Cancellation of Registration Granted to Trust u/s 12AA(3) of the Income Tax Act has no Retrospective Effect: Delhi High Court [Read Judgment]

Finance Act - Delhi High Court - taxscan

The Delhi High court has held that the provision for cancellation of registration granted to charitable trust under section 12AA (3) of the Income Tax Act, 1961 has no retrospective effect.

The assessee is being a charitable trust and it has a Secretary General. During the course of search, the statement of the Secretary General was retracted. And the initially granted registration cancelled by the CIT after considering the materials and statements.

The assessee argued that the statements were related to the personal premises of the secretary and not related with the trust hence the registration could not be cancel only on the basis of the said statements. He also mentioned a previous judgment of the court on the similar issue at the time of hearing. And said that the cancellation of the registration of the charitable trust u/s 122AA (3) was unjustified.

While dismissing the appeal filed by the assessee, the bench clarified that the cancellation of registration in this case could have related back only from the date of introduction of Section 12AA(3) of the Income Tax Act.

Therefore the appeal of the assessee the bench declared that cancellation of registration granted to charitable trust has no retrospective effect under Section 122AA (3) of the Income Tax Act.

Read the full text of the Judgment below.

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