Jalvayu Sehkari Awas Samiti Ltd., Noida V. CIT, Ghaziabad

ITA 541/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3804 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-06-2010
• Assessment Year: misc
• Appeal Filed On: 04-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K CHAND
• Keywords: Rectification of order; Charitable institution; Retrospective amendment; Condonation of delay; Cancellation of registration; Set aside
• Section: 12A; 12AA; 154; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D DELHI BEFORE SHRI A.D. JAIN AND SHRI K.G. BANSAL ITA NO. 541(DEL)/2010 ASSESSMENT YEAR: N.A JALVAYU SEHKARI AWAS SAMITI COMMI SSIONER OF INCOME-TAX, LTD., SECTOR-21, NOIDA. VS. G HAZIABAD. (U.P). PAN-AAATJ4438M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJAY KUMAR, C.A RESPONDENT BY: SH RI N.K. CHAND, SR. DR ORDER PER K.G. BANSAL : AM THIS APPEAL OF THE ASSESSEE EMANATES FROM THE OR DER OF COMMISSIONER OF INCOME-TAX, GHAZIABAD, PASSED ON 7.12.2009, IN PURSUANCE OF AN APPLICATION OF RECTIFICATION FI LED BY THE ASSESSEE ON 15.1.2008, IN WHICH ITS REQUEST FOR RESTORAT ION OF REGISTRATION U/S 12AA OF THE INCOME-TAX ACT, 1961, EARLIER CANCELLED B Y HIM ON 16.1.2004, WAS REJECTED WITH THE FOLLOWING REMARKS:- 6. THE SOCIETY IN QUESTION HAS NOT CARRIED OUT ANYTHING WHICH COULD BE TREATED AS CHARITABLE. THE SOC IETY HAS CLAIMED TO HAVE CARRIED OUT SOME ACTIVITIES F OR THE BENEFIT OF ITS MEMBERS ONLY AND WHICH ACCORDING TO IT ARE CHARITABLE. FROM THE ABOVE, IT IS CRYSTAL CLEA R THAT THE SOCIETY IS NOT CREATED FOR CHARITABLE PURPOSE RATHER IT IS CREATED WITH THE INTENT OF EARNING PROFITS AND PROVID ING FACILITIES TO ITA NO. 541(DEL)/2010 2 ITS MEMBERS ONLY. PERUSAL OF ASSESSMENT RE CORD REVEALS THAT THE SOCIETY GENERATES POSITIVE INCOME FRO M YEAR TO YEAR (FOR EXAMPLE IT ENJOYS INCOME FROM RECEI PTS FROM VENDORS, INTEREST FROM BANKS ETC., MISC. INCOME AND BY LEASE OF MI ROOMS ETC.) BUT THE BASIS ON WHICH THE ACTIVITIES OF THE SOCIETY ARE CLAIMED TO BE CHARITABLE IS N OT PROVED. THE MATTER HAS BEEN DISCUSSED IN DETAIL BY MY PRED ECESSOR IN HIS ORDER DATED 16.01.2004. IT APPEARS TH AT THE ASSESSEE HAS NOT FILED AN APPEAL AGAINST THE SAME. IN VIEW OF THE ABOVE REASONS, IT IS EVIDENT THAT THE SOCIETY IS NOT CARRYING ON ANY CHARITABLE ACTIVITY. T HUS AFTER GOING THROUGH THE APPLICATION DATED 15 TH JAN., 2008, 15 TH FEB., 2008 AND 19 TH MAY, 2008 FOR RECTIFICATION/CANCELLATION/ MODIFICATION OF THE ORDER OF THE COMMISSIONER OF INCOME- TAX, GHAZIABAD HAS BEEN REVIEWED. AFTER CAREFUL CONSIDERATION OF FACTS ON RECORD I FIND THAT O RDER DATED 16.01.2004 PASSED BY THE COMMISSIONER OF INCOME-TAX , GHAZIABAD IS REASONABLE AND JUSTIFIED. IT NEED S NO RECTIFICATION/CANCELLATION/MODIFICATION. HENCE AP PLICATION FILED BY THE ASSESSEE IS REJECTED. 2. BEFORE US, THE ONLY ARGUMENT OF THE LD. COU NSEL FOR THE ASSESSEE IS THAT THE POWER TO CANCEL REGISTRATION, EARLIER GRANTED TO AN ASSESSEE, HAS BEEN CONFERRED ON THE COMMISSIONER OF INCOME-TAX W ITH EFFECT FROM 01.10.2004, BY INSERTING SUB-SECTION (3) IN SE CTION 12AA BY THE FINANCE (NO. 2) ACT, 2004. HOWEVER, THE LD. CIT HAS CANCELLED THE REGISTRATION ON 16.01.2004, WHEN HE DID NOT HAVE ANY SUCH POWER. SUCH POWER COULD NOT BE INFERRED TO BE AN INHERENT POWER VESTED IN THE LD. COMMISSIONER IN VIEW OF THE DECISION OF HONBLE UTTRANCHAL HIGH COURT IN THE CASE OF WELHAM BOYS SCHOOL SOCIETY VS. CENTRAL BOARD OF DIRECT ITA NO. 541(DEL)/2010 3 TAXES & ANOTHER (2006) 285 ITR 74, HONBLE ALLA HABAD HIGH COURT IN THE CASE OF OXFORD ACADEMY FOR CAREER DEVELOPM ENT VS. CHIEF COMMISSIONER OF INCOME-TAX & ANOTHER (2009) 315 I TR 382, AND SOCIETY FOR THE PROMOTION OF EDUCATION ADVENTURE SPORT & CONSERVATION OF ENVIRONMENT VS. COMMISSIONER OF INCOME-TAX & ORS. (2008) 216 CTR (ALL.) 167. IN REPLY, THE LD. DR SUBMITTED THAT THE POSITION IS TO BE SEEN ON THE DATE ON WHICH ANY QUASI-JUDICIAL AUTHORITY OR COURT PASSES THE ORDER IN ORIGINAL PROCEEDINGS OR APPELLATE PROCEEDINGS. AS ON THE DATE OF HEARING BEFORE THE TRIBUNAL, THE COMMISSI ONER OF INCOME-TAX IS EMPOWERED TO CANCEL THE REGISTRATION IF CONDIT IONS MENTIONED IN SECTION 12AA(3) ARE SATISFIED. THEREFORE, THE LEARNED COMMISSIONERS ORDER MAY BE UPHELD. FOR THIS PURPOSE, HE RELIES ON THE DECISION OF LARGER BENCH OF THE TRIBUNAL IN THE CASE OF B.T. PAT IL & SONS BELGAUM CONSTRUCTION (P) LTD. VS. ACIT (2009) 126 TTJ (MUM.)(TM) 577. 3. THE ASSESSEE HAS FILED, STATEMENT OF FACT S BEFORE US, WHICH HAS NOT BEEN DISPUTED BY EITHER PARTY. THEREFORE, IT WILL BE APPROPRIATE IF A SUMMARY OF THE FACTS IS NARRATED HERE: ITA NO. 541(DEL)/2010 4 3.1 IN THE YEAR 1996, THE ASSESSEE-SOCIETY FILED AN APPLICATION IN FORM 10A WITH THE CIT, MEERUT (THEN HAVING JURISDICTI ON IN ITS CASE), SEEKING REGISTRATION UNDER SECTION 12A ALONG WITH APP LICATION FOR CONDONATION OF DELAY OF 9 YEARS AND 5 MONTHS. AFTER CONS IDERATION OF ITS OBJECTS, REGISTRATION UNDER SECTION 12A WAS GRANTED B Y THE CIT, MEERUT W.E.F. 1.4.1996 3.2 WITH THE FORMATION OF SEPARATE COMMISSIONERA TE AT GHAZIABAD, THE JURISDICTION IN THE CASE OF THE ASSESSEE GOT S HIFTED TO THE JURISDICTION OF COMMISSIONER OF INCOME-TAX, GHAZIABAD. THE SUCCEEDI NG COMMISSIONER OF INCOME-TAX, GHAZIABAD TOOK A VIEW THAT THE ASSE SSEE-SOCIETY IS NOT ELIGIBLE FOR REGISTRATION AND IN TERMS OF THE ORDER DATED 16.1.2004 PASSED BY HIM, THE EARLIER REGISTRATION CERTIFI CATE DATED 1.7.1997 HAS BEEN WITHDRAWN. 3.3 BELATEDLY, THE ASSESSEE FILED AN APPEAL A GAINST THE ORDER DATED 16.1.2004 BEFORE THE TRIBUNAL, BEARING ITA NO. 3368(DEL)/2007. THE SAID APPEAL HAS BEEN DISMISSED IN LIMINE BY G BENCH OF THE TRIBUNAL VIDE ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2 007, WITHOUT ITA NO. 541(DEL)/2010 5 ADJUDICATING THE ISSUE INVOLVED THEREIN, AS THE APPEAL WAS NOT FOUND TO BE MAINTAINABLE DUE TO LONG DELAY IN FILING THE SA ME. 3.4 AFTER RECEIPT OF THE ORDER DATED 16.11.200 7, THE ASSESSEE FILED AN APPLICATION BEFORE COMMISSIONER OF INCOME-TAX, GH AZIABAD ON 15.1.2008 SEEKING RECTIFICATION OF ORDER DATED 16.1.2004 PASSED BY HIS PREDECESSOR. THE GROUND OF RECTIFICATION WAS THAT AT THE TIME WHEN ORDER DATED 16.1.2004, CANCELING THE REGISTRATION EARLIER GRANTED BY CIT, MEERUT VIDE ORDER DATED 1.7.1997, WAS PASSED, THERE EXISTED NO PROVISION IN LAW FOR CANCELLATION OF REGISTRATION, AS SUB-SEC TION (3) WAS INSERTED IN SECTION 12AA BY FINANCE (NO. 2) ACT, 2004, WITH E FFECT FROM 1.10.2004 ONLY. 3.5 THE SAID APPLICATION WAS FOLLOWED UP BY SE VERAL REMINDERS AND FINALLY A COMPREHENSIVE PETITION DATED 26.11. 2009 WAS FILED BEFORE THE LD. CIT, GHAZIABAD, IN RESPONSE TO HIS LETTER D ATED 18.11.2009. THE ESSENCE OF THE SAID SUBMISSION IS THAT:- (A) PROVISION FOR CANCELLATION OF REGISTRATION U NDER SECTION 12AA(3) CAME ON THE STATUTE WITH EFFECT FROM 1.10.200 4 AND IN VIEW OF THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SOCIETY ITA NO. 541(DEL)/2010 6 FOR THE PROMOTION OF EDUCATION ADVENTURE SPORT & C ONSERVATION OF ENVIRONMENT VS. CIT (2008) 216 CTR 167, IT HAS PROSPECTIVE EFFECT; (B) AT THE TIME OF CANCELLATION OF REGISTRATION VIDE ORDER DATED 16.1.2004, THERE EXISTED NO ENABLING PROVISION IN THE STATUTE, THEREFORE, REGISTRATION UNDER SECTION 12A ONC E GRANTED, CANNOT BE CANCELLED; (C) IN ANY CASE, NO ORDER WHATSOEVER HAVING BEEN PASSED WITHIN A PERIOD OF SIX MONTHS, ON THE APPLICATION DATED 15.1.2008, THE SAID APPLICATION SHOULD BE DEEMED TO HAVE BEEN ALLO WED AS PER SPECIFIC PROVISION CONTAINED IN SUB-SECTION (8) O F SECTION 154 OF THE ACT. 4. WE MAY NOW DISCUSS VARIOUS CASES, RELIED UP ON BY RIVAL PARTIES IN SUPPORT OF THEIR CASES. THE DECISION IN THE CASE OF SOCIETY FOR PROMOTION OF EDUCATION ADVENTURE SPORT & CONSERVA TION OF ENVIRONMENT (SUPRA) IS BASED UPON SOME WHAT DIFFERENT FACT S. IN THAT CASE, THE COMMISSIONER OF INCOME-TAX MADE UNDUE DELAY IN DISPOSING OFF THE ITA NO. 541(DEL)/2010 7 APPLICATION OF THE ASSESSEE FOR REGISTRATION U/ S 12AA. THE QUESTION WAS- WHETHER THE APPLICATION OF THE ASSESSEE SHOU LD BE DEEMED TO HAVE BEEN ALLOWED? THE HONBLE COURT APPLIED THE PRINCIPLE O F PURPOSIVE INTERPRETATION AND HELD THAT THE BALANCE OF CON VENIENCE IS IN FAVOUR OF HOLDING THAT THE APPLICATION IS DEEMED TO HAV E BEEN ALLOWED IN ABSENCE OF ANY ORDER PASSED BY THE COMMISSIONER WITHIN THE STATUTORY TIME LIMIT. FOR THE SAKE OF READY REFERENCE, RELEVA NT PARAGRAPHS OF THE DECISION ARE REPRODUCED BELOW:- 17. CONSIDERING THE PROS AND CONS OF THE TWO V IEWS, WE ARE OF THE OPINION THAT BY FAR THE BETTER INTERPRET ATION WOULD BE TO HOLD THAT THE EFFECT OF NON-CONSIDERATION OF THE APPLICATION FOR REGISTRATION WITHIN THE TIME FIXED BY SECTI ON 12AA(2) WOULD BE A DEEMED GRANT OF REGISTRATION. WE DO NOT FIND ANY GOOD REASON TO MAKE THE ASSESSEE SUFFER MERELY BECAUSE THE I.T. DEPARTMENT IS NOT ABLE TO KEE P ITS OFFICERS UNDER CHECK AND CONTROL, SO AS TO TAKE TIMEL Y DECISIONS IN SUCH SIMPLE MATTERS SUCH AS CONSIDERATION OF AP PLICATIONS FOR REGISTRATION EVEN WITHIN THE LARGE SIX MONTH PER IOD PROVIDED BY S. 12AA(2) OF THE ACT. 18. WE ACCORDINGLY DIRECT THE RESPONDENTS, SUBJ ECT TO ANY ORDER WHICH MAY BE PASSED UNDER S. 12AA(3), TO TREAT THE PETITIONER SOCIETY AS AN INSTITUTION DULY APPR OVED AND REGISTERED UNDER S. 12AA AND TO RECOMPUTED ITS I NCOME BY APPLYING THE PROVISION OF S. 11 OF THE ACT. ACC ORDINGLY, A FORMAL CERTIFICATE OF APPROVAL WILL BE ISSUED FO RTHWITH TO THE PETITIONER BY THE RESPONDENT NO. 2. ITA NO. 541(DEL)/2010 8 4.1 IN THE CASE OF WELHAM BOYS SCHOOL SOCIETY (SUPRA), THE QUESTION BEFORE THE COURT WAS-WHETHER THE COMMISSIONER OF INCOME-TAX HAS ANY INHERENT POWER TO CANCEL THE REGISTRATION IN C ASE HE COMES TO A CONCLUSION THAT THE ASSESSEE IS NOT CARRYING O N CHARITABLE ACTIVITY? THE HONBLE COURT INTER-ALIA MENTIONED THAT THE REGIS TRATION WAS NOT OBTAINED BY ANY MIS-REPRESENTATION OR FRAUD. IT HAS BEE N FURTHER MENTIONED THAT THE GENERAL PRINCIPLE OF INHERENT POWER TO U NDO SOMETHING WHICH AN AUTHORITY HAS POWER TO DO IS NOT APPLICABLE WHEN THE POWERS ARE WELL REGULATED UNDER A STATUTE. THEREFORE, IT HAS BEEN HELD THAT THE COMMISSIONER OF INCOME-TAX DID NOT HAVE ANY POWER OR JURISDI CTION TO CANCEL THE ORDER OF REGISTRATION. THE RELEVANT PORTION OF THE ORD ER IS REPRODUCED BELOW:- 17. IN THE LIGHT OF THE DISCUSSION ABOVE, WE H OLD THAT ANNEXURE 6 ORDER WAS PASSED BY THE SECOND RESPON DENT WITHOUT POWER AND JURISDICTION AND, THEREFORE, IT IS LIABLE TO BE QUASHED. ACCORDINGLY, ANNEXURE 6 ORDER DATED MAY 8, 2002, PASSED BY THE SECOND RESPONDENT WITHDRAWING/RESCINDING THE ORDER GRANTING REGIST RATION TO THE PETITIONER SOCIETY UNDER SECTION 12AA OF THE INC OME-TAX ACT, 1961 IS QUASHED. CONSEQUENTLY, THE REGISTRATION GRANTED TO THE PETITIONER SOCIETY UNDER SECTION 12AA OF THE INCOME-TAX ACT, 1961, STANDS RESTORED. 18. IN VIEW OF THE QUASHING OF THE IMPUGNED ORDER ON THE GROUND OF LACK OF POWER AND JURISDICTION, WE FI ND IT UNNECESSARY TO CONSIDER THE OTHER CONTENTIONS RAISED BY THE PETITIONER FOR CHALLENGING THE IMPUGNED ORDER. ITA NO. 541(DEL)/2010 9 4.2 THE DECISION IN THE CASE OF OXFORD ACADEMY FOR CAREER DEVELOPMENT (SUPRA), IS COUCHED IN MORE OR LESS THE SAME LANGUAGE AS EMPLOYED IN THE CASE OF WELHAM BOYS SCHOOL SOCI ETY. THE DECISION IS ALSO THE SAME. HOWEVER, FOR THE SAKE OF COMPLE TENESS, RELEVANT PORTIONS OF THIS DECISION ARE ALSO REPRODUCED BELOW:- 28. IN THE LIGHT OF THE ABOVE DISCUSSION AND BY CO NSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF TH E CASE, WE HOLD THAT THE ORDER DATED MARCH 9, 2004, PASSED BY THE COMMISSIONER OF INCOME-TAX (ANNEXURE NO. 15 TO THE WRIT PETITION) AS PER THE THEN LAW IS WITHOUT POWER AND JURISDICTION AND, THEREFORE, IT IS LIABLE TO BE SET QUASHED. 29. ACCORDINGLY, THE IMPUGNED ORDER DATED MARCH 9,2004, PASSED BY OPPOSITE PARTY NO. 2 WITHDRAWING/RESC INDING THE ORDER GRANTING REGISTRATION ON APRIL 1, 1999, T O THE PETITIONERS SOCIETY UNDER SECTION 12A OF THE AC T, IS QUASHED. CONSEQUENTLY, THE REGISTRATION GRANTED TO THE PETITIONERS SOCIETY ON APRIL 1, 1999, STANDS RESTORED FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. 4.3 COMING TO THE CASE OF B.T.PATIL & SONS BELG AUM CONSTRUCTION (P) LTD., RELIED UPON BY THE REVENUE, ONE OF THE Q UESTIONS BEFORE THE LARGER BENCH OF THE TRIBUNAL WAS-WHETHER, THE POSITION OF LAW HAS TO BE SEEN ON THE DATE OF ORDER OR JUDGMENT DELIVERED BY A QUASI-JUDICIAL AUTHORITY OR THE COURT, AS THE CASE MAY BE, OR AT THE TIM E WHEN THE CASE WAS HEARD? IT HAS BEEN DECIDED THAT THE POSITION OF LAW AS OBTAINED ON THE DATE OF PASSING THE ORDER HAS TO BE SEEN. IT IS ALSO EXPLAINED THAT THE ITA NO. 541(DEL)/2010 10 AFFECTED PARTY IS REQUIRED TO BE GIVEN AN OP PORTUNITY OF BEING HEARD REGARDING ANY CHANGE IN LAW WHICH COMES INTO FORC E BETWEEN THE DATE OF HEARING AND THE DATE OF PASSING THE ORDER. IN THI S CASE, THE CHANGED POSITION OF LAW, EMBEDDED IN SECTION 12AA(3) HA S BEEN COMMUNICATED TO THE ASSESSEE IN THE COURSE OF HEARING BEFORE US, AND ITS VIEWS HAVE BEEN OBTAINED THROUGH ITS LEARNED COUNSEL. THESE VIEW S HAVE BEEN ALREADY SUMMARIZED BY US. THE RELEVANT PORTION OF THE OR DER OF THE TRIBUNAL, CONTAINED IN PARAGRAPHS 17 AND 18 ARE REPRODUC ED BELOW FOR READY REFERENCE:- 17. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD WE FIND THAT S. 294 IS NOT APPLICABLE IN THE PRESENT CIRCUMSTANCES. THIS SECTION PROVIDES THAT : IF ON THE 1 ST DAY OF APRIL IN ANY ASSESSMENT YEAR PROVISION HAS NOT YET BEEN MADE BY A CENTRA L ACT FOR THE CHARGING OF INCOME-TAX FOR THAT ASSESSMENT YEAR , THIS ACT SHALL NEVERTHELESS HAVE EFFECT UNTIL SUCH PRO VISION IS SO MADE AS IF THE PROVISION IN FORCE IN THE PRECE DING ASSESSMENT YEAR OR THE PROVISION PROPOSED IN THE BILL THEN BEFORE PARLIAMENT, WHICHEVER IS MORE FAVOURABL E TO THE ASSESSEE, WERE ACTUALLY IN FORCE. ON A BARE P ERUSAL OF THIS SECTION IT IS OBSERVED THAT THE SAME REFERS TO FOR THE CHARGING OF INCOME-TAX FOR THAT ASSESSMENT YEAR. WHEN WE CONSIDER THE LANGUAGE OF S. 4, WHICH IS CHARGING SECTION , IT TURNS OUT THAT THE SAME, INTER-ALIA REFERS TO THE RATE OR RATES OF INCOME-TAX WHICH SHALL BE CHARGED FOR THE ASS ESSMENT YEAR IN ACCORDANCE WITH AND SUBJECT TO THE PROVISI ONS OF THIS ACT IN RESPECT OF THE TOTAL INCOME OF THE PREVIOU S YEAR OF EVERY PERSON. THOUGH S. 4 IS A CHARGING SECTI ON, BUT THE RATES OF TAX ARE PROVIDED BY THE RELEVANT FINA NCE ACT. THUS, S. 4 IS A MEDIUM FOR GIVING EFFECT TO THE PROVI SIONS OF THE FINANCE ACT. IT IS IN THIS CONTEXT THAT S. 294 IS RELEVANT. EX ITA NO. 541(DEL)/2010 11 CONSEQUENTI THE NET EFFECT OF S. 294 R/W/S. 4 ON THE ONE HAND AND THE RELEVANT FINANCE BILL/ACT ON THE OTHER H AND IS THAT IF THE FINANCE BILL PROVIDING RATES OF TAX HAS BE EN ENACTED, THEN THE RATES AS PER THE FINANCE ACT AS ON THE 1 ST DAY OF APRIL IN THE ASSESSMENT YEAR SHALL BE APPLICAB LE, BUT IF THE RELEVANT PROVISIONS IN THE FINANCE BILL HAVE NOT BEEN ENACTED THEN THE RATES SO PROPOSED OR THOSE ALREADY A PPLICABLE, WHICHEVER ARE MORE BENEFICIAL TO THE ASSESSEE, SHALL BE APPLICABLE. 18. WHEN THIS POSITION WAS PUT ACROSS TO THE LEARNED AUTHORISED REPRESENTATIVE, HE CANDIDLY ACCEPTED OF NOT STRICTLY RELYING ON BUT ONLY TAKING ASSISTANCE FROM S. 294 IN SUPPORT OF HIS CASE. HE EMPHASIZED THAT THE LEAR NED AM OUGHT TO HAVE ESCHEWED FROM CONSIDERING THE EXP LANATION WHICH WAS STILL A PROPOSAL AT THE TIME OF HIS P ASSING ORDER. WE FIND THAT EVEN THE ASSISTANCE TAKEN OF THI S SECTION BY THE LEARNED AUTHORISED REPRESENTATIVE TO BOLSTER HIS SUBMISSION THAT EXPLANATION SHOULD NOT HAVE BEEN CONSIDERED BY THE LEARNED AM, IS MISPLACED. THE CRUCIAL WORDS USED IN THIS SECTION ARE UNTIL SUCH PROVISION IS SO MA DE. SO NO REFERENCE CAN BE MADE TO THIS SECTION WHEN THE PROVISION STANDS ENACTED. IT IS ONLY DURING INTERREG NUM THAT THE MORE BENEFICIAL PROVISION TO THE ASSESSEE IS MADE APPLICABLE AS PER THE MANDATE OF THIS SECTION. IF, HOWEVER, A PROPOSAL IN THE FINANCE BILL HAS BEEN ENACTED THAT WILL BECOME BINDING. IT IS ONLY TILL SUCH TIME THAT THE FINANCE BIL L IS CONVERTED INTO ACT THAT THIS SECTION CAN BE SAID TO HAVE ANY SIGNIFICANCE, EVEN GOING AS PER THE ARGUMENT OF THE LEARNED AUTHORISED REPRESENTATIVE. ONCE A PROPOSAL IN T HE FINANCE BILL IS CONVERTED INTO PROVISION IN THE ACT, SUC H PROVISION BECOMES APPLICABLE. LOT OF EMPHASIS HAS BEEN LA ID BY THE LEARNED AUTHORISED REPRESENTATIVE ON THE PROPOSIT ION THAT WHEN THE LEARNED AM PASSED HIS ORDER, THE SAID E XPLANATION TO S. 80-IA WAS MERELY A PROPOSAL IN THE FINAN CE BILL AND NOT ENACTED. IT IS OBSERVED THAT THE FINANCE BILL, 20 07 BECAME ACT ON RECEIVING THE ASSENT OF THE HONBLE PRESIDE NT OF INDIA ON 11 TH MAY, 2007 [2007] 209 CTR (ST) 85: (2007) 291 ITR (ST) 1]. THE LEARNED AM PASSED HIS ORDER ON 21 ST MAY, 2007 I.E., AFTER THE ENACTMENT OF EXPLANATION BELOW S. 80-I A(13). IT IS, ITA NO. 541(DEL)/2010 12 THEREFORE, CLEAR THAT WHEN THE LEARNED AM PASSED HIS ORDER, THE EXPLANATION TO S. 80-IA HAD ALREADY COME INTO FORCE WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 2000. THUS IT IS EVIDENT THAT THIS ISSUE HAS BEEN NEEDLESSLY DRAGGED BY THE LEARNED AUTHORISED REPRESENTATIVE, WHICH OTHERWISE HAS NO LEGS TO STAND ON. 5. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. BRIEFLY, THE FACTS ARE THAT THE ASSESSEE HAD BEEN GRANTED REGISTRATION BY THE COMMISSIONER OF INCOME -TAX. THIS REGISTRATION WAS WITHDRAWN BY AN ORDER DATED 16.1.2004, WHEN THE PROVISION CONTAINED IN SUB-SECTION (3) OF SECTION 12AA WAS NOT THE RE ON THE STATUTE BOOK. THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL, WHICH WAS DISMISSED ON ACCOUNT OF LATCHES. THEREAFTER, THE ASSESSEE FI LED A RECTIFICATION APPLICATION BEFORE THE LD. COMMISSIONER OF INCOME -TAX. AS MENTIONED EARLIER, THIS APPLICATION WAS REJECTED ON 07. 12.2009, WHEN THE AMENDED PROVISION HAD COME INTO FORCE. THE PROVISIONS CONTAINED IN SECTION 12AA WERE AMENDED WITH EFFECT FROM 1.10.2004, CONFERRING JURISDICTION ON THE COMMISSIONER OF INCOME-TAX TO WITHDRAW T HE REGISTRATION GRANTED EARLIER PROVIDED THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS. IT MAY BE MENTIONED HERE THAT WE ARE NOT DECI DING THE APPEAL AGAINST ORDER U/S12AA(3) BUT AGAINST ORDER U/S 154 PAS SED BY THE LD. ITA NO. 541(DEL)/2010 13 COMMISSIONER OF INCOME-TAX IN PURSUANCE OF THE AP PLICATION OF THE ASSESSEE. 5.1 THE FACTS OF THE CASE OF SOCIETY FOR THE PRO MOTION OF EDUCATION ADVENTURE SPORT & CONSERVATION OF ENVIRONMENT (SUPR A) ARE SOME WHAT DIFFERENT. THERE IS NO INORDINATE DELAY IN PAS SING THE RECTIFICATION ORDER AS IN THAT CASE. THE DELAY IS OF ONE YEAR. TH E ORDER DOES NOT DEAL WITH ANY FRESH MATTER AS IT IS IN CONTINUATION OF E ARLIER ORDER DATED 16.1.2004. THE JUDGMENT HAS BEEN RENDERED IN THE BACKGROUN D OF THE FACT THAT THE APPLICATION OF THE ASSESSEE FOR ITS REGISTRATI ON WAS KEPT PENDING FOR INORDINATE LENGTH OF TIME AND, THEREFORE, THE QU ESTION WAS- WHETHER IT SHOULD BE DEEMED TO HAVE BEEN ALLOWED? THE HON BLE ALLAHABAD HIGH COURT, AFTER CONSIDERING PROS AND CONS OF THE SITUATION, DECIDED THAT THE APPLICATION SHOULD BE DEEMED TO HAVE BEEN ALLOW ED. THE DECISION IS PECULIAR TO THE FACTS OF THESE CASE WHERE TH E HONBLE COURT FOUND THAT NO HARM WILL BE DONE TO THE REVENUE. HOWEVE R, SUCH A DEEMED ALLOWANCE IN THIS CASE WOULD HAVE THE EFFEC T THAT THE ASSESSEE WOULD GET EXEMPTION U/S 11 IN RESPECT OF APPLICATION OF ITS INCOME FOR THE BENEFIT OF ITS MEMBERS, WHICH CANNOT BE SAID T O BE A CHARITABLE PURPOSE. ITA NO. 541(DEL)/2010 14 5.2 THE FACTS OF THE CASE OF WELHAM BOYS SCHO OL SOCIETY ARE ALSO DIFFERENT AS IT WAS NEVER POINTED OUT TO THE HO NBLE UTTRANCHAL HIGH COURT AS TO WHETHER THERE HAS BEEN ANY CHANGE IN THE POSITION OF LAW AT THE TIME OF PASSING ORDER BY IT. THE COURT DEALT WITH THE ARGUMENT ABOUT ALLEGED INHERENT POWER VESTED IN THE COMMISSIONE R OF INCOME-TAX, WHICH WAS NEGATED. SUCH IS ALSO THE DECISION IN THE CASE OF OXFORD ACADEMY FOR CAREER DEVEOPMENT. BEFORE US, THE AMENDED PROVISIONS OF SECTION 12AA, CONTAINED IN SUB-SECTION (3), HAVE BEEN BROUGHT TO OUR NOTICE. IT IS NO DOUBT TRUE THAT ON THE DATE WHEN THE COMMISSIONER OF INCOME-TAX PASSED THE ORDER, THIS SECTION DID NOT EXIST ON THE STATUTE BOOK. HOWEVER, THIS PROVISION EXISTED ON THE STATUTE BOOK ON THE DATE OF HEARING OF THE CASE BY US. THE DECISION OF THE LARGER BENCH OF THE TRIBUNAL IN THE CASE OF AFORESAID B.T.PATIL & SONS IS TO THE EFFECT TH AT THE AMENDED PROVISION SHOULD BE CONSIDERED IF IT HAS BEEN CONVERTED I NTO LAW ON THE DATE OF THE ORDER OF THE TRIBUNAL. ONE CAN RAISE A CONT ROVERSY THAT THE LD. COMMISSIONER OF INCOME-TAX COULD NOT HAVE PASSED A VALID ORDER ON 16.1.2004, WITHDRAWING THE REGISTRATION TO THE ASSESSEE EARLIER AND, THEREFORE, THE TRIBUNAL NEED NOT GO FURTHER TO LOOK INTO THE AMENDMENT, WHICH CAME INTO FORCE AFTER 16.1.2004 . IN VIEW OF THE AFORESAID DECISION OF THE TRIBUNAL, SUCH A CO NTENTION COULD ONLY BE ITA NO. 541(DEL)/2010 15 TERMED AS CONTENTIOUS. A CONTROVERSIAL ISSUE IS NOT AMENABLE TO RECTIFICATION JURISDICTION UNDER SECTION 154. THUS, IT CANNOT BE CONCLUDED THAT THERE IS A MISTAKE APPARENT F ROM RECORD IN THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX. 5.3 WE MAY ALSO EXAMINE THE ISSUE FROM ANOTHER ANGLE. ASSUMING THAT WE SET ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX ON GROUND OF LACK OF JURISDICTION, THERE IS NOTHING IN TH E INCOME-TAX ACT WHICH WILL PREVENT HIM FROM PASSING AN ORDER, WITHDRAWING THE REGISTRATION ON THE GROUNDS TAKEN BY HIM IN ORDER U/S 12AA(3). TH EREFORE, THIS COURSE OF ACTION WOULD AMOUNT ONLY TO DELAYING THE DECISIO N, WITHOUT SERVING ANY PURPOSE. 6. IN THE LIGHT OF AFORESAID DISCUSSION, IT I S HELD THAT THE APPEAL OF THE ASSESSEE IS NOT SUSTAINABLE AS THE ISSUES RAISED BY IT DO NOT CONSTITUTE ANY MISTAKE APPARENT FROM RECORD. 7. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11TH JUNE, 2010. SD/- SD/- (A.D. JAIN) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 11TH JUNE, 2010. SP SATIA ITA NO. 541(DEL)/2010 16 COPY OF THE ORDER FORWARDE TO:- 1. JALVAYU SEHKARI AWAS SAMITI LTD., NOIDA. 2. AO 3. CIT, GHAZIABAD. 4. THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.