INDEPENDENT AND PUBLIC SPIRITED MEDIA FOUNDATION ,BENGALURU vs. PRINCIPAL COMMISSIONER OF INCOME-TAX, (CENTRAL), BENGALURU

Brief facts of the case shows that assessee is a trust incorporated on 1 July 2015 with following objects: - i. to provide scholarships, fellowships and awards for writers, authors and journalists involved in public interest or any other form of journalism that spreads information and awareness and benefits Indian citizens and India is a country. ii. to provide financial and other assistance to organisations and individuals creating and distributing public interest information to the public at large using digital media, social media, mass media or any other media thereby bringing about proper awareness and improving public understanding of issues Page 5 of 102 iii. to promote excellence in education in the field of journalism by providing financial and other assistance to journalism schools and other educational institutes in the country iv. to create public interest content, achieve wider distribution and consumption of public interest content, provide services to support content creation and distribution, create an umbrella brand that will provide a sense of common identity to the beneficiaries of the trust while allowing order preserving their respective identity and independence. v. to undertake actions and initiatives (including but not limited to providing financial assistance by way of grants all through other means) to create an ecosystem that sets trends, fosters, and accelerates excellence in public interest journalism and thereby improve public understanding of issues. vi. to seed/support: – (A) digital media that has an identity for addressing public interest issues, (B) digital media ventures that spotlight public interest issues. vii. to catalyse: – (a) the wider distribution of public interest content, particularly through the mainstream media, (B) the curation of public interest content and its wider distribution digitally. viii. to grow in India as editorial leadership on public interest issues by supporting the work of journalists in the digital or mainstream media, through scholarships, fellowships, awards, direct support, or any other support that the trustees may deem fit from time to time. ix. to organise functions that allow journalists to work to the best capacities, spatially addressing (a) legal, (B) training, (C) research and (B) technology requirements or any other functions that the trustees may deem fit from time to time. x. to undertake any other initiatives or activities of any charitable nature that the trustees in fact, xi. to accept donations, whether in cash or in-kind, with or without specific directions from the donor on the manner in which the said funds or income therefrom is to be utilised for specified/1 specified the charitable purposes.

Thus, based on the above objects the assessee trust has been registered under section 12 A of the Income Tax Act by the CIT (Exemption), Bangalore's as per certificate dated 8th of January 2016 with effect from assessment year 2016 – 17. This certificate of registration was subject to certain conditions that if the activities of the trust or institutions are found to be non-genuine or are not being carried out in accordance with the objects of the trust, its registration granted can become liable for revocation.

A survey under section 133 (A) of the Act was conducted at the office of the assessee on 7 September 2022 by The Deputy Director of Income Tax (Investigation), Delhi based on authorisation issued by The Principal Director of Income Tax (Investigation) – 1, Delhi.

Thus, the learned CIT noted that the activities carried out by the trust is in contrast to the stated objectives. He noted that the activities of the trust had been run in violation of the stated objectives for which it was incorporated. In the notice he tabulated what are the stated objectives of the trust and how they contrast with the activities carried on by the trust. Based on these findings during survey, the learned CIT referred to the provisions of the Act and issued notice for cancellation of the registration already granted to the assessee.

In response to the show cause notice, assessee asked for the material impounded during the survey which was provided to the assessee and further the assessee along with its representative and chief executive officer, senior program manager finance was intimated the information available. In paragraphs No. 1.6 of the order the learned CIT noted that during hearing, the assessee was made aware of the complete details of the evidence available on record which was relied upon for issuing show cause notice and the copies of which had already been made available to it. This included the addendum to the Page 9 of 102 agreement with the Delhi Press Patra Prakashan Private Limited, chat of Shri Sunil Raj Shekhar (CEO) with various persons namely Mr Mohammad Sohail Mabarak (key person of Dool 360 private limited, Mr Vignesh Vellore (key person of Spunklane Media Private Limited), Mr Shekhar Gupta (one of the key person is of Print Line Media Private Limited) and Ms Barkha Dutt (a well-known journalist) along with details of the payments made to these persons and entities over the financial year 2017-18 to 2021-22, information regarding articles published by Saamarasya Media LLP and Janjwar ] foundation and the details of the payments made to these entities, details of payment made to various profit-making entities as professional fees between financial year 2016 – 17 to financial year 21 – 22, service agreements relating to content commissioning, email correspondence between CEO and Mr Avinash and statement recorded during the survey. During hearing, many opportunities were granted; assessee submitted several written submissions and based on that the hearing finally concluded on 7 June 2023.

The main contention of the assessee before the ld. CIT was that new digital media entities do not have the backing of big businesses and they cater to both broad spectrum readers as well as those interested in specific or niche areas. The assessee trust was set up as a charitable entity to offer non-commercial funding that would support such independent, public interest media, and thereby create a greater media diversity as well as enable viability in challenging financial and management to strengthen Indian democracy, in which the media Page 10 of 102 plays a vital role. It was also the claim that as a part of its due diligence, it has always ensured that entity that has political affiliation is not supported. Assessee also stated that media entities receiving it support have repeatedly won recognitions and awards within the country and internationally for the quality of their journalism, as and when the content they produce has noticeable impact. Thus, assessee has taken a broad and independent endorsement of the funding decisions taken by it. Assessee also claims that its eminent trustees have worked pro bono, with no personal interest and for the above very reasons, it had been receiving generous donations from public spirited donors with impeccable credentials. Assessee also submitted various details to show that the work done by it complied with the objects of the trust. Assessee has also tried to emphasise on the testimonials from some well-known personalities to say that the assessee is carrying on the activities of the trust in consonance with its objects. The assessee also submitted that 'specified violation' in some instances cannot be used to cancel registration as it would be disproportionate act.

After considering the above general reply of the assessee, in paragraph No. 3 the learned CIT exemption analysed the reply of the assessee against each of the allegations in the show cause notice and gave finding vide page No. 15 of 73 to 63 of 73 of his order as under: -- Page 11 of 102 Page 12 of 102 Page 13 of 102 Page 14 of 102 Page 15 of 102 Page 16 of 102 Page 17 of 102 Page 18 of 102 Page 19 of 102 Page 20 of 102 Page 21 of 102 Page 22 of 102 Page 23 of 102 Page 24 of 102 Page 25 of 102 Page 26 of 102 Page 27 of 102 Page 28 of 102 Page 29 of 102 Page 30 of 102 Page 31 of 102 Page 32 of 102 Page 33 of 102 Page 34 of 102 Page 35 of 102 Page 36 of 102 Page 37 of 102 Page 38 of 102 Page 39 of 102 Page 40 of 102 Page 41 of 102 Page 42 of 102 Page 43 of 102 Page 44 of 102 Page 45 of 102 Page 46 of 102 Page 47 of 102 Page 48 of 102 Page 49 of 102 Page 50 of 102 Page 51 of 102 Page 52 of 102 Page 53 of 102 Page 54 of 102 Page 55 of 102 Page 56 of 102 Page 57 of 102 Page 58 of 102 Page 59 of 102 Page 60 of 102

Assessee also objected before the ld CIT on the issue of the cancellation of registration retrospectively from assessment year 2016 – 17, the assessee submitted that (1) the proceedings have been initiated without jurisdiction, (2) in any event, the cancellation cannot operate with effect from any previous year earlier than the previous year ending on 31st of March 2022, (3) the proposal to cancel registration violates the doctrine of proportionality.

The learned CIT stated that as specified violations have been found during the previous year in which it occurred, therefore the cancellation cannot be stated to be retrospective and the same is in accordance with the law. He submitted that the CIT has power to cancel the registration and the doctrine of proportionality does not apply to the facts of the case. He held that law provides that where there is a specific violation, registration is to be cancelled.

The assessee further challenged the contents of the notice, the learned CIT rejected the same stating that specific instances of specified violations were brought to the notice of the assessee from time to time and therefore, the notice is wrongly alleged to be vague but is specific and facts based on the evidence found.

Accordingly, the learned CIT was satisfied that there were specified violation in case of the assessee trust for the previous year 2016 – 17 to 2021 – 22 relevant to assessment year 2017 – 18 to 2022 – 23. So, the registration of the assessee trust granted under section 12 AA/12 Page 61 of 102 AB of the Act, is cancelled with effect from previous year 2016 – 17 and for all subsequent previous years as per provisions of section 12 AB (4) of the Act. Accordingly, the impugned order was passed on 26th of June 2023.

The assessee is aggrieved with that order and is in appeal before us. Shri A Sheshadri, Chartered Accountant and Shree Bharadwaj Sheshadri, Advocate, the learned authorised representatives, appeared and submitted the detailed argument. The assessee filed two volumes of the paper book containing 929 pages. The assessee in the paper book has also placed six videos (not shown to us). Assessee also submitted the list of donors [General Donors and corpus donors] from AY 2016-17 to 2025-26 to show that most illustrious donors have donated the funds for the object of the trust. Assessee also submitted a supplementary paper book containing 166 pages to support which shows methodology and the process by which the funds of the trusts are utilised. It contains some report, management Information systems report, email correspondence, agenda for board meetings., legal due diligence reports etc. On completion of hearing, assessee also submitted details by email dated 25-12-2025 where in email correspondence with respect to Delhi Press Patrika Limited [caravan] was to show that chairman of Trust Indicated that now it is not appropriate to pay the higher amount to caravan, executive summary of legal Due diligence review report in respect of Caravan Page 62 of 102 and emails dated July 2018 showing how funding for a particular month to caravan and relevant approval process, takes place.

On ground no. [3] Of the appeal LD. AR submitted that The Principal Commissioner of Income Tax lacks the jurisdiction to cancel the registration of the trust. He submitted that on 15/11/2022 the CIT (Exemption) Bangalore passed an order under section 127 of the Act pursuant to the survey under section 133A of the Act on 7 September 2022 wherein in order to have a 'coordinated investigation and to complete the assessment', The Principal Commissioner of Income Tax (Central), Bangalore who has requested that the following cases be transferred to DCIT/ACIT, Central Circle – 1 (2) Bangalore. Thus, the case of the assessee was listed there and was transferred to ACIT/DCIT, Central Circle – (1) (2), Bengaluru from The Income Tax Officer (Exemptions), Ward – 1, Bangalore. He submitted that this order is placed at page No. 52 – 53 of the paper books. He submitted that first no valid transfer takes place as it is not in accordance with the law and further, even if it is valid, no powers are vested with The Principal Commissioner of Income Tax (Central) for cancellation of the registration.

He submitted that the phrase "coordinated investigation" is not sufficient for transfer of jurisdiction. He relied upon the decision of the honourable Bombay High Court in case of ZODIAC DEVELOPERS PRIVATE LIMITED VERSUS PRINCIPAL COMMISSIONER OF INCOME TAX (2016) 387 ITR 223 wherein it is held that if the show cause notice passed such order for merely Page 63 of 102 coordinated investigation and administrative convenience, it makes it impossible to effectively respond to and therefore such a notice and consequent transfer is invalid.

He further referred to the decision of AMIT KUMAR GUPTA VERSUS INCOME TAX OFFICER (2025) 171 TAXMANN.COM 16 [Raipur] wherein it has been held that failure to provide a hearing before transfer of case under section 127 of the income tax act renders the jurisdiction of the assessing officer invalid.

He further stated that CIT Central could not have jurisdiction to cancel the registration already granted to the assessee. He placed reliance on PACIFIC ACADEMY OF HIGHER EDUCATION & RESEARCH SOCIETY V PCIT [ & 5/JODH /2020 DATED 25/01/2023. He submits that such power only vests with the Page 64 of 102 CIT [Exemptions] who granted it. The power of cancellation did not transfer to PCIT [Central] by passing order u/s 127 which also does not contain any reference to transfer of powers of cancellation.

He further referred to the definition of "case” for any assessment year stating that as the power of the cancellation provides to more than one assessment year and it is not related to any assessment year and therefore the provisions of section 127 of the act cannot be used to cancel the registration already granted to the assessee. For this proposition the ld AR vehemently relied up on the decision of the coordinate bench in case of AGARWAL VIDHYA PRACHARNI SABHA V PRINCIPAL COMMISSIONER OF INCOME TAX [ DEL/2023 DATED 8, JANUARY 2024] [ 2024] SCC ONLINE ITAT 7.

He further fairly referred to the decision of ITAT Delhi in ADVANTAGE INDIA V PRINCIPAL COMMISSIONER OF INCOME TAX [2025] 178 TAXMANN.COM 605 (DELHI) where in relying on the decision of Honourable Delhi High court in CIT V SAHARA INDIA FINANCIAL CORPORATION LIMITED [ 2007] 162 TAXMAN 357/ 294 ITR 363 it is held that case includes all proceedings. He submits that Honourable Supreme court in PRINCIPAL COMMISSIONER OF INCOME TAX V ABC PAPERS LIMITED [2022] 141 TAXMANN.COM 332 [SC} the word ' case' has been decided, ld AR referred to para no 22 onwards and submits that now the decision of ITAT in Advantage India [ supra] does not have any precedence value.

It was also the argument that the learned CIT at the time of issue of the show cause notice, the ld PCIT did not reach at the specific finding that what are the 'specified violations' conducted by the assessee and therefore his notice was so routine in general, thus, he did not invoke jurisdiction correctly by issuing the show cause notice. The assessee further relied upon the decision of the honourable Supreme Court in case COMMISSIONER OF CUSTOMS V TOYO ENGINEERING INDIA LIMITED OF 201 EXCISE LAW TIMES 513 (SC) [2006] 2006 taxmann.com 1488 [ SC) stating that allegation in the show cause notice should be very definite and then the adjudicating authority cannot go out of that show cause notice. Thus, his argument was that the allegation cannot be enlarged after the issue of the show cause notice while adjudicating the issue.

The ld AR further submitted that it seems that some of the expenditure of the assessee is stated to be Non genuine, it is not the case that whole of the funding as well as utilisation of the funds is stated to be non-genuine. In such cases it would not make the whole Trust Non genuine. For This proposition, the ld AR relied up on the decision of the Honourable Supreme court in case of COMMISSIONER OF INCOME TAX [EXEMPTION] V MANEKJI MOTA CHARITABLE TRUST [2020] 120 TAXMANN.COM 58 (SC) where in the decision of the Honourable Bombay High court in CIT V MANEKJI MOTA CHARITABLE TRUST [2019] 109 TAXMANN.COM 258 / 267 TAXMAN 16 ( BOM) was upheld. Thus, he held that whole the trust cannot be held to be non-genuine, and the registration cannot be cancelled.

The learned that CIT DR strongly relied upon the findings of the CIT for cancellation order passed under section 12 AB of the Act. He submitted that that the findings given therein clearly shows that the assessee's objects and activities are different and therefore the cancellation order passed by the learned CIT is sustainable, valid in law, with jurisdiction. The learned departmental representative further relied upon the written submission made during the hearing earlier carried out on 10 January 2024 containing the arguments of the revenue on the jurisdiction of the learned PCIT in passing the order and further the evidence collected during the course of survey. He further referred to notification dated 22/10/2014 as well as the record of survey proceedings. Decision & Reasons 32. We have carefully considered the rival contention and perused the orders of the learned lower authorities. We have also carefully perused paper books filed, judicial decisions relied upon. 33. No arguments were advanced on Ground no 1 and 2 of the Appeals, stated that these are general, Hence, dismissed.

Thus, case of the assessee is in the same city Bangalore. It was transferred ' to facilitate effective and coordinated investigation.".

Provisions of section 127 provides as under: - [Power to transfer cases.69 70 127. (1) The 71[Principal Director General or] Director General or 71[Principal Chief Commissioner or] Chief Commissioner or 71[Principal Commissioner or] Commissioner may 72, 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 72 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 71[Principal Director General or] Director General Page 70 of 102 or 71[Principal Chief Commissioner or] Chief Commissioner or 71[Principal Commissioner or] Commissioner,- (a) where the 71[Principal Directors General or] Directors General or 71[Principal Chief Commissioners or] Chief Commissioners or 71[Principal Commissioners or] Commissioners to whom such Assessing Officers are subordinate are in agreement, then the 71[Principal Director General or] Director General or 71[Principal Chief Commissioner or] Chief Commissioner or 71[Principal Commissioner or] Commissioner from whose jurisdiction the case is to be transferred may 73, after giving the assessee a reasonable opportunity of being heard in the matter, 73wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the 74[Principal Directors General or] Directors General or 74[Principal Chief Commissioners or] Chief Commissioners or 74[Principal Commissioners or] Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such 74[Principal Director General or] Director General or 74[Principal Chief Commissioner or] Chief Commissioner or 74[Principal Commissioner or] Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) 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 75 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” 75, in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act 75 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 Page 71 of 102 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.]

The ld AR relying on the decision of Honourable Bombay High Court in Zodiac Developers (P.) Ltd. vs. Principal Commissioner of Income- tax-8, Mumbai [2016] 72 taxmann.com 39 (Bombay)/[2016] 241 Taxman 230 (Bombay)/[2016] 387 ITR 223 (Bombay)/[2017] 295 CTR 104 (Bombay)[18-04-2016] where in writ petition filed by the assessee where the case of the assessee was transferred from Mumbai To Aurangabad. Honourable High Court allowed the writ petition and quashed order passed u/s 127 (2) of the Act. Facts shows that the impugned order does not deal with the petitioner's submissions as contained in its letter dated 14-7-2015 inter alia pointing out that only 3 flats out of 78 flats in the building being constructed in Vile Parle had been sold by the petitioner to the members of the Jhaveri Group. In case, the petitioner's assessments are to be transferred to the places where its customers (purchaser of its flats) are being assessed, then, the petitioner's cases would have to be transferred to at various places where its customers reside. This is impossibility. Further, where transaction take place in the course of its business and a search takes place on such other persons at the place where such person is assessed, it would not necessarily result in the transfer of petitioner's case to the place where the person it is dealing with in the normal course is being assessed. The aforesaid submission as contained in letter dated 14-7-2015 has not even been adverted to in the impugned Page 72 of 102 order dated 21-12-2015. Nor was the fact that there would be inconvenience to the petitioner as emphasized in its subsequent letter dated 24-11-2015 even adverted to in the impugned order much less dealt with. Thus, the order itself is a non-speaking order. The basic and minimal requirement of the petitioner being given a personal hearing and the opportunity to respond to the proposed transfer is to enable the authority to consider whether in the facts and circumstances of the case, the transfer of the case from Mumbai to Aurangabad is warranted. Particularly, bearing in mind that the petitioner has otherwise no connection with Aurangabad except for having sold 3 out of 78 flats in the building being constructed to the persons who are being assessed at Aurangabad. Thus, we do not find any similarity in those cases where the case of the assessee is in the same city i.e., Bangalore. Thus, there is no inconvenience faced by the assessee shown to us. It is also not the case that case of the assessee is tagged with another assessee. Case of the assessee is transferred independently and not connected with any other assessee and also transferred in the same city. Thus, reliance on the decision of Honourable Bombay High Court does not help the case of the assessee.

The second issue raised by the ld AR is that transfer of case u/s 127 of the Act is only with regard to assessment and not for the purposes of cancellation of registration relying up on the decision of the Coordinate bench in case of Agarwal Vidhya Pracharni Sabha V Pcit Page 73 of 102 [2024] Scc Online Itat 7. The Ld AR relied up on para no 37 to 39 of that judgement.

We find that in Advantage India vs. Principal Commissioner of Income-tax [2025] 178 taxmann.com 605 (Delhi - Trib.) [18-09-2025] above Decision was considered at para no 8 as under: -

That decision further held in para no 33 as under: -

A reading of clause(b) of the Notification 70/2014(supra) conjointly with the Explanation of section 127 leaves no room for doubt as to the intention of the Legislature as to the jurisdiction to be exercised by the authorities concerned over a class of case once order u/s 127 is issued. In the instant case, once the order u/s 127(2) dated 01.12.2016 was issued by the CIT(Exemptions), Delhi transferring the case of the assessee from ACIT(E), Delhi to Central Cir-16, Delhi under the charge of Pr.CIT(Central), Delhi, by virtue of Explanation to section 127 and Notification no 70/2014, the Pr.CIT(Central), Delhi assumes the jurisdiction over the assessee for all purposes and proceedings whether pending or completed or to be commenced, in respect of any year. In the instant case, the CIT(Exemptions), Delhi has specifically transferred the jurisdiction over the case to the Pr.CIT(Central)-2, Delhi, unlike the jurisdiction order passed u/s 127 in the case of Aggarwal Vidya Pracharni Sabha (supra) where the transfer order did not specifically mentioned the transfer of jurisdiction to PCIT, Gurgaon. The explanation to section 127 of the Income Tax Act is reproduced again for abundance clarity: "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 also includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year."

We find that the CBDT had further issued a directive vide letter dated 19.01.2024 on the issue of cancellation of registration u/s 12AA/10(23C)

Thus, it is evident that decision cited by the ld AR Agarwal Vidhya Pracharani Sabha V PCIT is distinguishable, and the facts stated in the paragraph 33 of this Advantage decision is identical.

Further on careful reading of section 127 of the Act and explanation there to that the word ' case' does not restrict it to any "Assessment year" but uses the phrase ' Year'. Had it been the intention of the legislature to restrict it to any " assessment Year' it would not have used the word 'year'. Principles of Interpretation provides that an unambiguous and plain statute must be given its full interpretation.

Therefore, we reject this contention of the ld AR that the PCIT Central lacks Jurisdiction as powers of cancellation are not transferred to him and further the ' case" does not include power of cancellation as it does not refer to any assessment year.

Further with respect to the argument that only the assessment rights are transferred but not the power of cancellation has also been dealt with the decision of Advantage India vs. Principal Commissioner of Income-tax [2025] 178 taxmann.com 605 (Delhi - Trib.) [18-09-2025] in para no 26 to 29 of that judgement as under: - "26. At this juncture, we note that the Hon'ble Delhi High Court in the case of CIT v. Sahara India Financial Corporation Ltd. , [2007] 162 Taxman 357/294 ITR 363 (Delhi) has explained what the Explanation to section 127 says and what the term 'case' means in relation to any person whose name is specified in any order or direction issued under section 127. In the said Explanation, 'case' means all proceedings under the Act in respect of any year: (a) which may be pending on the date of the order or direction; (b) which may have been completed on or before the date of the order or direction; (c) including all proceedings which may be commenced after the date of the order or direction in respect of any year. It was similarly held in the case of CIT v. AAR BEE Industries, [2013] 36 taxmann.com 308/357 ITR 542 (Delhi).

The 'case' referred in the Explanation to section 127, therefore, has to be read conjointly with 'all proceedings under this Act' to arrive at a harmonious and workable interpretation of the statute. The 'case' and 'all proceedings under the Act' can not be restricted to only 'assessment' proceedings. Jurisdiction over a case entail not only 'assessment' process but there are several functions and powers assigned to the jurisdictional hierarchy over that case. For example, the assessment is made by the ACIT/ITO, but when coercive action for recovery of demand is to made, the ACIT/ITO has to take approval from the Pr.CIT(Central). Similarly, where the AO denies stay of demand in a case, the Pr.CIT(Central) can review the decision of the ACIT/ITO. There are numerous such examples where the powers and functions over a 'case' has to be exercised in a chain of command in the hierarchy of Pr.CIT(Central).Similarly, a CIT(Exemptions) has powers/functions over Ranges which are manned by the Additional CIT/Joint CITs. There are four/five assessing officers in rank of ACITs/ITOs in a Range and all of them exercise their powers/functions under the CIT(Exemptions). Any jurisdiction over a 'case' cannot be segregated between two different PCIT/CIT that is to say that PCIT(C) will conduct 'assessment' proceedings and the PCIT(E) will conduct registration/cancellation. Such an interpretation will make the exercise of transfer of jurisdiction over a 'case' unworkable.

Further, under the income tax system, jurisdiction over a 'case' is recognized by the PAN assigned to each person/ assessee as defined in section 2(7) of the Act. The jurisdiction of each PAN is assigned to a particular CIT/Assessing Officer according to alphabetical or territorial basis. The CIT/AO exercises all the powers and functions under the Act over a PAN. Once a PAN is transferred from one AO/CIT to another AO/CIT u/s 127 of the Act, the entire proceedings under the Act related to that assessee/pAN is transferred to that other AO/CIT. There is no situation envisaged in the System that one PAN will have two different jurisdictional authorities at the same time. In such a scheme of things, the PAN of an assessee can not lie with one CIT for some proceedings under the Act and the same PAN will simultaneously lie with another CIT for some other proceedings under the Act. The system does not allow the AO under the PCIT(C) to make only the assessment of the Trust and at the same time allow the CIT(E) to carry out functions of granting/cancelling registration of the same Trust. When the PAN is transferred from CIT(Exemptions) charge to Page 78 of 102 the Pr.CIT(Central) charge, the entire 'case' and the associated 'proceedings' will be transferred to the PrCIT(Central). In such a situation, the CIT(Exemptions) can not 'see' the case/assessee in his jurisdiction to take action for registration/cancellation u/s 12AA. The CIT(Exemptions) will be incapacitated to issues any communications to the assessee nor will he be able to generate any DIN in respect to the said assessee. We are therefore of the considered view that once the PAN of the assessee was transferred from the ACIT(E), Cir 1(1), Delhi to Central Cir-16, Delhi, all the functionality and proceedings, pending or completed or to be taken in future, is also transferred from CIT(E) and his AO to PCIT(C) and his Assessing Officer.

This notification shall come into force with effect from the 15th day of November, 2014 SCHEDULE - II Chief Headqu Principal Headq Commissi arters Commissioner/Co uarters oner of mmissioner of Income- Income-tax tax (Central) (Central) (2) (3) (4) (5)

In the light of the above provisions of law and the Notifications, we now proceed to adjudicate the issue at hand. It is true that the Notification no. 52 dated 22.10.2014 grants the Commissioner of Income Tax (Exemption), Delhi-2 to have territorial and subject jurisdiction on "All cases of persons in the territorial area specified in column (4) (i.e.,Delhi) 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 Income-tax Act, 1961 and assessed or assessable by an Income-tax authority at serial numbers 88 to 111 specified in the notification of Government of India bearing number S.O. 2752 dated the 22nd October, 2014".

On the issue of the decision of Honourable Supreme Court in Principal Commissioner of Income-tax vs. ABC Papers Ltd. [2022] 141 taxmann.com 332 (SC)/[2022] 289 Taxman 150 (SC)/[2022] 447 ITR 1 (SC)[18-08-2022] we find that the question before the honourable court was the jurisdiction of the High Court consequent Page 81 of 102 upon administrative order of transfer of a 'case' under section 127 of the Act from one Assessing Authority to another Assessing Officer located in a different State. Honourable Punjab & Haryana High Court took the view that such a transfer would not change the principle laid down in Seth Banarasi Dass Gupta. However, the Honourable Delhi High Court in CIT v. Sahara India Financial Corpn. Ltd. [2007] 162 Taxman 357/294 ITR 363 and CIT v. Aar Bee Industries [2013] 36 taxmann.com 308/357 ITR 542 has taken a different view. The Honourable Delhi High Court held that an administrative order of transfer of cases will also have the consequence of transferring even the jurisdiction of the honourable High Court. As there is a difference of opinion between the honourable High Court of Punjab & Haryana on the one hand and the Honourable High Court of Delhi on the other, the Honourable supreme court was to determine and declare the appropriate High Court for filing an appeal in such cases.

It is argued that decision of Advantage India on this aspect is no longer valid as it relied on up decision of Punjab & Haryana High court which is reversed by the Honourable Supreme court in ABC papers Limited. On careful consideration of the decision of the Honourable Punjab & Haryana High court in CIT V Sahara India Financial corporation Limited which was followed and relied by Advantage India to hold that case also includes the power to cancel the registration also in para no 26 to 30 is valid as the Honourable Supreme court in ABC papers Limited has not overruled the decision Page 82 of 102 of Punjab & Haryana High court in CIT V Sahara Indi Financial Corporation Limited. Further the decision of Honourable Supreme court was altogether on the jurisdiction of Honourable high court and did not have any occasion to consider the situation as before us which is also there in case of Advantage India. Hence, we hold that The Ld CIT has validly assumed jurisdiction for cancellation of registration u/s 12 AB of the Act.

Therefore, we reject this contention of the LD AR that the PCIT Central lacks Jurisdiction as powers of cancellation are not transferred to him and further the ' case" does not include power of cancellation as it does not refer to any assessment year.

It is never in question that if the ITAT finds the noncompliance or violation of any provisions of section 127 of the Act, consequent orders can be quashed. This is also supported by the decision cited by the ld AR. But those are not relevant here unless we find that there is a violation of section 127 of the Act.

Our view is reinforced from the decision of the Delhi ITAT in the case of Young Indian (supra), that there is no bar in the statute to cancel the registration of an institution with retrospective effect. In paras 49, 88 and 121, the Delhi Bench held in the aforesaid case that the Pr CIT has the power to cancel the registration with retrospective effect as under:

The Delhi ITAT in the case of Young Indian (supra) drew its strength from the decision of Hon'ble Madras High Court Pratushyusha Educational Trust v. Pr. CIT [2019] 108 taxmann.com 385/266 Taxman 105/416 ITR 129 (Madras) which observed as follows:

It is well accepted that a statute must be construed according to the intention of the Legislature and the Courts should act upon the true intention of the legislation while applying law and while interpreting law. If a statutory provision is open to more than one meaning, the Court has to choose the interpretation which represents the intention of the Legislature. 48.......Exemptions from taxation have tendency to increase the burden on the other unexempted class of tax payers. A person claiming exemption, therefore, has to establish that his case squarely falls within the exemption notification, and while doing so, a notification should be construed against the subject in case of ambiguity. 56 To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of Page 91 of 102 such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. 57.In conclusion, we hold that the Society was in cohorts with its ex-president in acting as a conduit for bringing commission/liasoning fees and converting them into cash by taking bogus bills/entries since June 2012. The assessee Society has failed to discharge its onus to strictly demonstrate that its activities were genuine and it was conducting its activities to further its objectives. Since the evidence show that the Society commenced its non-genuine activities that do not align with its objectives, from the year June 2012, the PCIT(C)'s cancellation of Registration order retrospectively w.e.f 27.09.1999, needs some modification as the registration cannot be cancelled from a period prior to 01.10.2004 when the express power to cancel was granted to the competent authority. We therefore, modify the PCIT(C) order withdrawing the registration granted to the extent that it be effective from the June 2012 in FY 2012-13, instead of 27.09.1999, till the date of order of cancellation. The ground No 4 of appeal is partly allowed."

We do not rest our finding on the decision of the Delhi bench in Advantage India {supra} only that the Ld PCIT is correct in invoking his jurisdiction for cancellation of the registration u/s 12 AB of the Act with effect from Ay 2016-17 to 2022 -23. We are also supported by the decision of the Delhi ITAT in Young Indian [ Supra} where in it is held that power of cancellation of registration is Page 92 of 102 available with the PCIT since 2004. It also gets support from MEMORANDUM EXPLAINING THE PROVISION OF THE FINANCE ACT (2) OF 2004 which provides as under :- Memorandum explaining the Finance Bill No 2 of 2004 Power to the Commissioner for cancelling registration under section 12AA Under the existing provisions of section 12AA the procedure for registration of a trust or institution by the Commissioner of Income-tax is provided. Although the power of cancellation of registration flows from the power to register, the same has not been specifically provided in the Income-tax Act thereby leading to unnecessary litigation. It is proposed to provide that if the Commissioner of Income-tax is satisfied that the activities of any trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, he shall, after giving reasonable opportunity of being heard to the concerned trust or institution, pass an order in writing cancelling the registration granted under the said section. The proposed amendment will take effect from 1st October 2004. [Clause 6]

Thus, it is clear from the above that power of cancellation was available with the ld PCIT since 1st October 2004. Later on there is Page 93 of 102 some amendment in the provisions of cancellation by THE FINANCE ACT 2022 wherein over and above genuineness of the trust criteria of ' Specified Violations" were also enacted.

If for a moment, we agree with the arguments of the ld AR that the power could be exercised only from 1/4/2022 i.e. from A Y 2022-23 only, it would lead to anomalous situation. Suppose, if the Income tax Department comes to know about the non genuineness of the trust activities after 1/4/2022 prior to that date , it would be helpless prior to this period as those trust despite engaging in non genuine activities would be enjoying benefit of section 11 to 13 of the act and avoiding taxes u/s 115 TD of The Act up to Ay 2022-23. This is neither the intention of the law nor the law can be interpreted in such manner.

Further, circular No. 23/2022 dated 3 November 2022 in paragraph No. 9.5.4 has clearly stated that these powers are available from 1 April 2022 and are not at all restricted to any assessment year. Therefore it is clear that after 1 April 2022, the learned principal Commissioner of income tax is empowered to cancel the registration if specified violations or non-genuineness of the trust is found for any assessment year which can be reopened/reassessed and after 1/4/2004 it is empowered to cancel the registration for that period if the activities of trust are found to be non-genuine.

It is also the fact that powers were given to the PCIT for cancellation of registration with effect from 1st October 2004. Further such powers were amended from 1/4/2022. It is not the case that the authority has Page 94 of 102 assumed powers to exercise such jurisdiction prior to the date on which they are authorised to do so. Therefore, it cannot at all be considered a retrospective application of law.

Accordingly, we dismiss Ground no 8 of the appeal.

Coming to ground No. 9 to 13 on the merits, we have carefully considered the rival contentions and also perused the material placed before us. We find that the first specified violation was stated by the learned PCIT is with respect to 'exerting influence for promotion of political articles by paying more money compared to the other articles'. We find that the submission of the assessee was that the covering politics is left to the journalist and further the assessee does not review articles, stories published and does not have any directorial oversight. Further assessee when confronted with the agreements and various rate cards, it was explained and narrated that 'caravan' is a very renowned and awarded magazine. The learned PCIT rejected the same stating that claims are very generic, and no reasons are specifically provided that why the political articles are paid higher. Further the claim of the assessee that there is huge cost involved in publishing the political articles compared to the other articles and therefore there is a change in rate is also not substantiated. We find that the rates paid by the assessee for politics governance, policy, corruption as per the payment terms as per schedule No. 2 of the addendum agreement is ₹ 1 lakh compared to the other topics articles which are even half of the rate. Therefore, it is apparent that if the articles are published on specified subject of politics, governance, Page 95 of 102 policy, corruption, economic, business, free press, law and society, the amount of remuneration to be paid to the content provider for a story is ₹ 1 lakh whereas for others it is only 50,000/–. But this remains only a fact that when the political articles are published, the assessee is paying more to the content provider. This also remains a fact that if the higher sum is paid by the assessee to the content provider, it is in a position to influence those content providers to give more political contents. Thus, the allegation of the learned PCIT was that assessee was trying to control the category of the content by paying them the higher sum is correct. The explanation of the assessee was only with respect to that all these content providers are very renowned, have earned testimony to the quality of journalism produced on a consistent basis. However, there was no reply that when the assessee pays higher sum for a particular topic to the content providers, why the content providers will produce the material or content which is earning them less revenue. Thus, it is true that by paying the higher sum, or creating a rate structure in a manner, the assessee is promoting them to produce more articles on politics etc. a. This fact was not denied by the assessee that when a higher sum is paid, whether the content providers will produce the articles which are earning less. Naturally, the allegation of the learned PCIT was not on the quality of the content of the magazine but the fact that assessee is promoting printing of political articles and trying to control the category of content published by paying higher sum. This is not stated in the object of the trust. Thus, it shows that activity of the assessee Page 96 of 102 is promoting the articles on political agenda by paying the higher rates to different media.

With reference to the 'biased promotion of selected articles and issues', the learned and PCIT has referred to the WhatsApp chat between the CEO of the assessee as well as the key person of Dool 360 private limited, to whom assessee has provided the total grant of ₹ 20,947,894/– in four financial years. The communication with the key person of spunkline media private limited to whom the assessee has provided total grant of ₹ 21,008,900 in five financial years, further with the key person of print line media private limited, whom assessee has provided grant of ₹ 58,095,003/– for four years and the chat with Miss Barkha Dutt to whom the grants of ₹ 9,910,000 were provided in two years. The WhatsApp chat clearly shows that t from the side of the assessee a definite hint for publication of specific stories/ article, in different languages are conveyed. It may be an altogether different things that whether those entities publish those articles or not, but it is a fact that the chat of the assessee with those persons clearly shows an inclination for promotion of select articles by those entities. Thus, when the assessee has given huge sums to these entities, naturally, if the hint is provided by the assessee to carry on a particular story, at least, the chat shows that those content providers have given attention to it. It is immaterial that those parties did not print such articles in their won wisdom. We are not here to test their wisdom of those parties but to examine the activities of the assessee that whether it is charitable or not. We do not find that this is Page 97 of 102 part of the any of the object of the assessee to give a lead for publication of a particular kind of articles. There is also definitive hint to carry on the articles by translating it into a different language which were already taken by the other content providers. A specific communication is with the print line media wherein the assessee has communicated that in 'the recent CLAT exam there has been widespread discontent amongst students due to glitches on how the papers were evaluated. SC did not stay the result today and it was stated that could he go through the mail after which shall brief you on the source of the info'. This was the message by the CEO of the assessee. Therefore, not only the lead and the content but source of such information was also fed by the assessee to the content providers, we do not find that that is the object of the trust or even if it is object of the trust same is for charitable purpose.

The third objection is that assessee is supporting publicization of polarised content. This fact is considered at paragraph No. 5 of the order of the learned principal Commissioner of income tax. The assessee was specifically shown the several articles published by Samarasya Media LLP as well as Janjhwar foundation. The headlines for "harassed for being Muslims", 'Sedition cases in Modi era', "as BJP talks of law against conversion, attacks against Christians rise in Karnataka", "Modi government keeps financial deal with Bharat Biotech secret" and further certain ground reports on issues which are mentioned at page No. 51 – 52 of the order. On looking at the themes of the articles placed at page No. 53 and 54 of the order it clearly Page 98 of 102 shows that these are polarised contents, and which is not the object of the assessee. Further even otherwise, publishing polarised content which may create any disturbance in the society or are of a political nature, cannot be held to be a charitable activity at all.

With the fourth objection that the assessee is granting huge sums of money to the several entities under the garb of content commissioning charges as professional fees but there is no details of any services rendered by them to the assessee, therefore, such grant cannot be considered as an application of fund. We find that the paragraph No. 6.1 of the order list 21 entities wherein last six years the assessee has given almost ₹ 420,000,00/- these entities in the form of grant or content commissioning charges. The contention of the assessee is that such grant is within the objects of the assessee. And therefore, it cannot be stated that the assessee has granted funds to these entities beyond its object. Carefully considering once again the objects, clearly provides that had it been provided to educational institution or certain charitable organisation, or other institutions engaged in journalism, it would have definitely served the object of the assessee. However, contributing the funds to the profit making entities without giving any evidence of any services rendered to the assessee, defies the common sense that it can be considered as an application of the income of the assessee.

The further objection was with respect to the analysis of the annexure A – 4 of the statement of the senior program manager of the assessee trust which shows that the assessee trust and granted funds to Page 99 of 102 PRAVADA media foundation (Alt News) to the tune of Rs. 2.25 crores in three years. It was further stated by the learned PCIT in paragraph No. 7 that the co-founder of that entity is under investigation by multiple agencies for hurting the religious sentiments through his Twitter post. This entity was also involved in reporting of matters relating to farmers protest, Covid 19, Delhi riots, CAA – NRC protest, Jamia Millia incidents and other. The impounded documents as alleged by the learned PCIT shows that organisation was being supportive to that organisation based on availability of funds and cash reserve with the Alt news. The email dated 25 April 2022 reproduced at paragraph No. 7.1 of the order shows these facts. The explanation of the assessee is that it is providing the funds for 'fact checking of the news' and which is one of the objects of the assessee trust. The learned PCIT has categorically stated that issue of pending investigation against that entity as well as exception in funding to that entity clearly shows that it is promoting the targeted news which the assessee trust wanted to support. Naturally this is not the object of the trust.

In view of the above facts, we find that the assessee has carried out the activities which are listed in the order of the learned PCIT which are not in consonance with the object of the assessee. We find that the object of the assessee are promoting excellence in education in the field of journalism but the facts recorded by the learned PCIT shows that it is 'exerting influence for promotion of political articles by paying the content provider more money', it is also 'promoting biased Page 100 of 102 and select articles', 'polarised contents ' and 'grants funds to the profit making entities in the form of professional fees without any evidence of receiving services' from them.

Charitable purpose specifically deals with the benefit to the public or a section of public. In this case when the assessee is providing funds to the profitable entities without any stated rendition of services by them in the garb of either professional fees or grant, does not satisfy the provisions of the law that it is an application of the income for the purposes of the object of the trust which are charitable in nature.

Further the trust being an entity which is receiving the donations from the most illustrious companies, entities, persons from the country as well as the most decorated board of Trustees, does not make the case of the assessee stronger that despite collecting donations from them, the assessee can carry out objects which are not the objects of the trust. Further the various certificates of the personalities that 'those are not influenced' is also of no use. There is no evidence produced before us by the assessee except the reports etc. which are merely documents without substance, to show that the assessee is carrying on the activities of the trust in consonance with the objects and deserves registration u/s 12 AB of the Act. Therefore, we have no hesitation in dismissing ground 9 – 14 of the appeal of the assessee.

Ground No. 15 of the appeal is with respect to the disproportionate action of the learned PCIT in cancelling the registration of the trust. We find that provisions of section 12 AA (4) (a) are clear that if whole or any part of the income of the trust is utilised for other than Page 101 of 102 the object of the trust, the trust loses the exemption entity as a whole and therefore there is nothing like disproportionate action. Further the reliance by the assessee on the decision of the honourable Supreme Court in case of Manekji Mota charitable trust (supra) is not correct as that was the case for granting of the registration to the trust where the trust has spent 29% of its income to the religious objects but 71% of its income to the objects of the trust, where the honourable High Court held that at the time of registration of the trust it may not be seen. Here in the case before us there is evidence found that the fund have been used for altogether different purposes and therefore the registration granted to the trust after a survey under section 133A of the act, was cancelled. Therefore, we dismiss ground No. 15 of the appeal.

Ground No. 16 is general in nature and hence, dismissed.

In the result appeal of the assessee is dismissed.