Independent and Public Spirited Media Foundation Vs PCIT (ITAT Bangalore)
ITAT Bangalore Affirms Cancellation of Section 12AB Registration of Media Trust: Detailed Ruling on Jurisdiction, Specified Violations & Retrospective Effect
The Bangalore Bench of the ITAT adjudicated the appeal filed by Independent and Public Spirited Media Foundation challenging the order of the PCIT (Central), Bengaluru cancelling its registration under sections 12AA/12AB with effect from AY 2017-18 onwards. The cancellation was based on findings of “specified violations” unearthed during a survey under section 133A.
Assessee’s Arguments:
The assessee raised both jurisdictional and substantive challenges. On jurisdiction, it was contended that the PCIT (Central) lacked authority to cancel registration, as such power vested only with the CIT (Exemptions) who originally granted registration. The transfer of jurisdiction under section 127, according to the assessee, was only for assessment purposes and could not extend to cancellation of charitable registration. Reliance was placed on decisions such as Agarwal Vidhya Pracharni Sabha and Pacific Academy of Higher Education, and it was argued that “case” under section 127 could not include powers under section 12AB.
On merits, the assessee submitted that its objects were undeniably charitable under section 2(15) and there was no allegation that the objects themselves were non-charitable. It was argued that funding of independent digital media was integral to strengthening democracy and public discourse, and that payments made to media entities were pursuant to rate cards and formal agreements, without editorial interference. The assessee denied exerting influence over content, promoting political ideology, or supporting polarised narratives. It was further contended that even assuming isolated lapses, cancellation of registration was a disproportionate response, and at best, corrective measures or prospective action could have been taken. Retrospective cancellation from AY 2017-18 was also assailed as impermissible.
Revenue’s Arguments:
The Revenue strongly supported the PCIT’s order. It was argued that once jurisdiction was transferred under section 127 to officers subordinate to the PCIT (Central), the PCIT assumed jurisdiction over all proceedings relating to the assessee, including cancellation of registration. Reliance was placed on the Explanation to section 127, CBDT Notification No. 70/2014, and judicial precedents including Advantage India and Sahara India Financial Corporation.
On merits, the Revenue contended that extensive documentary and digital evidence gathered during survey clearly showed that the trust had gone far beyond passive funding. The trust allegedly influenced content selection, paid higher rates for political articles, funded profit-making entities under the guise of professional fees, and supported selective and polarised narratives—activities inconsistent with its stated charitable objects. These actions, according to the Revenue, squarely fell within the definition of “specified violation” under section 12AB(4), mandating cancellation of registration.
Tribunal’s Findings:
The ITAT rejected the jurisdictional objection, holding that the term “case” in section 127 is of wide amplitude and covers all proceedings under the Act. Once the PAN and jurisdiction stood transferred, bifurcation of powers between PCIT (Central) and CIT (Exemptions) was neither contemplated by law nor administratively workable.
On merits, the Tribunal held that the PCIT had marshalled sufficient evidence to establish specified violations. It observed that influencing content, selective promotion of political narratives, and diversion of funds to profit-oriented entities could not be treated as mere incidental lapses. The Tribunal also upheld cancellation from the year in which violations occurred, holding that such action was not impermissibly retrospective but in line with section 12AB(4).
Accordingly, the appeal was dismissed and the cancellation of registration under sections 12AA/12AB from AY 2017-18 onwards was upheld.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
