In a major relief to the TATA trust, the Income Tax Appellate Tribunal (ITAT), Mumbai bench has allowed the Trust to voluntarily surrender their registration, with effect from March 20, 2015.
In 2019, the Income Tax department observed that the act of surrendering the registration was a forced move after six Trusts were found in violation of provisions of the Income Tax rules.
Hearing an appeal by the Trust, the Tribunal comprising President Justice PP Bhatt and Vice President Pramod Kumar observed that “…we are of the considered view that the impugned order of cancellation of registration granted to the assessee under section 12A must be held to be effective from the date on which the hearing on first show-cause notice was concluded and the show-cause notice issued by the Commissioner was formally acquiesced by the assessee in the said hearing, that is, 20th March 2015, since, without disposing of the said matter, the Commissioner, or his successors, could not have started other parallel proceedings for cancellation of registration obtained under section 12A.”
The Tribunal further recalled its order in a similar case in Navajbai Ratan Tata Trust, wherein it was observed that “The registration having been “obtained” under section 12A was in the nature of a benefit to the assessee, and it was, therefore, entirely at the option of the assessee. In our considered view, an assessee unwilling to avail the “benefit” of registration “obtained” under section 12A cannot be, directly or indirectly and by actions or by inactions, compelled by the revenue authorities, to continue with the said registration “obtained’ by the assessee, particularly when it pertained to the registration obtained in a period prior to the insertion of section 12AA. The present cancellation of registration under section 12A must, therefore, be held to be effective from 20th March 2015.”
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