PCIT Vs Last Hour Ministry (Kerala High Court)
Kerala High Court held that section 12AA empower the Principal Commissioner to pass order cancelling registration granted u/s. 12A of the Income Tax Act and for ordering the same Principal Commissioner is not required to await decision of Assessing Authority.
Facts- Pursuant to a survey conducted in relation to the activities of the respondent-assessee on 26.02.2020 and a search conducted in the premises of the assessee on 05.11.2020, show-cause notices were issued u/s. 12AA(3) /(4) of the Income Tax Act to the assessee proposing to cancel the registration granted to them u/s. 12A of the Income Tax Act. Although the assessee preferred a detailed reply to the show-cause notices on 15.12.2020, by an order dated 31.12.2020, the Principal Commissioner of Income Tax rejected the contention raised by the assessee and confirmed the proposal for cancellation of the registration.
Appellate Tribunal allowed the appeal. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that the provisions of Section 12AA independently empower the Principal Commissioner to consider whether or not the circumstances mentioned in Section 12AA(3) and 12AA(4) of the Income Tax Act exist as a pre-condition for directing a cancellation of the registration that was granted to the Trust under Section 12A of the Income Tax Act. The statutory provisions do not require the Principal Commissioner to await a decision of the Assessing Authority concerned before passing an order cancelling the registration granted to an assessee under Section 12A of the Income Tax Act. The assumption by the Appellate Tribunal that the determination of relevant facts by an Assessing Officer was a pre-condition to the Principal Commissioner exercising his powers under Section 12AA, or that the exercise of power by the Principal Commissioner under Section 12AA would preclude an independent assessment by the Assessing Officer, as he would be bound by the determination by the Principal Commissioner under Section 12AA, is in our view flawed since the statutory provisions do not admit of any such interpretation.
