COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH vs. M/S CHANDIGARH GOLF CLUB, CHANDIGARH

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ITA/258/2016HC Punjab & HaryanaPHHC01110455201612 August 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT had correctly decided that the Commissioner of Income Tax had no jurisdiction to cancel the registration granted under Section 12A of the Income Tax Act, 1961, by its order dated 29.04.2002. The court found that on 29.04.2002, the Commissioner was not empowered to cancel such registration. The High Court affirmed the ITAT's reasoning that the amendment to Section 12AA(3) of the Act, empowering the Commissioner to cancel registration, came into force prospectively and could not be applied retrospectively to the assessment year in question. The court relied on its own previous judgments in Commissioner of Income Tax, Patiala Vs. Young Scholar’s Educational Society, Barnala, and Industrial Infrastructure Development Corporation (Gwalior) M.P. Limited. Consequently, the questions of law were answered in favour of the assessee. The appeal filed by the revenue was dismissed.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Chandigarh, in its order dated 02.11.2015, held that the Commissioner of Income Tax (CIT) erred in cancelling the registration granted to the respondent-assessee, M/s Chandigarh Golf Club, under Section 12AA(3) of the Income Tax Act, 1961. The revenue's appeal to the High Court challenged this ITAT order. The registration was initially granted on 19.12.2000. The revenue contended that the CIT exercised powers under Section 12AA(3), which came into force w.e.f. 01.06.2010, retrospectively. The High Court noted that the ITAT relied on previous judgments of the High Court, including the case of Commissioner of Income Tax, Patiala Vs. Young Scholar’s Educational Society, Barnala, and New Noble Educational Society v. Chief Commissioner of Income-Tax.

What were the issues?

1. Whether the ITAT erred in holding that the authority cancelling the registration under Section 12AA(3) of the Income Tax Act, 1961, had no jurisdiction and acted without authority in law, by applying the said powers retrospectively. Assessee's Contention: The assessee argued that the ITAT's decision was correct, relying on the High Court's judgment in Commissioner of Income Tax, Patiala Vs. Young Scholar’s Educational Society, Barnala, and New Noble Educational Society v. Chief Commissioner of Income-Tax, which held that the power to cancel registration under Section 12AA(3) was prospective and could not be applied retrospectively. The assessee also cited the case of Industrial Infrastructure Development Corporation (Gwalior) M.P. Limited, where it was held that the Commissioner was not empowered to cancel registration retrospectively. Revenue's Contention: The revenue contended that the ITAT had erred in holding that the authority lacked jurisdiction to cancel the registration granted under Section 12 of the Act by invoking Section 12AA(3). The revenue argued that the ITAT's conclusion was based on a misinterpretation of the law and the facts, and that the ITAT had wrongly relied on previous judgments.

Which sections of the Income-tax Act were involved?

Section 12AA(3),Section 12A,Section 12

AI-generated summary — verify with the full judgment below

214-3 IN TH

COMMISSIO

M/S CHAND CORAM: H

Present M

M M

* SANJEEV PR

1.

L submits that t (hereinafter re in an Appeal no jurisdictio Income Tax powers under 2. I Assessee und the Commiss 12AA(3) of t the said powe been done in ITA-21-2011 HE HIGH COURT OF PUNJA CHANDIGAR I D ONER OF INCOME TAX (EXE

V DIGARH GOLF CLUB, CHAND HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ Mr. Amanpreet (A.P.) Singh, Sen for the appellant/Income Tax Dep Mr. Shantanu Bansal, Advocate, Mr. Yugank Goyal, Advocatesfo *** RAKASH SHARMA, J. (Oral) Learned counsel for the appellan the Income Tax Appellate Tribu eferred to as the “ITAT”), vide i filed by the appellant, has erred on to cancel the registration gr Act, 1961 (hereinafter referred Section 12-AA(3) of the Act. In this case, the registration w der Section 12-A of the Act vid sioner of Income Tax, Chandig the Act, which came into force ers having been exercised retros view of the judgment dated 08 titled as The Commissioner of

AB AND HARYANA AT RH ITA-258-2016(O&M) Date of Decision:12.08.2024 EMPTIONS), CHANDIGARH

...…...Appellan V/s. DIGARH. ….....Respondent

NJEEV PRAKASH SHARMA NJAY VASHISTH nior Standing counsel partment. and or the respondent-Assessee. nt/revenue vehemently argued an unal, Division Bench, Chandigar its order dated 02.11.2015 passe d in holding that the authority ha ranted under Section 12 of th d to as “the Act”) by invokin was granted to the respondent de order dated 19.12.2000, whil garh, vide powers under Sectio w.e.f. 01.06.2010 and therefore spectively which could not hav .05.2024 passed by this Court i f Income Tax, Patiala Vs. Young nt d rh d as he g t- le n e, ve n g Suresh Kumar 2024.08.14 17:56 I attest to the accuracy and integrity of this document

ITA-258-2016

Scholar’s Ed by the appella on the judgm Chief Commi Pinegrove In (2010) 327 IT cancel the reg prospective an order is repro “1 1 w C ju a F r to a tr th 0 1 1 of In 6(O&M) Page 2 of 3

ducational Society, Barnala wh ant/revenue stands finally adjud ments passed in the case of New issioner of Income-Tax and an nternational Chairtable Trust TR (P&H) holding that the powe gistration granted under Section nd could not be applied retrospe duced as under:- 15.

XXXX XXXX 16. While answering questions o we find that essentially the ITAT ha CIT cancelling the registration o urisdiction and without authority amendment was made in Section Finance Act of 2010 empowering th registration granted under Section 1 o a conclusion that the activities of and not being carried out in acco rust or institution. The power was, he day when the CIT cancell 02.03.2010. 17. XXXX XXXX 18. Thus, we find that the facts w of the present case as in th Infrastructure Development Co hereby the similar issue as raise icated by this Court after relyin w Noble Educational Society v nother; (2022) 448 ITR 594 an vs Union of India and other ers available to the authorities t n 12AA(3) of the Act was onl ectively. The relevant extract th of law nos. 1, 3 and 4 (supra), as held the order passed by the on 02.03.2010 to be without in law. It has stated so as the n 12AA(3) of the Act by the he Commissioner to cancel the 12A of the Act where it reaches f the such trust are not genuine rdance with the objects of the , therefore, not available as on led the registration i.e. on were almost similar to the facts he aforesaid case Industrial orporation (Gwalior) M.P. d g vs d rs o y he Suresh Kumar 2024.08.14 17:56 I attest to the accuracy and integrity of this document

ITA-258-2016

L r o n q a T

3.

I Assessee her Accordingly, 4. A accordingly.

August 12, 20 Ess Kay

Whether Whether R 6(O&M) Page 3 of 3

Limited’s case (supra), the Com registration under Section 12A of t order dated 29.04.2002 and on 29.0 not empowered to cancel such reg questions of law no. 1, 3 and 4 a assessee on the basis of judgment Tax, Gwalior (supra).” In view of the above, we find th rein also could not have b the Appeal stands dismissed. All pending applications filed in

[SANJEEV

[SAN 024 speaking / reasoned

: Reportable

: mmission had cancelled the the Act dated 13.04.1991 by its 04.2002 the Commissioner was gistration. In view thereof, the are answered in favour of the t in Commissioner of Income- hat registration of the respondent been cancelled retrospectively n this case shall stand disposed o

V PRAKASH SHARMA] JUDGE NJAY VASHISTH] JUDGE

Yes / No Yes / No t- y. of Suresh Kumar 2024.08.14 17:56 I attest to the accuracy and integrity of this document

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