The Jodhpur Bench of Income Tax Appellate Tribunal (ITAT) has held that the registration of charitable trust could not be cancelled with retrospective effect.
The assessee, the Pacific Academy of Higher Education and Research Society is a society registered under the Rajasthan Society Registration Act, 1958. The main object of society is to impart education. In pursuance to these objects, society was running various educational institutes where more than 10000 students are imparted education
Subsequently, it was given the status of a university. A search was conducted on the Pacific Group of Udaipur dated 26.08. 2015. The PCIT observed that during the search at the residential premises of Sharad Kothari, Registrar of the assessee trust, some loose papers and three pen drives and documents seized relates to PAHER University and its college i.e. Pacific Dental College was seized.
The assessee, explained that the reasons assigned for withdrawal of registration and that the Hon’ble Rajasthan High Court had already stayed the implementation of the said order, the legible copies were also submitted.
The assessee further explained that there was no limitation prescribed for withdrawal of registration and therefore the proceedings for withdrawal are premature which may be kept pending. The PCIT however withdrew the registration already granted under Section 12AA of the Act and the approval given under Section 10(23C)(vi) of the Act with retrospective effect from 01.04.2009.
PC Parwal on behalf of the assessee submitted that, the activities were not being carried out for the charitable purposes or its activities are beyond the scope provided in the aims and objects of the trust. He also opposed the contention that the assessee had received capitation fees which was not recorded in books and had made unaccounted investment and done voluminous transaction with the trustees. He further contended that the registration could not be cancelled retrospectively.
Alka Rajvanshi Jain, on behalf of the revenue submitted that there were irregularities in the functioning of the assessee and the activities of the trust are not genuine or were not carried out as per its objects.
“We further observe that the ld. Pr.CIT (Central) cancelled such approval from A. Y. 2014-15, though the assessee has already assessed from A.Y. 2014-15 under section 143(3)/148 of the Act. It is also a settled legal position of law that Registration cannot be cancelled from retrospective effects”, the Bench observed.
The Division bench of Baskaran Br, (Accountant Member) and Sandeep Gosain, (Judicial Member) quashed the impugned order observing that ,
“we are of the opinion that in the present case the ld. Pr.CIT(Central) has no jurisdiction to pass the impugned order. Accordingly, we quash the same. Even otherwise we are also of the view that no retrospective cancellation could be made as neither in the Sec. 12AA (3) nor in Sec. 12AA(4) it has been provided or is seen to have been explicitly provided to have a retrospective character or intent. Therefore, without a specific mention of the amended provisions to operate retrospectively no cancellation for the past years could be ordered.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
