Case Law Details
Young Indian Vs ACIT (ITAT Delhi)
The appellant’s contention has been that, firstly, since it has surrendered its registration u/s 12A and 12AA vide letter dated 21.03.2016, therefore, it was no longer an entity that required exemption u/s 11 and consequently DIT (E) or ACIT (E) did not had jurisdiction at the time of issuance of notice u/s 148 on 10.01.2017. Secondly, once the assessee had raised the objection before the AO regarding its jurisdiction then it was incumbent upon the AO to refer the matter to higher authorities for determining the correct jurisdiction. However, we are unable to subscribe to the contention raised by the ld. Senior Counsel for the appellant before us for the reason that, it is an undisputed fact that after granting of registration u/s 12A/12AA by the ld. DIT (E) vide certificate & order dated 09.05.2011, thereafter the assessee has been regularly filing its return with Directorate of Exemption including the AY 2011-12. Upto the stage of issuance of notice u/s 148 on 10.01.2017, ld. CIT (E) had not passed any order cancelling the registration which was granted to the appellant u/s 12AA and withdrawing the exemption u/s 11 though from AY 2011-12 onwards. Since grant of registration till the cancellation of registration, the jurisdiction of the AO lies with Exemption circle, therefore, at the time of issuance of notice u/s 148 the jurisdiction was with Exemption circle. The registration has been cancelled even for the assessments relevant for those assessment years for which it had claimed exemption. The assessment for AY 2011-12 has been reopened in the period when statutorily the appellant was holding certificate of registration u/s 12A/12AA. Once company has been recognized as a charitable institution by grant of registration u/s 12A, then such registration can be cancelled only by an authority under the law and not by voluntary act of the assessee. The act of suo motto surrender of registration is neither permissible under the law nor is dependent upon the voluntary act of the assessee. Even if the assessee had filed letter surrendering its registration, it has no consequence till competent authority acts upon it and accepts the surrender letter and passes the order of cancellation. The order of cancellation of registration is a statutory order which is based on the foundation of certain facts coming on record during the breach of conditions for which registration was granted and such a breach cannot be reckoned from voluntary surrender of registration. The entire process has to be followed in accordance with the statute. Merely because the assessee had filed a letter on 21.03.2016 surrendering its registration u/s 12A or giving its benefit of section 11, does not mean that from the date of the letter, the jurisdiction of the AO automatically got changed. As stated above, at the time of issuance of notice u/s 148, the ACIT or DCIT, Circle Exemption, New Delhi had the valid jurisdiction not only to initiate the proceedings u/s 148 but also pass the assessment order.
Insofar as the contention raised by the appellant that, since the assessee had challenged jurisdiction, it was incumbent upon the AO to refer it to the higher authorities in terms of section 124(4). Such a contention is not tenable on the present facts for the reason that the jurisdiction over the assessee lied with the AO, Exemption Circle by virtue of provisions contained u/s 120 of the Act, because here it is a case of jurisdiction assumed by granting registration by the Income-tax Department on the application filed by the assessee which falls within the definition of “class of assessee and class of cases” as defined under clauses (c) & (d) of sub-section (3) of section 120. The appellant ostensibly falls into a specific category of cases and it is not open for the assessee on its own remove itself from specific category of cases and then contend that it should have been assessed by different Assessing Officer. The matter of jurisdiction is not by the choice of the assessee albeit it depends upon the specific provisions contained in sections 120 & 124. Thus, we do not find any merits in the contention raised in ground no.1 that Assessing Officer did not had jurisdiction either to issue notice or pass assessment order and the same is thus dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
The aforesaid appeal has been filed by the above-named appellant/assessee against the impugned order dated 06.12.2018, passed by the ld. CIT (Appeals)-40, Delhi for the quantum of assessment passed under section 143 (3)/147 of the Income-tax Act, 1961 (for short ‘the Act’) for the assessment year 2011-12.
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