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Facts
The assessee, Jan Abhivyankti Samajik Vikas Sanstha, filed an appeal against the order of the Pr. Commissioner of Income Tax (PCIT) dated 25.09.2024, which cancelled its registration under Section 12A of the Income Tax Act, 1961. The assessee contended that the PCIT lacked the jurisdiction to pass such an order.
Held
The Tribunal held that the PCIT did not possess the legally valid jurisdiction to cancel the assessee's registration. The cancellation order was passed without jurisdiction and was therefore quashed.
Key Issues
Whether the PCIT had the valid jurisdiction to cancel the assessee's registration under Section 12A of the Income Tax Act, 1961, and whether the order was passed in accordance with law.
Sections Cited
12A, 12AB, 133A, 127
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘C’: NEW DELHI
Before: SHRI ANUBHAV SHARMA&
ORDER
PER AMITABH SHUKLA, AM,
The captioned appeal has been preferred by the assessee against order dated 25.09.2024 of the ld. Pr. Commissioner of Income Tax, Central-2, New Delhi [hereinafter referred to as ‘ld. PCIT’] passed u/s 12A of the Income Tax Act, 1961 pertaining to Assessment Year 2024-25. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The assessee is assailing the action of ld. PCIT in rejecting its registration under section 12A by way of grounds of appeal including additional grounds of appeal. Through the additional grounds of appeal, the assessee has contested the very jurisdiction of ld. PCIT in rejecting its registration under section 12A.
3. The brief factual matrix of the case is that the assessee is a society registered on 13.11.2009. Registration under section 12A of the Act was granted on 28.05.2019 and which was subsequently renewed on 30.05.2022. The object of the trust includes ‘Preservation of Environment (including water sheds, forest and wild life). As per para-5 on page-6 of the impugned order of ld. PCIT, Central-2, Delhi, dated 25.09.2024, a survey under section 133A of the Act was conducted on 07.09.2022 in the case of Centre for Policy Research by the Investigation Wing of the Department. Information qua deficiencies, short comings, irregularities noted were shared with DCIT, Central Circle-14, Delhi which was subsequently shared with the ld. PCIT, Central-2, Delhi. It was chiefly noted that the appellant trust was not carrying on its activities as per objects of the Trust or the same were ingenuine. After confronting the assessee, the ld. PCIT in para-16 on page-45 of his order concluded as under:-
“….16.1. To summarize various findings based on satisfaction drawn and mentioned in the paras above and for ease of understanding the decisions taken qua cancellation of registration either u/s 12A/12AA or 12AB, the para wise decision are again mentioned below: I. As discussed in various places in Para No. 12.1 to 12.5 and 14.1 to 14.7 above in the form of findings, it is held that JASVS is involved in 'Hasdeo Andolan' and is being supervised by CPR employees in this regard. Since these activities are not as per the Page 2 of objects of JASVS, it is held that expenditure in respect of the above activities are in violation of the objects of JASVS. Therefore, registration u/s 12A/12AA of Income Tax Act from AY 2018-19 onwards and u/s 12AB of Income Tax Act for AY 2022-23 onwards is cancelled. II. As discussed in various places in Para No. 12.5, since the assessee trust has been receiving substantial payments from CPR since F.Y. 2015-16 and the same are not being spent as per objects of the trust, registration u/s 12A/12AA of Income Tax Act from FY 2015-16 onwards and u/s 12AB of Income Tax Act for FY 2021-22 onwards is cancelled. III. As discussed in finding in Para No. 14.1 it is held that these receipts by employees of JASVS are not declared in the financials of the Assessee trust. Therefore, registration u/s 12AB of I.T. Act is cancelled for A. Y.s 22-23 & 23-24 onwards. IV. As discussed in finding in Para No. 14.2 above it is held that these receipts by employees of JASVS are not declared in the financials of the Assessee trust. These expenditures pertain to AY 2019-20, hence on this account, the registration of JASVS u/s 12A r.w. 12AA is cancelled for A. Y 2019-20 onwards. V. As discussed in finding in Para No. 14.3 & 14.4 above, it is observed that whatever benefits Mr Aalok Shukla and Ms Bipasha Paul, drew from CPR was in the capacity of representative of JASVS and these payments were nothing but contribution to JASVS since CPR was making these expenses on behalf of JASVS only. It is held that these receipts has not as per objects of the Assessee Trust. Accordingly, on this account the registration u/s 12A r.w.s 12AA is cancelled for AY 2020-21, i.e, A.Y 2020-21 VI. As discussed in finding in Para No. 14.5 above, it is held that payment made by CPR to Ram R Da Hotel and Resorts Pvt. Ltd is not as per the objects of the trust, since Ms Bipasha Paul and Shri Ramlal were there in capacity of representative of JASVS. Therefore, expenditure borne for these individuals by CPR amounts to expenditure borne by CPR on behalf of JASVS which should have been declared in the financials of JASVS. These payments pertain to FY 2019-20. Hence on this account, the registration of JASVS u/s 12A r.w.s 12AA is cancelled for AY 2020-21 onwards.”
The appellant assessee is contesting the impugned action of ld. PCIT, Central-2, Delhi. Page 3 of At the outset, we have noted that the assessee has raised legal grounds through additional grounds challenging jurisdictional sufficiency and validity of the rejection of registration granted under section 12A to the assessee. Thus, the authority exercised by ld. PCIT qua the assessee becomes the foundation for passing of the rejection order which assumes the character of super structure. The Latin legal maxim Sublato fundamento cadit opus that corresponds to hypothesis that a superstructure does not survive on weak foundation is essential part of jurisprudence. This maxim literally translates to, "If the foundation is removed, the superstructure falls". It is a well-established principle in law, especially in cases where the initial action or underlying basis of a legal right is found to be invalid, causing all subsequent actions dependent on it to fail. Another related maxim with a similar meaning is Debile fundamentum fallit opus, which translates to "Where there is a weak foundation, the work fails". As the additional ground of appeal is a legal ground raising the presumption of lack of jurisdiction with the Ld.PCIT to pass the impugned order dated 25.09.2024, we would like to take the same first. It is trite law that a superstructure does not survive on weak foundation.
The ld. CIT-DR, Shri Mukesh Kumar Jha, vehemently argued in favour of the action of ld. PCIT, Central-2, Delhi. It was argued that there is no infirmity in the action of ld. PCIT. The ld. CIT-DR also placed on record following written submissions of the Revenue for consideration. Page 4 of With regards to isues of Cancellation of registration under Section 12AB(4) of the Income-tax Act, 1961 I. Preliminary Submissions 1. The present appeal arises from the order passed by the Ld. PCIT (Central-2), New Delhi under Section 12AB(4) of the Income Tax Act, 1961, cancelling the registration earlier granted to the assessee under Section 12AA/12AB of the Act.
The Revenue most respectfully submits that the impugned order has been passed within the jurisdiction and competence of the Ld. PCIT and in strict conformity with the provisions of the Act. The contentions of the assessee are misconceived, untenable, and liable to be rejected. II. Jurisdiction of the Ld. PCIT under Section 12AB(4) 1. Section 12AB(4) of the Act empowers "the Principal Commissioner or Commissioner" to cancel registration where specified violations are noticed. The statute does not restrict this power exclusively to the Commissioner (Exemptions). The use of the general expression indicates that any Principal Commissioner or Commissioner having administrative control over the assessee's case is competent to exercise such power.
It is a settled principle of interpretation that when the legislature employs a general expression without qualification, the Courts must give it its plain and natural meaning. Hence, the jurisdiction exercised by the Ld. PCIT (Central-2) falls squarely within the statutory framework. III. Effect of Transfer and Centralization under Section 127 1. The assessee's case was validly transferred and centralized under Section 127(2)(a) of the Act from the to the Central Circle under the charge of the Ld. PCIT (Central-2), New Delhi.
By virtue of the Explanation to Section 127, the term case" includes any proceeding under the Act for assessment or determination of liability.
Since registration under Section 12AB directly impacts the assessee's tax liability, the jurisdiction to examine and cancel such registration forms an inseparable component of the transferred case. Accordingly, the Ld. PCIT, having administrative control over the transferee Assessing Officer, was fully competent to pass the order under Section 12AB(4).
The Hon'ble ITAT, Delhi, has already adjudicated this precise jurisdictional issue in Legal Initiative for Forest & Environment (LIFE Trust) (SA No.129/DEL/2024 arising out of order dated 09.08.2024).
The Tribunal categorically held that:
Page 5 of Once a case stands centralized and transferred under Section 127, the transferee Principal Commissioner of Income Tax (Central) acquires complete jurisdiction over all proceedings pertaining to that assessee, including the power to cancel registration under Sections 12A/12AB. The CIT (Exemptions) does not retain concurrent jurisdiction once such transfer is effected. By virtue of Notification No. 70/2014 dated 13.11.2014, read with Section 120(4)(b) and the Explanation to Section 127, PCIT (Central) is legally empowered to exercise all powers and functions stipulated in the Act in respect of such centralized cases.
The Hon'ble ITAT further clarified (Paras 9.7 to 10 of the said order) that the PCIT (Central) has jurisdiction to cancel registration even with retrospective effect, where the facts reveal that the assessee's activities were not genuine or not carried out in accordance with its objects. This finding directly affirms the principle that centralization transfers complete jurisdiction, not merely assessment jurisdiction. IV. Information from AO highlighting specific violations constitutes valid information.
The Ld. PCIT acted upon credible material furnished by the Assessing Officer vide communication dated 18.12.2023, highlighting specified violations by the assessee.
Such information emanating from the regular assessment process is a valid trigger for action under Section 12AB(5). Therefore, initiation of proceedings by the Ld. PCIT on such material is legally sound. V. Centralization of Complex and Inter-connected Cases 1. It is further submitted that the assessee's case was centralized by the competent authority for coordinated investigation and assessment of complex financial transactions involving multiple entities and assessment years.
Such centralization was duly approved under Section 127 with the objective of unified scrutiny, interlinked fact-verification, and prevention of revenue leakage.
Once the case was centralized and placed under the jurisdiction of the DCIT Central Cirele-14, New delhi, the administrative control and consequential powers - including those under Section 12AB(4) stood vested in the Ld. PCIT (Central-2) New Delhi, as the supervisory authority of the Central Charge.
It is a settled proposition that when cases are centralized for coordinated assessment, the transferee authority assumes comprehensive jurisdiction over all proceedings concerning the assessee, including registration and exemption matters, to avoid fragmented adjudication.
Page 6 of Thus, the action of the Ld. PCIT, was in furtherance of the very purpose of centralization. VI. Interpretation Should Promote Administrative Efficiency 1. The construction advanced by the assessee would lead to multiplicity of proceedings and administrative inetliciency, requiring all proposals for cancellation to be remitted to the original CIT (Exemptions), even after transfer of the case.
Such an interpretation is contrary to the purpose of Section 127, which seeks to ensure effective coordination and unified control of tax proceedings.
Accordingly, the Revenue's construction harmonizes Sections 12AB, 120, and 127 to avoid absurd and impractical consequences. In view of the above, it is humbly prayed that the Hon'ble Tribunal may be pleased to: 1. Uphold the order passed by the Ld. PCIT under Section 12AB(4) of the Act; and 2. Dismiss the appeal filed by the assessee as devoid of merit.”
The ld. Counsel for the assessee fiercely argued against the rejection of its registration by the Ld. PCIT, Central-2, Delhi, on legal grounds. It was contended that CBDT notification no.SO2754(E), F. No.187/38/2014(ITA1) dated 22.10.2014 clearly defines the Pan India jurisdiction of Commissioner of Income Tax (Exemption) and that in accordance thereof the rightful legal jurisdiction over the assessee vests with CIT(E), Bhopal. It was contended that the consequent exercise of jurisdiction by the ld. PCIT, Central-2, Delhi, was patently illegal. In support of its contentions, the ld. Counsel placed reliance upon a catena of decisions, inter alia, including the decisions of Hon’ble, Chandigarh Bench in the case of Dera Sacha Sauda dated 25.04.2025, of Hon’ble Delhi Bench in the case of Agarwal Vidya Pracharni Sabha in dated
Page 7 of and in the case of Sushila Devi Centre for Professional Study and Research in dated 17.10.2025. It was accordingly requested that the impugned order of rejection of registration be set-aside and quashed.
We have considered the rival submissions in the light of material placed on record. The only issue that deserves to be decided in the present appeal is as to whether the ld. PCIT, Central-2, Delhi, had a valid jurisdiction over the assessee while he passed his order dated 25.09.2024 or not ??. We have noted that Hon’ble, Chandigarh Bench in the case of Dera Sacha Sauda dated 25.04.2025 has observed as under:-
“9.1 Thus, this judgement has not adjudicated the issue as canvassed by the ld. CIT DR. We find that all the Benches of the ITAT across the country are unanimous in its approach that registration granted to an assessee under Section 12AA could only be cancelled by CIT (Exemptions) and not by PCIT. The ITAT, Cuttack as well as Bangalore has conclusively held that Section 12AB sub-section (4) brought on the Statue Book w.e.f. 01.04.2022 cannot be applied with retrospective effect. It is prospective in nature.
Respectfully following the judgement of the Co-ordinate Benches on these two propositions, we are of the view that impugned order passed by the PCIT is not sustainable on both the folds of grievances. Hence, we quash the impugned order. We do not deem it necessary to adjudicate any other issue on merit. Accordingly, we allow the appeal of the assessee.”
Similarly, Hon’ble Delhi Bench in the case of Agarwal Vidya Pracharni Sabha in dated 08.01.2024 has observed that Page 8 of the light of the aforesaid discussion and the law cited before us, we are of the considered view that the impugned order has been passed by Ld. PCIT, Gurgaon, without jurisdiction in context to territorial powers and subject matter as well not in accordance with law and same is liable to be quashed. Accordingly, the additional ground raised
by the assessee is allowed. Since the relief is granted to assessee by allowing additional ground itself, the adjudication of other grounds raised by the assessee become academic in nature and are left open. Resultantly, the appeal of the assessee is allowed and the impugned order is quashed.”
10. We have also noted that a Co-ordinate Bench of Dehradun Tribunal has extensively dealt the matter in the case of Sushila Devi Centre for Professional Study and Research in dated 17.10.2025 and observed as under.
“…..7. Heard both the parties and perused the materials available on record. The sole issue in the grounds of appeal
No.1 to 7 of the assessee are with respect to the cancellation of the registration by the PCIT, Central, Kanpur without having jurisdiction and further the cancellation was made with retrospective effect. Before going further, we first examine the jurisdiction of an Officer as provided u/s 120 of the Act. As per section 120 sub-section (1) and (2) the Board may authorize any Income Tax authority to issue orders in writing for the exercise the powers and performance of the functions by all or any of the Income Tax Authorities who are subordinate to it. In the instant case, the Ld. PCIT by virtue of such power vested upon him u/s 127 of the Act, has transferred the jurisdiction over the assessee from the AO, Exemption Circle, Ghaziabad to DCIT/ACIT, Central Circle, Dehradun.
8. The CBDT in terms of the power given u/s 120(3) sub-section (1) and (2) in terms of the notification dated 22nd October, 2014 has notified the Commissioner of Income Tax to exercise the powers and perform all the functions in respect of cases or classes of cases falling in the territorial areas specified in the said notification. As per the aforesaid Notification at Serial No.11, the CIT(E), Headquarter at Lucknow has jurisdiction of the territorial area of State of UP and Uttarakhand over the cases or classes of cases comprising of all the cases of the persons in the territorial area claiming exemption in Clause (21), (22), (22A), 22B), (23), 23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46) and (47) of section 10, section 11, section 12, section 13A and section 13B of the Act and assessed or assessable by an Income-tax Authority at serial numbers 131 to 140 specified in the notification of Government of India bearing number S.O. 2752 dated 22nd October, 2014, the relevant notification is placed in paper book pages142 to 145. The Board in terms of another Page 9 of Notification dated 22.10.2024 has notified the Chief Commissioner of Income Tax (Exemption), Delhi vested the powers u/s 120(1) & 120(2) over the cases vested with all the CIT(E) whose jurisdiction was notified vide Notification dt. 22.10.20214 at S.O. 2754(E).
9. Thus, the jurisdiction over the assessee for granting the registration u/s 12A of the Act cannot be transferred by the CIT(E), Lucknow u/s 127(2) of the Act which can only be transferred by the CBDT in terms of the power confined under sub-section (1) & (2) section 120 of the Act and the jurisdiction over the assessee cannot be assumed by the PCIT, Central, Kanpur to decide the application for registration u/s 12A filed by the assessee, though the jurisdiction to assess the assessee was transferred from the Circle, Exemption Ghaziabad to AC/DC, Central Circle, Dehradun. The jurisdiction transferred to the Central Circle- Dehradun was to complete the assessments due as a result of search carried for better and proper co-ordination of the cases which does not mean that the jurisdiction of the CIT(E) at Lucknow was transferred to PCIT, Central, Kanpur.
10. The identical issue came up before the Co-ordinate Bench of the Tribunal in the case of Aggarwal Vidya Pracharni Sabha Vs. PCIT, Central Gurgaon wherein vide order dated 08.01.2024 the Co-ordinate Bench has held as under: “14. Having considered the aforesaid, it comes up that the order of transfer u/s 127 dated 26.10.2020 is shown to be passed under sub-clause (a) to sub-section (2) of section 127 of the Act which gave powers to CIT(E) Chandigarh to pass order of transfer qua such ‘Assessing Officers’ who are subordinate to other the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Thus when we consider the definition of “Assessing officer” u/s 2(7A) of the Act, certainly PCIT, Gurgaon, who has passed the impugned order is not an ‘assessing officer’, and order passed dated 26.10.2020, under sub-clause (a) to sub-section (2) of section 127 of the Act only referred to transfer of jurisdiction of ‘assessing officer’ subordinate to CIT(E) Chandigarh to DCIT, Central Circle-2, Faridabad DLC-CC-136-4 as assessing officer and not original jurisdiction of CIT(E) Chandigarh with regard to the subject matter as stands vested by order of CBDT dated 22/10/2014. 14.1 Further, what is material is that by the Notification dated 22.10.2014 the Board, exercising powers under sub-section (1) and sub-section (2) of section 120 vested powers to perform all the functions in respect of class of cases referred in the column No.5 of the Schedule of this Notification and had created a specific jurisdiction on territorial basis in regard to the provisions generally dealing with claim of exemptions u/ss. 10,11,12, 13A and section 13B of the Act. 14.2 Thus as we refer to the Notification dated 22.10.2014, the clause (a) vested powers with Commissioners of Income-tax Page 10 of for class or class of cases pertaining to section 10, section 11, section 12, section 13A and section 13B of the Act and clause (b), to issue orders in writing for the exercise of ‘their’ powers and perform all ‘their’ functions by Additional Commissioners of Income-tax or Joint Commissioners of Income- tax and Tax Recovery Officers who are subordinate to them and that signifies that again this delegation of powers by CIT(E), Chandigarh could have been qua officers subordinate to CIT(E), Chandigarh only and not, in any way, gave powers to CIT(E), Chandigarh to pass an order u/s 127(2)(b) of the Act to transfer powers vested by Board to any other Tax Authority. 14.3 Next, as we refer to Section 12 AB and Rule 17A which have come into effect from 01.04.2021, and read it with the Circular no. 11 dated 3rd june 2022, it comes up that section 12AB(2) of the Act provides that the pending applications under clause (b) of sub-section (1) of section 12AA before the date on which section 12AB came into force shall be deemed to be applications made under sub-clause (4) of clause (ac) of sub-section (1) of section 12A on that date for grant of registration. 14.4 However, as far as provision of cancellation of the registration provided by subsection (4) of section 12AA is concerned, sub-section (4) of section 12AB brings into place a completely new self-contained procedural code for conducting inquiry about ‘specified violations’, cancelling registration or refusing to cancel registration. 14.5 The Rule 17A, as clarified by Circular dated 3rd June 2022 provides that in addition to the ‘specified violations’, the power of cancellation has also been granted under sub-rule (5) of rule 17A and sub-rule (5) of rule 2C of the Income-tax Rules, 1962 to the Principal Commissioner or Commissioner authorised by the Board. The authorisation u/s 12AB or Rule 17A if have to be construed, by virtue of Board’s Notification dated 22.10.2014, then we pointed out during the hearing, to ld. DR that this Notification dated 22.10.2014 does not mention specifically that the powers which can be exercised by ld. PCIT u/s 12AB(4) of the Act and which have come into effect from 01.04.2021 would also be exercised by virtue of this Notification dated 22.10.2014 or that further jurisdiction u/s 12AB of the Act could be transferred to other authorities as per this Notification. The query was left unsatisfied and no other Notification or Circular was brought to our notice.
15. Thus, at one end, in the absence of any specific reference of section 12AB in the Notification dated 22.10.2014 or there being subsequent authorisation by any Circular or Notification of the Board, we conclude that at the time of passing the order u/s 127 of the Act on 26.10.2020, CIT(E), Chandigarh did not have powers to as such transfer his jurisdiction u/s 127(2)(a) of the Act, for the purpose of Section 12AB has come into effect from Page 11 of Accordingly, under no circumstance while passing order u/s 127 of the Act on 26.10.2020, CIT(E), Chandigarh could have transferred his powers u/s 12AB of the Act to any other authority. 15.1 On the other hand, ld. PCIT, Gurgaon by virtue of the Explanation defining the scope of ‘case’ for the purpose of section 127, did not have power vested in him to cancel registration u/s 12AB(4). The ‘case’ refers to assessment initiated as consequence of search or consequential proceedings to such assessments only and cannot be extended to special powers of ld. CIT(E), Chandigarh. Thus, the assumption of jurisdiction on the basis of the order dated 26.10.2020 of CIT(E), Chandigarh is completely illegal and that makes the whole exercise of ld. PCIT passing the impugned order liable to be quashed.
Furthermore, if examine the legality of the procedure followed by ld.PCIT, Gurgaon to pass order u/s 12AB(4), by recourse to exercise of powers by virtue of clause (a) of sub- section (4) of section 12AB, it comes up that ld.PCIT, Gurgaon admits that a ‘proposal’ for cancellation of the registration of the assessee trust granted u/s 12AA of the Act was forwarded vide letter dated 23.08.2022 by the AO through the Range head. In this context, if we refer to second proviso to sub-section (3) of section 143 of the Act, the same provides that if the AO is satisfied about any specified violation provided in sub-section (4) of section 12AB, the AO shall send a ‘reference’ to the PCIT or Commissioner to withdraw the approval or registration, as the case may be, and clause (b) to this proviso provides that no order making an assessment of total income or loss of such institution or trust shall be made without giving effect to the order passed by PCIT or Commissioner. In the case in hand, the ld. PCIT, Gurgaon has reproduced the part of letter dated 23.08.2022 which has observed about a ‘proposal’ of cancellation of registration u/s 12AB(4) and based upon the same, the ld. PCIT had initiated action. The assessment by said assessing officer was completed in September, 2021, so, before the letter dated 23.08.2022 the assessment proceedings stood culminated. Thus, there was no occasion for concerned AO to invoke ‘reference’ powers under second proviso to sub-section (3) of section 143 of the Act. To that extent Ld. PCIT observations are correct. 16.1 However, what is relevant here is that in any case the ‘reference’ by jurisdictional AO was to be made not to the PCIT or Commissioner, to whom this AO was subordinate but one authorised by board for the purpose of Section 12AB. The one who could grant or cancel the registration as per amended provisions which is not PCIT, Gurgaon, but, would be CIT(E), Chandigarh. Thus assumption of jurisdiction for cancellation of registration u/s 12AB(4) of the Act by virtue of aforesaid transfer of jurisdiction order u/s 127 of the Act is not conceivable.
Page 12 of At the same as we observed above that the assessment by said assessing officer was completed in September, 2021, thus, there was no occasion for concerned AO to invoke ‘reference’ powers under second proviso to sub-section (3) of section 143 of the Act. It appears that when confronted with the situation that the second proviso of section 143(3) having come into effect from 01.04.2022 is not applicable to the assessment initiated consequent to search and seizure operations u/s 132 of the Act carried out on 19.02.2020, the ld. PCIT, Gurgaon improved his case by claiming that he had exercised his powers by virtue of clause (a) of sub-section (4) of section 12AB, which entitles a Principal Commissioner or Commissioner to take cognizance on the basis of a ‘specified violation’ coming into his notice during any previous year. At the cost of repetition, we observe that reference in section 12AB is not to PCIT or Commissioner to whom the said Assessing Officer would be subordinate, but, the CIT(E) who has been given special power for grant and cancellation of the registration as original jurisdiction. 17.1 Furthermore, here in this case, the exercise of power u/s 12AB(4) of the Act seems to also not have been done in accordance with law. As what comes up further is that, if at all, PCIT, Gurgaon was acting under clause (a) to Section 12AB(4), then, before issuing the notice dated 08.09.2022, itself the ld. PCIT, Gurgaon should have first formed his opinion that the assessee had committed one or more of a ‘specified violation'. However, as we go through the relevant part of the impugned order we find that the ld. PCIT has not mentioned as to which amongst the various specified violations mentioned in Explanation attached to sub-section (4) of section 12AB were attracted so as to show cause the assessee under sub-section (4) of section 12AB of the Act and ask for information by notice dated notice dated 08.09.2022. 17.2 Rather, in the opening paragraph at page 34 of the impugned order, the ld. PCIT mentions, “it was noticed that the assessee trust has committed one or more specified violation. Thereafter, information was called for from the assessee trust by this letter dated 08.09.2022.” We are of the view that when Ld. PCIT was assuming jurisdiction under clause (a) to Section 12AB(4), then while calling for the documents or information under clause (i) of sub-section (4) of Section 12AB, the assessee should be notified as to for which of the ‘specified violation’ the Ld. PCIT is calling for the information or documents. The same is not coming from the impugned order that before issue of notice on 08/09/2022, calling for the documents or information under clause (i) of sub-section (4) of Section 12AB, Ld. PCIT, Gurgaon had actually ‘noticed’ one or more of such ‘specified violation.’ 17.3 In this context further if the final show cause notice dated 14.03.2023 available at pages 7 to 37 of the paper book is considered, it
Page 13 of shows in para 4.10 a reference is made to what sort of information was called by letter dated 08.09.2022:- “4.10 In the light of above facts of the case, it appears that the assessee trust has made specified violation in terms of explanation to Section 12AB(4) of the Income Tax Act, 1961. As such, following information from the assessee trust was called for under Section 12AB of the Act vide this office letter dated 08.09.2022 to examine the activities of the Aggarwal Vidya Pracharni Sabha with a view to ascertain whether the same are covered under the clause of explanation to the provisions of Section 12AB(4) of the Act and other provisions of the Act. Details of information called for the relevant period i.e. AY 2014- 15 to 2020-21 is as under: Copy of registration u/s 12AA/12AB(1) of the Act. Coy of memorandum of association containing the objects for which the Aggarwal Vidya Pracharni Sabha was set up along with copy of registration with the relevant authorities. Details of capital expenditure and revenue expenditure incurred for various A.Ys. as mentioned above. Copies of Form 10 and Form 10B in respect of funds accumulated u/s 11(1)(a), 11(2) of the Act and year wise utilization of the same. Specify the activities of which the accumulated funds have been utilized. Copy of account of the Aggarwal Vidya Pracharni Sabha with M/s Tirupati Realbuild Pvt. Ltd. And M/s Radhey Krishna Infratech Pvt. Ltd. For the above AYs explaining the nature and purpose of transactions undertaken with the said entities including advance given for the purpose of construction along with supporting evidences in order to substantiate the genuineness of the same. Relationship of the Aggarwal Vidya Pracharni Sabha and its members with the directors of M/s Tirupati Realbuild Pvt. Ltd. And M/s Radhey Krishna Infratech Pvt. Ltd.” 17.4 Then in para 4.1.2 sub-clause (d), the ld. PCIT mentions of the earlier letter dated 08.09.2022 that: “d) Further, vide this office letter dated 08.09.2022, the assessee was requested to furnish details of capital and revenue expenditure incurred for various assessment years. In response, the assessee only submitted copy of Form 10B which is not supported with the details of capital expenditure and copy of accounts and documentary evidence. Further, no activity was specified for which accumulated funds were utilized.”
Thus it appears that by this notice dated 14.03.2023, only the assessee for the first time was asked to show cause about the ‘specified violation’ of the nature reproduced below:- Page 14 of 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;"
Thus, if it was the case of the PCIT (Central), Gurgaon that he was exercising the powers u/s 12AB(4)(a) on his own cognizance of the ‘specified violation’, then, at first instance as he was not competent authority u/s 12AB(1) to pass an order of registration of the Trust, then, he had no powers u/s 12AB(4) to call for to show cause an order of cancellation. In any case, the manner of exercise of jurisdiction without first making conclusive notice of the alleged ‘specified violation’ is not sustainable.
We have also taken into consideration the order of the Jaipur Bench of the in the case M/s Wholesale Cloth Merchant Association vs. Pr. CIT (Central), Jaipur in where this issue of jurisdiction u/s 127 of the Act has been considered and the findings support out aforesaid view on the facts before us. It will be appropriate to reproduce the relevant paras No.14 and 15:- “14. We found that the above facts and proceedings of power of transfer U/s 127 was only for a limited purpose of Co-Ordinate Assessment. Neither any search & Seizure action nor any notice u/s 153A or 153C of the Act or assessment u/s 153A or 153C of the Act in the case of assessee were initiated and there was only a survey u/s 133A of the Act in the case of assessee. The assessment has been completed u/s 148/143(3) of the act vide order dated 19.12.2018. As the assessment has been completed, the purpose of transfer u/s 127A has also been completed. Although No notices regarding the transfer of the cases u/s 127 have been sent to the assessee for the purpose of Co-ordinate assessment and the purpose of transfer was only Co-Ordinate Assessment as clearly mentioned in the transfer letter 19.08.2016. The assessment was completed u/s 148 r.w.s 143(3) 19.12.2018 and the proposal was sent to the Pr. CIT(C) which has been received on 31.12.2018 in the office of Pr. CIT(C) on 23.01.2019 after a lapse of more than one month.
Even otherwise, in the said notification, there is no mention where CIT(E) can transfer to other CIT or Pr.CIT. The said notification of CBDT has authorized the CIT(E) to issue order in writing for the exercise of the powers and functions by the Addl.CIT or JCT or TRO who are "subordinate" to them and has authorised the Addl.CIT to issue order in writing for the exercise of the powers by the Assessing Officer who are the subordinate to them. In section 124 of the Act, the jurisdiction of Assessing Officer has been given and not 'Jurisdiction of Commissioner'.” 20.1 The Jaipur Bench has dealt with this issue further in paras 18 to 21 as under:- “18. We also observe that as per Sec. 120(6) of the Act, the CBDT by its Notification No. 52/2014 and 53/2014 dated 22.10.2014 has given power to CIT(Exemption) Jaipur for the State of Rajasthan for all cases of persons in the territorial area specified Page 15 of in column (4) claiming exemption under clauses (21), (22), (22A), (22B), (23), (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46) and (47) of section 10, section 11, section 12, section 13A and section 13B of the Act and assessed or assessable by an Income-tax authority at serial numbers 131 to 140 specified in the notification of Government of India bearing number S.O.2752 dated the 22nd October, 2014. Thus firstly as per above notification and provisions of Sec. 120 and 127 the ld. CIT(Exmp.) cannot transfer or hand over or given his work or power or duties to the other same rank of CIT at all to cancel the Registration u/s 12AA. However, in case, if it is necessary to do so then there has to be proper proceedings in writing. As there has to be some order in writing from higher authorities i.e. from Chief Commissioner of Income Tax (Exmp.) Delhi or CBDT in writing and an opportunity of being heard is to be given to the assessee before transferring the case whereas all these are absent in the present case and nothing has been demonstrated by the department.
We further observe that Sec. 127 of the Act empower to transfer cases among Assessing Officers but not to Commissioners of Income Tax as CIT is not an Assessing Officer. In our view, to pass an order u/s 12A for registration or cancellation is not within the jurisdiction or power of an Assessing Officer. Hence registration u/s. 12A can be withdrawn only by the 'Prescribed Authority' who has been empowered to grant the same and by the Notification dated 22.10.2014 the ld.CIT(Exmp.) has empowered for the same, hence the Pr.CIT (Central) cannot cancelled the same.
In assessee's case, the case u/s 127 was transferred to the Central Circle for limited purpose of Co-Ordinate assessment admittedly which do not mean that the Section 12A proceeding has been transferred to the Pr.CIT(Central) Automatically, when both the proceedings are separately or independent and also has to be done or conducted by the different rank Authorities. More particularly when for the purpose of Exemption cases or 12A registration a Separate Commissioner of Income Tax has been Authorized for whole of Rajasthan by the CBDT by its Notification dated 22.10.2014. In support of the above contention, the ld AR has relied on the decision in the case of Dilip Tanaji Kashid vs. M.I. Karmakar PR. CIT& ANR. (2018) 304 CTR 0436 (Bom) wherein It has been held: “Transfer of jurisdiction--Power of competent officers-- Centralization of case--Dissenting note--Assessee was issued notice enshrining proposal for transfer of his case from Kolhapur to Mumbai, so as to centralise cases relating to D.Y. Patil Group- -Assessee objected that such notice did not referred to any agreement being reached by officers of equal rank at Mumbai and Kolhapur--These objections were however overruled and assessee's case was transferred--High Court quashed purported Page 16 of transfer u/s 127--Held, "Centralisation Committee" which took decision for transfer of jurisdiction, is not authority envisaged u/s 127(2)--Counter- affidavit filed on behalf of Revenue does not disclose that there was any agreement between authorities of equal rank,as a pre- condition for invoking powers u/s 127-- "Absence of dissenting note" from officer of equal rank who has to agree to proposed transfer would not constitute agreement, envisaged u/s 123(2)(a)--Assessee's petition allowed.”
It was also been brought to our notice that the AR had inspected the records of the case but there was no agreement between both the CIT's regarding initiation of proceedings U/s 12A of the Act. The entire communication on record is with regard to limited purpose of Co- Ordinate assessments only. Even the Instruction No. F.No.286/88/2008IT(Inv-II) dated 17.09.2008 has relied upon by the Revenue also relates to "search assessment" and was not with regard to proceedings U/s 12A or other proceedings. Even no agreement for initiation proceedings U/s 12AA of the Act has been found out on record. Even, the proposal for centralization was not sent within the statutory time of 30 days from the date of search as admittedly the search was conducted on 30.06.2016 and the proposal was sent on 19.08.2016 i.e. after 30 days of the search. In this respect, the ld AR has relied upon the decision in the case of Rentworks India (P) Ltd. vs. Pr.CIT & ANR.(2017) 100 CCH 0258 Mum HC wherein it has been held that: “ Income tax authorities--Power to transfer cases--Jurisdiction- - CIT, issued notice to assessee taking recourse to subsection 2 of Section 127--Assessee was put to notice that there was proposal to transfer case of assessee to DCIT, for proper co- ordinated investigation--Impugned order was made by Principal CIT under sub-section 2 of section 127 by which case of assessee was transferred to DCIT--Held, in Noorul Islam Educational Trust it was held that as Income-tax/assessment file of assessee had been transferred from one AO in Tamil Nadu to another AO in Kerala and two AO were not subordinate to same Director General or Chief Commissioner or Commissioner of Income Tax u/s 127(2)(a) agreement between Director General, Chief Commissioner or Commissioner, as case might be, of two jurisdictions was necessary-- Counter affidavit filed on behalf of Revenue did not disclose that there was any such agreement--In fact, it had been consistently and repeatedly stated in said counter affidavit that there was no disagreement between two Commissioners-- Existence of agreement between two jurisdictional Commissioners was condition precedent for passing order of transfer--Clause (b) of sub-section (2) of section 127 provides for consequences when there was no such agreement--When jurisdiction to pass order of transfer under clause (a) of sub-section (2) of Section 127 could be exercised only when there was such agreement, fact that such agreement exists ought to had been stated in show cause notice as same was Page 17 of jurisdictional fact--It was on basis of written document that finding was recorded that there was agreement between Jurisdictional Commissioners of Ranchi and Delhi--Even going by case made out by revenue, no such agreement was spelt out.
The Apex Court has categorically held that the absence of disagreement will not be tantamount to an agreement as visualized under section 127(2)(a) which contemplates positive state of mind of the two jurisdictional Principal Commissioners of Income Tax. The agreement contemplated by clause (a) of sub- section (2) of section 12 7 may not be a drawn up agreement. What is necessary is that there has to be an agreement which will involve positive state of mind of the two jurisdictional Principal Commissioners. Both of them must consent to the transfer after application of mind.
In the present case, it is not even the case made out in the show cause notice that the agreement as contemplated by the first part of clause (a) of sub-section (2) of section 127 exists. The existence of such agreement between two jurisdictional Commissioners is a condition precedent for passing the order of transfer.Except for the request which came from the investigation office, Chennai of transferring the case, 38 ITA 688/JP/2019_ M/s Wholesale Cloth Merchant Association Vs Pr.CIT there is no reference whatsoever to any such agreement. Clause (b) of sub- section (2) of section 127 provides for consequences when there is no such agreement. When the jurisdiction to pass an order of transfer under clause (a) of sub-section (2) of Section 127 can be exercised only when there is such an agreement, the fact that such an agreement exists ought to have been stated in the show cause notice as the same is a jurisdictional fact. Apart from the failure to mention the same in the show cause notice, the only stand of the revenue is that there is an agreement by implication. This stand is completely contrary to paragraph 5 of the decision of the Apex Court in the case of Noorul Islam Educational Trust (supra). The decision in the case of Ramswaroop (supra) will also bind this Court for the reasons stated above.
Coming to the decision in the case of Jharkhand Mukti Morcha, relevant facts are in paragraph 12. In the said case, specific reliance was placed on a document dated 2 7th November 2016. It is on the basis of the written document that a finding was recorded that there was an agreement between the Jurisdictional Commissioners of Ranchi and Delhi. In the present case, even going by the case made out by the respondent, no such agreement is spelt out. In absence of any such agreement, the first respondent had no jurisdiction to pass the order of transfer.
As the impugned order cannot be sustained on above ground, it is not necessary to into other challenges.
Accordingly, for the reasons quoted above, we pass following order: Page 18 of Impugned order dated 25th May 2 017 (Exhibit-H to the petition) is hereby quashed and set aside. Rule is made absolute on above terms with no order as to costs. The Hon'ble Supreme Court in the case of Ajantha Industries & Ors.vs. Central Board of Direct Taxes & Ors. (1976) 102 ITR 0281 has been held that: "The CBDT sent a notice to the appellants under s. 127 proposing to transfer their case files "for facility of investigation" from the respective ITO at Nellore to the ITO, B Ward, Special Circle II, Hyderabad. By this notice they were also asked to submit in writing if they had any objection to the proposed transfer within 15 days of receipt of the notice. The appellants made their representation objecting to the transfer and on 26th July, 1973, the Central Board passed the impugned order transferring the cases from Nellore to Hyderabad. The short question that arises for consideration is whether failure to record the reasons in the order which was communicated to the appellants is violative of the principles of natural justice for which the order should be held to be invalid. Held : The requirement of recording reasons under s. 127(1) is a mandatory direction under the law and non-communication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee. When law requires reasons to be recorded in a particular order affecting prejudicially the interests of any person, who can challenge the order in Court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated. Non- communication of the reasons in the order passed under s. 127(1) is a serious infirmity in the order for which the same is invalid.-- Kashiram Aggarwalla vs. Union of India (1965) 56 ITR 14 (SC) : TC69R.660 and S. Narayanappa vs. CIT (1972) 86 ITR 741 (All) : TC51R.651 distinguished; Sunanda Rani Jain vs. Union of India 1975 CTR (Del) 135 : (1975) 99 ITR 391 (Del) : TC69R.693 overruled; Judgment and order dt. 12th Sept., 1974, of the Andhra Pradesh High Court in Writ Appeal No. 626 of 1974 set aside.
The Hon'ble Supreme Court in the case of Noorul Islam Educational Trust vs. CIT AND Ors (2016) 388 ITR 0489 (SC) held that Special Leave Petition--Transfer of case--Validity--High Court of Madras, Madurai Bench, upheld order of C.I.T.1, Madurai, Tamil Nadu, transferring file of assessee from Tamil Nadu to Kerala-- Held, as Income-tax/assessment file of assessee has been transferred from one Assessing Officer in Tamil Nadu to Page 19 of another Assessing Officer in Kerala and two Assessing Officers are not subordinate to same Director General or Chief Commissioner or Commissioner of Income Tax, u/s 127(2) (a) an agreement between Director General, Chief Commissioner or Commissioner, as the case may be, of two jurisdictions is necessary-- Absence of disagreement cannot tantamount to agreement as visualized under Section 127(2) (a) which contemplates a positive state of mind of two jurisdictional Commissioners of Income Tax which is conspicuously absent-- Transfer of Income-tax/assessment file of assessee from Assessing Officer, Tamil Nadu to Assessing Officer, Kerala is not justified--High Court order set aside--Special appeal allowed. Although, the ld DR has relied upon the decision of Hon'ble Rajasthan High Court in the case of Lalit Hans Vs PCIT DP Special Appeal (Writ) 249/2015 but the facts of the above case are entirely different. Hence, the said judgment is of no help to the Revenue on the facts of the present case. Thus, keeping in view our above discussions, we are of the view that the ld. PCIT had no jurisdiction to pass order U/s 12AA(3) & 12AA(4) of the Act and the same is not sustainable in the eyes of law and accordingly stands quashed.”
In the light of the aforesaid discussion and the law cited before us, we are of the considered view that the impugned order has been passed by Ld. PCIT, Gurgaon, without jurisdiction in context to territorial powers and subject matter as well not in accordance with law and same is liable to be quashed. Accordingly, the additional ground raised
by the assessee is allowed. Since the relief is granted to assessee by allowing additional ground itself, the adjudication of other grounds raised by the assessee become academic in nature and are left open. Resultantly, the appeal of the assessee is allowed and the impugned order is quashed.”
11. Further under identical circumstances, the Co-ordinate Bench of ITAT, Jodhpur in the case of Pacific Academy of Higher Education and Research Society vs. PCIT, Central in and vide order dated 25.01.2023 by making the following observations has held that the PCIT(Central) has no power to cancel the registration granted by the ld. CIT(E). The relevant observations as contained in para 6.2 to 6.7 of the order are as under: “6.2 First of all, we would like to deal with legal objection raised by the assessee with regard to the jurisdiction of Pr. CIT(Central) in issuance of show cause notice and in passing of consequent order. In this respect, our attention was drawn towards Section 120(3) and CBDT Circular No. 52/2014 and 53/2014 both dated 22/10/2014. As per provisions of Section 120(3) of the Act, the criteria of Jurisdictions of Income Tax Authorities has been provided by the CBDT and as per provisions of Sec. 120(3) of the Page 20 of Act, there are four criteria for deciding the jurisdiction and the same are reproduced below: (3) In issuing the directions or orders referred to in sub- sections (1) and (2), the Board or other income-tax authority authorized by it may have regard to any one or more of the following criteria, namely: - (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases. Therefore, in furtherance of the said provisions, the CBDT vide notification Nos. 52/2014 and 53/2014 both dated 22/10/2014 had given powers to Id. CIT(Exemption) Jaipur for the State of Rajasthan for all cases of persons in the territorial area specified in column (4), claiming exemption under clauses (21), (22), (224), (228), (23), (23A), (23AAA), (238), (23C), (23F), (23FA), (24), (46) and (47) of section 10, section 11, section 12, section 13A and section 138 of the Act and assessed or assessable by an Income-tax authority at serial numbers 131 to 14 specified in the notification of Government of India bearing number S.O. 2752 dated the 22nd October, 2014. Thus, in this way from Oct, 2014 Ld. CIT (Exemption) has been constituted separately for these class or type of cases. Hence, the case of the assessee admittedly falls in the jurisdiction with the Id. CIT (Exemption). 6.3. We found from perusal of the record that a search and seizure operation has been carried out in the case of Pacific Group of Udaipur on 26.08.2015. Warrant of authorization under section 132(1) of the Act was also issued and duly executed in respect of the assessee trust being part of the Pacific Group. The Notification referred above does not provide that Id. CIT(E) can transfer his power or jurisdiction to other CIT or PCIT. In the said notification the CBDT has authorized the CIT (E) to issue order in writing for the exercise of powers and functions by the Addl. CIT or JCIT or TRO who are subordinate to him, and has authorized the Addl. CIT to issue order in writing for the exercise of powers by the Assessing Officer who are subordinate to him. In section 124 jurisdiction of Assessing Officer has been given, not the jurisdiction of Commissioner. Further, in section 127 power of transfer of cases has been given from one Assessing Officer to other Assessing Officer and not from CIT to CIT. Therefore, registration under section 12A or approval under section 10(23C)(vi) can be withdrawn only by the prescribed authority who is empowered to grant the same. Notification No. 52/2014 and 53/2014 dated 22.10.2014 only empower the CIT (E) to withdraw the registration/approval. The Pr. CIT has not been given power to withdraw/cancel the registration/approval. Page 21 of Further, in the said notification, there is no mention where CIT(E) can transfer to other CIT or Pr. CIT. The said notification of CBDT has authorized the CIT(E) to issue order in writing for the exercise of the powers and functions by the Addl. CIT or JCT or TRO who are "subordinate" to them and has authorized the Addl. CIT to issue order in writing for the exercise of the powers by the Assessing Officer who are the subordinate to them. In section 124 of the Act, the jurisdiction of Assessing Officer has been given and not Jurisdiction of Commissioner'. 6.5 Further in Sec. 127 of the Act, the power of transfer of cases is given from one Assessing Officer to another Assessing officer not from CIT to CIT. For ready reference, we reproduce Sec. 127 of the Act, which provides as under: 127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,- (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in Chief Commissioner or Chief Commissioner or Principal Commissioner o agreement, then the Principal Director General or Director General or Principal Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order, (b) where the Principal Directors General or Directors General or Principal Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorize in this behalf. Page 22 of Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub- section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation. In section 120 and this section, the word "case", in relation to any person whose name is specified in any order or direction issued there under, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 6 .6 Sec. 120 (4) to 120(6) also provide the work assigned to the subordinate officers which is reproduced below: (4) Without prejudice to the provisions of sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein, (a) authorize any Principal Director General or Director General or Principal Director or Director to perform such functions of any other income-tax authority as may be assigned to him by the Board; (b) empower the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director, and, where any order is made under this clause, references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply. Page 23 of The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed concurrently by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply. (6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification. We also observe that as per Sec. 120(6) of the Act, the CBDT by its Notification No. 52/2014 and 53/2014 dated 22.10.2014 has given power to CIT(Exemption) Jaipur for the State of Rajasthan for all cases of persons in the territorial area specified in column (4) claiming exemption under clauses (21), (22), (224), (228), (23), (23A), (23AAA), (23B), (23C), (23F), (23FA), (24), (46) and (47) of section 10, section 11, section 12, section 13A and section 13B of the Act and assessed or assessable by an Income-tax authority at serial numbers 131 to 140 specified in the notification of Government of India bearing number S.O. 2752 dated the 22nd October, 2014. Thus firstly as per above notification and provisions of Sec. 120 and 127 the Id. CIT(Exmp.) cannot transfer or hand over or given his work or power or duties to the other same rank of CIT at all to cancel the Registration u/s 12AA. However, in case, if it is necessary to do so then there has to be proper proceedings in writing. As there has to be some order in writing from higher authorities i.e. from Chief Commissioner of Income Tax (Exmp.) Delhi or CBDT in writing and an opportunity of being heard is to be given to the assessee before transferring the case whereas all these are absent in the present case and nothing has been demonstrated by the department. 6.7 We further observe that Sec. 127 of the Act empower to transfer cases among Assessing Officers but not to Commissioners of Income Tax as CIT is not an Assessing Officer. In our view, to pass an order u/s 12A for registration or cancellation is not within the jurisdiction or power of an Assessing Officer. Hence registration u/s. 12A can be withdrawn only by Page 24 of the 'Prescribed Authority' who has been empowered to grant the same and by the Notification dated 22.10.2014 the Ld. CIT(Exmp.) has empowered for the same, hence the Pr. CIT (Central) cannot cancel the same.”
As the facts of the aforesaid cases of the Co-ordinate Benches in the case of Aggarwal Vidya Pracharni Sabha v. PCIT and Pacific Academy of Higher Education and Research Society vs. PCIT(supra) are identical to the facts of the present case of the assessee, thus, by respectfully following the same and further looking to the facts that in the instant case, as CBDT Notification dated 22.10.2014 CIT(E) is the prescribed authority to grant/cancel the registration u/s 12A of the Act and, therefore, the Ld. PCIT, Central, Kanpur has no jurisdiction to cancel the same. Therefore, the said order of PCIT cancel the registration is hereby quashed.
Since, we have already quashed the order of PCIT, other grounds of appeal
relate to merits of the appeal require no adjudication. Grounds of appeal No. 4 to 7 are allowed.
14. In the result, the appeal of the assessee is allowed.”
11. We have noted that the facts of the present case are identical to those in the judicial pronouncements discussed hereinabove and no distinguishment was indicated by the Revenue. We are in agreement with the findings given in the impugned judgments to conclude that in view of the specific notification issued by the CBDT dated 22.10.2014 and no orders for any transfer coming out from CBDT, the ld. PCIT, Central-2, New Delhi did not possessed any legally valid jurisdiction over the appellant assessee to have cancelled the registration vide its order dated 25.09.2024. Accordingly, respectfully following the impugned decisions and for the principle of consistency, we are of the considered view that the ld. PCIT, Central-2, New Delhi did not had any jurisdiction to cancel the registration of the assessee. Therefore, the impugned order of the ld. PCIT is hereby quashed. The additional ground of the appeal is allowed.
Page 25 of Since, we have already quashed the order of the ld. PCIT, other grounds of appeal relating to merits of the appeal have become academic in nature requiring no adjudication.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 21st January, 2026.
Sd/- Sd/- [ANUBHAV SHARMA] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:. 21.01.2026 Shekhar Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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