Young Indian, New Delhi V. CIT(E), New Delhi

MA 02/DEL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2150 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-10-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 03-01-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MAYANK PA
• Assessee Lawyers: ANKIT AGGARWAL
• Keywords: Charitable institution; Opportunity of being heard; Additional evidence; Competent authority; Benefit of exemption; Cancellation of registration; Borrowed satisfaction
• Section: 12A; 12AA; 264; 254(2); 113; 73; 72; 13; 153; 22; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER THROUGH VIDEO CONFERENCING M .A. NO. 02 / DEL/20 20 ARISING OUT OF I.T .A. NO. 7751 /DEL/201 7 YOUNG IN DIAN, 5A, HEARLD HOUSE, BAHADURSHAH ZAFAR MARG, NEW DELHI. V. CIT (EXEMPTION) NEW DELHI. TAN/PAN: AABCK2559G (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: S/ SHRI YOGESH THAR , CA AND ANKIT AGGARWAL , ADV. RESPONDENT BY: SHRI G.C. SRIVASTAVA STANDING COUNSE L AND SHRI MAYANK PATWARI, ADV DATE OF HEARING: 27 07 20 20 DATE OF PRONOUNCEMENT: 10 20 20 O R D E R PER AMIT SHUKLA, JUDICIAL MEMBER: THE AFORESAID MISC. APPLICATION HAS BEEN FILED BY THE APPLICANT ASSESSEE IN RELATION TO THE ORDER DATED 15.11.201 9 IN ITA NO.7751/DEL/2017. 2. THE ASSESSEE COMPANY HAD FILED THE ABOVE APPEAL AGAINST THE ORDER DATED 26.10.2017 , PASSED BY L D. C OMMISSIONER OF I NCOME T AX (E XEMPTION ), NEW DELHI CANCELLING THE REGISTRATION U/S. 12AA(3) . A GAINST THE SAID CANCELLATION OR DER, THE M .A. NO. 02 /DEL/20 20 2 ASSESSEE HAD PREFERRED AN APPEAL BEFORE THIS TRIBUNAL. BOTH THE PARTIES WERE HEARD AT LENGTH AND AFTER MARATHON HEARING, ORDER WAS PASSED VIDE ORDER DATED 15.11.2019 . NOW B Y WAY OF AFORESAID MISCELLANEOUS APPLICATION , THE APPLICANT ASSESSEE HAS SO UGHT TO POINT OUT THAT , CERTAIN CONTENTIONS RAISED DURING THE COURSE OF HEARING HAVE EITHER NOT BEEN CONSIDERED OR HAS NOT BEEN PROPERLY APPRECIATED BY THE TRIBUNAL , WHICH TANTAMOUNT TO MISTAKE APPARENT FROM RECORD WITHIN THE SCOPE AND AMBIT OF SECTION 254 (2) . IN ALL SIX GROUNDS/ISSUES RAISED IN THE IMPUGNED MISCELLANEOUS APPLICATION , APPLICANT ASSESSEE HAS CONTENDED THAT CERTAIN INADVERTENT ERROR HAS CREPT IN AND THEREFORE, THE CAPTIONED ORDER SHOULD BE RECALLED IN ENTIRETY OR IN PART. 3. THE FIRST AND FOREMOST OBJECTION WHICH HAS BEEN RAISED IS AS UNDER: 1.1 THE APPLICANT HUMBLY SUBMITS THAT IN THE COURSE OF THE HEARING, THE APPLICANT HAD CONTENDED THAT THE ORDER PASSED BY THE ID, CIT(E) U/S. 12AA(3) OF THE ACT IN BAD IN LAW IN ABSENCE OF A PROPER SHO W CAUSE NOTICE ISSUED TO THE APPLICANT FOR CANCELLATION OF REGISTRATION U/S. 12AA OF THE ACT. 1.2 THE APPLICANT HAD INVITED THE ATTENTION OF THE HON'BLE TRIBUNAL TO THE S HOW CAUSE NOTICE ISSUED BY THE L D. CIT(E). IT WAS POINTED OUT THAT IN THE SAID NOTICE , THE ID. CIT(E) HAD REFERRED TO A COMMUNICATION DATED AUGUST 16, 2017 RECEIVED FROM THE ACIT, CIRCLE 1(1) (EXEMPTIONS), NEW DELHI MAKING VARIOUS ALLEGATIONS IN THE RESPECT OF THE APPLICANT. BASED ON THE SAID LETTER, THE CIT(E) ISSUED THE PURPORTED SHOW CA USE NOTICE TO THE APPLICANT TO SUBMIT VARIOUS DETAILS SO AS TO ENABLE HIM TO FORM A VIEW ON THE REPORT OF THE ACIT. IN THE SAID NOTICE, THE CIT(E) HAS NO WHERE SHOWN THAT HE HAS COME TO ANY INDEPENDENT SATISFACTION TO CANCEL THE REGISTRATION OF THE M .A. NO. 02 /DEL/20 20 3 APPLICA NT U/S. 12AA. NOWHERE IN THE NOTICE THERE ARE ANY WORDS REQUIRING THE APPLICANT TO SHOW CAUSE WHY THE REGISTRATION SHOULD NOT BE CANCELLED. PLEASE SEE THE COPY OF THE SHOW CAUSE NOTICE AT PAGE 73 OF THE PB I. ACCORDINGLY, BEING UNCLEAR AS TO WHAT WAS THE P URPOSE OF THE SHOW CAUSE, THE APPLICANT HAD, VIDE LETTER DATED SEPTEMBER 4, 2017, ASKED THE CIT(E) TO INFORM THE SPECIFIC ISSUE ON WHICH THE APPLICANT WAS REQUIRED TO SHOW CAUSE. PLEASE SEE PAGE 75 OF THE PB I. SINCE NO CLARIFICATION WAS RECEIVED BY THE AP PLICANT, THE APPLICANT VIDE LETTERS DATED SEPTEMBER 28, 2017 AND OCTOBER 16, 2017 (PLEASE SEE PAGES 109 - 111 AND 113 - 115 OF THE PB I) REPLIED T O THE MAIN ALLEGATION OF THE ACI T, I.E. BY VIRTUE OF HOLDING SHARES OF AJL, APPLICANT IS ENGAGED IN COMMERCIAL ACT IVITY OF AJL. TO THE SAID POINT, THE APPLICANT HAD REPLIED THAT BY MERELY HOLDING SHARES OF A COMPANY, THE APPLICANT CANNOT BE REGARDED AS ENGAGED IN THE ACTIVITIES CARRIED OUT BY THAT COMPANY. FOR THE SAID PROPOSITION RELIANCE WAS PLACED ON THE DECISIONS OF THE SUPREME COURT IN MRS. BACHA F. GUZDAR V/S. CIT (27 ITR 1)(SC) AND RUSTOM CAWASJEE COOPER AND UNION OF INDIA (40 COMPANY CASES 325, 343)(SC), WHEREIN IT IS CATEGORICALLY HELD THAT SHAREHOLDERS OF A COMPANY ARE DIFFERENT FROM THE COMPANY AND THE SHARE HOLDERS CANNOT BE REGARDED AS CARRYING OUT THE ACTIVITIES OF THE COMPANY. SUBSEQUENT TO OUR REPLIES, THE L D. CIT(E) DID NOT ASK ANY FURTHER QUESTION AND PROCEEDED TO PASS THE ORDER DIRECTLY CANCELLING THE REGISTRATION U/S. 12AA OF THE ACT THAT TOO WITH RET ROSPECTIVE EFFECT FROM AY 2011 - 12. 1.3 IT WAS ACCORDINGLY SUBMITTED BEFORE THE HON'BLE TRIBUNAL THAT THE ORDER PASSED BY THE ID. C IT (E) U/S. 12AA, BEING A QUASI - JUDICIAL ORDER, CANNOT BE PASSED WITHOUT GIVING HIS MIND THAT HE WANTS TO CANCEL THE REGISTRAT ION AND WITHOUT SEEKING SUBM ISSIONS FROM THE APPLICANT AS TO WHY HE SHOULD NOT CANCEL. THE PROVISO TO SECTION 12AA(3) ITSELF STATES THAT 'NO ORDER UNDER THIS SUB - SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONABLE OPPORTUNI TY OF BEING HEARD.' THE APPLICANT HAD ACCORDINGLY PRAYED THAT SINCE THE L D. CIT(E) HAS CANCELLED THE REGISTRATION OF THE APPLICANT BY INVOKING SECTION 12AA(3) WITHOUT GIVING ANY OPPORTUNITY TO SHOW CAUSE AS TO WHY THE REGISTRATION SHOULD NOT BE CANCELLED, THE SAME IS BAD IN LAW M .A. NO. 02 /DEL/20 20 4 AND VOID AB INITIO. ALTERNATIVELY, THE APPLICANT HAD ALSO CONTENDED THAT SINCE THE L D. CIT(E)'S SHOW CAUSE NOTICE IS MERELY BASED ON THE COMMUNICATIONS RECEIVED FROM AGT/JCIT, THE ORDER PASSED BY HIM IS BASED ON BORROWED SATISFACTION AND WITHOUT ANY INDEPENDENT APPLICATION OF MIND AND ACCORDINGLY, EVEN FOR SAID REASON, THE ORDER PASSED BY THE CIT(E) IS BAD IN LAW. 1.4 THE APPLICANT'S CONTENTION OF ORDER BEING BAD IN LAW FOR WANT OF PROPER SHOW CAUSE NOTICE WAS ALSO INCLUDED AT PARAS 1 1.1 TO 11.3 OF THE WRITTEN SYNOPSIS OF THE ARGUMENTS OF THE APPLICANT SUBMITTED TO THE HON'BLE TRIBUNAL. FURTHER, THE ARGUMENT ON ORDER BEING BAD IN LAW SINCE IT IS BASED ON BORROWED SATISFACTION WAS INCLUDED AT PARA 3.1 TO 3.7 OF THE WRITTEN SYNOPSIS OF T HE ARGUMENTS OF THE APPLICANT SUBMITTED TO THE HON'BLE TRIBUNAL. 1.5 HOWEVER, ON PERUSAL OF THE TRIBUNAL'S ORDER, IT IS OBSERVED THAT THOUGH ALL OTHER ARGUMENTS OF THE APPLICANT HAVE BEEN REPRODUCED AT PARAS 30 TO 50 OF THE TRIBUNAL'S ORDER, THERE IS NO R EFERENCE TO THE ARGUMENT OF THE APPLICANT IN RELATION TO NON - ISSUE OF PROPER SHOW CAUSE NOTICE. THE TRIBUNAL'S ORDER IS SILENT ON THE ARGUMENT OF THE APPLICANT RELATING TO NON - ISSUE OF PROPER SHOW CAUSE NOTICE. THE SAME HAS NEITHER BEEN MENTIONED NOR ADJUD ICATED BY THE HON'BLE TRIBUNAL. IT IS EVIDENT THAT THE SAID CONTENTION HAS SKIPPED THE ATTENTION OF THE HON'BLE BENCH WHILE DICTATING THE ORDER. IT IS MOST HUMBLY SUBMITTED THAT THIS IS AN APPARENT MISTAKE WHICH OUGHT TO BE RECTIFIED. 1.6 INDEED, AT PARA 1 01 OF THE TRIBUNAL'S ORDER, IT HAS BEEN HELD BY THE HON'BLE TRIBUNAL THAT THE ASSESSEE HAS NOT SUBMITTED BEFORE THE CIT(E) WHAT WAS THE PURPOSE FOR ACQUIRING AJL DURING THE CANCELLATION PROCEEDINGS. IT IS HUMBLY SUBMITTED THAT THERE WAS IN FACT NO VALID CA NCELLATION PROCEEDINGS WHERE THE APPLICANT COULD HAVE MADE OUT ITS CASE BEFORE THE CIT(E)! IT IS ACCORDINGLY SUBMITTED THAT THE SAID CONTENTION GOES TO THE ROOT OF THE MATTER BUT UNFORTUNATELY THE HON'BLE TRIBUNAL SEEMS TO HAVE INADVERTENTLY LOST SIGHT OF THE SAME WHILE DICTATING THE ORDER. 1.7 THE APPLICANT SUBMITS THAT NON CONSIDERATION AS WELL AS NON ADJUDICATION OF A VITAL CONTENTION OF THE APPLICANT AMOUNTS TO M .A. NO. 02 /DEL/20 20 5 MISTAKE APPARENT ON RECORD AND THE SAME OUGHT TO BE RECTIFIED. IN THIS REGARD, KIND ATTENTIO N IS DRAWN TO THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (262. ITR 146)(GUJ), WHICH HAS BEEN AFFIRMED BY HON'BLE APEX COURT IN 173 TAXMAN 322, WHEREIN IT IS HELD AS UNDER: ... IT HAS TO BE BORNE IN MIND THAT THE ACT IS A STATUTE PROVIDING FOR LEVY AND COLLECTION OF TAX. IN CASE A PARTY BEFORE THE TRIBUNAL INVITES THE ATTENTION OF THE TRIBUNAL THAT A POINT OR A CONTENTION WHICH IS MATERIAL FOR DETERMINING THE AMOUNT OF TAX PAYABLE (WHICH MAY BE NIL IN A GIVEN CASE) HAS NOT BEEN CONSIDERED BY THE TRIBUNAL, IT WOULD CERTAINLY CONSTITUTE A MISTAKE APPARENT FROM THE RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE ACT. THE TERM 'RECORD' IN THE PROVISION TAKES WITHIN ITS SWEEP THE ENTIRE RECORD BEFORE THE TRIBUNAL. THE PROVISIONS OF SECTION 254(2) COULD NOT BE CONSTRUED IN A MANNER WHICH WOULD PRODUCE AN ANOMALY OR OTHERWISE PRODUCE AN IRRATIONAL OR ILLOGICAL RESULT. IT IS ONE OF THE BASIC PRINCIPLES AND A LEGAL POLICY THAT WHEN THERE IS A PROVISION FOR RE CTIFICATION OF A MISTAKE APPARENT FROM THE RECORD, THAT POWER SHOULD BE ALLOWED TO BE EXERCISED FOR CORRECTING MISTAKE AND/OR ERROR FROM THE RECORD AND IF THE TRIBUNAL FEELS THAT THE TRIBUNAL HAS COMMITTED AN ERROR OF LAW, IT WOULD BE AGAINST THE CONCEPT O F JUSTICE AND FAIR PLAY AND ALSO AGAINST THE PRINCIPLE OF LEGAL POLICY NOT TO ALLOW THE TRIBUNAL TO EXERCISE SUCH POWER'. (UNDERLINED FOR EMPHASIS) 1.8 SIMILAR VIEW HAS ALSO BEEN TAKEN IN THE FOLLOWING DECISIONS: SHAHID ATIQ VS. ITO (97 ITD 22)(DEL); STOCK EXCHANGE VS. ACIT (68 TTJ 610)(AHD); 1.9 IN VIEW OF THE ABOVE, THE APPLICANT PRAYS THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO RECTIFY THE AFORESAID INADVERTENT ERROR BY RECALLING THE CAPTIONED ORDER IN ITS ENTIRETY OR IN PART AND/ OR PASS SUCH SU PPLEMENTAL ORDER AS THE HON'BLE TRIBUNAL MAY DEEM FIT UNDER THE FOREGOING FACTS AND CIRCUMSTANCES. M .A. NO. 02 /DEL/20 20 6 4 . IN SUMS AND SUBSTANCE, THE ASSESSEES CONTENTION IS THAT , BEFORE CANCELLING THE REGISTRATION U/S.12AA(3), THE L D. CIT(E) HAS NOT GIVEN ANY SHOW CAUSE N OTICE OR HAS TO COME AN INDEPENDENT SATISFACTION WHILE CANCEL ING THE REGISTRATION GRANTED TO THE ASSESSEE U/S.12A. 5 . THE BRIEF BACKGROUND OF THE CASE ARE THAT THE ASSESSEE WHICH WAS INCORPORATED ON 23.11.2010 U/S. 25 OF THE C OMPANIES ACT , 1956 HAD APPLI ED FOR REGISTRATION U/S. 12A/ 12AA ON 31.03.2011 WHICH WAS GRANTED BY THE THEN DIT(E), NEW DELHI VIDE CERTIFICATE DATED 09.05.2011 , W.E.F. ASSESSMENT YEAR 2011 - 12 . A LL THESE FACTS AND BACKGROUND OF THE CASE AND THE FORMATION OF THE COMPANY ALONG WITH CONSTIT UTION OF THE D IRECTORS AND THE SHAREHOLDERS HAVE BEEN ELABORATELY DISCUSSED IN THE TRIBUNAL ORDER FROM PAGES 3 TO 15. BASED ON THE INFORMATION AND MATERIAL SUPPLIED BY THE APPLICANT - ASSESSEE , REGISTRATION WAS GRANTED BY THE THEN DIT (E) AS PER THE TERMS AN D CONDITIONS MENTIONED THEREIN WHICH TOO HAS BEEN INCORPORATED IN PARAGRAPH 12 OF THE ORDER . IT IS A MATTER OF RECORD THAT IN THE 5 TH YEAR FROM THE DATE OF REGISTRATION, THE APPLICANT ASSESSEE HAD SUO MOTO SURRENDERED THE REGISTRATION GRANTED U/S 12A, VIDE LETTER DATED 31.03.2016 AND ACCORDINGLY , THE BENEFIT OF BEING A CHARITABLE INSTITUTION AND THE REGISTRATION WHICH WAS GRANTED WAS GIVEN UP BY THE ASSESSEE COMPANY. THEREAFTER, THE L D. CIT(E) IN THE IMPUGNED ORDER HAS NOTED THAT AN INTIMATION WAS RECEIVED FROM ACIT(E), CIRCLE - 1(1) VIDE LETTER DATED 16.08.2017 THAT ASSESSEE COMPANY HAD VIOLATED THE CONDITIONS FOR WHICH IT WAS GRANTED M .A. NO. 02 /DEL/20 20 7 REGISTRATION U/S.12AA. THE SAID CONTENTION HAS BEEN SUMMARIZED NOT ONLY IN THE S HOW CAUSE NOTICE ISSUED BY THE L D. CIT (E) BUT ALSO IN THE CANCELLATION ORDER. THEREAFTER, L D. CIT (E) HAS EXAMINED THE VARIOUS ANNUAL REPORTS OF THE ASSESSEE AS WELL AS OF THE A SSOCIATED J OURNAL L TD. (AJL); AND AFTER GOING THROUGH THE FINDINGS OF THE ASSESSING OFFICER AND THE INFORMATION AND MATERIAL PLACE D BEFORE HIM , LD. CIT(E) OBSERVED THAT ALLEGATIONS MADE BY THE ASSESSING OFFICER ARE CORROBORATED WITH THE FACTS ON RECORD OF THE ASSESSEE AS WELL AS OF THE AJL. HE ALSO NOTED ABOUT VARIOUS INQUIRIES WHICH WAS CONDUCTED BY THE DIT ( INV ) WITH REGARD TO MANNER IN WHICH AJL WAS TAKEN OVER BY THE ASSESSEE COMPANY AND THE BACKGROUND IN WHICH ASSESSEE HAS SURRENDER ED THE REGISTRATION U/S.12AA. 6. AFTER EXAMINING THE MATERIAL INFORMATION COMING ON RECORD BEFORE HIM, THE L D. CIT (E) HAD ISSUED A SHOW CA USE NOTICE TO THE ASSESSEE ON 21.08.2017 WHICH TOO HAS BEEN INCORPORATED IN THE ORDER OF CANCELLATION OF LD. CIT ( E) AND THIS FACT HAS ALSO BEEN INCORPORATED IN DETAIL IN TRIBUNAL ORDER FROM PAGES 19 ONWARDS. THE ASSESSEE HAD ALSO GIVEN VARIOUS REPLIES IN RESPONSE TO THE SAID NOTICE WHICH FACT HAS BEEN NOTED AND SUMMARIZED BY THE TRIBUNAL IN DETAIL IN PARAGRAPH 16 TO 17. BESIDE THIS, SAME ARGUMENT WAS RAISED DURING THE COURSE OF HEARING ALSO BEFORE THE THIS TRIBUNAL AND THE D EPARTMENTAL R EPRESENTATIVE HAD FILED THE COPIES OF ORDER SHEET ENTRIES AND THE PROCEEDINGS CONDUCTED BY THE LD. CIT(E) AND ALSO THE COPIES OF THE SHOW CAUSE NOTICE. THUS, IT CANNOT M .A. NO. 02 /DEL/20 20 8 BE SAID THAT LD. CIT (E) HAD NOT ISSUE D ANY NOTICE OR HAS NOT GIVEN ANY OPPORTUNITY OF HEARING BEFORE PASS ING OF THE ORDER. SECTION 12AA (3) MANDATES THAT ORDER OF CANCELLATION SHALL NOT BE PASSED UNLESS A REASONABLE OPPORTUNITY OF BEING HEARD IS GIVEN TO THE ASSESSEE . FROM THE RECORDS PLACED BEFORE US AND AFTER HEARING BOTH THE SIDES , THIS TRIBUNAL WAS CONVIN CED THAT DUE AND PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE BY THE LD. CIT(E) BEFORE PASSING OF THE ORDER U/S.12AA . E VEN IF FOR THE ARGUMENT S SAKE , IT IS ACCEPTED THAT PARTICULAR PHRASE WAS NOT USED BY THE LD. CIT IN THE SHOW CAUSE NOTICE AS TO WHY REGI STRATION GRANTER EARLIER SHOULD NOT BE CANCELLED , BUT FACT OF THE MATTER IS THAT , A DETAIL NOTICE WAS SENT BY THE L D. CIT(E) WHEREIN HE HAS CLEARLY CONFRONTED TO THE ASSESSEE AS TO WHAT WAS THE RELEVANT INFORMATION AND MATERIAL AND WHAT WAS HIS PRIMA FACI E SATISFACTION . HE HAS CLEARLY EXPRESSED IN THE NOTICE THAT ACTIVITIES OF THE ASSESSEE ARE NOT BEING CARRIED OUT IN CONSONANCE WITH THE OBJECTS AS WELL AS INCONFORMITY WITH THE REGISTRATION GRANTED TO THE ASSESSEE COMPANY. LD. CIT (E) HAS ISSUED FIRST SHOW CAUSE NOTICE ON 21.08.2017 , WHEREIN HE HAS MENTIONED ABOUT TERMS AND CONDITIONS ON WHICH THE REGISTRATION U/S.12A WAS GRANTED TO THE ASSESSEE - COMPANY . THEN HE HAS MENTIONED ABOUT CERTAIN INQUIRIES WHICH WERE CONDUCTED BY THE DEPARTMENT AND THE CONTENT OF SUCH INQUIRIES AND THE FINDINGS WAS ALSO SUMMARISED BY HIM IN THE SHOW CAUSE NOTICE. HE HAS ALSO NOTED THAT THE ASSESSEE HAD SURRENDERED ITS REGISTRATION SUO MOTO VIDE LETTER DATED 21.03.2016. LD. CIT (E) HAS EVEN MENTION THAT SECTION 12AA M .A. NO. 02 /DEL/20 20 9 R.W.S. 12A STIPUL ATES ONLY GRANTING/REFUSAL OR CANCELLATION OF REGISTRATION U/S.12A BY THE COMPETENT AUTHORITY , BUT THE PROVISION DO NOT PROVIDE FOR SURRENDER OF REGISTRATION U/S.12A. HE ALSO TOOK NOTE OF THE FINDINGS OF THE ASSESSING OFFICER AS WELL AS THE INQUIRY REACHED BY THE ASSESSING OFFICER TO REACH TO HIS OWN CONCLUSION THAT ACTIVITIES OF THE ASSESSEE WAS NOT IN CONFORMITY WITH THE TERMS AND CONDITIONS SUBJECT TO WHICH REGISTRATION U/S.12A WAS GRANTED . AFTER RECORDING HIS PRIMA FACIE SATISFACTION , LD. CIT (E) HAS AS KED FOR INFORMATION FROM THE ASSESSEE WHICH TOO HAS BEEN ELABORATED IN THE SAID SHOW CAUSE NOTICE. IN RESPONSE TO THIS NOTICE , THE ASSESSEE VIDE LETTER DATED 4 TH SEPTEMBER, 2017 HAD REQUESTED TO PROVIDE THE COPY OF LETTER DATED 16 TH AUGUST, 2017 WHICH WAS RECEIVED FROM ACIT(E), CIRCLE - 1(1), DELHI WHICH WAS MENTIONED IN THE SHOW CAUSE NOTICE . T HEREAFTER , THE L D. CIT VIDE LETTER DATED 20.09.2017 HAD PROVIDED THE SAID LETTER ALSO WHICH CONTAIN S ALL NECESSARY INFORMATION BASED ON WHICH THE HE HAS ISSUED SHOW CA USE NOTICE. THE SAID LETTER OF ASSESSING OFFICER WAS ACCOMPANIED WITH VARIOUS ENCLOSURES WHICH INCLUDED NOTICE U/S.12A AND THE REASONS RECORD ED U/S 148 FOR THE ASSESSMENT YEAR 2011 - 12 . IN RESPONSE TO THESE NOTICES AND MATERIAL CONFRONTED TO THE ASSESSEE , I T HAD DULY RESPONDED TO AND HAD FILED THE DETAILS . 7. NOW U NDER THESE FACTS, IT CANNOT BE INFERRED THAT EITHER THE ASSESSEE WAS NOT GRANTED ANY OPPORTUNITY OF HEARING OR WAS NOT CONFRONTED WITH THE MATERIAL/INFORMATION COMING ON RECORD. ONCE A DETAIL S HOW CAUSE NOTICE HAS BEEN ISSUED AND M .A. NO. 02 /DEL/20 20 10 ALL THE MATERIAL HAVE BEEN CONFRONTED TO THE ASSESSEE, THEN IT CANNOT BE HELD THAT NO PROPER OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSEE. ALL THESE FACTS HAVE BEEN NARRATED AND INCORPORATED IN DETAIL IN THE TRIBUNAL ORDE R IN THE CAPTIONED ORDER . IN VIEW OF THESE FACTS , THE CONTENTION RAISED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION CANNOT BE ACCEPTED AND IS LIABLE TO BE REJECTED. 8. THE SECOND CONTENTION WHICH HAS BEEN RAISED BY THE ASSESSEE IN THE AFORESAID APP LICATION IS UNDER: 2.1 THE APPLICANT HUMBLY SUBMITS THAT AT THE TIME OF REJOINDER TO THE SUBMISSIONS OF THE LD. DEPARTMENTAL REPRESENTATIVE (DR), THE APPLICANT HAD ARGUED THAT THE ID. DR CANNOT BE ALLOWED TO MAKE OUT A NEW CASE. THE LD. DR HAD DURING HIS SUBMISSIONS BEFORE THE HON'B L E TRIBUNAL MADE VARIOUS ARGUMENTS BASED ON NEW EVIDENCES, AND MADE OUT A NEW CASE, WHICH WAS NOT AT ALL THE BASIS ON WHICH THE L D. CIT(E) HAD PASSED THE CANCELLATION ORDER. THE ID. DR HAD SUBMITTED THAT THE APPLICANT HAD OBTAIN ED REGISTRATION U/S 12AA R.W.S. 12A BY SUPPRESSING THE FACT OF ACQUISITION OF SHARES OF AJL AND THEREFORE, THE CANCELLATION OF REGISTRATION WAS VALID. FURTHER, REFERENCE WAS MADE BY THE ID. DR TO VARIOUS DOCUMENTS SUCH AS THE LOAN ASSIGNMENT DEED BETWEEN A ICC AND THE APPLICANT, ETC. TO STATE THAT THE SHARES WERE ACQUIRED FOR A PALTRY SUM. THE ID. DR HAD ALSO RELIED ON VARIOUS FINDINGS OF FACTS IN THE DECISION OF THE DELHI HIGH COURT DATED DECEMBER 21, 2018 IN THE CASE OF 'ASSOCIATED JOURNAL LTD. & ANR V. LA ND & DEVELOPMENT OFFICE' IN W.P.(C) 12133/2018 & CM 47131/2018. FURTHER, REFERENCE WAS MADE TO THE PAST INVESTIGATION PROCEEDINGS EVEN THOUGH THEY HAD NO RELEVANCE TO THE CANCELLATION OF REGISTRATION. ALSO, ALLEGATIONS WERE MADE THAT THE LOAN TAKEN FROM DO TEX BY THE APPLICANT WERE BOGUS AND IT WAS ALLEGED THAT THE ACTIVITIES ARE NOT GENUINE, AND SO ON. 2.2 THE APPLICANT HAD ARGUED BEFORE THE HON'BLE TRIBUNAL THAT THE ID. DR SHOULD NOT BE ALLOWED TO TAKE THE SAID ARGUMENTS M .A. NO. 02 /DEL/20 20 11 AT THE APPELLATE STAGE AS IT GOES BEYOND PURV IEW OF THE ORDER PASSED BY THE L D. CIT(E). THE L D. CIT(E) IN HIS ORDER HAS NO WHERE STATED THAT THE APPLICANT HAD SUPPRESSED ANY FACTS AT THE TIME OF OBTAINING THE REGISTRATION. MORE IMPORTANTLY, THE ALLEGED SUPPRESSION OF FACTS WAS NOT AT ALL T HE BASIS ON WHICH THE ID. CIT (E) HAS CANCELLED THE REGISTRATION. SIMILARLY, THE L D, CIT(E) HAS NOT MADE ANY OF THE FOREGOING ALLEGATIONS WHICH WERE THE BASIS OF ENTIRE ARGUMENT OF THE ID. DR. THE MAIN BASIS FOR CANCELLATION OF REGISTRATION BY THE CIT(E) I S THAT THE APPLICANT IS ENGAGED IN REAL ESTATE ACTIVITY, WHICH CANNOT BE REGARDED AS GENUINE ACTIVITY BASED ON THE OBJECTS OF THE APPLICANT. THE APPLICANT HAD ARGUED THAT THE SAID REASONING OF THE L D. CIT( E) HAS BEEN DISREGARDED BY THE I D. DR AND HE MADE A COMPLETELY NEW CASE TO SUPPORT CANCELLATION OF REGISTRATION ON THE GROUND THAT THE APPLICANT HAD ACQUIRED SHARES OF AJL IN DUBIOUS MANNER AND THAT THE FACT OF SUCH ACQUISITION WAS 'SUPPRESSED' WHILE TAKING REGISTRATION. 2.3 IN SUPPORT OF ITS CONTENTION, THE APPLICANT HAD RELIED ON THE FOLLOWING DECISIONS WHEREIN IT IS HELD THAT THE ID. DR CANNOT MAKE AN ALTOGETHER NEW CASE OR EVEN IMPROVE UPON THE CASE OF THE CIT. - MAHINDRA & MAHINDRA LTD. V. DCIT [2009](30 SOT 374)(MUMBAI)(SB); - ACIT V. PRAKASH L. SHAH [2008] 115 ITD 167 (MUMBAI) (SB); S.A. RAHIM V. CIT [2011] 15 TAXMANN.COM 321 (ANDHRA PRADESH); AND - SUPERMAX PERSONAL CARE (P.) LTD. V. ACIT [2019] 107 TAXMANN.COM 361 (MUMBAI - TRIB.). 2.4 THE APPLICANT HUMBLY SUBMITS THAT THE APPLICANT HAD ALSO ARGUE D THAT THE LD. DR CANNOT BE ALLOWED TO ARGUE OR ALLEGE AT THIS STAGE THAT THE APPLICANT HAD SUPPRESSED FACTS AT THE TIME OF APPLYING FOR REGISTRATION. IT WAS ARGUED THAT THAT WHEN THE LD. CIT(E) HAS NO WHERE MADE SAID ALLEGATIONS, SUCH AN ALLEGATION CANNOT BE MADE AT THE APPELLATE LEVEL. 2.5 RELIANCE IN THIS REGARD WAS PLACED ON THE DECISION IN THE CASE OF WE L HAM BOYS' SCHOOL SOCIETY V. CBDT [2006] 285 ITR M .A. NO. 02 /DEL/20 20 12 74 (UTTARANCHAL) WHEREIN IT IS HELD THAT WHERE IN THE SHOW CAUSE NOTICE OR IN THE IMPUGNED ORDER, THE COMMISSIONER HAD NOT ALLEGED THAT THE ASSESSEE HAD OBTAINED THE REGISTRATION BY PRACTISING FRAUD OR FORGERY, SAID GROUND CANNOT SURVIVE BEFORE THE COURT. FURTHER, RELIANCE WAS PLACED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT HAS, IN CASE OF MAHESHW ARI MANDAL (DELHI) VS THE STATE OF DELHI & ORS (W.P. (C) 2029/2016 AND CM NOS. 8748/2016, 21328/2016 AND CRL. M.A. NOS. 5911/2017 & 6253/2017) WHEREIN IT IS HELD THAT WHERE IN THE ORIGINAL PROCEEDINGS IT WAS NOT ALLEGED THAT REGISTRATION WAS OBTAINED BY FR AUD THEN SAID GROUND CANNOT BE TAKEN DURING APPEAL. 2.6 THE FOREGOING CONTENTIONS WAS ALSO INCLUDED IN THE WRITTEN SYNOPSIS SUMMARIZING THE APPLICANT'S REJOINDER TO ARGUMENTS TAKEN BY THE L D. DR, SUBMITTED TO THE HON'BLE TRIBUNAL. THE SAME IS ALSO MENTION ED AT PARAS 72 AND 94 OF THE TRIBUNAL'S ORDER, 2.7 HOWEVER, ON PERUSAL OF THE TRIBUNAL'S ORDER, IT IS OBSERVED THAT THE HON'BLE TRIBUNAL HAS CONSIDERED ALL THE FOREGOING ARGUMENTS OF THE L D. DR WITHOUT FIRST ADJUDICATING ON THE ISSUE AS TO WHETHER THE L D. DR CAN BE PERMITTED TO MAKE OUT A COMPLETELY NEW CASE WHICH IS NOT EVEN THE BA SIS OF THE ORDER PASSED BY THE L D. C I T(E). IT APPEARS THAT THIS ASPECT HAS ALSO SKIPPED THE ATTENTION OF THE HON'BLE TRIBUNAL SINCE THERE IS NO ADJUDICATION ON THE SAID CONTENTI ON OF THE APPLICANT. 2.8 IT IS MOST HUMBLY SUBMITTED THAT NON - ADJUDICATION OF THE SAID ISSUE IS A MISTAKE APPARENT FROM RECORD, WHICH OUGHT TO BE RECTIFIED. ACCORDINGLY, THE APPLICANT HUMBLY REQUESTS THE HON'BLE TRIBUNAL TO ADJUDICATE UPON THE ADMISSIBILI TY OF NEW CASE MADE OUT BY THE L D. DR. 2.9 RELIANCE IS AGAIN PLACED ON THE FOLLOWING DECISIONS, WHEREIN IT IS HELD THAT NON ADJUDICATION OF THE CONTENTION RAISED BY THE ASSESSEE IS A MISTAKE APPARENT FROM RECORD: ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (262 ITR 146) (GUJ), AFFIRMED BY HON'BLE APEX COURT IN 173 TAXMAN 322; SHAHID ATIQ VS. ITO (97 ITD 22)(DEL); STOCK EXCHANGE VS. ACIT (68 TTJ 610)(AHD). M .A. NO. 02 /DEL/20 20 13 2.10 FURTHER, THE DECISION OF THE JURISDICTIONAL HIGH COURT IN MAHESHWARI MANDAL (DELHI) VS T HE STATE OF DELHI & ORS (SUPRA) HAS ALSO NOT BEEN DEALT WITH. THE APPLICANT RELIES ON THE DECISION OF THE HON'BLE SUPREME COURT IN CASE OF ACIT V. SAURASHTRA KUTCH STOCK EXCHANGE LTD. [(2008) 305 ITR 227] WHEREIN IT IS HELD THAT NON - CONSIDERATION OF THE DE CISION OF THE HON'BLE JURISDICTIONAL HIGH COURT CONSTITUTES MISTAKE APPARENT ON RECORD, 2.11 RELIANCE IS ALSO PLACED ON THE DECISION OF THE SUPREME COURT IN HONDA SIEL POWER PRODUCTS LTD. V. CIT (165 TAXMAN 307)(SC) WHEREIN IT IS HELD THAT NOT CONSIDERING THE DECISIONS RELIED UPON BEFORE THE TRIBUNAL AMOUNTS TO A MISTAKE APPARENT FROM THE RECORDS. 2.12 IN VIEW OF THE ABOVE, THE APPLICANT PRAYS THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO RECTIFY THE AFORESAID INADVERTENT ERROR BY RECALLING THE CAPTIONED OR DER IN ITS ENTIRETY OR IN PART AND/ OR PASS SUCH SUPPLEMENTAL ORDER AS THE HON'BLE TRIBUNAL MAY DEEM FIT UNDER THE FOREGOING FACTS AND CIRCUMSTANCES. 9 . THIS CONTENTION WAS SPECIFICALLY RAISED BY THE L D. C OUNSEL DURING THE COURSE OF HEARING AND ALSO IN T HE REJOINDER PROCEEDINGS BEFORE US. THE L D. DEPARTMENTAL REPRESENTATIVE HAD SPECIFICALLY REBUTTED THE SAID CONTENTION THAT NO NEW CASE HAS BEEN MADE OUT BY THE DEPARTMENT DURING THE COURSE OF HEARING , BECAUSE THE ORDER OF L D. CIT (E) PROCEEDS ON PRIMARY SA TISFACTION RECORDED AND HIS REASONING GIVEN ON PARAGRAPH 16 AND 17 THAT THE ACTIVITIES OF THE ASSESSEE WAS NEITHER GENUINE NOR THEY HAVE CARRIED OUT IN ACCORDANCE WITH THE STATED OBJECTS. THE DEPARTMENT HAD ONLY STRENGTHEN THE CASE AND THE FINDING GIVEN IN THE CIT (E). NO NEW VIEW OR ALL TOGETHER DIFFERENT CASE HAS BEEN CANVASSED BY THE DEPARTMENT BEFORE THE TRIBUNAL. M .A. NO. 02 /DEL/20 20 14 10. ON GOING THROUGH THE DETAILED ARGUMENT MADE BY THE LD. C OUNSEL AS WELL AS BY THE L D. DR , THIS TRIBUNAL HAS NOTED THE OBJECT IONS OF THE D R IN PARAGRAPH 95 WHICH READS AS UNDER: 95. WITH THE PERMISSION OF THE COURT, MR. G.C. SRIVASTAVA, LD. SPECIAL COUNSEL FOR THE REVENUE SUBMITTED THAT NO NEW CASE HAS BEEN MADE OUT BY THE DEPARTMENT AND IT IS COMPLETELY MISCONCEIVED ASSERTION. THE ORDER OF LD. CIT(E) COMPLETELY PRIMARY SATISFACTION RECORDED BY HIM IN PARA 15 & 17 AND THE ENTIRE COURSE OF THE CANCELLATION ORDER IS THAT ACTIVITIES OF THE APPELLANT/ASSESSEE ARE NEITHER GENUINE NOR THEY HAVE BEEN CARRIED OUT IN ACCORDANCE WITH ITS STATED OBJEC TS. HE ALSO REFERRED TO THE JUDGMENT IN THE CASE OF ACIT V. PRAKASH L. SHAH (2008) 115 ITD 167, WHEREIN THE TRIBUNAL HAS CLEARLY STATED THAT THE DR CAN STRENGTHEN THE VIEW TAKEN BY THE ASSESSING OFFICER FROM ANY ANGLE, HE LIKES, BUT CANT BRING OUT AN ALTO GETHER DIFFERENT CASE DE HORS THE VIEW OF THE ASSESSING OFFICER. THE AREA OF ARGUMENTS OF DR IS UNLIMITED BUT WITHIN THE BOUNDARY LIMIT MARKED BY THE ASSESSING OFFICER. HE ALSO DISTINGUISHED THE CASE OF MAHINDRA 8C MAHINDRA (SUPRA) BUT CONTENDED THAT IN TH OSE CASES REVENUE WAS SEEKING TO NEGATE THE FINDINGS ALREADY RECORDED BY THE ASSESSING OFFICER AND DR ARGUED IN THAT CASE CONTRARY TO THE FINDING OF THE ID AO. THUS, THIS CASE DOES NOT SUPPORT THE ARGUMENT OF THE ASSESSEE. 11 . THIS ARGUMENT OF THE LD. DR WAS ACCEPTED AND I N THE ENTIRE ORDER THE TRIBUNAL HAS NOT GIVEN ANY FINDING BASED ON ALTOGETHER NEW FACTS BROUGHT FOR THE FIRST TIME BY THE DEPARTMENT ; OR THE TRIBUNAL HAS BASED ITS REASONING ON SOME M .A. NO. 02 /DEL/20 20 15 DIFFERENT FACTS OR MATERIAL NOT ON RECORD OR DIVORCE FR OM THE LINES OR THE FINDINGS GIVEN BY THE L D. CIT (E). N OWHERE THE CONCLUSION OR THE FINDING OF THE TRIBUNAL IS BASED ON ALTOGETHER DIFFERENT FACTS OR REASONING DE HORS THE FINDING OF LD. CIT (E). WE AGREE THAT DEPARTMENT CANNOT MAKE OUT A NEW CASE ALTOGET HER WHICH IS NEITHER THE CASE OF THE ASSESSING OFFICER NOR THE CASE OF THE L D. CIT (E) , BUT CERTAINLY THE DEPARTMENT CAN RELY UPON THE SAME FACTS AND MATERIAL OR MAY BRING SOMETHING ON RECORD TO STRENGTHEN THE OBSERVATIONS AND THE FINDINGS OF THE ASSESSING OFFICER OR LD. CIT (E). THUS, THE CONTENTION RAISED BY THE ASSESSEE IN THE APPLICATION IS NOT CORRECT AND THEREFORE SAME IS REJECTED. 12 . THE THIRD CONTENTION RAISED BY THE ASSESSEE IN MISCELLANEOUS APPLICATION READS AS UNDER: 3.1 THE APPLICANT HUMBL Y SUBMITS THAT IN THE COURSE OF THE HEARING, IT WAS CONTENDED THAT SINCE THE APPLICANT HAD ALREADY SUO MOTO SURRENDERED THE REGISTRATION VIDE LETTER DATED MARCH 21, 2016 ADDRESSED TO THE DIRECTOR OF INCOME TAX (EXEMPTIONS), THE PURPORTED SHOW CAUSE NOTICE ISSUED BY THE LD. CIT(E) ON AUGUST 21, 2017 (17 MONTHS LATER) CALLING FOR VARIOUS DETAILS IN RESPECT OF THE ACTIVITIES OF THE APPLICANT AND THE ORDER PASSED BY THE LD. CIT(E) IS WITHOUT JURISDICTION AND BAD IN LAW. THE SURRENDER LETTER OF THE APPLICANT IS AT PAGE 70 OF PB - I. FURTHER, IN RESPONSE TO THE ALLEGATION OF THE LD. CIT(E) THAT THE APPLICANT HAD SUO MOTO SURRENDERED THE REGISTRATION AS A SEQUEL TO THE INVESTIGATION AGAINST THE APPLICANT, THE APPLICANT HAD M .A. NO. 02 /DEL/20 20 16 SUBMITTED IN DETAIL THE SEQUENCE OF EVENTS W HICH CLEARLY SHOWS THAT THE SAID SURRENDER HAD NO RELATION TO THE PAST INVESTIGATIONS PROCEEDINGS AGAINST THE APPLICANT. IT WAS FURTHER SUBMITTED THE APPLICANT HAD ITSELF DISCLOSED THE TRANSACTION OF ACQUISITION OF SHARES OF AJL BY WAY OF A NOTE TO ITS ACC OUNTS FOR THE YEAR ENDED MARCH 31, 2011 AND HENCE, THERE WAS NO REASON FOR THE APPLICANT TO BE WARY OF SO CALLED 'INVESTIGATION'. FURTHER, AS REGARDS THE FINDING OF THE LD. CIT(E) THAT THE SURRENDER WAS NOT VALID, SINCE THE APPLICANT DOES NOT HAVE THE RIGH T TO SURRENDER THE REGISTRATION UNDER SECTION 12AA, THE APPLICANT HAD SUBMITTED THAT THE OPTION SHOULD BE ON THE ASSESSEE WHETHER OR NOT TO AVAIL THE BENEFIT OF EXEMPTION U/S. 11 AND ACCORDINGLY, IF THE ASSESSEE SO WISHES, HE SHOULD BE ALLOWED TO SURRENDER ITS REGISTRATION. IN THIS REGARD, RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS: 1 - CIT V. MAHINDRA MILLS [2000] (109 TAXMAN 225)(SC); 2 - CYANAMID INDIA LTD. V. CCE [1997] (1997 TAXMANN.COM 1518)(CEGAT - NEW DELHI); AND 3 - GOTHI PLASTIC INDUSTRIES V. C CE [1996](1996 TAXMANN.COM 486){CEGAT - CHENNAI). 3.2 IT WAS ALSO SUBMITTED THAT SINCE AFTER SURRENDER OF THE REGISTRATION, NO ACTION WAS TAKEN BY THE LD. CIT(E) FOR A LONG PERIOD OF 17 MONTHS, IT SHOULD BE DEEMED THAT THE SURRENDER HAS BEEN ACCEPTED BY T HE DEPARTMENT, IN THIS REGARD, REFERENCE WAS DRAWN TO THE PROVISIONS OF SECTION 12AA(2) WHEREIN A TIME LIMIT OF SIX MONTHS HAS BEEN M .A. NO. 02 /DEL/20 20 17 PRESCRIBED FOR GRANTING OR REJECTING ANY APPLICATION FOR REGISTRATION. FURTHER, RELIANCE WAS PLACED ON THE FOLLOWING DECISIO NS WHEREIN IT HAS BEEN HELD THAT NON - DISPOSA L OF AN APPLICATION FOR REGISTRATION UNDER SECTION 12AA WITHIN SIX MONTHS FROM DATE OF FILING WOULD BE CONSIDERED AS DEEMED GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT: C I T V. SOCIETY FOR THE PROMOTION O F EDUCATION, ADVENTURE SPORT & CONSERVATION OF ENVIRONMENT [2016] 67 TAXMANN.COM 264 (SC); COMMISSIONER OF INCOME TAX, COCHIN V. TBI EDUCATION TRUST [2018] 96 TAXMANN.COM 356 (KERALA) 3.3 ACCORDINGLY, IT WAS SUBMITTED THAT SIX MONTHS HAS BEEN CONSIDERED A S REASONABLE TIME UNDER THE ACT TO PASS ANY ORDER OR TAKE ANY ACTION BY THE DEPARTMENT, AND SINCE NO ACTION HAS BEEN TAKEN BY THE DEPARTMENT FOR MORE THAN SIX MONTHS AFTER THE SURRENDER OF REGISTRATION, THE SAME SHOULD BE DEEMED TO BE ACCEPTED BY THE DEPAR TMENT. 3.4 RELIANCE WAS ALSO PLACED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF STATE OF PUNJAB V. BHATINDA DISTRICT COOP, MILL (11 SCC 363)(SC) WHEREIN, IN THE CONTEXT OF PUNJAB GENERAL SALES TAX ACT, IT IS HELD THAT EVEN IF THE STATUTE DOES NOT P RESCRIBE A TIME LIMIT FOR PASSING AN ORDER, THE SAME OUGHT TO BE PASSED WITHIN REASONABLE TIME. 3 5 RELIANCE WAS ALSO PLACED ON THE DECISION IN AMALNER COOPERATIVE BANK LTD. V. COMMISSIONER OF CENTRAL EXCISE, NASHIK [2012] 21 TAXMANN.COM 433 (MUM. - CESTAT ) WHEREIN IN THE CONTEXT OF THE SERVICE TAX LAW, IT HAS BEEN M .A. NO. 02 /DEL/20 20 18 HELD THAT AS SOON AS REGISTRATION CERTIFICATE HAD BEEN SURRENDERED BY ASSESSEE, THE ONUS WAS ON REVENUE TO FIND OUT CAUSE OF SURRENDERING REGISTRATION AND IF ACTION WAS NOT TAKEN WITHIN REASONABL E TIME, THE SAME WOULD NOT BE QUESTIONED SUBSEQUENTLY. 3.6 THE FOREGOING CONTENTIONS WAS ALSO INCLUDED AT PARAS 6.1 TO 7.9 OF THE WRITTEN SYNOPSIS OF THE ARGUMENTS OF THE APPLICANT SUBMITTED TO THE HON'BLE TRIBUNAL. THE SAME IS ALSO MENTIONED AT PARAS 45 - 4 8 OF THE TRIBUNAL'S ORDER. 3.7 HOWEVER, ON PERUSAL OF THE TRIBUNAL'S ORDER, IT IS OBSERVED THAT THE HON'BLE TRIBUNAL HAS NOT ADJUDICATED UPON SAID CONTENTIONS OF THE APPLICANT. IT APPEARS THAT THIS ASPECT HAS SKIPPED THE ATTENTION OF THE HON'BIE TRIBUNAL S INCE THERE IS NO ADJUDICATION ON THE SAID CONTENTION OF THE APPLICANT. IT IS MOST HUMBLY SUBMITTED THAT NON - ADJUDICATION OF THE SAID ISSUE IS A MISTAKE APPARENT FROM RECORD, WHICH OUGHT TO BE RECTIFIED. ACCORDINGLY, THE APPLICANT HUMBLY REQUESTS THE HON'BL E TRIBUNAL TO ADJUDICATE UPON THE SAID CONTENTIONS OF THE APPLICANT AS THEY GO TO THE ROOT OF THE MATTER. 3.8 RELIANCE IS AGAIN PLACED ON THE FOLLOWING DECISIONS, WHEREIN IT IS HELD THAT NON ADJUDICATION OF THE CONTENTION RAISED BY THE ASSESSEE IS A MISTAK E APPARENT FROM RECORD: ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (262 ITR 146)(GUJ), AFFIRMED BY HON'BLE APEX COURT IN 173 TAXMAN 322; SHAHID ATIQ VS. ITO (97 ITD 22)(DEL); M .A. NO. 02 /DEL/20 20 19 STOCK EXCHANGE VS. ACIT (68 TTJ 610)(AHD). 3.9 IN VIEW OF THE ABOVE, THE APPLI CANT PRAYS THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO RECTIFY THE AFORESAID INADVERTENT ERROR BY RECALLING THE CAPTIONED ORDER IN ITS ENTIRETY OR IN PART AND/ OR PASS SUCH SUPPLEMENTAL ORDER AS THE HON'BLE TRIBUNAL MAY DEEM FIT UNDER THE FOREGOING FACTS A ND CIRCUMSTANCES. 3.10 IN VIEW OF THE ABOVE, THE APPLICANT PRAYS THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO RECTIFY THE AFORESAID INADVERTENT ERROR BY RECALLING THE CAPTIONED ORDER IN ITS ENTIRETY OR IN PART AND/ OR PASS SUCH SUPPLEMENTAL ORDER AS THE HON 'BLE TRIBUNAL MAY DEEM FIT UNDER THE FOREGOING FACTS AND CIRCUMSTANCES. 13 . THIS ISSUE OF SUO MOT O SURRENDER HAS BEEN DISCUSSED IN DETAIL BY THE TRIBUNAL IN THE CAPTIONED ORDER , BUT NOWHERE ANY FINDING HAS BEEN GIVEN AS TO UNDER WHAT CIRCUMSTANCES IT WAS FORCED TO SURRENDER THE REGISTRATION GRANTED EARLIER. IN FACT THE TRIBUNAL HAS TAKEN NOTE OF THIS FACT THAT ASSESSEE ITSELF HAS GIVEN UP ITS REGISTRATION AND EVEN PRIOR TO SUCH SURRENDER LETTER , NO SUCH ACTIVITIES WAS CARRIED OUT WHICH CAN BE RECKONED AS CHARITABLE ACTIVITIES OR ANY ACTIVITIES HAS BEEN CARRIED OUT IN PURSUANCE OF ITS OBJECT S . IN FACT, THE ASSESSEE HAD FILED VOLUMINOUS ADDITIONAL EVIDENCES WHICH ARE POST THE DATE OF THE SURRENDER L ETTER TO SHOW THAT THE ASSESSEE WAS DOING SOME ACTIVITIES WHICH WAS SOMEHOW IN CONSONANCE WITH ITS OBJECTS TO WHICH TRIBUNAL HAS DEALT WITH IN DETAIL AND HAS M .A. NO. 02 /DEL/20 20 20 OBSERVED THAT MOST OF THE ADDITIONAL EVIDENCES FILED RELATE TO THE EVENTS POST THE DATE OF SURRENDER AND EVEN AFTER THE DATE OF PASSING OF THE ORDER OF THE CIT (E). IT HAS BEEN SPECIFICALLY NOTED AND OBSERVED BY THE TRIBUNAL THAT, ALL THESE EVIDENCES WHICH WERE FILED TO CONTEND THAT ASSESSEE WAS TRYING TO START SOME ACTIVITIES OR HAS DONE SOME PUBLISHING OF ARTICLES TO CANVASS IT WAS TRYING TO DO SOME ACTIVIT IES, WILL NOT MAKE MUCH DIFFERENCE , FIRSTLY , ASSESSEE ITSELF HAS GIVEN UP ITS REGISTRATION ; AND SECONDLY , THESE ACTIVITIES WILL NOT JUSTIFY THAT IT WAS CARRYING OUT ANY ACTIVITIES OF CHARITABLE ACTIVITY FROM THE DATE OF GRANTING OF REGISTRATION TILL THE DA TE OF SURRENDERING OF THE REGISTRATION. THE TRIBUNAL IN PARAGRAPH 115 HAS EVEN NOTED THE PARADOX OF THE ASSESSEE , WHICH IS INCORPORATED HEREUNDER: 115. THER E IS ANOTHER ANGLE WHICH PONDERS US IS THAT, IF NO ACTIVITIES WERE CARRIED OUT BY YI TOWARDS CHA RITABLE ACTIVITY BETWEEN THE PERIOD 2011 TO 2016, THEN WHY SO MUCH OF CLAMOUR THAT ASSESSEE SHOULD BE RECOGNIZED AS CHARITABLE INSTITUTION QUA THAT PERIOD ONLY SHOULD HAVE THE BENEFIT OF REGISTRATION U/S.12AA FOR THIS PERIOD OF FIVE YEARS, I.E., FROM THE A SSESSMENT YEAR 2011 - 12 TO ASSESSMENT YEAR 2016 - 17 AND POST 21 ST MARCH, 2016, THE ASSESSEE ITSELF CHOSE TO SURRENDER ITS REGISTRATION AND WILLINGLY GIVE UP ITS CHARITY STATUS UNDE R THE INCOME TAX ACT, IF BOTH YI AND AJL ARE NON - PROFITABLE COMPANY, THEN WHY SUCH A DISPUTE ON CANCELLATION FROM RETROSPECTIVE DATE. M .A. NO. 02 /DEL/20 20 21 14 . NOT ONLY THIS FACT HAS BEEN REITERATED AT SEVERAL PLACES IN THE IMPUGNED ORDER BUT ALSO DETAIL REASONING HAS BEEN GIVEN THAT , ONCE THE ASSESSEE ITSELF HAS GIVEN UP ITS REGISTRATION TO CARRY OUT CHARITABLE ACTIVITIES, AND IF FOR THE INTERREGNUM PERIOD (I.E., FROM THE DATE OF GRANTING OF REGISTRATION TO THE DATE OF SURRENDER LETTER) NO ACTIVITIES HAS BEEN CARRIED OUT , THEN WE DO NOT FIND ANY REASON AS TO WHY THE APPLICANT ASSESSEE IS SEEKING THE ST ATUS OF A CHARITABLE INSTITUTION FOR THAT PERIOD . NOWHERE THE FINDING OF THE TRIBUNAL IS BASED ON REASONING THAT MERELY BECAUSE ASSESSEE HAS SURRENDERED THE REGISTRATION AND THEREFORE THE CANCELLATION OF THE ORDER BY THE LD. CIT (E) IS JUSTIFIED. THUS , SUC H A CONTENTION AS RAISED BY THE ASSESSEE IS REJECTED. 1 5 . IN POINT NO.4, THE ASSESSEE HAS RAISED THE FOLLOWING CONTENTION : - 4.1 THE APPLICANT HUMBLY SUBMITS THAT IN THE COURSE OF THE HEARING, THE APPLICANT HAD SUBMITTED THAT TILL 2014 (WHEN SUB - SECTION (4) WAS INSERTED IN SECTION 12AA W.E.F. 1.10.2014) UNDER SECTION 12AA, REGISTRATION COULD BE CANCELLED ONLY IF THE CIT FINDS THAT THE ACTIVITY OF THE TRUST IS NOT GENUINE OR IT IS NOT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. ANY OTHER BASIS, SUCH AS AS SESSEE HOLDING ASSETS NOT PERMISSIBLE UNDER SECTION 11(5) OR ANY OTHER REASON DOES NOT PERMIT CANCELLATION OF SHARES. IN THIS REGARD, ATTENTION WAS DRAWN TO THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME - TAX (EXEMPTION) V. ABUL KALA M AZAD ISLAMIC AWAKENING [2013] 33 TAXMANN.COM M .A. NO. 02 /DEL/20 20 22 364 (DELHI) WHEREIN IT IS HELD THAT REGISTRATION GRANTED UNDER SECTION 12A CANNOT BE CANCELLED ON GROUND OF INVESTMENT IN COMMERCIAL PROPERTY. RELIANCE WAS ALSO PLACED ON THE DECISION IN PRABODHAN SHIKSHAN PRA SARAK SANSTHA V. DCIT [2014] 44 TAXMANN.COM 33 (PUNE - TRIB.) WHEREIN SIMILAR VIEW HAS BEEN TAKEN. 4.2 WITHOUT PREJUDICE TO SAID CONTENTION, THE APPLICANT HAD ALSO SUBMITTED THAT IF THE LD. CIT(E) IS RIGHT IN SAYING THAT THE REGISTRATION IS TO BE CANCELLED SINCE THE APPLICANT HELD SHARES OF AJL, ALLEGEDLY A COMMERCIAL ENTITY ENGAGED IN REAL ESTATE, THAT COULD BE A GROUND FOR CANCELLATION ONLY UNDER SECTION 12AA(4), WHICH IS EFFECTIVE ONLY FROM 1 - 10 - 2014, AND NOT FROM ASSESSMENT YEAR 2011 - 12, FROM WHICH THE CANCELLATION ORDER HAS BEEN MADE EFFECTIVE. 4.3 IN THIS REGARD, RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS WHEREIN IT IS HELD THAT THE POWER OF CANCELLATION UNDER SECTION 12AA IS A QUASI - JUDICIAL POWER AND IT CANNOT BE EXERCISED UNLESS THERE IS SPECIF IC POWER UNDER THE LAW: INDUSTRIAL INFRASTRUCTURE DEVELOPMENT CORPORATION (GWALIOR) M.P. LTD. [2018] 90 TAXMANN.COM 281 (SC); - WELHAM BOYS' SCHOOL SOCIETY V. CBDT [2006] 285 ITR 74 (UTTARANCHAL); LILAVATI KIRTILAL MEHTA MEDICAL TRUST V. CIT [2019] 108 TAX MANN.COM 272 (MUMBAI - TRIB.) WHEREIN IT IS HELD THAT VIOLATION OF PROVISIONS OF SECTION 13 CAN BE A GROUND FOR CANCELLATION OF REGISTRATION ONLY UNDER SECTION 12AA(4) AND NOT 12AA(3) AND THAT SECTION 12AA(4) WOULD TAKE EFFECT M .A. NO. 02 /DEL/20 20 23 ONLY FROM 1.10.2014. THERE CA NNOT BE RETROSPECTIVE CANCELLATION U/S. 12AA(4) PRIOR TO 1.10.2014. 4.4 IT WAS ACCORDINGLY SUBMITTED THAT SINCE POWER TO CANCEL REGISTRATION FOR HOLDING COMMERCIAL INVESTMENT WAS BROUGHT IN THE STATUTE ONLY IN 2014 VIDE SUB - SECTION (4), EVEN IF REGISTRATIO N WAS CANCELLED UNDER SECTION 12AA(4), ITS OPERATION CANNOT GO PRIOR TO 1 - 10 - 2014. IT WAS FURTHER SUBMITTED THAT SINCE CIT(E) HAS ALREADY PASSED SAID ORDER AND NOT INVOKED SECTION 12AA(4), THEREFORE, HE IS NOW PRECLUDED FROM INVOKING SAID PROVISION, SINCE ONE CANNOT REVIEW HIS OWN ORDER IN ABSENCE OF SPECIFIC PROVISION. 4.5 THE FOREGOING CONTENTIONS WAS ALSO INCLUDED AT PARAS 9.1 TO 10.9 OF THE WRITTEN SYNOPSIS OF THE ARGUMENTS OF THE APPLICANT SUBMITTED TO THE HON'BLE TRIBUNAL. THE SAME IS ALSO MENTIONED A T PARA 50 OF THE TRIBUNAL'S ORDER. 4.6 HOWEVER, ON PERUSAL OF THE TRIBUNAL'S ORDER, IT IS OBSERVED THAT THE HON'BLE TRIBUNAL HAS NOT ADJUDICATED UPON SAID CONTENTIONS OF THE APPLICANT. IT APPEARS THAT THIS ASPECT HAS SKIPPED THE ATTENTION OF THE HON'BLE TR IBUNAL SINCE THERE IS NO ADJUDICATION ON THE SAID CONTENTION OF THE APPLICANT, IT IS MOST HUMBLY SUBMITTED THAT NON - ADJUDICATION OF THE SAID ISSUE IS A MISTAKE APPARENT FROM RECORD, WHICH OUGHT TO BE RECTIFIED. ACCORDINGLY, THE APPLICANT HUMBLY REQUESTS TH E HON'BLE TRIBUNAL TO ADJUDICATE UPON THE SAID CONTENTIONS OF THE APPLICANT AS THEY GO TO THE ROOT OF THE MATTER. 4.7 RELIANCE IS AGAIN PLACED ON THE FOLLOWING DECISIONS, M .A. NO. 02 /DEL/20 20 24 WHEREIN IT IS HELD THAT NON ADJUDICATION OF THE CONTENTION RAISED BY THE ASSESSEE IS A MISTAKE APPARENT FROM RECORD: ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (262 ITR 146)(GUJ), AFFIRMED BY HON'BLE APEX COURT IN 173 TAXMAN 322; SHAHID ATIQ VS. ITO (97 ITD 22)(DEL); STOCK EXCHANGE VS. ACIT (68 TTJ 610)(AHD), 4.8 IN VIEW OF THE ABOVE, T HE APPLICANT PRAYS THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO RECTIFY THE AFORESAID INADVERTENT ERROR BY RECALLING THE CAPTIONED ORDER IN ITS ENTIRETY OR IN PART AND/ OR PASS SUCH SUPPLEMENTAL ORDER AS THE HON'BLE TRIBUNAL MAY DEEM FIT UNDER THE FOREGOING FACTS AND CIRCUMSTANCES. 4.9 IN VIEW OF THE ABOVE, THE APPLICANT PRAYS THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO RECTIFY THE AFORESAID INADVERTENT ERROR BY RECALLING THE CAPTIONED ORDER IN ITS ENTIRETY OR IN PART AND/ OR PASS SUCH SUPPLEMENTAL ORDER AS THE HON'BLE TRIBUNAL MAY DEEM FIT UNDER THE FOREGOING FACTS AND CIRCUMSTANCES. 16 . F IRST OF ALL , THE TRIBUNAL HAS NOT UPHELD THE CANCELLATION OF THE ORDER ON THE ISSUE OF ACQUISITION OF SHARES OF A COMMERCIAL ENTITY ; OR WAS THE SOLE GROUND FOR DENIAL OF EXEMPTION OR CANCELLATION OF REGISTRATION. THE FINDING OF THE TRIBUNAL REVOLVES AROUND THE FACT THAT , FIRSTLY , THE ASSESSEE AT THE TIME OF REGISTRATION HAD NOT DISCLOSED MATERIAL FACTS WHICH WAS REQUIRED TO BE BROUGHT ON RECORD WHILE SEEKING M .A. NO. 02 /DEL/20 20 25 REGISTRATION U /S.12AA ; AND SECONDLY , NO ACTIVITIES O F THE ASSESSEE WAS CARRIED OUT WHICH CAN BE SAID TO BE OF CHARITABLE IN NATURE NOR WAS IT CARRIED OUT IN PURSUANCE OF ITS OBJECT FOR WHICH IT WAS GRANTED REGISTRATION. THIS WAS NEVER THE GROUND ON WHICH THE TRIBUNAL HA S U PHELD THE ORDER OF THE CANCELLATION OF L D. CIT ( E ), THEREFORE SUCH CONTENTION BY THE ASSESSEE DOES NOT HOLD GROUND . 1 7 . I N POINT NO.5, THE ASSESSEE HAS RAISED THE FOLLOWING CONTENTION : - 5.1 ON PERUSAL OF THE TRIBUNAL'S ORDER, IT IS NOTICED THAT AT PAR A 106, IT IS STATED AS UNDER: 'OTHER PIVOTAL AND UNDERPINNING REASONS FOR CANCELLING THE REGISTRATION BY THE L D. CIT(E) ARE THAT THE ASSESSEE COMPANY HAS NOT BEEN ABLE TO POINT OUT ANY SINGLE ACTIVITY CARRIED OUT IN FURTHERANCE OF ITS STATED OBJECTS, FOR W HICH IT WAS CREATED DURING THE SAID PERIOD, I.E., FROM A. Y.S 2011 - 12 TO 2016 - 17; AND THE ONLY ACTIVITY OF THE ASSESSEE WAS BORROWING OF RS. 1 CRORE FROM KOLKATA BASED COMPANY AND MAKING THE PAYMENT OF RS. 50 LAKHS TO AICC AND APPLYING FOR ALLOTMENT OF SHA RES AGAINST CANCELLATION OF LOAN OF RS. 90 CRORES ASSIGNED BY AICC TO YOUNG INDIAN. ALL THESE ACTIVITIES DEFINITELY CANNOT BE HELD TO BE IN FURTHERANCE OF THE OBJECTS OF THE YOUNG INDIAN, BECAUSE AT NO POINT OF TIME, IT WAS EVER STATED WHAT WAS THE PURPOSE AND OBJECTIVE BEHIND ACQUIRING THE AJL AND MAKING PAYMENT OF RS. 50 LAKHS TO AICC. AS WE HAVE ALREADY HELD ABOVE, EVEN IF AJL WAS ACQUIRED FOR THE PURPOSE OF STATED OBJECTS, M .A. NO. 02 /DEL/20 20 26 BUT THAT OBJECT WAS A NONSTARTER FROM DAY ONE AND TILL THE SURRENDER OF REGISTRAT ION ALSO, SUCH AN ACTIVITY IN FURTHERANCE OF OBJECTS WAS NEVER CARRIED OUT. (EMPHASIS SUPPLIED) 5.2 AS WOULD BE OBSERVED, IT HAS BEEN HELD BY THE HON'BLE TRIBUNAL THAT THE ACTIVITY OF ACQUIRING SHARES OF AJL BY THE APPLICANT CANNOT BE REGARDED AS BEING IN FURTHERANCE OF THE OBJECTS OF THE APPLICANT SINCE 'AT NO POINT IN TIME, IT WAS EVER STATED WHAT WAS THE PURPOSE AND OBJECTIVE BEHIND ACQUIRING THE AJL'. BASED ON SAID OBSERVATION, IT HAS BEEN HELD THAT SAID CONTENTION OF THE APPLICANT IS AN AFTERTHOUGHT. S IMILAR FINDINGS HAVE BEEN MADE AT VARIOUS OTHER PLACES IN THE TRIBUNAL'S ORDER. 5.3 IN THIS REGARD, KIND ATTENTION IS INVITED TO PARA 18 OF THE TRIBUNAL'S ORDER, WHERE WHILE DETAILING THE CONTENTS OF THE ORDER OF THE C1T(E), REFERENCE HAS BEEN MADE TO THE NOTES OF ACCOUNTS OF THE APPLICANT FOR THE FY 2010 - 11, WHEREIN THE PURPOSE OF ACQUIRING SHARES OF AJL WAS MENTIONED BY THE APPLICANT. THE RELEVANT EXTRACT OF THE TRIBUNAL'S ORDER IS REPRODUCED HEREUNDER FOR READY REFERENCE: '18. IN THE NOTES TO ACCOUNTS, T HE ASSESSEE EXPLAINED THE NATURE OF RS.50 LAKHS SPENT IN THE FOLLOWING MANNER: '1. IN PURSUIT OF ITS OBJECTS, THE COMPANY ACQUIRED LOAN OWED OF RS. 90,21,68,980 BY THE ASSOCIATED JOURNALS LTD. ('THE SAID COMPANY'), PRESENTLY ENGAGED IN ACHIEVING A M .A. NO. 02 /DEL/20 20 27 RECAST O F ITS ACTIVITIES SO AS TO HAVE ITS MAIN OBJECT CONGRUENT TO THE MAIN OBJECT OF THE COMPANY, FOR A CONSIDERATION OF RS. 50 LACS. AS A PART OF RESTRUCTURING EXERCISE OF THE SAID COMPANY, THE SAID LOAN WAS CONVERTED INTO 9,02,16,898 ORDINARY SHARES OF RS. 10 EACH FULLY PAID. SINCE SAID ACQUISITION IS TREATED AS APPLICATION ON THE OBJECTS OF THE COMPANY (AND ACCORDINGLY, TREATED IN THE FINANCIAL STATEMENTS OF THE COMPANY), THE SAME HAS NOT BEEN REFLECTED AS AN INVESTMENT IN SHARES. BESIDES, EVEN IF THE SHARES W ERE TO BE TREATED AS AN ASSET ('INVESTMENT'), HAVING REGARD TO THE FACT THAT THE NET WORTH OF THE SAID COMPANY IS NEGATIVE, RECOGNIZING THE ENTIRE COST AS 'DIMINUTION IN VALUE' WOULD RESULT IN AN EQUIVALENT CHARGE TO THE INCOME & EXPENDITURE ACCOUNT.'' 5.4 AS WOULD BE KINDLY OBSERVED THERE FROM, THE PURPOSE BEHIND ACQUIRING THE SHARES OF AJL WAS DISCLOSED BY THE APPLICANT IS THE SAID YEAR ITSELF BY WAY OF NOTES TO ACCOUNTS IN ITS FINANCIAL STATEMENTS WHEREIN IT WAS CATEGORICALLY STATED THAT THE SAID ACQUIS ITION WAS MADE IN PURSUIT OF ITS OBJECTS AND THAT THE SAME WAS TREATED AS APPLICATION OF INCOME BY THE APPLICANT. 5.5 ATTENTION IS ALSO INVITED TO PARA 22 OF THE TRIBUNAL'S ORDER, WHERE AGAIN, WHILE EXPLAINING THE ORDER OF THE CIT(E), AGAIN IT HAS BEEN ME NTIONED AS UNDER: 'WHILE EXPLAINING THE INVESTMENT TO TAKE OVER AJL THE ASSESSEE HAD CLAIMED IN NOTES TO ACCOUNT FOR FY 2010 - 11 THAT THE INVESTMENT WAS FOR THE PURPOSE OF THE STATED M .A. NO. 02 /DEL/20 20 28 OBJECT OF THE ASSESSEE COMPANY NAMELY YOUTH COMMITMENT TO THE IDEAL OF DE MOCRATIC AND SECULAR SOCIETY AND THE AJL WAS IN PROCESS OF REALIGNING ITS BUSINESS TO THE STATED OBJECT OF THE ASSESSEE COMPANY. HOWEVER, FINDINGS AS DISCUSSED ABOVE HAD PROVED BEYOND DOUBTS THAT AJL HAD NEVER CHANGED ITS BUSINESS ACTIVITIES OF REAL ESTATE DURING AY 2011 - 12 TO 2014 - 15 TO REALIGN ITSELF WITH THE STATED OBJECT OF THE ASSESSEE COMPANY.' (EMPHASIS SUPPLIED) 5.6 AS WOULD BE KINDLY OBSERVED, EVEN LD. CIT (E) AT THE TIME OF PURPORTED CANCELLATION PROCEEDINGS WAS AWARE OF THE SAID CONTENTION OF TH E APPLICANT THAT THE INVESTMENT WAS MADE FOR THE STATED OBJECTS OF THE APPLICANT, I.E. YOUTH COMMITMENT TO THE IDEALS OF DEMOCRATIC AND SECULAR SOCIETY. 5.7 THE SAID FACT WAS POINTED OUT TO THE HON'BLE TRIBUNAL IN THE COURSE OF THE HEARING. PLEASE SEE PAG E 42 OF THE PB - I FOR THE NOTES TO ACCOUNTS OF THE FINANCIAL STATEMENT OF THE APPLICANT FOR FY 2010 - 11. THE APPLICANT HAD ALSO POINTED OUT THAT EVEN IN THE INCOME TAX RETURN FOR SAID YEAR I.E. AY 2011 - 12, THE AMOUNT SPENT TOWARDS THE SAID ACQUISITION HAS BE EN CLAIMED AS APPLICATION OF INCOME TOWARDS THE OBJECTS WHICH AGAIN SHOWS THAT THE APPLICANT ALWAYS CONSIDERED SAID ACQUISITION AS A PART OF ITS OBJECTS. SAID FACT ALSO FINDS MENTION AT PARA 88 OF THE HON'BLE TRIBUNAL'S ORDER. IN FACT, AS POINTED OUT DURIN G THE HEARING, ON ACQUISITION OF SAID SHARES, THE OBJECTS OF AJL WERE M .A. NO. 02 /DEL/20 20 29 IMMEDIATELY REALIGNED WITH THAT OF THE APPLICANT IN THE YEAR 2011 TO INCLUDE THE FOLLOWING OBJECT: 'TO INCULCATE IN THE MIND OF INDIA'S YOUTH COMMITMENT TO IDEAL OF A DEMOCRATIC AND SECU LAR SOCIETY FOR ITS ENTIRE POPULACE WITHOUT ANY DISTINCTION AS TO RELIGION, CASTE OR CREED AND TO AWAKEN INDIA'S YOUTH TO PARTICIPATE IN ACTIVITIES THAT MAY PROMOTE THE FOREGOING OBJECTIVE IN ANY MANNER WHATSOEVER INCLUDING, WITHOUT LIMITATION, PARTICIPATI NG IN ALL DEMOCRATIC ACTIVITIES THROUGH OPEN AND TRANSPARENT ELECTORAL PROCESS, SO AS TO CONFORM TO THE IDEALS OF THE FOUNDING FATHERS OF INDIA, MAHATMA GANDHI AND PANDIT JAWAHARLAL NEHRU' 5.8 PLEASE SEE PAGES 268 - 280 OF THE AE - PB I. THEREAFTER, STEPS W ERE TAKEN TO FIRST REVIVE THE ECONOMIC CONDITION OF AJL, AFTER WHICH THE PUBLICATION ACTIVITY OF THE COMPANY HAS BEEN RECOMMENCED, WHEREIN THE FOCUS IS TO PROMOTE THE IDEOLOGY OF DEMOCRACY AND SECULARISM. 5.9 IN VIEW OF THE FOREGOING FACTS ON RECORD, IT I S HUMBLY SUBMITTED THAT THE OBSERVATION MADE AT PARA 106 THAT 'AT NO POINT IN TIME, IT WAS EVER STATED WHAT WAS THE PURPOSE AND OBJECTIVE BEHIND ACQUIRING THE AJL' AND THAT FOR THE SAID REASON SAID ACQUISITION CANNOT BE SAID TO BE ANY ACTIVITY TOWARDS THE OBJECT OF AJL IS A FACTUAL MISTAKE WHICH IS APPARENT FROM THE RECORDS AND OUGHT TO BE RECTIFIED. 5.10 IN VIEW OF THE ABOVE, THE APPLICANT PRAYS THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO RECTIFY THE AFORESAID M .A. NO. 02 /DEL/20 20 30 INADVERTENT ERROR BY RECALLING THE CAPTIONED ORDER IN ITS ENTIRELY OR PART AND/ OR PASS SUCH SUPPLEMENTAL ORDER AS THE HON'BLE TRIBUNAL MAY DEEM FIT UNDER THE FOREGOING FACTS AND CIRCUMSTANCES. 18 . T HIS FACT HAS BEEN NOTED BY THE T RIBUNAL ON VARIOUS PLACES INCLUDING IN PARAGRAPH 18 , 22 AND FINALLY IN PARAGRAPH 106 . T HE CASE OF T HE R EVENUE AS WELL AS ONE OF THE MAIN REASON ING GIVEN BY THE TRIBUNAL IN THE CAPTIONED ORDER WAS THAT THIS MATERIAL F ACT WAS NEITHER DISCLOSED NOR BROUGHT ON RECORD BY THE ASSESSEE AT THE TIME OF SEEKING REGISTRATION. T HIS MA Y HAVE BEEN DISCLOSED IN THE NOTES TO THE ACCOUNT AT THE TIME OF FILING OF RETURN POST GRANT OF REGISTRATION , BUT CERTAINLY IT WAS NOT DISCLOSED AT THE TIME OF SEEKING REGISTRATION THAT , WHAT WAS THE PURPOSE AND OBJECTIVE OF ACQUIRING THE AGL ON A PALTRY S UM OF RS.50 LAKHS TO I N C . T HE TRIBUNAL HAS NOTED THAT ACQUISITION OF SHARES IN SUCH A MANNER CANNOT BE HELD TO BE IN FURTHERANCE OF THE OBJECTS OF THE ASSESSEE COMPANY . O NE OF THE CONDITIONS PUT FORTH BY THEN L D . D IT (E) AT THE TIME OF GRANTING R EGISTRATION WAS THAT , IF LATER ON IT WAS FOUND THAT REGISTRATION HAS BEEN GRANTED BY MISREPRESENTATION OR SUPPRESSION OF ANY FACTS THEN REGISTRATION SO GRANTED IS LIABLE TO BE CANCELLED AS PER THE PROVISION OF SECTION 12 AA ( 3 ) . T HIS TERM AND CONDITION GIVEN IN THE REGISTRATION HAS BEEN REITERATED BY THE CIT (E) IN THE CANCELLATION ORDER . O NE OF THE REASONING GIVEN BY THE T RIBUNAL TO UPHOLD THE CANCELLATION ORDER WAS THAT , ASSESSEE HAD SUPPRESSED VITAL AND MATERIAL M .A. NO. 02 /DEL/20 20 31 FACTS REGARDING ACQUISITION OF SHARES OF AJL AND THE PURPOSE FOR WHICH IT WAS ACQUIRED AT THE TIME OF SEEKING THE REGISTRATION. T HUS , THERE IS NO S UBSTANCE IN THIS CONTENTION THAT , MERELY BECAUSE LATER ON THIS FACT WAS MENTIONED IN THE NOTES TO THE ACCOUNT OF THE BALANCE - SHEET FILED SUBSEQUENTLY ALONG WITH THE RETURN OF INCOME A MOUNTS TO FURNISHING OF INFORMATION AT THE TIME OF REGISTRATION . A CCORDINGLY , SUCH CONTENTION RAISED IN MISCELLANEOUS APPLICATION IS REJECTED . 1 9 . L ASTLY , THE ASSESSEE HAD RAISED THAT THERE IS ERRONEOUS FINDING THAT THE APPLICANT DID NOT UNDERTAKE ANY ACTIVITY IN FURTHERANCE OF ITS OBJECT PRIOR TO CANCELLATION OF REGISTRATION . T HE SAID CONTENTION RAISED IN THE APPLICATION READS AS UNDER : - 6.1 THE APPLICANT HUMBLY SUBMITS THAT ON PERUSAL OF THE TRIBUNAL'S ORDER, IT HAS BEEN OBSERVED THAT THE HON'BLE TRIBUNAL HAS MENTIONED AT SEVERAL PLACES THAT THE APPLICANT HAD NOT UNDERTAKEN ANY ACTIVITY IN FURTHERANCE OF ITS OBJECTS BEFORE THE CANCELLATION OF REGISTRATION AND THAT ALL THE ACTIVITIES HAPPENED SUBSEQUENTLY. FOR INSTANCE, AT PARA 107 IT HAS BEEN MENTIONED THAT AFTER ACQUISITION OF SHARES OF AJL, THE APPLICANT HAS NOT DEMONSTRATED THAT IT HAD CARRIED OUT ANY ACTIVITY IN FURTHERANCE OF ITS OBJECTS, NOR ANY SUCH THING HAS BEEN PLACED BEFORE US THAT IT HAD CARRIED ANY ACTIVITY BETWEEN THE YEARS 2011 TO 2016 OR UP TO THE DATE OF CANCELLATION OF REGISTRATION. IT HAS ALSO BEEN REPEATEDLY MENTIONED THAT AJL WAS NOT IN PUBLICATION OF ANY KIND OF NEWSPAPER IN PRINT OR DIGITAL FORM DURING THE M .A. NO. 02 /DEL/20 20 32 ENTIRE PERIOD AND IT HAS BEEN ACCORDINGLY HELD THAT IT WAS NEVER THE INTENTION OF THE APPLICANT TO CARRY OUT ANY CHARITABLE ACTIVITY BY ACQUIRING AJL. 6.2 IN THIS REGARD, IT IS HUMBLY SUBMITTED THAT THE APPLICANT HAD DURING THE HEARING POINTED OUT TO THE HON'BLE TRIBUNAL THAT AT THE TIME OF ACQUIRING THE SHAR ES OF AJL, IT WAS A SICK COMPANY, WHICH NEEDED REVIVAL. ACCORDINGLY, SUBSEQUENT TO THE ACQUISITION, THE COMPANY WAS FIRST IN THE PROCESS OF REVIVAL AND AFTER OBTAINING FINANCIAL STABILITY, THE NEWSPAPER ACTIVITY WAS RECOMMENCED IN THE COMPANY. SAID CONTENT ION OF THE APPLICANT WAS ALSO SUBMITTED IN THE WRITTEN SYNOPSIS OF THE CONTENTIONS AS WELL AS REJOINDER. THE SAME IS ALSO SUMMARILY REPRODUCED AT PARA 75 OF THE TRIBUNAL'S ORDER. FURTHER, THE APPLICANT HAD ALSO SUBMITTED BEFORE THE HON'BIE TRIBUNAL THE SEQ UENCE OF EVENTS AT THE TIME OF RECOMMENCEMENT OF NEWSPAPER PUBLICATION ACTIVITY OF AJL. THE SAME IS ALSO REPRODUCED AT PARA 37 OF THE TRIBUNAL'S ORDER. AS WOULD BE OBSERVED THEREFROM, ON 23/01/2014, AJL HAD WRITTEN TO THE REGISTRAR OF NEWSPAPERS FOR INDIA (RNI) INFORMING IT OF ITS INTENT TO RESTART PUBLICATION OF THE NEWSPAPERS. PLEASE SEE PAGE 267 OF THE AB - PB I. FURTHER, ON 26/09/2016, A RESOLUTION WAS PASSED BY THE BOARD OF DIRECTORS OF AJL TO RESUME THE PUBLICATIONS OF NEWSPAPERS. PLEASE SEE PAGE 266 OF THE AB - PB I. FURTHER, ON 14/11/2016, AJL LAUNCHED NATIONAL HERALD WEBSITE. PLEASE SEE PAGES 204 TO 213 OF THE AB - PB I, ALSO ON 15/11/2016, AN AGREEMENT WAS M .A. NO. 02 /DEL/20 20 33 ENTERED BETWEEN AJL AND PRESS TRUST OF INDIA FOR WIRE NEWS SERVICES, PLEASE SEE PAGES 245 - 24 9 OF THE AB - PB I; FURTHER, ON 12/06/2017, AJL LAUNCHED THE COMMEMORATIVE EDITION OF NATIONAL HERALD (PUBLICATION) IN PRINT IN BANGALORE. PLEASE SEE PAGES 133 - 153 OF THE AB - PB I. ON 23/06/2017, AJL OBTAINED REGISTRATION CERTIFICATE FOR NATIONAL HERALD N EWSPAPER FROM THE REGISTRAR OFFICE OF NEWSPAPERS FOR INDIA, MINISTRY OF INFORMATION AND BROADCASTING. PLEASE SEE PAGES 239 - 240 OF THE AB - PB 1. ON 01/07/2017, AJL LAUNCHED COMMEMORATIVE EDITION OF NATIONAL HERALD (PUBLICATION) IN PRINT IN NEW DELHI. PIEAS E SEE PAGES 154 - 185 OF THE AB - PB I FOR THE COPIES OF VARIOUS REPORTS AND PHOTOGRAPHS OF SAID LAUNCH. ON 12/08/2017, AJL LAUNCHED QAUMI AWAZ WEBSITE IN URDU. PLEASE SEE PAGES 215 - 229 OF THE AB - PB I. 6.3 AS AGAINST THIS, THE PURPORTED SHOW CAUSE NOTICE WAS ISSUED BY THE LD. CIT(E) ON 21.08.2017 I.E. SUBSEQUENT TO THE FOREGOING EVENTS. IT IS ACCORDINGLY, SUBMITTED THAT THE FINDING OF THE HON'BLE TRIBUNAL THAT THE APPLICANT OR AJL HAD NOT UNDERTAKEN ANY CHARITABLE ACTIVITY TILL 2016 OR TILL CANCELLATION O F REGISTRATION IS FACTUALLY INCORRECT, WHICH IS APPARENT FROM THE RECORDS. IT IS AGAIN SUBMITTED THAT AFTER ACQUISITION OF THE SHARES OF AJL, FIRST STEPS WERE TAKEN FOR REVIVAL OF AJL, AND THEREAFTER NEWSPAPER ACTIVITY WAS RECOMMENCED. 6.4 IN VIEW OF THE FOREGOING FACTS ON RECORD, IT IS HUMBLY M .A. NO. 02 /DEL/20 20 34 SUBMITTED THAT THE OBSERVATION MADE BY THE HON'BLE TRIBUNAL THAT NO ACTIVITY WAS UNDERTAKEN AND THEREFORE IT WAS NEVER THE INTENTION OF THE APPLICANT TO USE AJL FOR ITS OBJECTS IS A FACTUAL MISTAKE APPARENT FROM THE RECORDS AND OUGHT TO BE RECTIFIED. 6.5 IN VIEW OF THE ABOVE, THE APPLICANT PRAYS THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO RECTIFY THE AFORESAID INADVERTENT ERROR BY RECALLING THE CAPTIONED ORDER IN ITS ENTIRELY OR PART AND/ OR PASS SUCH SUPPLEMENTAL OR DER AS THE HON'BLE TRIBUNAL MAY DEEM FIT UNDER THE FOREGOING FACTS AND CIRCUMSTANCES. 20. I N THE ENTIRE ORDER OF THE TRIBUNAL, AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND CONSIDERING ALL THE MATERIAL PLACED ON RECORD INCLUDING THE VARIOUS EVIDENCES , THIS T RIBUNAL HAS COME TO THE CONCLUSION THAT NO ACTIVITIES AS SUCH WAS CARRIED OUT WHICH CAN BE SAID TO BE FOR THE CHARITABLE PURPOSES OR TOWARDS FURTHERANCE OF ANY CHARITABLE ACTIVITY OR ANY ACTIVITY WAS CARRIED OUT IN ACCORDANCE WITH OBJECTS . T HIS FACT HAS BEEN REITERATED AT VARIOUS PLACES IN THE ORDER . O NE OF THE IMPORTANT ASPECTS WHICH HAS BEEN DISCUSSED IN DETAIL AND ALSO FOLLOWED BY THE T RIBUNAL WAS THE JUDGMENT IN THE CASE OF AJL BY THE H ON BLE DELHI HIGH COURT IN LPA 10 / 2019 AND CM NO.5 66 & 649/2019 , WHERE IN THE H ON BLE DELHI HIGH COURT HAD CONSIDERED EXACTLY THE SAME ISSUES , WHICH HAS BEEN INCORPORATED AND DISCUSSED BY THE T RIBUNAL FROM PAGES 138 TO 162 . THE FINDING OF THE T RIBUNAL M .A. NO. 02 /DEL/20 20 35 AND THE CONCLUSION DRAWN BESIDES OTHER FACTS AND MATERI AL ON RECORD WAS ALSO BASED ON THE B INDING PRE CEDENT OF THE FINDING AND THE JUDGMENT OF THE H ON BLE DELHI HIGH COURT , WHICH WAS RENDERED ALMOST O N THE SAME FACTS WHEREIN THERE IS A CLEAR - CUT OBSERVATION THAT ALL THESE TRANSACTIONS WERE HIDDEN FROM THE INCO ME T AX D EPARTMENT . IN FACT THIS VITAL FACT WAS ALSO HIDDEN FROM THE D IT (E) WHILE SEEKING TH E RE GISTRATION UNDER SECTION 12AA ; AND NOT ONLY THAT , POST GRANTING OF RE GISTRATION ALSO NO SUCH GENUINE ACTIVITIES WAS CARRIED OUT FROM THE PERIOD OF GRANTING OF RE GISTRATION TILL THE PERIOD ASSESSEE HAS SURRENDERED FOR REGISTRATION . I N THIS REGARD OBSERVATION AND CONCLUSION OF THE T RIBUNAL IN PARAGRAPH 12 2 IS RE ITERATED. 21. L ASTLY , THE T RIBUNAL IN PARAGRAPH 1 23 HAS NOTED THAT IT HAS NOTED DOWN VARIOUS ARGUMENTS PL ACED BY THE PARTIES AS WELL AS JUDG MENT RELIED UPON AND ALSO DEALT WITH ALL THE CORE ARGUMENTS , BUT SAME ARE NOT BEING DEALT WITH, BECAUSE THE FINDINGS HAVE BEEN REACHED ON THE REASONING AND THE CONCLUSION GIVEN IN THE FOREGOING P ARAGRAPHS AND THE ORDER OF C I T (E) CANCELLING THE REGISTRATION WAS UPHELD . IN THE IMPUGNED MISCELLANEOUS APPLICATION NO SUCH MISTAKE HAS BEEN POINTED OUT WHICH CAN BE SAID TO BE A MISTAKE APPARENT FROM RECORD WHICH CAN BE HELD TO BE RECTIFIABLE WITHIN THE SCOPE AND AMBIT OF SECTION 254 (2). 22 . IN ANY CASE , THE ASSESSEE HAD PREFERRED THE APPEAL ON THE FOLLOWING TWO GROUNDS ONLY : - M .A. NO. 02 /DEL/20 20 36 ON THE AFORESAID GROUNDS T HE DETAIL REASONING AND FINDING HAS BEEN GIVEN . N OWHERE IN THE MISCELLANEOUS APPLICATION HAS THE ASSESSEE POINTED OUT THAT , EIT HER THE GROUNDS HAVE NOT BEEN ADJUDICATED O R HAS BEEN OMITTED TO BE CONSIDERED BY THE TRIBUNAL . THUS EVEN O THERWISE THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE DOES NOT STAND SCOPE AND AMBIT OF SECTION 254 (2) OF THE A CT . ACCORDINGLY, THE MISCELLANE OUS APPLICATION FILED BY THE ASSESSEE IS DISMISSED ORDER PRO NOUNCED IN THE OPEN COURT ON OCTOBER , 20 20 . [ PRASHANT MAHARISHI ] ACCOUNTANT MEMBER [ AMIT SHUKLA ] JUDICIAL MEMBER DATED: OCTOBER , 20 20 PKK COPY FORWARDED TO: 1. APPELLANT 2. R ESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR DATE 1. DRAFT DICTATED ON (DIRECT ON COMPUTER) 2. DRAFT PLACED BEFORE AUTHOR 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE COMES BACK TO PS/SR. PS M .A. NO. 02 /DEL/20 20 37 8. UPLOADED ON 9. FILE SENT TO THE BENCH CLERK 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER.