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TMI Blog2024 (8) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by different set of provisions and cannot be said to be a consequence of the impugned order cancelling registration granted to the assessee - It is a fact that the notice u/s 148 of the Act for AY 2016-17 was issued on 04.05.2023 prior to the date on which the cancellation order was passed on 30.09.2023, but it cannot be denied that such cancellation order dated 30.09.2023, which has been appealed by the assessee will not have an adverse impact on the ongoing assessment proceedings of the assessee for Assessment Year 2016-17. Similarly, as stated by the Revenue that even though for other assessment years, in the reasons recorded for reopening the assessment, the fact of cancellation of registration vide order dated 30.09.2023 of the PCIT(Central)-2, Delhi has been noted for completeness but again it cannot be denied that the cancellation order will not have an adverse impact on the ongoing re-assessment proceedings in the case of the assessee. Maintainability of the stay application - For grant of stay, the assessee has to satisfy all the three conditions i.e. prima facie case in favour of the assessee, balance of convenience and irreparable loss/injury to become eligible for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Plants and Coal Mine projects. Various emails reproduced prima facie indicates the involvement of the assessee trust in furnishing about the status of Thermal Power Projects and the Coal mining. The discussion by the PCIT, Central-2, in respect of email titled LIFE Coal Cases update 10.07.2016 shows that the assessee trust proposes to file and litigate matter in respect of Thermal Power Plants and Coal Mines. These facts prima facie show the contradiction in the claim of the assessee that it has no involvement with Earth Justice and is not engaged in the stopping the thermal power projects and coal mining with assistance from Earth Justice. Therefore, in view of the facts on record, the claim for exemption by the assessee on account of suffering irreparable loss and balance of convenience is also not satisfied because prima facie the facts on record suggest that the activities of the trust in stopping coal based Indian Thermal Power Plants and Coal Mine projects will cause irreparable loss to the nation rather than the assessee. Therefore, in this background, it is held that the assessee fails to satisfy the test of irreparable loss caused to it by the cancellation order dated 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the IT Act, cancelling the registration of the assessee trust with retrospective effect for Assessment Years. 2014-15 To 2022-23, 2023-24 onwards, pending disposal of the appeal and pass such further or other order or orders as the Tribunal may deem fit and proper in the circumstances of the case and thus render justice. 2. Brief facts of the case:- The Legal Initiative for Forest and Environment' Trust (LIFE) was formed by Shri Ritwick Dutta, Shri Rahul Chaudhary and Shri Priyabrata Satapathy on 20th May, 2008. It was stated by the assessee vide its reply dated 09.03.2023 to the PCIT, Central-2 New Delhi, during the cancellation proceedings initiated by him that it was formed with the main objective of serving environmental issues like bringing transparency and accountability in the environmental decision-making process, providing information, creating awareness by holding conferences, seminars, symposiums, conducting trainings and capacity building of communities. The PCIT noted that Legal Initiative for Forest and Environment (LIFE/LIFE Trust) got registered u/s 12A(a) of the Income Tax Act, 1961 (the Act) on 05.09.2011 vide Registration No. DIT(E)/2011-12/DEL-LR21498-0509 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations, etc. xviii) General to do all such things as may be incidental or conductive to the attainment of the main object of the Foundation. 2.2. Further, the PCIT noted that in the case of LIFE Trust, a survey action was carried out by the Investigation Wing of the Income Tax Department in N-71LGF, Greater Kailash, New Delhi on 07.09.2022. Materials collected during the survey were shared by the Investigation Wing with the Assessing Officer (AO), i.e., DCIT, Central Circle-14, New Delhi, where the case was transferred u/s 127(2) of the Act vide order dated 10.11.2022 from the jurisdiction of ITO(Exemption)-1(4), New Delhi. The said information/material was shared by the DCIT, Central Circle-14, New Delhi with his PCIT on 17.01.2023. According to the PCIT, Central-2, New Delhi, this included information relating to carrying out of activities by the trust LIFE, which were either not as per objects of the Trust or were apparently not genuine. Thereafter, the PCIT after examining the evidences issued a show cause notice dated 04.02.2023 for cancellation of registration u/s 12AB (4) r.w.s. 12A and 12AA of the Act vide DIN No.ITBA/COM/F/17/2022-23/1049418557(1). The said notice was duly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he probability of the above reaction is quite high . (iii) The assessee trust is receiving majority of fund as foreign aid. The details are as under:- Trust Financial Year Domestic Contributions (Rs.) % to Total Foreign Contributions (Rs.) % to Total Total Contributions (Rs.) LIFE 2015-16 1,625,000 29.61% 3,863,245 70.39% 5,488,245 LIFE 2016-17 1,660,000 13.89% 10,291,754 86.11% 11,951,754 LIFE 2017-18 639,000 5.65% 10,663,125 94.35% 11,302,125 LIFE 2018-19 1,500,000 10.76% 12,434,426 89.24% 13,934,426 LIFE 2019-20 1,470,000 13.06% 9,783,029 86.94% 11,253,029 LIFE 2020-21 740,000 5.64% 12,374,755 94.36% 13,114,755 (iv) LIFE trust is being used as an instrument by Earth Justice to stall the coal mines and Thermal Power Projects. For these purposes, Earth Justice is making strategies; -engaging an international treaty body; applying an international human rights strategy; such as engaging one or more UN special rapporteurs; using one of the complaint process under the international financial institutions; pressurizing private banks or investors, strategies to bring pressure from foreign governments etc. (v) Earth Justice is also involved in targeting Indian entities undertaking proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st for litigation is not as per the objects of the trust. Therefore, he held that the activities of the assessee trust are not genuine and not being carried out in accordance with the objects of the trust. He, therefore, cancelled the registration granted to the assessee us 12AB from FY 2021-22 onwards. 2.8. The PCIT, in view of the finding in Para No. 13.3 in his order held that rent payment by the assessee trust for LIFE LLP is covered u/s 13(3) rws 13(1)(c)(ii). He, therefore, cancelled the registration granted to the assessee u/s 12AB from FY 2022-23 onwards. 3. In the Stay Petition, the assessee submitted that Legal Initiative for Forest and Environment Trust is a Charitable organization registered in Delhi vide Trust Deed registered on 27.05.2008, and was working for environmental causes across India. The work of the assessee in safeguarding the environment has been recognized both nationally and globally. In 2021, the assessee was awarded the 'Right Livelihood award', also known as the 'Alternate Nobel Prize', at Stockholm, Sweden. The assessee trust has always functioned with a very high degree of probity and transparency. The assessee trust had duly filed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y co-operated and furnished all the information, explanations and documents as demanded in response to the show cause notices issued by the PCIT. The Ld. AR submitted that without considering the detailed submissions furnished during the course of the above proceedings, the impugned order dated 30.09.2023 under Section 12A rws 12AA 12AB(4) of the IT Act was passed by the Pr. CIT (Central)-2, New Delhi cancelling the registration of the assessee under 12AB(4) rws Section 12A and 12 AA of the of the IT Act, with retrospective effect for AY 2014-15 to AY 2022-23, and AY 2023- 2024 onwards on the ground that the activities of the assessee were not in accordance with its objects. The Ld. AR submitted that the Pr. CIT has adopted an arbitrary view of the operations of the assessee Trust and has cancelled the registration of the assessee on frivolous grounds without establishing any finding of omission or discrepancy in the functioning of the Trust. The assessee Trust has always genuinely carried out activities in furtherance of its main objects and has therefore filed an appeal bearing ITA No. 3241/DEL/2024 seeking quashing of the cancellation of Registration u/s. 12A, 12AA and 12AB of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commissioner and the transferee commissioner. Alternatively, such transfer of jurisdiction must be notified by the CBDT. The current order, issued under section 127(2), which transfers jurisdiction from the Assessing Officer under the Principal Chief Commissioner (Exemption) to the Assessing Officer under the Principal Chief Commissioner (Central), does not mention the required consent of the Principal Chief Commissioner (Exemption). This absence of consent creates makes transfer of jurisdiction invalid. [Refer: Noorul Islam Education Trust Vs CIT [2016) 388 ITR 489 (SC)]. 4.1. It was further submitted that the impugned order is also bad in law insofar as it seeks to retrospectively cancel the registration granted to the assessee under Section 12A/12AA/12AB from FY 2013-14. It is well settled principle that unless a statute expressly states to the contrary, it cannot be construed as having retrospective effect. In that light, it is submitted that Sections 12AA(3) and 12AB(4) of the IT Act which provide for cancellation of registration, nowhere contemplate nor provide for such cancellation to have retrospective effect. 4.2. It was further submitted that it was also pertinent to not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see's Case Compilation; Auro Lab v ITO /2019] 411 ITR 308 (Madras) @ Para 20-21 @ Page 249 of Assessee's Case Compilation; Pacific Academy of Higher Education and Research Society v PCIT (Central) ITA No. 04/JODH/2020 @ Para 6.9 @ Page 94-98 of Assessee's Case Compilation; Wholesale Cloth Merchant Association v PCIT(Central) ITA No. 688/JP/2019 @ Para 30-31 @ Page 153-155 of Assessee's Case Compilation.] 2. That the Hon ble High Court of Delhi had granted stay in similar cases Refer: Centre for Policy Research v PCIT(Central) W.P.C) 11270/2023 Order dated 25.08.2023; Oxfam India v PCIT(Central) W.P. (C)15287/2023 Order dated W.P. (C) 15364/2023 and CAV 608/2023 CM APPL. 61634/2023 Care India Solutions For Sustainable Development 3. Maintainability of the Stay Petition filed by the assessee and the power of the ITAT to grant stay. M.K. Mohammed Kunhi /1969) 71 ITR 815 @ Para 9-13; ITO v. Khalid Mehdi Khan |1977| 110 ITR 79 Para 5; CIT v ITAT [2013/ 31 taxmann.com 369 (Delhi) @ Para 21]. 4. Submission: That the Hon ble High Court of Delhi in assessee s own case granted a stay on the operation of Section 148 notice issued by the Department. Legal Initiative For Forest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also made evident from the order dated 10.11.2022 passed under Section 127(2) of the Act by the Commissioner of Income Tax (Exemptions), Delhi wherein only the jurisdiction of the Assessing Officer from Ward (Exemp.)-1(4), Delhi has been transferred to Central Circle-14, Delhi and therefore, such transfer is only limited to conducting of assessment. Without such necessary transfer of jurisdiction, the impugned order is illegal and bad in law as the power to cancel registration in terms of Section 12AB(4) continues to remain with the prescribed authority. 3. Even otherwise, Section 127(2) of the Act specifies that if there is a transfer of jurisdiction from one Assessing Office to another who is not subordinate to the same Principal Chief Commissioner, then the concerned commissioner must record consent from both the transferor commissioner and the transferee commissioner. Alternatively, such transfer of jurisdiction must be notified by the CBDT. The current order, issued under section 127(2), which transfers jurisdiction from the Assessing Officer under the Principal Chief Commissioner (Exemption) to the Assessing Officer under the Principal Chief Commissioner (Central), does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strategy, formulated by the Board from time to time, for any previous year; * the Principal Commissioner or Commissioner shall, (i) call for such documents or information from the trust or institution, or make such inquiry as he thinks necessary in order to satisfy himself about the occurrence or otherwise of any specified violation; (ii) pass an order in writing, cancelling the registration of such trust or institution, after affording a reasonable opportunity of being heard, for such previous year and all subsequent previous years, if he is satisfied that one or more specified violations have taken place... 5. It is also pertinent to note that Section 12AB(4) was amended by the Finance Act, 2022 to specifically include Section 12AB(4)(c)(fi) which states that such cancellation of registration can only be for 'such previous year and all subsequent previous years'. Given the definition of previous year' in Section 3 of the IT Act which states that the same means the 'financial year immediately preceding the assessment year', it is made expressly clear that the legislation no where contemplates retrospective cancellation. 6. In the case of Pacific Academy of Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal challenges being W.P. (C) No. 15787/2023 and W.P. (C) No. 15364/2023 in order dated 18.01.2024 and stay was granted to the Assessees therein. The relevant portion of the order dated 25.08.2023 In WP (C) 11270/2023 is extracted hereunder: 9. That brings us to the issue, as to whether the balance of convenience is presently in favour of the petitioner, and would any irreparable harm be caused to the petitioner, if an interim order; as sought by the petitioner, is not granted. 10. The cancellation of registration would definitely entail a consequence, which would result in disabling the petitioner from accepting any contributions from domestic contributors. The petitioner is an organization which survives on contributions. The employees engaged by the petitioner and its work depend on the contribution that it receives. Therefore, the balance of convenience, as it stands, is in favour of the petitioner: 11. The third aspect that we need to consider is that if we were to decline the interim relief, would any detriment be caused to the petitioner, which is irreversible? 12. Insofar as this aspect is concerned, we can only say that the inability of the petitioner to ace/pt donations m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other sum payable by the assessee under the Act. It was submitted that in the present case, vide the impugned order, the Department has not raised any demand for any tax, interest, fee, penalty or any other sum payable. The Ld. DR also made reference to Rule 35(1)(a) of the Income Tax (Appellate Tribunal) Rules, 1963, according to which, a stay application can only be filed for stay of recovery of demand of tax, interest, penalty, fine, estate duty or any other sum. 6.1. In view of these facts, the Ld. DR submitted that the present stay petition of the assessee trust was not maintainable. The Ld. DR further submitted that as far as reliance of the assessee on the judgment of the Hon'ble High Court of Delhi in the case of CIT vs. Income Tax Appellate Tribunal [2013] 31 taxmann.com 369 (Delhi), is concerned, the same is clearly not applicable to the facts of the present case. The Hon'ble High Court in the aforementioned case, was dealing with the implications of staying an order passed u/s 263 and in that light observed that the purpose of granting stay is two folds: (1) to prevent multiplicity of proceedings and harassment to the assessee, with the possibility of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owered to perform/ exercise powers and functions stipulated in the Act in respect of such cases or classes or such persons or classes of persons, which were assigned to AO sub-ordinate to him, under section 127 of the Act. 6.3. It was further submitted that in fact the ITAT in the case of Aggarwal Vidya Pracharni Sabha (Supra) was constrained to observe that the query was left unsatisfied and no other Notification or Circular was brought to the notice of the Tribunal when pointed out during the hearing to ld. DR that this Notification dated 22.10.2014 does not mention specifically that the powers which can be exercised by ld. PCIT u/s 12AB(4) of the Act which has come into effect from 01.04.2021 would also be exercised by virtue of this Notification dated 22.10.2014 or that further jurisdiction u/s 12AB of the Act could be transferred to other authorities as per this Notification. The Ld. DR further submitted that the assessee in the present case, pursuant to the order u/s 127 dated 10.11.2022, is now being assessed under DCIT, Central Circle 14. As per the Explanation to Section 127, once the 'case' of the assessee is transferred from one AO to another, all proceedings und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviding, fully or partly, or by providing false or incorrect information or documents required to be provided, the Principal Commissioner or Commissioner, after giving an opportunity of being heard, may cancel the registration in Form No. 10AC and Unique Registration Number (URN), and such registration or such Unique Registration Number (URN) shall be deemed to have never been granted or issued. 6.7. The ld. DR on the issue of jurisdiction to cancel registration of the assessee retrospectively submitted that the case laws relied upon by the assessee was considered by the Delhi Bench of ITAT in the case of Young Indian vs. CIT (Exemption), New Delhi, (ITA No. 7751/Del/ 2017) 2019 SCC Online ITAT 21465, in its order dated 15.11.2019, in paras 49 and 88, and proceeded to hold in Para 121 that registration can be cancelled from the date, the CIT(Exemption), notices the infringement. It was further submitted that the aforementioned Hon ble High Court judgments relied upon by the assessee are not in the context of Section 12AB(4) and thus distinguishable on this ground alone. Clause (ii) of Section 12AB(4)(c), as amended by Finance Act, 2022, clearly provides for cancelling the registra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich does not finally and conclusively decide an issue cannot be a precedent. Any reasons assigned in support of such non-final interim order containing prima facie findings, are only tentative and relied upon the decision in the case of State of Assam v. Barak Upatyaka D.U. Karmachari Sanstha, (2009) 5 SCC 694 (Para 21)]. It was also submitted that the Hon'ble High Court in the case of the managing trustee of the assessee i.e. Ritwick Dutta vs. DCIT, Central Circle 14 [WPC No. 8079/2024] vide order dated 29.05.2024 while dismissing the writ petition, has taken due note of the allegations against the assessee and its managing trustee in relation to diversion of funds being received from Earth Justice to avoid scrutiny from various government agencies. The order passed by the Hon'ble High Court clearly establishes that there cannot be a prima facie in favour of the assessee. 6.9. As regards the reliance on various decisions to contend that the Pr. CIT, Central-2, Delhi does not have the jurisdiction to cancel registration is also unsustainable as it has been clearly established that these decisions do not lay down the correct law in view of the Notification No. 70/2014 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, which is one of the relevant factors required to be looked into, while considering applications for stay/interim injunctions. Relying upon the decision in the case of Colgate Palmolive (India) Ltd. v. Hindustan Lever Ltd. (1999) 7 SCC 1, @ Para 24 (vii), it was submitted that the Hon'ble Supreme Court had held that considerations which weight with the court hearing the application or petition for the grant of injunctions includes whether the grant of or refusal of injunction will adversely affect the interest of the general public which can or cannot be compensated otherwise. Further, it was submitted that the Hon'ble Supreme Court in Mahadeo Savlaram Shelke Ors. v. Pune Municipal Corporation Anr., (1995) 3 SCC 33 @ Para 14 held that public interest is one of the material and relevant considerations in either exercising or refusing to grant ad interim injunction. 6.13. In view of the aforesaid submissions, it was submitted that the assessee has failed to establish prima facie case, balance of convenience and irreparable loss, in case an interim protection is not granted till the disposal of the appeal and is liable to be dismissed as the assessee has failed to make out i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein there is any tax, interest, fee, penalty or any other sum payable by the assessee under the Act. In the present case, vide the impugned order, the Department has not raised any demand for any tax, interest, fee, penalty or any other sum payable. 8. Reference may also be made to Rule 35A1)(a) of the Income Tax (Appellate Tribunal) Rules, 1963, according to which, a stay application can only be filed for stay of recovery of demand of tax, interest, penalty, fine, estate duty or any other sum. 9. As far as reliance of the Assessee on the judgment of the Hon ble High Court of Delhi in the case of CIT vs. Income Tax Appellate Tribunal [2013] 31 taxmann.com 369 (Delhi), is concerned, the same is clearly not applicable to the facts of the present case. Hon'ble High Court in the aforementioned case, was dealing with the implications of staying an order passed u/s 263 and in that light observed that the purpose of granting stay is two folds: (1) to prevent multiplicity of proceedings and harassment to the assessee, with the possibility of the proceedings before the Assessing Officer becoming meaningless if ultimately the order passed by the CIT is found to be invalid on grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 5.0.822(E),dated the 23rd August, 2001 published in the Gazette of India, Extraordinary, Part Il, section 3, sub-section (it), dated the 23rd August, 2001, except as respects things done or omitted to be done before such supersession, the Central Board of Direct Taxes hereby, (a) ... (b) directs that the Director General of Income-tax or the Chief Commissioner of Income-tax specified in column (2)of the said Schedules or the Principal Commissioner/Commissioner of Income-tax specified in column (4) of the said Schedules or Joint Commissioners of Income-tax subordinate to them, shall exercise powers and perform the functions as stipulated in the said Act in respect of such cases or classes of cases or such persons or classes of persons, assigned to Assessing Officers subordinate to them, under section 127 of the said Act, from the date of publication of this notification; 14. A conjoint reading of the aforementioned Notifications and provisions makes it clear that the CIT(Exemptions) does not exercise jurisdiction in respect of persons claiming exemption under section 11, section 12 of the Act which have been assigned to the Assessing Officers subordinate to PCIT, Central, under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r tax authority to again specify transfer of power of erstwhile CIT/PCIT will now be performed by the new CIT/PCIT. 18. Further, the aforesaid order u/s 127 dated 10.11.2022 has not been challenged by the assessee before any court/tribunal. Assessee having accepted the jurisdiction of DCIT, Central Circle 14, is now barred from challenging the jurisdiction of PCIT (Central)-2, Delhi to exercise all powers and functions as stipulated in the said Act, including the power of cancellation of registration u/s 12A/12AA/12AB. 19. Further, the reliance by the assessee on the Notification No. 30/2021 dated 01.04.2021 in the rejoinder, is also misplaced for the following reasons: a. Notification No. 30/2021 was further amended by Notification No. 52/2022 dated 09.05.2022, whereby in the opening paragraphs, the words and Commissioner of Income Tax (Exemption), Bengaluru were omitted. Therefore, this is in contradiction to the submission of the assessee that CIT (Exemption) is only empowered to cancel registration u/s 12A/12AA/12AB. b. Also, as per the submission of the assessee, Director of Income Tax (Centralized Processing Centre), Bengaluru or CIT (Exemption), Bengaluru becomes the sole au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w.e.f. 01.06.2010. In the case of Auro Labs (Supra), vide order dated 30.12.2010, registration granted under 12A was cancelled w.e.f. 09.10.1992. Hon'ble Court held that the 2010 amendment to Section 12AA(3) is prospective and not retrospective in character and therefore, the cancellation order can not operate from a past date. 23. The aforesaid high court judgments were also relied upon by the Ld. Tribunal in the cases of Pacific Academy of Higher Education (Supra) and Heart Foundation of India vS. CIT-Central ITA No. 1524/MUM/2023 to hold that power to cancel registration retrospectively was not available and therefore, the said decisions are also not applicable to the present case. 24. It is humbly submitted that the Delhi Bench of Ld. ITAT in the case of Young Indian vs. CIT (Exemption), New Delhi, (ITA No. 7751/Del/ 2017) 2019 SCC Online ITAT 21465, vide order dated 15.11.2019, has considered all the aforesaid high court judgments in the following Paras 49 and 88, and proceeded to hold as under in Para 121: 49. Without prejudice, the Ld. Counsel submitted that registration cannot be cancelled retrospectively without giving specific opportunity to the assessee and further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a facie case on the following reasons: a. Interim order dated 25.05.2023 passed by Hon'ble Delhi High Court in WPC 7324/2023 titled Legal Initiative for Forest and Environment Trust vs. DCIT. b. Interim orders dated 25.08.2023, 18.01.2024 passed by Hon'ble Delhi High Court in WP(C) No. 11270/2023, WP(C) No. 15787/2023 and WP(C) No. 15364/2023 in the case of other assessee's. c. Decisions cited in relation to jurisdictional issues mentioned earlier. 27. It is humbly submitted that interim order dated 25.05.2023, was issued in the context of reassessment proceedings initiated for AY 2016-17. The interim protection was granted by the Hon'ble High Court was issued on the grounds of misalignment between the purportedly escaped income as indicated in notice u/s 148A(b) and the order passed u/s 148A(d). The same cannot have any bearing on the present case. 28. It is submitted that interim order dated 25.08.2023, issued in the case of another assessee i.e. Centre for Policy Research was passed primarily on the issue of violation of principles of natural justice. Also, interim order dated 18.01.2024, was passed in case of Oxfam India and Care India Solutions for Sustainable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uine and in line with it's stated objects. The grant of exemption is lieu of public money and therefore, any contravention of the aforesaid undertaking and statutory provisions would clearly disentitle the assessee from claiming existence of balance of convenience in its favour. No Irreparable Loss/ Injury caused to the Assessee : 34. The impugned order was passed on 30.09.2023 and the assessee has failed to substantiate it's submission on irreparable loss/injury being caused to it as a result of the impugned order. Mere bald averments regarding the assessee being dependent on donations for day to day functioning has been made in the stay application. Public Interest is a vital consideration in grant of interim injunctions: 35. In addition to the aforementioned points, even though the assessee has not choosen not to make submissions on merits in support of it's application for stay, it is humbly submitted that the impugned order dated 30.09.2023, clearly records that the assessee has received substantial funding (87% of total contributions on average) from entities situated outside India with the purpose of engaging in agitation/litigation beyond their stated objects. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and High Courts cited above by the assessee. 7.1. As regards the power of PCIT, it was submitted that the Department's reliance on Notification No. 70/2014, dated 13.11.2014, is misplaced because the power to grant exemption is not a supervisory power over the AO but a separate power independent of the assessment. This is because, for the power of grant/revocation of the exemption status, the CBDT had issued Notification 52/2014 granting the power to issue registration u/s 12A to CIT(E). Thereafter, in view of the faceless regime, the CBDT has issued a separate notification no. 30/2021, dated 01.04.2021, which grants the power to grant/revoke registration to DIT(CPC), Bengaluru and not to CIT (E) or PCIT(Central). Therefore, when the CBDT, through Notification No. 30/2021, has clearly provided that DIT(CPC) Bengaluru will have the power to grant/revoke registration, PCIT(Central) could never have revoked registration by way of transfer u/s 127 order when CIT(Exemption) itself was not empowered to grant/revoke the registration. The Department's reliance on Order dated 10.11.2022 passed under Section 127 of the Act granting the PCIT the power to grant/revoke registration is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.2023 ( Impugned Order ) cancelling registration granted to the Assessee under Section 12A r.w.s. 12AA 12AB(4) of the Income-tax Act, 1961 ( the Act ) passed by the PCIT(Central), Delhi -2 . 2. It is submitted that for the grant of an order of interim stay, the Hon'ble Supreme Court has prescribed three conditions that have to be factored in for the grant of an order of interim stay, viz., 1) a prima facie case, 2) an irreparable loss and 3) a balance of convenience. Prima facie case 3. It is submitted that the Assessee has made out a prima facie case for grant of interim stay on the Impugned Order for the following reasons a. That the PCIT(Central) did not have the jurisdiction to pass the Impugned Order dated 30.09.2023 i. It is submitted that the PCIT(Central) did not have the jurisdiction to cancel the registration granted to assessee u/s 12A and 12AA of the Act, and therefore, the Impugned Order is void ab initio. [Refer: Aggarwal Vidya Pracharni Sabha v PCIT (Central) Gurgaon ITA No. 1308/DEL/2023 @ Para 19-21 @ Page 47-55 of Assessee's Case Compilation; Pacific Academy of Higher Education and Research Society v PCIT (Central) ITA No. 04/JODH/2020 @ Para 6.8-6.9 @ Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 @ Page 82 treats the Assessee and the aforesaid institutions as the same and acting in concert. Therefore, on parity of reasoning, the interim order in the above cases should ensure benefit to the Assessee as well. In this regard, it would be instructive to refer to the judgment of the Hon'ble Supreme Court in Vishnu Traders v. State of Haryana and Others 1995 Supp (1) Supreme Court Cases 461 where it states that 'all similar matters should receive similar treatment except where factual differences require a different treatment so that there is assurance of consistency, uniformity. predictability and certainty of judicial approach'. d. Further, pursuant to the cancellation of the Assessee's registration, the Department has initiated assessment proceedings on the gross receipts received by the Assessee, treating the Assessee as a non-exempt organisation. If the registration granted to the Assessee were still valid, the Department would not be able to make such assessments on a gross basis. e. The Department has also issued Section 148A notices for A Ys 2014-15 onwards, for which the Impugned Order had cancelled the registration retrospectively. Moreover, assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of demand and does not state that an order on the application of stay cannot be passed in the Tribunal. The power to grant a stay is incidental or ancillary to its appellate orders as given under Section 254(1) of the Act. ii. Further, it is submitted that a Rule cannot circumscribe the power given by a Statute. Hence, Rule 35-A would only apply where an application of stay is filed in cases of demand of recovery and not in cases where an application of stay is filed on the operation of the order. This power shall lie under Section 254(1) of the Act. Therefore, rules cannot decide whether the Tribunal has the power or not, but the Statute defines the power of the Tribunal along with decisions of the Hon'ble Supreme Court and High Court. B. Qua Power of PCIT i. It is submitted that the Department's reliance on Notification No. 70/2014, dated 13.11.2014, is misplaced because the power to grant exemption is not a supervisory power over the AO but a separate power independent of the assessment. This is because, for the power of grant/revocation of the exemption status, the CBDT had issued Notification 52/2014 granting the power to issue registration u/s 12A to CIT(E). Thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale Cloth Merchant Association (supra) considers and relies on the Hon'ble Supreme Court and all the High Court decisions in this regard. 8. Therefore, in light of the above submissions and the arguments made during the course of the hearing, the Assessee has made out a prima facie case for a grant of interim stay on the Impugned Order. 8. We have considered the rival submissions and perused the material available on record. The preliminary issue to be decided in the matter of present stay application is about its maintainability. As stated above, the assessee relied upon three case laws namely M.K. Mohammed Kunhi /1969) 71 ITR 815, ITO v. Khalid Mehdi Khan |1977| 110 ITR 79, CIT v ITAT [2013/ 31 taxmann.com 369 (Delhi), to submit that the ITAT has powers to grant stay of any proceedings, which has a relevance to the appeal filed by the assessee u/s 253 of the Act before the Tribunal or in respect of the operation of the any order, which is the subject matter of the appeal. In the case of CIT vs ITAT (supra) the Hon ble Delhi High Court affirmed the order of the Tribunal, wherein, vide order dated 21.05.2010 had granted stay to the ongoing assessment proceedings pursuant to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said orders before the Tribunal which was pending for disposal. In this case, even though, the request for stay of the penalty demand was made, when there was no provision in the Act for granting of stay of tax, interest, fee, penalty or any other sum payable, which was introduced by the Finance Act,2007 w.e.f. 01.06.2007 by way of proviso to section 254(2A) of the Act, the Hon ble Apex Court affirmed the order of the Hon ble High Court, which had granted stay of the recovery of the demand relating to the penalty orders. In this order, the Hon ble Apex Court made important observations about the powers of the Tribunal provided u/s 254(1) of the Act as under:- Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when s. 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an appeal is pending before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovides for an appeal to the Appellate Tribunal against the orders of the Appellate Assistant Commissioner, and the Commissioner, passed under specified provisions of the Act. Subsection (1) of Section 254 empowers the Tribunal to pass such orders on the appeal as it thinks fit, after giving both the parties to the appeal an opportunity of being heard. In Income-tax Officer v. M. K. Mohammed Kunhi [1969] 71 ITR 815 (SC), the Supreme Court held that Section 254 of the Act confers on the Appellate Tribunal powers of widest amplitude in dealing with appeals before it and that, by necessary implication, it also confers on the Tribunal the power of doing all such acts or employing all such means as are essentially necessary for the exercise of its substantive power, viz., a proper and effective disposal of the appeal. In other words, it was held that the conferment of the substantive power to entertain and dispose of the appeal carried with it, by necessary implication, all the ancillary and incidental powers which are necessary to make the exercise of the substantive power fully effective. While holding that the Income-tax Appellate Tribunal is not a court , it was held that it exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... open to the department to bring to the notice of the Tribunal the particular difficulties, if any, it would face in case a stay is granted, and the Tribunal shall of course consider the said plea and all other relevant circumstances and shall exercise its power having regard to them and in the light of the principles enunciated by the Supreme Court in Income-tax Officer v. Mohammed kunhi [1969] 71 ITR 815 (SC). That the Tribunal has taken into consideration the relevant circumstances in this case is evident from the fact that, having granted a stay, it directed the appeals to be posted for hearing within two months therefrom. We are told, however, that the appeals could not be so heard on account of the filing of these writ petitions which necessitated the remittance of relevant records to this court. 8.4. On a careful perusal of the above decisions, we observe that the Hon ble Apex Court and Hon ble High Courts of Andhra Pradesh, and Delhi have held that the ITAT has the power to grant stay of the operation of the order, which is subject matter of challenge before the Tribunal during its pendency before it, if the Tribunal came to a finding that by not staying the operation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Hon ble Delhi High Court in the case of CIT vs ITAT (supra), it is held that the Tribunal will have the power to grant stay the order dated 30.09.2023 cancelling the registration of the assessee trust with retrospective effect in the case of the assessee if the facts and circumstances of the case warrants a stay of the operation of the said order. However, in view of the discussion, later in this order, it is held that the assessee is not entitled for stay in this case. 9.2. The assessee in its stay petition has sought stay on the ground that prima facie the case was in favour of the assessee as the order dated 30.09.2023 was illegal and ought to be set-aside for lack of jurisdiction being passed by the PCIT(Central)-2, Delhi because such jurisdiction was not transferred to him by virtue of the order u/s 127 of the Act dated 10.11.2022 and it was also not possible by virtue of Board Notification No.52/2014 dated 22.10.2014 and Notification No.30/2021, dated 01.04.2021. Further, it submitted that the cancellation order could not have been passed with retrospective effect i.e. for FY 2013-14. Thirdly, it submitted that the assessee always acted in accordance with its objects and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) ... (b) directs that the Director General of Income-tax or the Chief Commissioner of Income-tax specified in column (2)of the said Schedules or the Principal Commissioner/Commissioner of Income-tax specified in column (4) of the said Schedules or Joint Commissioners of Income-tax subordinate to them, shall exercise powers and perform the functions as stipulated in the said Act in respect of such cases or classes of cases or such persons or classes of persons, assigned to Assessing Officers subordinate to them, under section 127 of the said Act, from the date of publication of this notification; 9.5. It was submitted that a conjoint reading of the aforementioned Notification and provisions of the Act makes it clear that the CIT(Exemptions) does not exercise jurisdiction in respect of persons claiming exemption under section 11, section 12 of the Act which have been assigned to the Assessing Officers subordinate to PCIT, Central, under Section 127 of the Act and by virtue of clause (b) of the Notification No.70/2014 dated 13.11.2014, the PCIT (Central) has been empowered to perform/exercise powers and functions stipulated in the Act in respect of such cases or classes or such pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that Delhi Bench of the Tribunal in the case of Young Indian (supra), had considered all the high court judgments relied by the assessee in the following Paras 49 and 88, and proceeded to hold that the PCIT had the power to cancel the registration with retrospective effect as under in Para 121. The relevant paras are as under:- 49. Without prejudice, the Ld. Counsel submitted that registration cannot be cancelled retrospectively without giving specific opportunity to the assessee and further, registration cannot be cancelled with retrospective date. Reliance in this regard was placed on the judgment of Allahabad High Court in the case of Agra Development Authority (2018) 90 taxmann.com 282 and of Madras High Court in the case of Auro Lab v. ITO (2019) 102 taxmann.com 225 (Madras). ... 88. As regards reliance placed on the judgment of Madras High Court in the case of Prathyusha Educational Trust (supra) on retrospective cancellation of registration u/s. 12A/12AA, the Id. counsel submitted Hon'ble Allahabad High Court in the case of Agra Development Authority (supra) has clearly held that CIT (Exemption) is not empowered to cancel registration with retrospective effect, i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 11.1. In the above mail, the words scanner of Indian Intelligence Organization and its apprehension of being bracketed in the category of Sierra Club and Greenpeace prima facie indicate some suspicious activity and that everything was not being done in accordance with law. 11.2. A similar chat with Ms. Puja Tewari dated 03.05.2023 was found in the phone of Shri Ritwick Dutta, Managing Trustee of the trust LIFE, where she is discussing about routes of funding to LIFE after FCRA regulations. She also mentions, as under: - Dear. Ritwick thanks. No background just to understand current work and funding amount gaps and possible routes of funding options to Life post fcra regulations etc.. Earth Justice is one for eg . to get your opinion on latest work .. many thanks and regards. 11.3. In this order, we are consciously avoiding to deal with the submissions of the assessee to the show-cause notices issued by the PCIT, Central-2, Delhi and his finding in the order, so as not to give any finding on the merits regarding the decision of cancellation of the registration of the assessee trust by the PCIT, Central-2, Delhi, which will be separately decided in the appeal filed by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orship Concern of Sh. Ritiwick Dutta, which was later converted in LIFE LLP was utilized to stop coal based Indian Thermal Power Plants and Coal Mine projects. In this regard, various emails reproduced on page no.7, 8, 9, 10 and 11 prima facie indicates the involvement of the assessee trust in furnishing about the status of Thermal Power Projects and the Coal mining. The discussion by the PCIT, Central-2, in para no.6.2.3.1(v) on pages no.26-27 of his order in respect of email dated 10.07.2016 titled LIFE Coal Cases update 10.07.2016 shows that the assessee trust proposes to file and litigate matter in respect of Thermal Power Plants and Coal Mines. These facts prima facie show the contradiction in the claim of the assessee that it has no involvement with Earth Justice and is not engaged in the stopping the thermal power projects and coal mining with assistance from Earth Justice. 11.6. Therefore, in view of the facts on record, the claim for exemption by the assessee on account of suffering irreparable loss and balance of convenience is also not satisfied because prima facie the facts on record suggest that the activities of the trust in stopping coal based Indian Thermal Power Pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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