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TMI Blog2025 (2) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... on/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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no intimation of such modification was sent to the second Respondent "it is quite clear that the registration granted to BCCI u/s.12A of the Income-tax Act, 1961 vide order dated 12.02.1996 does not survive from the date on which the objects were changed i.e. 01.06.2006. However, as has been mentioned in the above para a fresh application for registration u/s.12AA of the Income-tax Act, 1961 may be filed alongwith necessary documents." 7. Aggrieved by the aforementioned communication/order dated 28 December 2009, the BCCI filed an appeal, ITA No. 1285/Mum./2010, before the Income Tax Appellate Tribunal (ITAT) on 17 February 2010. 8. Before the ITAT, the learned Special Counsel for the Revenue submitted that the DIT, by the impugned communication/order dated 28 December 2009 had neither cancelled nor withdrawn the registration dated 12 February 1996 granted to the BCCI under Section 12A of the IT Act, 1961. He contended that by the impugned communication/order, the DIT had merely intimated the BCCI of the consequences of changes in the objects of the BCCI. Based on these submissions, the Special Counsel for Revenue contended that Appeal under Section 253 of the IT Act, 1961 woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Pardiwalla submitted that Section 12A (1) (ab) mandating an application to be made where a trust earlier registered, inter alia under Section 12A, has adopted or undertaken modification of the objects which do not conform to the condition of registration was inserted by Finance Act 2017 only with effect from 01 April 2018. He, therefore, submitted that there was no such requirement in the law prior to such amendments. He, therefore, submitted that the provision of Section 12A (1) (ab) would not apply to the amendments undertaken on 01 June 2006 and 21 August 2007. 16. In the alternate, Mr. Pardiwalla submitted that the amendments of 1 June 2006 and 21 August 2007 were minor and did not affect any of the BCCI's objectives, namely promoting sports. He also submitted that the ITAT did not consider these aspects. He submitted that nothing in Section 12A obliges the BCCI to inform the registering authority of the amendments to its objects. He also submitted that the undertaking furnished by the BCCI when obtaining registration was ultra vires, and based on this, the impugned communication/order could not have been made. He submitted that the validity of the impugned communication/or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT's impugned order. 22. Mr. Chhotaray submitted that the onus was on the BCCI to prove the exemption provision covered the case. He submitted that exemption from taxation always increases the burden on the other members of the community. He submitted that exemption provisions had to be strictly construed. Based on all this, He submitted that there was no error in the impugned communication/order dated 28 December 2009, holding that the BCCI's registration did not survive the amendments to its objects carried out on 01 June 2006 and 21 August 2007. He relied on Novopan India Ltd., Hyderabad Vs Collector of Central Excise and Customs, Hyderabad 1994 Supp (3) SCC 606 and Commissioner of Income Tax (Exemptions) Vs Saifee Hospital Trust (2017) 88 taxmann.com 694 (Bombay). 23. The rival contentions now fall for our determination. 24. The two main issues involved in these matters are the following: [A] Whether the ITAT, after recording a categorical finding that the impugned communication/order dated 28 December 2009 did not amount to any order of cancellation of BCCI's registration under Section 12A of the IT Act, 1961 and further holding that since there was no cancellation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t raised by learned Special Counsel on behalf of the Revenue: - "25. Learned Sr. Special Counsel, on the other hand, argues that the Revenue has not withdrawn or cancelled the registration granted under section 12A and that the DIT has only availed of an opportunity to inform the legal position to the BCCI and has for its benefit enclosed a copy of the extracts from the book "Charitable and Religious Trusts and Institutions" authored by the learned author Mr. S. Rajaratnam, so that the assessee takes suitable action." 28. The ITAT, based upon the Special Counsel's above submissions/contentions, made the following observations in the impugned order connected with the issue of maintainability of the Appeal under Section 253 (1) (c) of the IT Act, 1961:- "26. When it is the stand of the Revenue that the registration granted under section 12A, is not withdrawn or cancelled, the assessee society should not have any grievance. If the Assessing Officer has not understood the letter of The DIT dated 28th December 2009, as not withdrawing or canceling of the Registration granted under section 12A, then the assessee can rely on the stand of the Revenue before the Tribunal which is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t suggested that the impugned communication/order dated 28 December 2009 had the effect of cancelling BCCI's registration under Section 12A of the IT Act, 1961. 32. However, without going into the issue whether the Revenue's contention regarding the impugned communication/order dated 28 December 2009 not being an order of cancellation of BCCI's registration or the ITAT's upholding of this contention, we believe that the ITAT, after having upheld the Revenue's contention [whether rightly or wrongly] exceeded its jurisdiction in examining the impugned communication/order dated 28 December 2009 on its merits and recording observations tending to uphold the impugned communication/order dated 28 December 2009 on its merits. 33. In the impugned order dated 30 March 2012, the ITAT has made the following observations: - "17. We agree with the findings of the DIT that granting of registration under section 12A, means granting of registration based on the objects and by-laws of the society as filed by the assessee along with the application for registration. Grant of registration under section 12A, does not mean that only the name of the society is registered. It means that the memor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also to be examined by the Revenue authorities and it is not for the assessee to unilaterally declare that the amendments are not drastic or substantive. If the assessee does not intimate the Revenue of the amendments on the ground that there is no statutory requirement, in our opinion, the assessee, as a consequence, cannot claim the benefit that flows under section 12A, for these changed objects; otherwise it would amount to a situation where the assessee shifts the goalpost midway and continues to claim benefit. There might be no statutory requirement for intimating the DIT of the changes in the memorandum and rules and regulations but if the assessee does not fulfill Its undertaking to furnish the changes, then he cannot claim automatic benefits under sections 11 to 13 of the Act, for those altered objects, rules and regulations. Benefits under the Act cannot be claimed unless the changes are vetted by the authorities. 23. ...... Hence, in our view, changes in the rules and regulations are also material and have to be intimated to the Revenue authorities for examination. Thus, we do not find any fault in the view taken by the DIT that the assessee should take steps by inti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s Appeal before it "was not maintainable", exceeded its jurisdiction in recording the above observations virtually upholding the impugned communication/order dated 28 December 2009. The authority or the jurisdiction to uphold the impugned communication/ order dated 28 December 2009 would be derived by the ITAT upon concluding that the Appeal before it was maintainable. If, according to the ITAT, the Appeal before it was not maintainable, then we fail to comprehend how the ITAT derived jurisdiction to make the above observations, which virtually approved the impugned communication/ order dated 28 December 2009. Therefore, the above observations/findings are without jurisdiction and cannot be relied upon by the Respondents in the proceedings connected with the assessment of the BCCI or proceedings connected with the cancellation of BCCI's registration under Section 12A of the IT Act, 1961. 35. In Tin Plate Co. of India Ltd. Vs. State of Bihar and others (1998) 8 SCC 272 the Hon'ble Supreme Court was concerned with a case where the High Court, having dismissed a Writ Petition on the ground of alternative remedy not being exhausted, proceeded to express opinion and record some fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion/order dated 28 December 2009 was not "maintainable", there was no question of the ITAT evaluating the impugned communication/order on its merits or making any observations or recording any findings regarding its validity or otherwise. Therefore, such observations and findings are without jurisdiction and should not have been made. 40. This does not mean we have examined the merits of the above observations or findings recorded by the ITAT. We have only declared that the above observations/findings are without jurisdiction and, therefore, the same should not be treated as binding by the Respondents or others, mainly while deciding the appeal against the assessment order dated 30 December 2009 or in the proceedings initiated for the cancellation of BCCI's registration under Section 12A of the IT Act. All such issues, including the issue as to whether the BCCI, on account of modification of its objects is liable to have its registration under Section 12A cancelled or whether the BCCI is disentitled to benefits otherwise available to charitable institutions or trusts should be examined by the prescribed authorities on their own merits, independently and without being influenced b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in way, the thing must be done in that way or not at all, and the other performance methods are necessarily forbidden. 45. 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 ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory letter or only an advisory. 50. Mr. Pardiwalla referred us to the decision of the Coordinate Bench dated 11 December 2018 disposing of Income Tax Appeal No. 689 of 2016 [CIT (Exemptions), Mumbai Vs. M/s Bhansali Trust]. In the said matter, the Revenue complained about the assessee amending its objects but not intimating the changes to the Revenue Authorities, and the ITAT incorrectly distinguished the decision in Allahabad Agricultural Institute (supra). However, the Revenue's contention that the ITAT incorrectly distinguished the decision in Allahabad Agricultural Institute (supra), was not accepted by the Coordinate Bench in its order dated 11 December 2018. 51. Novopan India Ltd. Hyderabad (supra) or Saife Hospital Trust (supra) undoubtedly hold that the onus is on the assessee to prove that its case is covered by the exception or exemption prohibition. However, that is not the issue at present. Based upon the impugned communication/order dated 28 December 2009, which the Revenue accepts is only an advisory or non-statutory communication, the Revenue cannot decide matters of exemption, etc. Such issues must be decided by the prescribed statutory authorities, who must ..... X X X X Extracts X X X X X X X X Extracts X X X X
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