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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
Before: MANISH AGARWAL
This is an appeal filed by the assessee against the ord This is an appeal filed by the assessee against the ord This is an appeal filed by the assessee against the order of the ld CIT (Exemptions) dated 20.6.2023 u/s.12AB(4) of the Income tax Act. 20.6.2023 u/s.12AB(4) of the Income tax Act.
2. The assessee has also filed stay petition The assessee has also filed stay petition No.12/CTK/2023 No.12/CTK/2023 arising out of ITA No.358/CTK/2023. of ITA No.358/CTK/2023.
3. Shri S.K.Agrawala, and Shri Shri S.K.Agrawala, and Shri S.K.Hotala, ld ARs S.K.Hotala, ld ARs appeared for the assessee and Shri Sanjay Kumar, ld CIT DR appeared for the revenue. assessee and Shri Sanjay Kumar, ld CIT DR appeared for the revenue. assessee and Shri Sanjay Kumar, ld CIT DR appeared for the revenue. P a g e 1 | 19
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4. At the time of hearing, ld AR submitted that he desires to withdraw the stay petition. Consequently, the stay petition is dismissed as withdrawn.
In regard to appeal in it was submitted by ld AR that the assessee had been granted registration u/s.12A w.e.f. 1.1.1996 and 80G w.e.f. 20.10.2006. It was the submission that the assessee had also filed Form No.10A to re-register itself under the new regime u/s.12AA of the Act and the assessee had been granted registration in Form No.10AC on 24.9.2021 from the assessment years 2022-23 to 2026-27. The assessee had also been granted registration u/s.80G vide order dated 24.9.2021 from A.Ys 2022-23 to 2026-27. It was the submission that subsequently, the ld CIT(Exemptions) issued a show cause notice to the assessee on 6.10.2022, copy of the show cause notice was placed at page 50 to 53 of PB. The assessee had replied to the show cause notice and the ld CIT(Exemptions) had vide order dated 20.6.2023 cancelled the registration to the assessee u/s.12AA w.e.f. 1.4.2014. It was the submission that the impugned appeal was against the said cancellation of the registration u/s.12AA by an order u/s.12AB(4).
It was the submission that the appeal filed by the assessee is delayed by 97 days. It was submitted that on receipt of the order of the ld CIT(Exemptions), the assessee had filed writ petition before the Hon’ble Jurisdictional High Court of Orissa and subsequently with the permission of the Hon’ble High Court, the writ petition was withdrawn with a liberty to the P a g e 2 | 19
ITA No.358/CTK/2023 S.P. No.12/CTK/2023 assessee to file an appeal to the Tribunal, which was also granted by the Hon’ble High Court and the appeal has been filed before the Tribunal. It was the submission that the delay was on account of the period during which the writ petition was pending before the Hon’ble High Court. It was the submission that the delay in filing of the appeal before the Tribunal may be condoned. Ld CIT DR did not raise any serious objection to the condonation of delay.
Considering the fact that the delay was on account of the assessee seeking alternate remedy before the Hon’ble High Court through writ petition, which was subsequently withdrawn and the permission had been granted by the Hon’ble High Court to file an appeal before the Tribunal, the delay in filing of the appeal is condoned and the appeal disposed off on merits.
At the outset, it was submitted by ld AR that the order passed u/s.12AB(4) on 20.6.2023 did not contain the Document Identification Number (DIN No.) and consequently in view of the circular issued by CBDT in Circular No.19/2019 dated 14.8.2019, the order was non-est. At this point, ld CIT DR submitted that the Hon’ble Supreme Court in the case of CIT vs Brandix Maritius Holdings Ltd.,158 taxmann.com 247(SC) has stayed the issue of cancellation/annulment of an order on account of non-recording of DIN No. against the judgment of Hon’ble Delhi High Court in the case of Brandix Maritius Holdings Ltd in 332 CTR 221(Del). P a g e 3 | 19
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Admittedly, the circular issued by CBDT is binding on the authorities below and the ld CIT(Exemptions) is an authority under the CBDT. As the order passed by ld CIT(E) in the case of the assessee, has admittedly been passed without issuing a DIN, in view of the circular issued by CBDT, the order admittedly is non-est and is liable to quashed.
However, the issue having been stayed by the Hon’ble Supreme Court in the case of Brandix Maritius Holdings Ltd(supra), this finding of the Tribunal quashing the order of CIT(Exemptions) dated 20.6.2023 on account of non-availability of DIN in the said order would stand suspended till the issue is decided by the Hon’ble Supreme Court.
Ld AR further submitted on merits that there was a survey on the premises of the assessee on 9.9.2016, substantial number of documents had been impounded and impounding list was shown at pages 8 to 10 of PB. The said documents which have been impounded continue to be in possession of the department by a retention order passed by the CIT(E) and even today, the retention continues. Ld AR drew our attention to pages 11 to 13 of the PB, which was a retention order dated 19.4.2021. It was the further submission that on 18.10.2016, the ld CIT(E) issued a show cause notice u/s.12AA(3), wherein, there was a proposal to withdraw the registration granted u/s.12A of the Act. Copy of the show cause notice dated 18.10.2016 was placed at pages 14 to 15 of PB, which reads as follows: P a g e 4 | 19
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“GOVERNMENT OF INDIA Ministry of Finance, Income Tax Department Office of the Commissioner of Income Tax (E) Annex, Aayakar Bhavan, Basheerbagh, Hyderabad-500 004 Tei: 040 23426031,32 Fax: 040 23426033
F.No.CIT(E)/Hyd/12A/Cancellation/04/2016-17 dt,.18.10.2016 To M/s. People Forum,44, Dharma Vihar, Khandagiri, Bhubaneswar.
Sir, Sub: Show cause notice u/s.1AA(3) of the I.T.Act, 1961 for cancellation of registration u/s.12A of the IT Act, 1961 in the case of M/s. People Forum (PAN :AAATP 2214R), Bhubaneswar, Odisha- calling for explanation-Reg. Please refer to the subject mentioned above.
Earlier, the Society in your case was granted registration 12A of the Income tax Act, 1961 by the Commissioner of Income Tax, Orissa, Bhubaneswar vide registration Skl.No.58/95-96 dated 8.1.1996 with effect from 1.4.1995 onwards.
It is observed that the Society has been violating the provisions of sub-section (3) of Section 12AA of the I.T.Act, 1961 as under: (i) The assessee society is advancing loans to SHGs and collection interest alongwith processing fees, membership fees, etc which amounts to a business activity. (i) The assessee society donated a sum of Rs. Crores to Aids Awareness Trust of Orissa, whose physical existence is not available at the given address, which amounts to diversion of funds for purposes other than charity.
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ITA No.358/CTK/2023 S.P. No.12/CTK/2023 (iii)Thus, it shows that the Society in your case is not running as a charitable Society but as a Commercial entity and hence, not falling under the provisions of section 2(15) of the I T . Act, 1961.
Under the above circumstances, ie., when the Society in your case running as a c; e Society, please explain as tc why the registration granted u/s.12A of the IT Act, 1961, in your case, should not be withdrawn 12AA(3) of the Act. In this connection, I am directed to inform that you are required to appear before the Commissioner of Income Tax (Exemptions), yderabad at Camp office, Room No.407, Aayakar Bhavan, Annexe Building, Rajaswa Vihar, Bhubaneswar, Odisha alongwith relevant information/documents on 24.10.2016 at 2.15 PM, failing which, it will be presumed that you have no submissions to be made and appropriate orders would be passed.”
It was the submission that the show cause notice was replied to. It was the submission that after the reply of the assessee on 24.10.2016, no action came to be taken in regard to cancellation of the registration and, therefore, it is to be deemed that the proceedings had been dropped. It was the submission that no specific order dropping the proceedings has been received by the assessee and that normally when proceedings are dropped, entries are passed in the order sheet and no communication normally comes to the assessee. It was the submission that in any case as the ld CIT(E) has not passed the order in regard to the show cause notice issued on 18.10.2016 within six months as prescribed under the provisions or within a reasonable period of time, the proceedings initiated should be deemed to have dropped by accepting the explanation of the assessee. It was the further submission that in the said show cause notice on 18.10.2016, the issue raised was that the activity of the assessee amounts to business activity and the second issue is in regard to donation of Rs.2.00
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ITA No.358/CTK/2023 S.P. No.12/CTK/2023 crores given to Aids Awareness Trust of Orissa, whose physical existence was questioned. It was the submission that for assessment years 2009 - 2010 to 2013 - 2014, the Assessing Authority had treated the micro finance activity of the assessee as commercial activity and denied the assessee the benefit of exemption u/.s.11 & 12 of the Act. The said assessment orders were subject matter of appeal before the ld CIT(A), who had allowed the claim of the assessee and had held the issue in favour of the assessee. The orders of the ld CIT(A) allowing the assessee’s appeal for the assessment years 2009 - 2010 to 2013-14 are placed at pages 223-299 of PB. The revenue filed appeal against the orders of ld CIT(A) to the ITAT and the ITAT vide its order in and C.O. 02/CTK/16 dated 30.11.2016 had held the issue in favour of the assessee and upheld the orders of the ld CIT(A) and dismissed the revenue’s appeal. Copy of the orders of the Tribunal in ITA No.325/CTK/2015 and C.O. No.45/CTK/2015, dated 18.1.2017, ITA No.326/CTK/2015 and C.O. No.46/CTK/2015 dated 4.7.2017 and ITA No.81/CTK/2016 and C.O.02/CTK/2016 order dated 30.11.2016 were placed at pages 300 to 366 of PB. Ld AR drew our specific attention to ITA No.326 /16, C.O.46/CTK/2015, order dated 4.7.2017 and referred to page 340 of the paper book which has an extract of the order of the Co-ordinate Bench in assessee’s own case for the assessment years 2011-12, wherein, it has been held as follows:
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10. Before me, Id D.R. could not point out that the orders passed in the earlier years by the Id CIT(A) were reversed by any higher authority on an appeal filed there against. I further find that in view of the decisions of the Tribunal in the case of Assistant Director of Income Tax (Exemptions) vs Bharatha Swamukhi Samsthe, (2009) 28 DTR 0113 (Bang) and Spandana (Rural & Urban Development Organisation) vs Assistant Commissioner of Income Tax (2010) 48 DTR 0153 (Vis. Trib), the activity under consideration falls under the expression relief to poor" as envisaged under section 2(15) of the Act. Therefore, in my considered view simply because an activity undertaken in commercial line in pursuance to furtherance of the object of society to poor does not make the activity non-charitable within the meaning of section 2(15) of the Act. In the circumstances, I do not find any good reason to interfere with the conclusion' of the Id CIT(A). Hence, this ground of the revenue is dismissed."
It was the submission that no further appeal has been filed by the Revenue against the orders of the Tribunal and the issue has attained finality. It was the submission that the next issue was in regard to donation to Aids Awareness Trust of Orissa. It was the submission that assessment u/s.143(3) in the case of Aids Awareness Trust of Orissa was done by the Assessing Officer on 26.12.2016 much after the survey and also much after the show cause notice originally issued by the ld CIT(E) on 18.10.2016. It was the submission that the ITO (Exemption), Ward, Bhubaneswar has passed the order in the case of Aids Awareness Trust of Orissa accepting the returned income on the basis of approval accorded by the ld Commissioner of Income Tax vide order Regd.No.70/2008-2009 dated 12.08.2008. It was the submission that the issue raised in the show cause notice by the ld CIT (E) had been completely approved and the proceedings had been dropped. It was the submission that the new show cause notice
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ITA No.358/CTK/2023 S.P. No.12/CTK/2023 issued on 6.10.2022, which is placed at pages 50 to 53 of PB shows seven grounds. Copy of the show cause notice is extracted below:
“GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT CIT EXEMPTION HYD AT BBN PAN: dated DIN & Letter No AAATP2214R 06/10/2022 ITBA/COM/F/17/2022-23/1046190758(1) Sir/ Madam/ M/s, Subject: Online service of Orders - Letter Sub: Show-cause notice u/s 12AA of the Income-tax Act, 1961 for cancellation of registration granted u/s 12A of the Income Tax ACT.1961 in the case of People's Forum (AAATP2214R) - Issue o f - Regarding. On verification of records of the department following facts/discrepancies relating to M/s People's Forum (AAATP2214R) have been noticed. i) People's Forum was granted registration u/s 12A w.e.f 01.01.1996 & 80G w.e.f 20.10.2006 ii) A survey operation u/s 133A was conducted on 09-9-2016 in the premises of People's forum and Aids Awareness Trust of Orissa. As per the audited books of accounts a sum of Rs.3,04,73,716/- & Rs.2,27,15,020/- were received by the People's Forum during the FY 2013-14 & 2014-15 as contribution to corpus fund. iii) During the course of Survey, People's forum has donated a sum of Rs.2 Crore out of its corpus fund to the trust Aids Awareness Trust of Orissa(AATO) –PAN AABTA8672M on 31.03.2014, which is addressed at 44, Dharma Vihar, Khandagiri, Bhubaneswar. the same address as reported by the People's Forum in its returns. During the course of survey proceedings and also post survey proceedings, neither any office nor any documents relating to the trust AATO found. iv) During the course of survey proceedings and post survey enquiries, the assessee failed to submit the details of corpus donation. After due verification, assessment was completed for the Asst. Year 2016-17 u/s 143(3) r.w.s. 263, taxing the anonymous donations aggregating to Rs.3,26,33,030/- being unexplained. v) During the post Survey enquiry, it is revealed that one company namely Annapuma Microfinance Pvt. Ltd is located at 97, Dharma Vihar, Khandagiri, Bhubaneswar. It is revealed from MCA website that Sri Gobinda
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Chandra Pattnaik is also one of the Directors of M/s Annapuma Micro Finance Pvt Ltd. vi) It is noted that one of the object of assessee society is "to promote and manage self held groups of poor women/men through their solidarity groups and raise loans for further on lending to them from various organisations like Rashtriya Mahila Kosh, SIDBI, NABARD, National and International Bank with a view to providing collateral free credit for suitable livelihood option to them." vii) Whereas analysis of the balance sheet of the assessee society depicts that the society has substantial borrowed funds in the form of loans from various banks/financial institutions and substantial amount of such borrowed funds has been invested to SHGs for giving loans by charging various charges. It is noted that while advancing loans, the assessee not only charges interest but collecting processing fee, membership fee etc which resulted in commercial surplus over the years. Such kind of micro finance activity cannot be termed as charitable activity rather than business activity. Although the assessee was involved in carrying out certain objects of general public utility, such activities being in nature of commercial activity for consideration or service charges would not qualify to be Charitable in nature. In view of the facts stated above, the assessee trust does not qualify for exemptions available under the Income tax Act and do not entitle for Registration u/s 12AAofthe Income tax Act, 1961. Section 12AB(4) explicitly provides as under: 4) Where registration or provisional registration of a trust or an institution has been grant* ' clause (aj or clause (b) or clause (c) of sub-section (1) or clause (b) of sub-section (1) of section 12AA. as the case may be, and subsequently,— (a,) the Principal Commissioner or Commissioner has noticed occurrence of one or more specified violations during any previous year; or (b) the Principal Commissioner or Commissioner has received a reference from the Assessing Officer under the second proviso to sub-section (3) of Section 143 for any previous year, or (c) such case has been selected in accordance with the risk management 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;
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(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; (iii) pass an order in writing, refusing to cancel the registration of such trust or institution, if he is not satisfied about the occurrence of one or more specified violations; (iv) forward a copy of the order under clause (ii) or clause (iii), as the case may be, to the Assessing Officer and such trust or institution. Explanation.—For the purposes of this sub-section, the following shall mean "specified violation",— (a) where any income derived from property held under trust, wholly or in part for charitable or religious purposes, has been applied, other than for the objects of the trust or institution, or (b) the trust or institution has income from profits and gains of business which is not incidental to the attainment of its objectives or separate books of account are not maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives; or (c) the trust or institution has applied any part of its income from the property `held under a trust for private religious purposes, which does not endure for the benefit of the public; or (d) the trust or institution established for charitable purpose created or established after the commencement of this Act, has applied any part of its income for the benefit of any particular religious community or caste; or (e) any activity being earn to the trust or institution— (i) is not genuine (ii) s nor being carried out in accordance with all or any of the conditions subject to which it was registered; or (f) 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 sub- section (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. In view of the facts stated above, I, am of the opinion that the assessee trust has violated the provisions of Sec. 11 of the Income tax Act, 1961 and same are treated as "Specified violations" as specifically mentioned in the explanation to the Provisions of Sec. 12AB(4) of the Income Tax Act and I, the Commissioner of Income tax (Exemptions), Hyderabad, Competent
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Authority, propose to cancel the Registration granted u/s 12AA of the Act. Therefore, you are requested to show cause why the Undersigned should not cancel the Registration granted u/s 12AA of the Act. For this purpose, in term of provisions of Sec. 12AB (4)(ii) of the Act, opportunity of being heard is accorded to file your objection for the proposed cancellation of registration u/s 12A. For this purpose your case is posted for hearing on 18.10.2022 at 11 A.M. It may please be noted that in case of failure to respond or failure to furnish any explanation, it will be presumed that you have no valid explanation to offer and matter will be decided on merits of the case. BALA KRISHNA BATTULA CIT EXEMPTION HYD AT BBN”
It was the submission that the first is not an issue for cancellation of registration, second refers to the contribution towards corpus funds received by the assessee, third refers to Rs.2 crores given by the assessee to Aids Awareness Trust of Orissa, which is identical to the issue raised in the show cause notice of 2016 which was replied to. In regard to fourth issue, the details of corpus donation was submitted and the assessment u/s.143(3) had been done, which was also the subject matter of revisionary proceedings u/s.263 of the Act. The order u/s 263 was challenged and the Hon’ble High Court of Orissa vide its order in of 2022 dated 4.8.2023 had quashed the order passed u/s 263 holding as follows:
“6. We have perused the assessment order and found the AO said, inter alia, as reproduced below. “During the course of assessment proceedings the assessee produced the relevant documents as per questionnaire through e-proceeding. The Books of account including bank statements, audit report, statement of income and the ledgers furnished for verification were examined. Considering the P a g e 12 | 19
ITA No.358/CTK/2023 S.P. No.12/CTK/2023 submissions made and after verification of the documents submitted by the assessee the total income of the assessee trust is hereby accepted. Accordingly, the total income of the assessee is determined at Rs. Nil.” (emphasis supplied) As aforesaid, the Commissioner in the revision order had reproduced assessee’s reply to the show-cause notice, where in paragraph 3.2 the assessee said it had again enclosed therewith, detailed list of donors along with their complete address and amounts of donations given by them as annexure- 1.
The paragraph is reproduced below. “3.2. That thereafter the Ld. Assessing Officer complied all the details filed by the assessee with the books of account and other documents impounded which were found to be in order, therefore did not make any additions or did not treated the corpus donations as anonymous donation and passed the assessment order u/s. 143(3) by accepting the returned income. For your kind perusal again herewith we are enclosing the detailed list of the donor along with their complete address and the amount of donations given by them as Annexure-1” (emphasis supplied) The Commissioner went on to only say, the assessee’s reply had been considered but not found tenable. In the circumstances, we did not find a dispute regarding disclosure of identity of donors, their addresses and the amount of donations they had made to the assessee. This fact is sufficient for compliance of requirement under section 115-BBC(3), in claiming exemption of the donations from being chargeable to income tax.
7. Facts found by the Commissioner and the Tribunal clearly show that the assessee had furnished record of the identities indicating name and address of persons making the contributions. Revenue has not been able to demonstrate further requirement by prescribed particulars, as mentioned under sub-section (3) in section 115-BBC. As such, we answer the question in the negative and in favour of appellant (assessee).
8. The appeal is allowed. The orders of Tribunal and the Commissioner are set aside and quashed.” Copy of the order is placed at pages 44 to 49 of PB.
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It was the submission that clearly all the details were produced and even the Hon’ble High Court have been convinced by all the facts and proceedings quashed. It was the submission that the order of the Hon’ble High Court has also become final.
In regard to fifth issue, it was submitted that Shri Govinda Chandra Pattnaik, who is the Secretary of the assessee trust was a Director of Annapurna Microfinance Pvt Ltd., and that there is no bar in regard to holding the Directorship by any of the trustee. In Item No.6, what is stated by the ld CIT (E) is a fact that there is no allegation of deviating by the said clause by the ld CIT(E). In item No.7, the issue was in regard to activity of the assessee being a commercial activity which has also reached finality as being a charitable activity by the orders of the Co-ordinate Bench of this Tribunal referred (supra) for the assessment year 2009 - 2010 to 2011-12. It was thus the submission that the cancellation of the registration was itself liable to be annulled.
It was the further submission that admittedly the registration has been cancelled u/s.12A but the registration u/s.80G available to the assessee has not been touched even till today. It was also the submission that a perusal of the provisions of section 12AB(4)(ii) in regard to cancellation of registration, same could be done only for such previous year to which the show cause notice has been issued and for all subsequent P a g e 14 | 19
ITA No.358/CTK/2023 S.P. No.12/CTK/2023 previous years. It was the submission that there was no power with the CIT(E) for issuing show cause notice on 6.10.2022 and cancelling the registration w.e.f. 1.4.2014. It was the submission that the cancellation of the registration as done by the ld CIT(A) may be annulled.
In reply, ld CIT DR submitted that w.e.f. 1.4.2022, the law has been amended and the ld CIT(E) could cancel the registration of such trust or institution after affording reasonable opportunity of being heard for such previous year and or subsequent previous year, as he satisfy that one or other specific violation had taken place. It was the submission that in the show cause notice the ld CIT(E) refers to the survey and details regarding violation of provisions of section 11 of the Act for the financial year 2013-14 and 2014-15. It was thus the submission that this was a reason why the ld CIT(E) had cancelled the registration w.e.f. 1.4.2014. It was the further submission that just because certain reliefs had been granted to the assessee by the appellate forums would not mean that all the violations as done by the assessee have been exonerated. It was the further submission that if at all the issues could be restored to the file of the ld CIT(E) for re- examination and passing appropriate orders. Ld CIT DR vehemently supported the order of the ld CIT(E).
We have considered the rival submissions. Admittedly, the proceedings for cancellation of the registration u/s.12A to the assessee had been initiated by the ld CIT(E) as early as on 18.10.2016 being after a P a g e 15 | 19
ITA No.358/CTK/2023 S.P. No.12/CTK/2023 reasonable period from the date of the survey on the assessee. Admittedly, the assessee had responded to the same and it is an admitted fact that the proceedings did not continue after the show cause notice and reply filed by the assessee. The provisions of section 12AB(4) provide for the time limit in regard to passing of an order in respect of cancellation of the registration but the said provision refers to the first notice to be issued on or after 1st April, 2022. There is no saving provision in regard to the proceedings initiated prior to 1st April, 2022 and which admittedly being not calumniated into an order being served on the assessee. A perusal of the show cause notice issued by the ld CIT(E) on 6.10.2022 admittedly also does not refer to a show cause notice having been issued on 18.10.2016 and, therefore, it cannot be treated as a continuation of the proceedings either. The main crux of the cancellation of the registration is (i) whether the activity of the assessee is a business activity or charitable activity. Admittedly, this has reached finality for the assessment year 2009-10 to 2011-12, wherein, the Co-ordinate Bench of this Tribunal have held the issue in favour of the assessee. The second issue is in regard to donation to Aids Awareness Trust of Orissa and the questioned the existence of the trust. The assessee has produced the assessment order in the case of said trust and the assessment order passed also refers to its registration by the ld CIT(A). Therefore, the second issue could fall to the ground on account of the act of the department itself in regard to the assessment and in regard to P a g e 16 | 19
ITA No.358/CTK/2023 S.P. No.12/CTK/2023 registration by the ld CIT(E). It is also admitted by ld CIT(E) that there are no common trustees nor any related trustee between the assessee trust and Aids Awareness Trust of Orissa. In any case, both the issue had been raised by the ld CIT(E) in its original show cause notice which had been culminated in the orders served on the assessee. A new issue which has been raised by the ld CIT(E) in the show cause notice dated 6.10.2022 is the details of the corpus donation. Admittedly, this was the subject matter of 263 proceedings and that the issue had been considered by the Hon’ble Jurisdictional High Court and the Hon’ble High Court had found the orders of ld CIT to be un-sustainable and also quashed the same. Thus, all the issues on which the ld CIT(E) has raised the show cause notice for the purpose of cancellation of registration u/s.12A have already been decided by the Appellate Authority and same has also reached finality. The ld CIT(E) by his order dated 20.6.2023 being the impugned order has tried to unsettle issues which are already settled in the case of the assessee. This is not permissible. This being so, as it is noticed that all the issues on the basis of which, ld CIT(E) has cancelled the registration u/s.12A granted to the assessee has already been settled by various appellate authorities on earlier occasion and the issue had reached finality, same cannot be used for cancelling the registration of the assessee. This being so, on merits also, the order passed u/s.12AB(4) by the ld CIT(E) on 20.6.2023 cancelling the registration granted to the assessee stands quashed.
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We are not going into the issue as to whether the registration can be cancelled retrospectively though we are of the view that retrospective cancellation w.e.f. 1.1.2014 is erroneous as we have already quashed the cancellation of registration.
It would also be worthwhile to mention here that the ld CIT(E) in para 8 of his order mentions that the ITAT had sustained the order of the ld CIT(E) in respect of 263 order but this order of the Tribunal sustaining the order u/s.263 by the ld CIT(E) has already been quashed by the Hon’ble Jurisdictional High Court in of 2022 order dated 4.8.2023, which is also extracted earlier. In these circumstances, the order cancelling the registration stands annulled on merits also.
In the result, appeal filed by the assessee stands allowed and the stay petition stands dismissed as withdrawn.
Order dictated and pronounced in the open court on 22/04/2024.