Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DEHRADUN BENCH: DEHRADUN
Before: SHRI YOGESH KUMAR U.S. & SHRI MANISH AGARWAL
M/s Sushila Devi Centre for PCIT (Central), Professional Studies and Research, Kanpur Chandanwari, Prem Nagar, Vs. Dehradun, Uttarakhand-248001. PAN:AABAS1682E (Appellant) (Respondent) Assessee by Shri Salil Kapoor, Adv., Ms. Ananya Kapoor, Adv., Shri Shivam Yadav, Adv. and Shri Sumit Lal Chandani, Adv. Department by Shri Amar Pal Singh, JCIT-DR Date of hearing 11.09.2025 Date of pronouncement 17.10.2025 O R D E R
PER MANISH AGARWAL, AM:
The present appeal is filed by the assessee against the order of Learned Principal Commissioner of Income Tax, Dehradun (‘the Ld. PCIT’ in short), passed u/s 12AB(4) of the Income Tax Act, 1961 wherein the Ld. PCIT cancelled the registration granted to the assessee u/s 12A/12AB of the act with retrospective effect from Assessment Years: 2014-15, 2015-16, 2016-17, 2018-19, 2019-20, 2020-21, 2021-22, 2023-24 and 2024-25 and all the subsequent previous years in terms of the sub-clause 2 of section 12AB of the Act and treated the assessee as AOP for the purposes of charging tax.
Brief facts of the case are that the assessee M/s Sushila Devi Centre for Professional Studies and Research was granted registration u/s 12A r.w.s 12AB
2 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT of the Act vide order dated 10.02.2004 by PCIT, Dehradun which was subsequently renewed on 23.09.2021 up to Assessment Years 2026-27. A seach and seizure actions u/s 132 of the Act was carried on 22.11.2023 by Investigation Wingh, Dehradun and in terms of the order passed u/s 127(2)(a) of the Act by the CIT(E), Lucknow, the jurisdiction over the assessee was transferred from Exemption Circle, Ghaziabad to DCIT/ACIT, Central Circle, Dehradun for the purpose of completing the assessments as a result of search. The assessee had filed an applicaton for registration u/s 12A of the Act on 23.09.2021 before the Ld. CIT(E), Lucknow at MRT. The PCIT, Central Kanpur vide his impugned order dt. 30.6.2025 has rejected the application for registration and cancelled the registration gratned earlier from AY 2014-15 to AY 2024-25. Aggrieved by the said order, present appeal is filed by the assessee by taking following grounds of appeal:
1. That on the facts and in the circumstances of the case and in law, the impugned order dated 30.06.2025 passed by the Principal Commissioner of Income Tax, Central, Kanpur under Section 12AB(4) of the (the Act"), cancelling the registration granted to the Assessee Society, is illegal, bad in law and without jurisdiction and barred by time limitation.
2. On facts and circumstances of the case and in law, the order passed by PCIT Central Circle, Kanpur under section 12AB(4) of the Act cancelling the registration of the Assessee Society is without jurisdiction as the jurisdiction to pass such an order is vested only with CIT(Exemption). The observation made by the PCIT is based on mere surmises and conjectures.
3. That the reference made by the Assessing Officer under the second proviso to Section 143(3) read with Section 12AB(4)(b) is illegal, without jurisdiction, and contrary to the mandate of the Act. The impugned order is liable to be quashed.
4. That the order passed under Section 127 of the Act is illegal, bad in law, and liable to be quashed. Consequently, the order passed by the Principal Commissioner of Income Tax. Central, Kanpur under Section 12AB of the Act is without jurisdiction and deserves to be set aside
5. That the impugned order passed by the PCIT (Central), Kanpur under Section 12 AB(4)(ii)of the Act is without jurisdiction in the absence of a valid order under Section 127 of the Act, and is therefore null and void 3 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 6. That the PCIT has erred in holding that the activities of the appellant are not genuine and are not being carried out in accordance with the objects of the Assessee Society, despite extensive documentary evidence filed during the course of proceedings.
7. That the PCIT has erred in applying the provisions of Section 12AB(4) and the Explanation thereto retrospectively, even though such provisions were introduced by the Finance Act. 2022 and are applicable prospectively only.
Without prejudice to the above, the order passed by PCIT Central, on the basis of reference made by AO under the second proviso to the provisions of section 143(3) of the Act is void ab initio and bad in law, as no satisfaction note has been prepared by the AO before making a reference under aforesaid proviso to PCIT Central Circle.
That the impugned order fails to satisfy the threshold of 'specified violation' in each assessment year as defined under the Explanation to Section 12AB(4) of the Act, inasmuch as no cogent material has been brought on record to show non-genuineness of activities or deviation from the stated charitable objects of the Assessee Society, 10. That in view of facts and circumstances of the case and in law the Principal Commissioner of Income Tax, Central, Kanpur has failed to prove that the activities of the Assessee Society are not genuine or that the activities of the Assessee Society are not in consonance with its objects, which is the foremost consideration for cancellation of registration granted u/s 12A of the Act 11. That the Principal Commissioner of Income Tax, Central, Kanpur has erred in holding that the Assessee Society diverted funds by purchasing land from related persons without establishing that such transactions were not at arm's length or that any undue benefit accrued to any person under Section 13(3) of the Act.
That the Principal Commissioner of Income Tax, Central, Kanpur has failed to appreciate that the land purchases were made to meet the statutory requirement of the Indian Council of Agricultural Research (ICAR) for affiliation and that all acquisitions were supported by registered valuer reports and independent valuation, establishing that the transactions were at fair market value.
That the Principal Commissioner of Income Tax, Central, Kanpur has erred in law and on facts in concluding that the land transactions violated the provisions of the Act, despite there being no evidence of personal benefit or diversion of funds, and the application of funds being entirely towards the educational objects of the Assessee Society.
That the Principal Commissioner of Income Tax, Central, Kanpur has erred in placing reliance on seized material to draw adverse inference regarding the genuineness of activities of the appellant, without establishing the authorship, contents, or their direct relevance to the functioning of the 4 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT Assessee Society or proving any link to unaccounted income or application of funds for non-charitable purposes.
That the cancellation of registration solely on the basis of alleged unverified diaries and cash found during search, without a finding of diversion of income or misuse of exemption under Sections 11 and 12, is unjustified, excessive and contrary to the scheme of Section 12AB.
That the Principal Commissioner of Income Tax. Central, Kanpur has erred in relying on the alleged seizure during the course of search to question the genuineness of Assessee Society activities, without establishing ownership of the cash or demonstrating that such funds belonged to the Assessee Society or were derived from its operations. PCIT has failed to appreciate that the cash found is part of the regular books of account of the assessee.
Since all the grounds of appeal of the assessee are in respect to the cancellation of registration sought from AY 2014-15 thus they are taken together for consideration.
Before us, the Ld. AR of the assessee submits that the assessee was granted registration u/s 12A in terms of the order passed by CIT(E), Dehradun on 10.02.2004 wich was further renewed on 23.09.2021. The Ld. AR submits that the Ld. PCIT, Centra,l Kanpur without having jurisdiciton over the assessee had denied the registration and further cancelled the same with retrospective effect. He submits that the CBDT in terms of the Circular No.53/2014 exercising its power sub-section (1) and (2) of section 120 wherein the jurisdiction of CIT(E), Lucknow was ntoifed over the cases of States of Uttar Pradesh and Uttarakhand and thus, the PCIT, Central, Kanpur had no jurisdiction over the assessee to cancel the registration granted u/s 12A of the Act. The Ld. AR further submits that the order passed u/s 127(2), for the purpose of transfer of jurisdiciton over the assessee from one Assessing Officer to another Assessing Officer was only to assess the income and through such order jurisdiction cannot be assumed by the PCIT Central, Kanpur in the case of specific assessee for whom jurisdiction was notified by the CBDT itself. Moreover, the said order u/s 127(2) of the Act was passed by the CIT(E), Lucknow at MRT and, therefore, this order could not 5 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT transfer the jurisdictionl to PCIT, Central, Kanpur unless there is a specific order by the CBDT u/s 120 of the Act. The Ld. AR also submits a written submissions which reads as under: “1. The Assessee, Sushila Devi Centre Professional Studies and Research, was registered under Section 12AA read with Section 12A of the Income Tax Act, 1961 ("the Act') vide order dated 10.02.2004 passed by Commissioner of Income Tax, Dehradun. Thereafter, the registration was granted on 23.09.2021 under Section 12A of the Act up to Assessment Year (AY") 2026-27.
A show cause on 19.06.2024 was given to the Assessee by CIT(E), Lucknow, Mrt to transfer the case from the present jurisdictional assessing officer (AO). Ghaziabad to assessing office of Central Charge. Thereafter, the order under Section 127(2)(a) of the Act on 04.07.2024 was passed by CIT(Exemption), Lucknow, Mrt. transferring the case to AO from Exemption Circle, Ghaziabad to DCIT/ACIT, Central Circle: Dehradun.
Thereafter, impugned order under Section 12(AB)(4)(ii) of the Act was passed on 30.06.2025 by PCIT (Central), Kanpur and the registration granted for Assessment Year ('AY') 2014-15, 2015-16, 2016-17, 2018-19, 2019-20, 2020-21,2021-22, 2023-24 and 2024-25 respectively is cancelled. The legal submissions raised by the Assessee are as follows: 4. The Central Board Direct Taxes (CBDT) issued a circular No. 53 of 2014 dated 22.10.2014 (refer page number 141 to 146 of case law compilation), in which the jurisdiction of the cases where the person is claiming benefits of provisions of Section 11 and 12 of the Act in the instant case the same is under the charge of CIT(Exemption), Lucknow. The CIT(Exemption). Lucknow under whose charge the Assessee was assessed do not have the power or jurisdiction to transfer his own jurisdiction to PCIT, Central, Kanpur. This fact is duly noted by the Hon'ble Tribunal and has quashed the order passed by PCIT, Central, cancelling the registration under Section 12A rws 12AA & 12AB of the Act on identical facts. The reliance is placed on the following case laws: a. Aggarwal Vidya Pracharni Sabha v PCIT, Central Gurgaon.
at Page Nos. 1-39 of the Case Law Compilation. b. Pacific Academy of Higher Education and Research Society v PCTT, Central, TTA. No. 04/0001/2020 at Page Nos. 40-81 of the Case Law Compilation c. Wholesale Cloth Merchant Association v PCIT, Central, ITA No. 688/JP/2019 at Page Nos. 82-138 of the Case Law Compilation. d. Lakhmi Chand Charitable Society v. PCIT, Central, ITA No. 1803/DEL/2024 at Page Nos. 156-187 of the Case Law Compilation. e. Hemkunt Foundations v. Principal Commissioner Income Tas, Central-1, New Delhi, ITA No. 631/DEL 2024 at Page Nos. 266-285 of the Case Law Compilation. f. Lala Sher Singh Memorial Jeevan Vigyan Trust Society v. PCIT(Central), [2025] 175 taxmann.com 671 (Delhi Trib.) [16-06-2025] at Page Nos: 315-328 of the Case Law Compilation. c. Meenakshi Foundation v. PCIT, [2025] 175 taxmann.com 990 (Delhi-Trib.) (23-05-2025) at Page Nos. 329-342 of the Case Law Compilation.
The order passed under Section 127(2)(a) of the Act dated 04.07.2024 is for the purpose of transferring the case to one assessing officer to another assessing officer. The said order also specifies that it is passed to transfer the case from one assessing 6 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT officer to another assessing officer. It is not open to the PCIT, Central, Kanpur to assume jurisdiction on the basis of said order passed under Section 127 of the Act. which has transferred the assessment from one assessing officer to another assessing officer. Hence, the PCIT, Central, Kanpur lacks the jurisdiction to pass the impugned order under Section 12(AB)(4)(ii) of the Act to cancel the registration granted by the CIT(Exemption), Lucknow who has the valid jurisdiction. The reliance is placed on the above mentioned judgements and the copy of the same are in the Case Law Compilation.
It is further submitted that the order under Section 127 dated 04.07.2024 merely transfers assessment files from one Assessing Officer to another. Section 127 falls under Chapter XIII dealing with assessment jurisdiction and does not, and cannot, enlarge or reallocate statutory powers vested in a particular Commissioner. The legislature has consciously bifurcated assessment functions and registration functions under separate Chapters. To pernit the PCIT (Central) to rely on a Section 127 transfer order to usurp exemption powers would amount to a colourable exercise of power. The maxim Quando aliquid prohibetur ex directo, prohibetur et per obliquum squarely applies i.e. what cannot be done directly cannot be done indirectl 7. The doctrine of institutional competence also deserves emphasis. Registration under Section 12A/12AA/12AB is an exercise involving consideration of charitable objects, genuineness of activities, and compliance with the statutory regime governing charitable institutions. This function, by design, is entrusted to the specialised authority of the CIT (Exemption). A Central charge officer, whose domain is search assessments and undisclosed income, is institutionally unsuited to adjudicate upon matters of charity law. To allow such an officer to cancel registration not only frustrate the statutory scheme but also undermines the specialised allocation envisaged by CBDT itself.
Without prejudice, it may also be submitted that the order under Section 107 of the Act passed on 04.07.2024 by CIT (Exemption) is without agreement of the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners and as such the order under Section 127 of the Act dated 04.07.2024 is not a valid order and has to be ignored. The reliance in this context can be placed on order passed by Hon'ble Supreme Court in the case of 'Noorul Islam Educational Trust v. CTT-1 & Ors SLP(C) No. 13968/2015 dated 21.10.2016. It is mandatory required that the order passed under Section 127(2) of the Act that the senior authority must be in agreement to the said transfer of assessing officer. The absence of disagreement doesn't meet the requirement of provisions of the Act. Hence, the order under Section 127 of the Act is illegal and bad in law.
Without prejudice, while passing the order cancelling the registration, the PCIT (Central), Kanpur, has treated certain acts of the Assessee as 'specified violation' as defined in subclause (f) of the explanation to Section 12AB (4) of the Act. The said provision is introduced in the Act on 01.04.2022. It is submitted that the specified violation' itself came into statute on 01.04.2022, and as such, the same could not have occurred prior to 01.04.2022. The PCIT Central has wrongly applied the same to AY 2014-15, 2015-16, 2016-17, 2018-19, 2019-20, 2020-21 and 2021-22 respectively. Even otherwise, there is no specified violation by the assessee in all the assessment 7 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT years mentioned in the impugned order and as such the impugned order is illegal, bad in law.
The invocation of the provision of Sections 12A, 12AA & 12AB(4) of the Act to cancel the registration on the allegation of 'specified violation for AYs 2014-15. 2015- 16, 2016-17, 2018-19, 2019-20, 2020-21 and 2021-22 is not permissible as the same has seen the light of the day on 01.04.2022.
Hence, the alleged 'specified violation' could not have occurred prior to 01.04.2022 i.e.. AY 2022-23 and earlier years. The reliance is placed on the following case laws: a. Aggarwal Vidya Pracharni Sabha v PCIT, Central Gurgaon. I'TA No. 1308/DEL/2023 at Page Nos. 1-39, Paragraph 7.3 of the Case Law Compilation. b. Lakhmi Chand Charitable Society v. PCIT, Central, at Page Nos. 156-187, Paragraphs 21 & 22 of the Case Law Compilation.
By the rule of strict construction and by the presumption against retrospectivity affirmed in CIT v. Vatika Township (P) Lid (367 ITR 466, SC), such a provision cannot be applied to assessment years prior to its coming into force. Retrospective application of "specified violation" to AYs 2014-15 to 2021-22 amounts to legislative overreach by the executive, something impermissible in law.
Without prejudice, the power to cancel the registration has been introduced by Finance Act, 2022 in section 12AB(4) of the Act. The Provision for cancellation of registration for specified violation' are inserted in Section 12AB(4) of the Act on 01.04.2022 and cannot be retrospective. Reliance can placed on "Human Welfare Foundation v. DCIT (Exemption), [2025] 174 taxmann.com 650 (Delhi-Trib.) [29-04- 2025] at Page Nos. 286-314 of the Case Law Compilation. PRAYER: 14. Without prejudice to the submissions/arguments on merits of the case, the order passed by PCIT, Central, Kanpur for ('AY') 2014-15, 2015-16, 2016-17, 2018-19, 2019- 20, 2020-21, 2021-22, 2023-24 and 2024-25 respectively is liable to be quashed as the same lacks jurisdiction. In view of the above facts and circumstances and in law, it is humbly requested that the order under Section 12(AB)(4)(ii) of the Act passed on 30.06.2025 by PCIT (Central), Kanpur, may kindly be quashed.
Ld. AR thus, submits that the Ld. PCIT, Kanpur Central has erred in cancelling the registration of the assessee without having jurisdiciton over the assessee that too with retrospective effect though the powers for cancellaiton with retrospective effect were introduced by the Finance Act, 2022. He thus prayed for restoration of the registration.
8 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 6. Per contra, the Ld. CIT-DR submits that search and seizure operations was carried on 15.11.2003 in the cases of the assessee and it was found that assesse society was misappropriating its funds. As a result of search the transfer jurisdiction of the Assessing Officer over the assessee was transferred from Exemption Circle-Ghaziabad to AC/DC, Central Circle Dehradun who has fallen under the jurisdiction of PCIT, Central, Kanpur and, therefore, all the adminstrative approvals are to be given by the PCIT, Central, Kanpur inlcuding granting/withdrawal of registration u/s 12A of the Act. The Ld. CIT-DR further submits that assessee was engaged in the activities which are in violation to the provisions of section 11, 12 and 13 and, therefore, the Ld. PCIT, Central, Kanpur has rightly cancelled the registration w.e.f Assessment Year 2014-15 which is the year from which the evidences of such violations were found during the search. He thus, submits with the order of Ld. PCIT, Central, Knapur cancelling the regisration be upheld.
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.
9 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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 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 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT
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 (Exemptions), 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 sub- section (4) of section 12AA is concerned, sub-section (4) of section 12AB brings into 11 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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.
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 01.04.2021. 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 12 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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.
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.’ 13 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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 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:-
14 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT "(a) where any income derived from property held under trust, wholly or in part for charitable or religious purposes, has been applied, other than for the objects of the trust or institution;"
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 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 15 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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 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 16 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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 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 17 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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: 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.
18 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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 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 19 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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 ITA No. 05/Jodh/2020 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 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 20 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT (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. 6.4 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 21 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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. (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 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.
22 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT (5) 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 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 23 IT No.131/DDN/2025 M/s Sushila Devi Centre for Professional Studies and Research vs. PCIT 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.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 17.10.2025.