Principal Commissioner of Income Tax (Central), Gurgaon V. Prabhu Dayal Memorial Religious Educational Association, Village Sarai

ITA/385/2016

AI Insights

The case revolves around the cancellation of registration of the Prabhu Dayal Memorial Religious Educational Association by the Commissioner of Income Tax (Central), Ludhiana, under Section 12AA(3) of the Income Tax Act, 1961. The initial cancellation was contested, and the ITAT ruled that the Commissioner did not possess the authority to cancel the registration retroactively as the relevant amendments to Section 12AA were introduced by the Finance Act, 2010, and not applicable prior to this date. The High Court of Punjab and Haryana, after reviewing the arguments and precedents, agreed with the ITAT's decision, emphasizing the independence of Sections 12A and 12AA.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 798339 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 18-10-2024
• Assessment Year: misc
• Other Referred Cases: Industrial Infrastructure Development Corporation (Gwalior) M.P. Limited vs Commissioner of Income-Tax, Gwalior (2018) 403 ITR 1 (SC), The Commissioner of Income Tax, Patiala vs. Young Scholar's Educational Society, Barnala, decided on 08.05.2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Respondent
• Court: HIGH COURT
• Department Lawyers: SANJEEV SHARMA; DEEPAK AGGARWAL
• Assessee Lawyers: VARUN ISSAR
• Keywords: Income Tax; Registration cancellation; Section 12A; Section 12AA
• Section: 12A; 12AA(3)

Judgement Text

"206 IN THE HIGH COURT OF PUNJAB AND HARYANA Principal Commissioner of Income Tax (Central), Gurgaon Prabhu Dayal Memorial Religious Educational Association, Village Sarai Aurangabad CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE Present Mr. Mr. Sanjeev K. Sharma, Advocate for Mr. Deepak Aggarwal, Advocate for the respondent. SANJEEV PRAKASH SHARMA, J.(Oral) 1. The issue raised in the present appeal is no more Commissioner of Income Tax (Central), Ludhiana, vide his order dated 28.05.2009, had cancelled the registration by exercising the powers under Section 12AA(3) of the Income Tax Act, 1961 2. The ITAT vide its order dated 07.04.2016, decided bunch of appeals holding that the power was not available with the Commissioner of Income Tax (Appeals), to cancel the registration w.e.f. 2004, as the amendment in Section 12AA of the Act, to cancel the re 12AA of the Act, 3. Learned counsel submits Section 12A with the Commissioner, the amendment in Section 12AA by the Finance Act, 2010, is to be treated as clarificatory and date of introduction of the Section 12AA i.e. from 01.10.2004. 4. We are afraid and we do not agree with such proposal as Section 12A is independent to Section 12AA IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA Date of Decision: Principal Commissioner of Income Tax (Central), Gurgaon Vs. Prabhu Dayal Memorial Religious Educational Association, Village Sarai HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH Mr. Varun Issar, Sr. Standing Counsel for the appellant. Mr. Sanjeev K. Sharma, Advocate for Mr. Deepak Aggarwal, Advocate for the respondent. *** SANJEEV PRAKASH SHARMA, J.(Oral) The issue raised in the present appeal is no more Commissioner of Income Tax (Central), Ludhiana, vide his order dated 28.05.2009, had cancelled the registration of the respondents by exercising the powers under Section 12AA(3) of the Income Tax Act, 1961 The ITAT vide its order dated 07.04.2016, decided bunch of appeals holding that the power was not available with the Commissioner of Income Tax (Appeals), to cancel the registration w.e.f. 2004, as the amendment in Section 12AA of the Act, to cancel the re of the Act, were added w.e.f. 01.06.2010 by the Finance Act, 2010. Learned counsel submits that as the power was available under Section 12A with the Commissioner, the amendment in Section 12AA by the , 2010, is to be treated as clarificatory and date of introduction of the Section 12AA i.e. from 01.10.2004. We are afraid and we do not agree with such proposal as Section 12A is independent to Section 12AA of the Act, IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA-385-2016 (O&M) Date of Decision: 18.10.2024 Principal Commissioner of Income Tax (Central), Gurgaon …Appellant Prabhu Dayal Memorial Religious Educational Association, Village Sarai …Respondent HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA SANJAY VASHISTH Varun Issar, Sr. Standing Counsel for the appellant. Mr. Sanjeev K. Sharma, Advocate for Mr. Deepak Aggarwal, Advocate for the respondent. The issue raised in the present appeal is no more res-integra. The Commissioner of Income Tax (Central), Ludhiana, vide his order dated of the respondents w.e.f. 01.10.2004, by exercising the powers under Section 12AA(3) of the Income Tax Act, 1961. The ITAT vide its order dated 07.04.2016, decided bunch of appeals holding that the power was not available with the Commissioner of Income Tax (Appeals), to cancel the registration w.e.f. 2004, as the amendment in Section 12AA of the Act, to cancel the registration granted under Section were added w.e.f. 01.06.2010 by the Finance Act, 2010. that as the power was available under Section 12A with the Commissioner, the amendment in Section 12AA by the , 2010, is to be treated as clarificatory and retrospective from the date of introduction of the Section 12AA i.e. from 01.10.2004. We are afraid and we do not agree with such proposal as Section of the Act, and if the argument of the Prabhu Dayal Memorial Religious Educational Association, Village Sarai . The Commissioner of Income Tax (Central), Ludhiana, vide his order dated w.e.f. 01.10.2004, The ITAT vide its order dated 07.04.2016, decided bunch of appeals holding that the power was not available with the Commissioner of Income Tax (Appeals), to cancel the registration w.e.f. 2004, as the amendment granted under Section that as the power was available under Section 12A with the Commissioner, the amendment in Section 12AA by the from the We are afraid and we do not agree with such proposal as Section the argument of the RAJESH KUMAR 2024.10.21 14:46 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh. ITA-385-2016 (O&M) [2] counsel for the appellant is accepted, then the very purpose of making an amendment in Section 12AA w.e.f. 01.06.2010, would be purposeless. The scope of Section 12A and 12AA of the Act, have to be read and considered independently. 5. This Court in ITA-21-2021, titled as The Commissioner of Income Tax, Patiala vs. Young Scholar’s Educational Society, Barnala, decided on 08.05.2024, by relying upon the decision of the Hon’ble Supreme Court in Industrial Infrastructure Development Corporation (Gwalior) M.P. Limited vs Commissioner of Income-Tax, Gwalior (2018) 403 ITR 1 (SC), has held as under:- “In view of the aforesaid interpretation, we find that the Commissioner was required to examine the aforesaid factors while granting approval of registration under Section 10 (23C) of the Act. In the opinion of this Court, the same factors would also be required to be considered for the cancellation of registration already granted to the educational institutions, while examining the case under Section 12AA of the Act, of course, taking into consideration the conditions provided therein also.” 6. In view thereto, we do not find any reason to change our view to that has already taken earlier. The appeal is accordingly dismissed. 7. All pending misc. application(s) also stand disposed of. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE 18.10.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable? : Yes/No RAJESH KUMAR 2024.10.21 14:46 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh. "