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TMI Blog2025 (3) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal erroneously found that the powers of the Principal Commissioner u/s 12AA could not be exercised without a prior determination by the Assessing Authority as to whether or not the assessee had occasioned a breach of the statutory provisions or conducted themselves in violation of the objects of the Trust concerned. In our view, the provisions of Section 12AA independently empower the Principal Commissioner to consider whether or not the circumstances mentioned in Section 12AA (3) and 12AA (4) of the Income Tax Act exist as a pre-condition for directing a cancellation of the registration that was granted to the Trust under Section 12A of the Income Tax Act. The statutory provisions do not require the Principal Commissioner to await ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JAYASANKARAN NAMBIAR, J. The revenue is in appeal before us in these I.T. Appeals aggrieved by a common order dated 17.03.2022 in I.T.A. No.12/Coch/2021, I.T.A. No. 13/Coch/2021, I.T.A. No. 14/Coch/2021, and I.T.A.No.15/Coch/2021, preferred by the respondent-assessee against an order of the Principal Commissioner of Income Tax under Section 12AA of the Income Tax Act, 1961, cancelling the registration granted to the assessee under Section 12A of the Income Tax Act. 2. The brief facts necessary for the disposal of these I.T. Appeals are as follows: Pursuant to a survey conducted in relation to the activities of the respondent-assessee on 26.02.2020 and a search conducted in the premises of the assessee on 05.11.2020, show-cause notices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s u/s. 13 (1) (c) and 13 (1) (d) of the Act which would result in additions in the assessment and reassessment. Such violations, if any to be assessed as income taxable at the marginal rate. A perusal of the provisions of Section 12AA (4) shows that the cancellation of registration is permissible in respect of trust/institution which has been granted registration if the activities of the trust or the institution are being carried out in a manner that the provisions of Section 11 and 12 do not apply to exclude either the whole or any part of the income of such trust or institution due to the operation of sub-section(1) of Section 13 or the trust or the institution has not complied with the requirements of any other law. Reading of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound for the cancellation of registration. On this ground itself, the order passed by the Ld. CIT(E) is liable to be quashed and we do so. Even otherwise, reading of proviso to Section 12AA (4) shows that there is liberty available with the assessee to show that there was reasonable cause for the activities to be carried out in the said manner. This proviso clearly shows that the assessee could reply or show reasonable cause only after the quasi-judicial authority being the assessing authority questions the assessee during the course of assessment. Further, the reading of 2nd proviso to Section 153A clearly shows that assessments/re-assessments which are pending for a period of six assessment years abates. This clearly shows that even as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal was right in holding that Assessing Officer's (AO's) order is required before the cancellation of Registration of Trusts by the Commissioner of Income Tax when the provisions u/s.12AA of Income Tax Act make no mention of the same? 4. Whether on the facts and circumstances of the case, the Hon'ble Tribunal was right in holding that in absence of assessment order or any order of any quasi-judicial authority the cancellation of registration by Commissioner of Income Tax (Exemption) is liable to be quashed whereas as per the specific provisions of Section 12AA (1) of the Act the Commissioner of Income Tax is the authority for granting registration to the Trusts and as per Section 12AA (4) the Commissioner only is the auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat was to be considered by the Appellate Tribunal, namely, the legality of the order passed by the Principal Commissioner cancelling the registration granted to the respondent-assessee under Section 12A of the Income Tax Act, we find that the Appellate Tribunal in the impugned order, proceeded on a mistaken assumption with regard to the order passed by the Principal Commissioner. The Appellate Tribunal erroneously found that the powers of the Principal Commissioner under Section 12AA of the Income Tax Act could not be exercised without a prior determination by the Assessing Authority as to whether or not the assessee had occasioned a breach of the statutory provisions or conducted themselves in violation of the objects of the Trust concern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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