Cancellation of registration u/s 12AB(4) - violation of ...

Society's Registration Cancellation Overturned Due to Jurisdiction Error; PCIT Lacked Authority for Pre-2022 Violations.

August 29, 2024

Case Laws     Income Tax     AT

Cancellation of registration u/s 12AB(4) - violation of provisions of Sections 11(1)(a), 11(1)(d), and 13(1)(c). The reference made under the second proviso of Section 143(3) to the Principal Commissioner of Income Tax (PCIT) to whom the Assessing Officer was subordinate is not permissible. The Commissioner of Income Tax (Exemption), Delhi, having territorial jurisdiction specified in the relevant notifications, is the appropriate authority for claiming exemption u/s 12A. The order passed by the PCIT cancelling the appellant society's registration based on the Assessing Officer's reference is flawed and without jurisdiction. The reference u/s 12AA can be made only during the pendency of the assessment proceedings, not after conclusion. The second proviso to Section 143(3), enabling reference to the PCIT u/ss 12AA and 12AB, was inserted effective April 1, 2022, and cannot be applied retrospectively. The show cause notices issued by the PCIT invoking Sections 12AA(5) and 12AB(4) for cancellation of registration for alleged violations prior to April 1, 2022, are erroneous and liable to be quashed. The final order by the PCIT cancelling the appellant society's registration for Assessment Years 2015.

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