Meenakshi foundation Vs PCIT (ITAT Delhi)
The assessee, an educational society registered under the Societies Registration Act and holding registration under Section 12A and approval under Section 10(23C)(vi), challenged the order of the Principal Commissioner of Income Tax (Central)-3 cancelling its registration under Sections 12A, 12AA and 12AB(4). The cancellation was based on search proceedings in which the Revenue alleged non-genuine activities, diversion of funds and violation of Section 13(1)(c). The assessee contended that the PCIT (Central) lacked jurisdiction to cancel the registration, as such power vested with the Commissioner of Income Tax (Exemptions), and that the transfer under Section 127 was only for coordinated assessment. It also submitted that the Assessing Officer, while completing assessments after the search, had recorded that the society’s objects were charitable, that the registration had been renewed after the search, that cancellation could not be retrospective, and that the Assessing Officer’s reference was made after completion of assessment proceedings. The Revenue defended the cancellation, relying on search findings and alleged diversion of funds. The Tribunal observed that the facts were identical to those in Lakhmi Chand Charitable Society v. PCIT, Central-3, where the coordinate bench had held that the reference under the second proviso to Section 143(3), the exercise of jurisdiction by the PCIT, and the cancellation proceedings were without jurisdiction. Respectfully following the earlier decision, the Tribunal quashed the order cancelling the assessee’s Section 12A registration and allowed the appeal.
