returns on 12.08.2016 for the assessment years 2009-10, 2010-11, 2011-12 and 2012-13. 2.4.The assessment for assessment years 2009-10 to 2015-16 were completed by the revenue by order dated 31.12.2016 and the respondent computed the total taxable income for the relevant assessment years. Felt aggrieved over the said computation of the assessment made by the revenue, the petitioner filed appeal before the CIT (Appeal), Chennai. The CIT (Appeal), vide its common order dated 02.04.2018 allowed the appeals filed by the petitioner by stating that proceedings initiated under Section 153 C of the Act is untenable and bad in law. As against the said order passed by the CIT (Appeal), Chennai, the revenue preferred Tax Case Appeal in TCA No.161 to 167 of 2020 before this Court, which were also dismissed by confirming the order passed by the CIT (Appeal), Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he erstwhile provisions 12A, 12AA and the newly inserted provision, that is 12AB of the Act. 5. In this context, it is pertinent to be pointed out that, according to the learned counsel, Sub-Section 5 of Section 12AA has been inserted under the Finance Act, 2021, which says that ' Nothing contained in this Section shall apply on or after the 1st day of April 2021 '. Heavily relying upon Section 12AB, the learned counsel would contend that, what are all the procedures available under 12AA, either for grant of registration or for cancellation of registration are no more available for the respondent revenue on and from the 1st day of April 2021. Instead, the new procedure as contemplated under Section 12AB since has been introduced, under which, the exhaustive procedure has been provided for the trust and charitable institution like the petitioner to adopt for making a fresh application to get a fresh registration. In this context, it is the contention of the learned counsel for the petitioner that, a new application under Form 10A has been made through online on 04.05.2021 under Sub-Clause (i) of Clause (ac) of Sub-Section (1) of Section 12A of the Act. Therefore, if an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that Section shall apply on or after the 1st day of April, 2021. 9. Therefore, the sum and substance of the arguments advanced by the learned counsel appearing for the petitioner in this regard is that, in view of Sub-Section 5 of Section 12AA, the entire procedure contemplated under Section 12AA of the Act, which was the regime upto 31st March, 2021, is no more available in the statute book. Therefore, if at all any action to be taken against the existing trust or charitable institution, it is open to the respondent revenue to take such action, only after adopting the procedure under Section 12AB of the Act by registering the trust or charitable institution concern under the new regime and for which, since the application was made already on 04.05.2021 by the petitioner trust, the application should be disposed of granting registration as contemplated under Section 12AB(1)(a) and after granting such registration, it may be open to the respondent to invoke the other provisions namely Sub-Section (4) and (5) of Section 12AB of the Act and since the granting of registration is not completed as of now, unless and until the application pending before the respondent is decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant documents to the satisfaction of the revenue. Without utilizing the said opportunity of personal hearing, the petitioner assessee ought not to have rushed to challenge the impugned show cause notice. Therefore, on that ground also, the petitioner cannot have a successful challenge against the impugned show cause notice, he contended. 12. He also submitted that, assuming that the arguments advanced by the petitioner side as projected by the learned counsel appearing for the petitioner that in view of the pendency of the application dated 04.05.2021, without disposing the same under Section 12AB(1)(a) of the Act, the present action initiated under the impugned notice ought not to have been issued is concerned, no such application to the best of the knowledge of the respondent, as per their instructions, either been received or pending with the respondent, but it is for the petitioner to establish that he has filed application on 04.05.2021 enabling the proper authority to receive it and to act upon as contemplated and unless and until that position is clarified and established, even the ground that has been urged by the learned counsel appearing for the petitioner is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced. The Sub-Section 5 reads thus: Nothing contained in this Section shall apply on or after the 1st day of April 2021. which means that, after 1st April, 2021, Section 12AA shall not apply for any cases, in other words, the applicability of the provision under Section 12AA has become redundant with effect from 1st April, 2021. Instead, Section 12AB has been introduced under the heading Procedure for fresh registration by the very same Finance Act, 2021, with effect from 01.04.2021. 21. In order to appreciate the new provision, namely, Section 12AB, the said Section in entirety is extracted herein: Procedure for fresh registration. 12AB. (1)The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall - (a) where the application is made under subclause (i) of the said clause, pass an order in writing registering the trust or institution for a period of five years; (b) where the application is made under subclause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) of the said clause,- (i) call for such documents or information from the trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of sub-section (4), where registration of a trust or an institution has been granted under clause (a) or clause (b) of sub-section (1) and subsequently, it is noticed that- (a) the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of subsection (1) of section 13; or (b) the trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (I) of clause (b) of subsection (1), and the order, direction or decree, by whatever name called, holding that such noncompliance has occurred, has either not been disputed or has attained finality, then, the Principal Commissioner or the Commissioner may, by an order in writing, after affording a reasonable opportunity of being heard, cancel the registration of such trust or institution. 22. Simultaneously, the Clause called (ac) also has been inserted in Section 12A of the Act by the very same Finance Act, 2021 with effect from 01.04.2021, which reads thus: (ac) notwithstanding a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(ac), the Principal Commissioner/Commissioner shall pass an order in writing registering the trust or institution for a period of five years. 25. On reading of this Section, it has been made abundantly clear that, once the trust enjoyed the registration either under 12A regime or 12AA regime, the same, within three months from 1st April, 2021, shall make an application in the prescribed form and manner provided therein and on receipt of such application, the Principal Commissioner/Commissioner as the case may be shall pass an order in writing registering the trust or institution for a period of five years. Therefore, under this provision, no such procedure has been contemplated that the Principal Commissioner/Commissioner, on receipt of such application from the existing trust enjoyed registration under Section 12A or 12AA, to have any discretion either to grant or to reject the registration as sought for. The reason being that, if at all any adverse notice comes to the Department, as against the existing trust or institution, which allegedly violated any of the conditions or provisions of the Act, such kind of issue can be dealt with separately, that is, after registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er on 04.05.2021 has reached the concerned officer or not probably would have arisen, because, in the hard copy of the application submitted before this Court, in the column against the authority granting registration , it has been typed as ''Income Tax . However, the Act contemplates either the Principal Commissioner/Commissioner, as the case may be, shall be the authority to consider the application submitted by the trust or institution for grant of registration. Probably because of this confusion, the application submitted by the petitioner on 04.05.2021 might not have reached the concerned officer. Nevertheless, the hard copy of the application dated 04.05.2021 can very well be submitted by the petitioner to the concerned officer, namely the Principal Commissioner/Commissioner as the case may be and such kind of personal submission of the copy of application already sent through online on 04.05.2021 is necessitated because of the peculiar circumstances. Such application submitted by the petitioner has to be first looked into and should be disposed of by the Principal Commissioner/Commissioner as the case may be under the aforesaid provision namely, Section 12AB for gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Sub-Section 4 of Section 12AB of the Act. 36. For all these reasons stated above and the discussions made hereinabove, this Court is inclined to dispose of this writ petition with the following orders: (a)that the impugned notice dated 10.08.2021 shall be kept in abeyance. (b)The application submitted by the petitioner dated 04.05.2021 through online addressed to the Income Tax Department through web portal shall be processed by the Principal Commissioner/Commissioner as the case may be as contemplated under Section 12AB of the Act as introduced by the Finance Act, 2021 and such application since has been filed under Sub-Clause (i) of Clause (ac) of Sub- Section (1) of Section 12A of the Act, the same shall be considered and the order shall be passed in writing to and in favour of the petitioner registering the petitioner trust for a period of five years. (c)once such order is passed granting such fresh registration for the petitioner trust for five years, it is open to the respondent to proceed against the petitioner, under Sub-Section (4) of Section 12AB of the Act and for the said purpose, what are the contends made in the impugned notice dated 10.08.2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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