Dr. Virendra Swaroop Educational Foundation Vs ACIT (ITAT Dehradun)
PCIT (Central) Lacks Jurisdiction to Cancel Trust Registration – ITAT Dehradun Quashes Cancellation Under Section 12AB
The Dehradun Bench of the ITAT allowed the appeal of Dr. Virendra Swaroop Educational Foundation and quashed the order cancelling registration u/s 12A / 12AB, holding that the PCIT (Central), Kanpur had no jurisdiction to cancel the registration granted by the Commissioner (Exemption).
The registration of the assessee trust, engaged in running educational institutions, had been cancelled by PCIT (Central) u/s 12AB(4)(ii) on the allegation that the trust was involved in real estate, leasing and commercial activities based on material found during a search in the Mehta Group. The PCIT relied upon a transfer order u/s 127 to assume jurisdiction.
The Tribunal held that:
- Under CBDT Notification dated 22-10-2014 issued u/s 120, jurisdiction over exemption cases in UP & Uttarakhand vests exclusively with CIT (Exemption), Lucknow.
- Section 127 transfers only assessment jurisdiction between Assessing Officers and cannot transfer statutory powers of registration/cancellation vested in CIT (Exemption).
- PCIT (Central) cannot usurp the specialized jurisdiction of CIT (Exemption) for cancellation of registration u/s 12AB.
- No valid jurisdictional order or CBDT authorization existed empowering PCIT (Central) to cancel registration.
- Even procedurally, the action was defective as no proper “specified violation” was identified before initiating cancellation proceedings.
Relying on several coordinate bench decisions including Sushila Devi Centre for Professional Studies, Aggarwal Vidya Pracharni Sabha, Pacific Academy, Wholesale Cloth Merchant Association and Supreme Court rulings in Noorul Islam Educational Trust and Ajantha Industries, the Tribunal held that the cancellation order was without authority, void and bad in law.
Accordingly, the entire cancellation of registration w.e.f. AY 2023-24 was quashed, and the assessee’s registration and exemption status stood restored. The appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT DEHRADUN
