Nagarjuna Education Society, Guntur v. CIT, Guntur

ITA 93/VIZ/2009 | misc
Pronouncement Date: 29-03-2010 | Result: Allowed

Appeal Details

RSA Number 9325314 RSA 2009
Assessee PAN AAATN5541K
Bench Visakhapatnam
Appeal Number ITA 93/VIZ/2009
Duration Of Justice 1 year(s) 28 day(s)
Appellant Nagarjuna Education Society, Guntur
Respondent CIT, Guntur
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 29-03-2010
Date Of Final Hearing 01-03-2010
Next Hearing Date 01-03-2010
Assessment Year misc
Appeal Filed On 02-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO.66/VIZAG/2009 ASSESSMENT YEAR : 2005-06 ACIT CIRCLE-2(1) GUNTUR NAGARJUNA EDUCATIONAL SOCIETY GUNTUR (APPELLANT) VS. (RESPONDENT) PAN NO.AAATN 5541K ITA NO.93&94/VIZAG/2009 ASSESSMENT YEAR : NA NAGARJUNA EDUCATIONAL SOCIETY GUNTUR CIT GUNTUR (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI B. SASMAL DR RESPONDENT BY: SHRI C.P. RAMASWAMI ADVOCATE ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER:- THESE CROSS APPEALS ARE PREFERRED BY THE ASSESSEE AS WELL AS THE REVENUE AGAINST THE RESPECTIVE ORDER OF THE CIT(A). SINCE THESE APPEALS WERE HEARD TOGETHER THESE ARE BEING DISPOSED OFF BY THI S CONSOLIDATED ORDER. WE HOWEVER PREFER TO ADJUDICATE THEM ONE AFTER THE OTH ER. ITA NO.66 OF 2009: 2. THIS IS AN APPEAL OF THE REVENUE IN WHICH THE OR DER OF THE CIT(A) IS ASSAILED ON VARIOUS GROUNDS WHICH ARE AS UNDER: 1. THE LD. CIT(A) GUNTUR ERRED IN BOTH ON FACTS AND I N LAW IN ALLOWING THE ASSESSEES APPEAL. 2. THE LD. CIT(A) OUGHT TO HAVE CONFIRMED THE ASSESSME NT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) GUNTUR HAS ERRED IN HOLDING THAT THE ASSESS EE CAN CLAIM EXEMPTION U/S 10(23C) OR SEC.11 OF THE ACT. 2 4. THE PROVISIONS OF SEC.10(23C)(VI) HAVING BEEN INSER TED BY THE FINANCE (NO.2) ACT 1998 W.E.F 1.4.1999 THE LD. CI T(A) GUNTUR OUGHT NOT TO HAVE RELIED ON THE CASE LAWS REFERRED TO IN HER ORDER WHICH ARE DISTINGUISHABLE ON FACTS. 5. THE LD. CIT(A) GUNTUR ON THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE OUGHT TO HAVE HELD THAT THE ASSESSEE IS O BLIGED TO GET AN APPROVAL FROM THE PRESCRIBED AUTHORITY U/S 10(23C)( VI) IRRESPECTIVE OF THE FACT THAT THE ASSESSEE HAS BEEN GRANTED REGI STRATION U/S 12A OF THE ACT. 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF H EARING OF THE APPEAL. 3. THOUGH THE REVENUE HAS RAISED VARIOUS GROUNDS OF APPEAL BUT THEY ALL RELATE TO AN ISSUE AS TO WHETHER THE ASSESSEE CAN C LAIM EXEMPTION EITHER U/S 10(23) OR 11 OF THE INCOME TAX ACT (HEREIN AFTER CAL LED AS AN ACT). IN THIS REGARD OUR ATTENTION WAS INVITED TO THE ORDER OF T HE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 IN WHICH THE TRIBUNAL HAS HELD THAT ASSESSEE SOCIETY CAN CLAIM EXEMPTION EITHER U/S 10(23C) OR SECTION 11 OF THE I.T. ACT AFTER HAVING RELIED THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. AN DHRA PRADESH RIDING CLUB 168 ITR 393. THE RELEVANT OBSERVATION OF THE TRIBU NAL IS EXTRACTED HEREUNDER: WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. WE NOTICE THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION OF ITAT DELHI IN THE CASE OF SHARAK SHIKSHA SAMITI VS. CIT (16 SOT 213) (DEL.) WHEREIN IT WAS HELD THAT WHEN TWO RECOU RSES ARE AVAILABLE TO A PERSON UNDER A LAW IT IS FOR HIM TO CHOOSE ONE OR THE OTHER OR BOTH THE RECOURSES. THE LD. CIT(A) HAS AL SO FOLLOWED THE DECISION OF JURISDICTIONAL AP HIGH COURT IN THE CAS E OF CIT VS. ANDHRA PRADESH RIDING CLUB (168 ITR IN PG.393) WHE REIN IT WAS HELD THAT SECTION 10(23) AND SECTION 11 ARE NOT MUT UALLY EXCLUSIVE AND EXEMPTION CAN BE CLAIMED U/S 11 EVEN WHEN GOVER NED BY THE PROVISIONS OF SECTION 10. THIS BENCH HAS TAKEN SIM ILAR VIEW IN THE CASE OF MALINENI PERUMALLU EDUCATIONAL SOCIETY IN I TA NOS.541 & 542/VIZ/2009 BY FOLLOWING TWO DECISIONS OF ITAT HY DERABAD LISTED BELOW WHEREIN THE TRIBUNAL HAS TAKEN A VIEW THAT TH E EXEMPTION CAN BE CLAIMED EITHER U/S 11 OR SEC (23C) OF THE AC T. (A) RAJASTHAN SHIKSHA SAMITI ITA NOS.80 & 81/HYD /08 (B) DDIT VS. ST. TERESA CONVENT SOCIETY ITA NO.234/HYD/07 3 SINCE THE DECISION RENDERED BY LD. CIT(A) IS IN AC CORDANCE WITH THE VIEW CONSISTENTLY TAKEN UP BY VARIOUS BENC HES OF ITAT WE DO NOT FIND ANY NECESSITY TO INTERFERE WITH HIS ORD ER. 4. SINCE THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL WE FIND NO VALID REASON TO TAKE A CONTRAR Y VIEW IN THIS APPEAL. WE ACCORDINGLY FOLLOWING THE SAME CONFIRM THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. ITA NOS.93 & 94 OF 2009: 5. THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAI NST THE RESPECTIVE ORDERS OF THE CIT. IN ITA 94 OF 2009 THE ORDER OF THE CIT DENYING THE REGISTRATION U/S 12AA IS CHALLENGED ON VARIOUS GROU NDS WHICH ARE AS UNDER: 1. THE CIT IS NOT CORRECT IN LAW OR ON FACTS IN CANCEL LING THE REGISTRATION GRANTED U/S 12A BY INVOKING THE PROVIS IONS OF SECTION 12AA (3) OF THE INCOME TAX ACT 1961: 2. THE APPELLANT SOCIETY SUBMITS THAT EVEN U/S 12AA(3) REGISTRATION GRANTED UNDER THAT SECTION CAN BE CANCELLED ONLY IF THE SOCIETY IS NOT GENUINE OR ITS ACTIVITIES ARE NOT IN ACCORDANCE WITH ITS OBJECTS AND THAT IN THE ABSENCE OF THOSE TWO SITUATIONS IN THE GIVEN CASE EVEN SECTION 12AA(3) HAS NO APPLICATION; 3. THE CIT IS NOT CORRECT IN CONCLUDING THAT THE AMOUN TS RECEIVED BY THE APPELLANT SOCIETY AS DONATIONS ARE CAPITATION F EES AND THEREBY CANCELLING THE REGISTRATION SINCE THE APPELLANT SO CIETY RECEIVED THE DONATIONS FROM THE PUBLIC AS PERMITTED UNDER THE PR OVISIONS OF A.P. EDUCATIONAL INSTITUTIONS (REGULATION OF ADMISSION & PROHIBITION OF CAPITATION FEE) ACT OF 1983; 4. THE APPELLANT SOCIETY SUBMITS THAT THE PRESUMPTION OF THE CIT THAT THE AMOUNTS COLLECTED ARE CAPITATION FEES IS NOT BA SED ON CORRECT FACTS AS CONTAINED IN THE AFFIDAVITS FILED BY THE S AID INDIVIDUAL DONORS; 6. IN ITA NO.93 OF 2009 THE ORDER OF THE CIT DENYING THE RENEWAL OF EXEMPTION U/S 80G ON THE BASIS OF CANCELLATION OF R EGISTRATION U/S 12AA(3) IS CHALLENGED MAINLY ON TWO GROUNDS WHICH ARE AS UNDER : 1. THE CIT IS NOT DECLINING AND REFUSING TO RENEW THE EXEMPTION U/S 80G OF THE ACT STATING THAT REGISTRATION OF THE APP ELLANT SOCIETY WAS CANCELLED U/S 12AA(3) OF THE I.T. ACT 2. THE APPELLANT SOCIETY SUBMITS THAT IT HAS FILED AN APPEAL AGAINST THE ORDER PASSED U/S 12AA(3) OF THE IT ACT BEFORE THE I TAT AND THAT 4 FOR GROUNDS RAISED THEREIN THE CANCELLATION OF REG ISTRATION IS NOT CORRECT IN LAW AND INCONSEQUENCE THEREOF THE REFUS AL OF RENEWAL OF EXEMPTION U/S 80G. 7. BASICALLY THE RENEWAL OF EXEMPTION U/S 80G WAS D ENIED BY THE CIT FOR THE SOLE REASON THAT THE REGISTRATION U/S 12AA WAS REJECTED. IN THESE CIRCUMSTANCES WE ARE REQUIRED TO ADJUDICATE FIRSTL Y WHETHER THE DENIAL OF REGISTRATION U/S 12AA IS PROPER AND WE ACCORDINGLY HEARD THE PARTIES ON THIS ISSUE. 8. THE LD. COUNSEL FOR THE ASSESSEES HAS INVITED OU R ATTENTION TO THE PROVISIONS OF SECTION 12A & 12AA OF THE ACT WITH TH E SUBMISSION THAT ONCE THE REGISTRATION IS GRANTED U/S 12A IT CANNOT BE REJECT ED OR DENIED IN SUBSEQUENT YEARS U/S 12AA OF THE ACT AS THERE IS NO PROVISION FOR THE DENIAL IN SECTION 12A OF THE ACT. THE SECTION 12AA CAN ONLY BE INVOK ED WITH RESPECT TO OTHERS APPLICATIONS WHICH WERE MADE ON OR AFTER THE FIRST DAY OF JUNE 2007. THE PROVISIONS OF SUB-SECTION 3 OF SECTION 12AA IS ONLY PROSPECTIVE AND CAN ONLY BE APPLIED TO THOSE TRUST OR INSTITUTIONS WHICH WER E GRANTED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION 1 OF SECTION 12AA OF THE ACT. BUT THE ASSESSEE SOCIETY WAS REGISTERED U/S 12A BY THE ORDER OF THE COMMISSIONER DATED 4.11.1974 AND THE APPLICATION FOR RENEWAL OF EXEMPT ION WAS ALSO FILED ON 4.5.2007 I.E. BEFORE FIRST DAY OF JUNE 2007 AS SUC H THE CIT HAS WRONGLY INVOKED THE PROVISIONS OF SUB-SECTION 3 OF SECTION 12AA OF THE ACT. THE LD. COUNSEL HAS ALSO PLACED A RELIANCE UPON THE FOLLOWI NG JUDGEMENTS IN SUPPORT OF HIS CONTENTIONS: SL.NO. NAME OF THE CASE APPELLATE AUTHORITY REFERENCE 1. BHARATHI VIDYAPEETH VS. ITO ITAT PUNE B BENCH 1 19 TTJ 261 (2008) 2. ST. DON BOSCO EDUCATIONAL SOCIETY VS. CIT ITAT LUCKNOW BENCH 90 ITD 477 (2004) 3. WELHAM BOYS SCHOOL SOCIETY VS. CBDT HIGH COURT OF UTTARANCHAL 285 ITR 74 (2006) 4. DCIT VS. COSMOPOLITAN EDUCATION SOCIETY HIGH COURT OF RAJASTHAN 244 ITR 494 (2000) 5. CIT VS. KHALSA RURAL HOSPITAL & NURSING TI HIGH COURT OF PUNJAB & HARYANA 304 ITR 20 (2008) 6. SANJEEVAMMA HANUMANTHE GOWDE CHARITABLE TRUST VS. DIT (EXEMPTION) HIGH COURT OF KARNATAKA 285 ITR 327 (2006) 5 9. THE LD. DR ON THE OTHER HAND HAS SUBMITTED THAT UNDER SUB-SECTION 3 OF SECTION 12AA THE CIT HAS JURISDICTION TO EXAMINE THE NATURE OF ACTIVITIES OF THE ASSESSEES AND IF HE IS SATISFIED THAT THE ACTIV ITIES OF TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDA NCE WITH THE OBJECT OF THE TRUST OR INSTITUTION AS THE CASE MAY BE HE SHALL P ASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF SUCH TRUST OR INSTIT UTION. IT MAKES NO DIFFERENCE WHETHER THE REGISTRATION WAS GRANTED U/S 12A OR 12A A OF THE ACT. SECTION 12A DEALS WITH THE CONDITIONS FOR APPLICABILITY OF SECTION 11 & 12 WHEREAS THE 12AA DEALS WITH THE PROCEDURE FOR REGISTRATION. ME ANING THEREBY BOTH THE PROVISIONS ARE TO BE READ TOGETHER AND IF THE CIT I S SATISFIED AT THE TIME OF RENEWAL THAT THE ACTIVITIES OF THE TRUST OR INSTITU TION ARE NOT GENUINE HE MAY CANCEL THE REGISTRATION. THUS THE CIT HAS RIGHTLY CANCELLED THE REGISTRATION IN THE INSTANT CASE HAVING SATISFIED THAT THE ACTIVITI ES OF THE ASSESSEES ARE NOT IN ACCORDANCE WITH THE OBJECT OF THE ASSESSEE SOCIETY. 10. HAVING HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE ORDERS OF CIT AND THE RELEVANT PROVISIONS OF THE ACT AND WE F IND THAT SECTION 12A DEALS WITH THE CONDITIONS OF THE APPLICABILITY OF SECTION 11 & 12 AND UNDER THIS SECTION A PERSON WHO IS IN RECEIPT OF INCOME AS PER SECTION 11 & 12 MAKES SL.NO. NAME OF THE CASE APPELLATE AUTHORITY REFERENCE 7. SRI CHAITANYA EDUCATIONAL COMMITTEE VS. CIT ITAT HYDERABAD B BENCH 106 ITD 256 (2007) 8. CIT VS. GUJARAT MARITIME BOARD SUPREME COURT OF INDIA 295 ITR 561 (2008) 9. GURU GOBIND SINGH EDUCATIONAL SOCIETY VS. CIT ITAT AMRITSAR BENCH 118 ITD 207 (2009) 10. OXFORD ACADEMY FOR CAREER DEVELOPMENT VS. CCIT HIGH COURT OF ALLAHABAD 315 ITR 382 (2009) 11. KAILASHANAND MISSION TRUST VS. ACIT ITAT DELHI C BENCH 88 ITD 125 (2004) 12. SOLE TRUSTEE LOK SHIKSHANA TRUST VS. CIT SUPREME COURT OF INDIA 101 ITR 234 (1975) 13. PADAMASUNDARA RAO VS. STATE OF TAMILNADU SUPREME COURT OF INDIA 255 ITR 147 (2002) 14. HIRALAL BHAGVATHI VS. CIT HIGH COURT OF GUJARAT 246 ITR 188 (2000) 15. ACIT VS. SURAT CITY GYMKHANA SUPREME COURT OF I NDIA 300 ITR 214 (2008) 16. DHAKESWARI COTTON MILLS LTD. VS. CIT SUPREME COURT OF INDIA 26 ITR 775 (1954) 6 AN APPLICATION FOR REGISTRATION OF THE TRUST OR INS TITUTION IN THE PRESCRIBED FORM. BEFORE THE INTRODUCTION OF SECTION 12AA THE REGISTR ATION WAS GRANTED U/S 12A OF THE ACT BUT W.E.F. 1.4.97 WHEN SECTION 12AA WAS INTRODUCED THE REGISTRATION WAS GRANTED U/S 12AA AS IT DEALS WITH THE PROCEDURE FOR REGISTRATION. SUB-SECTION 3 OF SECTION 12AA CONFER S THE POWER UPON A COMMISSIONER TO EXAMINE THE ACTIVITIES OF SUCH TRUS T OR INSTITUTION AND IF HE IS SATISFIED THAT IT IS NOT GENUINE OR NOT BEING CARRI ED OUT IN ACCORDANCE WITH THE OBJECT OF THE TRUST OR INSTITUTION AS THE CASE MAY BE HE MAY CANCEL THE REGISTRATION OF SUCH TRUST. THE POWER OF CANCELLAT ION WAS NOT CONFERRED WITH THE COMMISSIONER U/S 12A WITH RESPECT TO THOSE CASE S WHERE THE REGISTRATION WAS GRANTED U/S 12A. FOR THE SAKE OF REFERENCE AND ALSO TO UNDERSTAND THE SCOPE OF BOTH THESE SECTIONS WE REPRODUCE THEM AS UNDER: 12A. [(1)] THE PROVISIONS OF SECTION 11 AND SECTIO N 12 SHALL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUST OR INSTITUTION UNLESS THE FOLLOWING CONDITIONS ARE FULFILLED NAMELY:- (A) THE PERSON IN RECEIPT OF THE INCOME HAS MADE A N APPLICATION FOR REGISTRATION OF THE TRUST OR INSTIT UTION IN THE PRESCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE COMMISSIONER BEFORE THE 1 ST DAY OF JULY 1973 OR BEFORE THE EXPIRY OF A PERIO D OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION [WHICHEVER IS LAT ER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA]: [ PROVIDED THAT WHERE AN APPLICATION FOR REGISTRATION OF THE T RUST OR INSTITUTION IS MADE AFTER THE EXPIRY OF THE PERIOD AFORESAID THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN REL ATION TO THE INCOME OF SUCH TRUST OR INSTITUTION - (I) FROM THE DATE OF THE CREATION OF THE TRUST OR T HE ESTABLISHMENT OF THE INSTITUTION IF THE COMMISSIONER IS FOR REASONS TO BE RECORDED IN WRITING SATISFIED THAT THE PERSON IN RECEIPT OF TH E INCOME WAS PREVENTED FROM MAKING THE APPLICATION BEFORE THE EX PIRY OF THE PERIOD AFORESAID FOR SUFFICIENT REASONS; (II) FROM THE 1 ST DAY OF THE FINANCIAL YEAR IN WHICH THE APPLICATION IS MADE IF THE COMMISSIONER IS NOT SO SATISFIED: [ PROVIDED FURTHER THAT THE PROVISIONS OF THIS CLAUSE SHALL NOT APPLY IN RELATION TO ANY APPLICATION MADE ON OR AFT ER THE 1 ST DAY OF JUNE 2007;] 7 [(AA) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION ON OR AFTER THE 1 ST DAY OF JUNE 2007 IN THE PRESCRIBED FORM AND MANNER TO THE COMMISSIONER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER S ECTION 12AA;] (B) WHERE THE TOTAL INCOME OF THE TRUST OR INSTITUT ION AS COMPUTED UNDER THIS ACT WITHOUT GIVING EFFECT TO [THE PROVIS IONS OF SECTION 11 AND SECTION 12 EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX IN ANY PREVIOUS YEAR] THE ACCOUNTS OF THE TRUST OR INSTITUTION FOR THAT YEAR HAVE BEEN AUDITE D BY AN ACCOUNTANT AS DEFINED IN THE EXPLANATION BELOW SUB- SECTION (2) OF SECTION 288 AND THE PERSON IN RECEIPT OF THE INCOME FURNISHES ALONG WITH THE RETURN OF INCOME FURNISHES ALONG WITH THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH AC COUNTANT AND SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCRIBED .] [ PROCEDURE FOR REGISTRATION. 12AA. (1) THE COMMISSIONER ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER C LAUSE (A) [OR CLAUSE (ASSESSING AUTHORITY) OF SUB-SECTION (1)] OF SECTION 12A SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTI TUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY I N THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUS T OR INSTITUTION; (II) SHALL IF HE IS NOT SO SATISFIED PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTI ON. AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT: PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OP PORTUNITY OF BEING HEARD. [(1A) ALL APPLICATIONS PENDING BEFORE THE CHIEF CO MMISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE THE 1 ST DAY OF JUNE 1999 SHALL STAND TRANSFERRED ON THAT DAY TO THE COMMISSIONER AND THE COMMISSIONER MAY PR OCEED WITH SUCH APPLICATIONS UNDER THAT SUB-SECTION FROM THE S TAGE AT WHICH THEY WERE ON THAT DAY.] 8 [(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANT ED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) AND SUBSEQUENTL Y THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SU CH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIE D OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION AS THE CASE MAY BE HE SHALL PASS AN ORDER IN WRITING CANCELLIN G THE REGISTRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASS ED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A R EASONABLE OPPORTUNITY OF BEING HEARD.] 11. FROM A CAREFUL PERUSAL OF BOTH THE SECTIONS IT IS AMPLY CLEAR THAT PRIOR TO THE INSERTION OF SECTION 12AA THE APPLICATIONS F OR REGISTRATION RECEIVED U/S 12A WERE TO BE PROCESSED UNDER THE SAME SECTION ITS ELF. BUT LATER ON SEPARATE PROVISION I.E. 12AA WAS INTRODUCED TO DEAL WITH THE PROCEDURE FOR REGISTRATION. SECOND PROVISO TO SUB-SECTION 1 OF S ECTION 12A FURTHER STATES THAT PROVISIONS OF CLAUSE 1(A) SHALL NOT APPLY IN R ELATION TO ANY APPLICATIONS MADE ON OR AFTER THE FIRST DAY OF JUNE 2007. MEAN ING THEREBY AFTER FIRST DAY OF JUNE 2007 ALL APPLICATIONS FOR REGISTRATION U/S 12A ARE TO BE RECEIVED U/S 12AA AND THERE AFTER TO BE PROCESSED ONLY U/S 12AA OF THE ACT. 12. TURNING TO THE FACTS OF THE CASE WE FIND THAT ASSESSEE WAS GRANTED REGISTRATION U/S 12A ON 4.11.1974. AT THE TIME OF GRANT OF REGISTRATION SECTION 12AA WAS NOT ON THE STATUTE AS SUCH THE REGISTRAT ION WAS PROCESSED U/S 12A OF THE ACT. NOW THE QUESTION ARISE WHETHER THE GEN UINENESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION WHICH WERE REGISTER ED U/S 12A CAN BE EXAMINED BY THE COMMISSIONER U/S 12AA (3) OF THE ACT. THE A NSWER IS CERTAINLY NO. THE REASON IS THAT SUB-SECTION 3 CATEGORICALLY DEAL S WITH THOSE REGISTRATIONS WHICH WERE GRANTED UNDER CLAUSE (B) OF SUB-SECTION 1 OF SECTION 12AA OF THE ACT. IT HAS NO RELEVANCE WITH RESPECT TO THE REGIST RATIONS WHICH WERE GRANTED U/S 12A OF THE I.T. ACT. MEANING THEREBY ONCE THE REGISTRATION IS GRANTED U/S 12A IT CANNOT BE CANCELLED BY THE CIT IN AS MUCH A S IN THIS REGARD WE DO NOT FIND ANY PROVISIONS U/S 12A OF THE ACT. THE ONLY P ROVISION AVAILABLE IN THE ACT IS SUB-SECTION 3 OF SECTION 12AA OF THE ACT. THIS ISSUE WAS ALSO EXAMINED BY THE VARIOUS BENCHES OF THE TRIBUNAL. IN THE CASE O F BHARATHI VIDYAPEETH VS. ITO 119 TTJ 261 THE TRIBUNAL HAS HELD THAT THE REG ISTRATION GRANTED U/S 12A 9 CANNOT BE WITHDRAWN OR CANCELLED BY THE CIT BY INVO KING THE PROVISIONS OF SECTION 12AA(3). THE PROVISIONS OF SUB-SECTION 3 O F SECTION 12AA WHICH WERE BROUGHT ON THE STATUTE BOOK BY THE FINANCE ACT (NO. 2 2004) ARE SUBSTANTIVE IN NATURE AND HAVE NO RETROSPECTIVE EFFECT. THE SI MILAR VIEW WAS TAKEN BY THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF ST. DO N BOSCO EDUCATIONAL SOCIETY VS. CIT 90 ITD 477. THE UTTARANCHAL HIGH C OURT IN THE CASE OF WELHAM BOYS SCHOOL SOCIETY VS. CBDT 285 ITR 74 HAS ALSO TAKEN THE SIMILAR VIEWS. THEIR LORDSHIP HAVE CATEGORICALLY HELD THAT THE SUB-SECTION 3 WAS INCORPORATED IN SECTION 12AA W.E.F. 1.10.2004. THE REFORE PRIOR TO THE SAID DATE THE AUTHORITY GRANTING REGISTRATION U/S 12AA HAD NO INHERENT POWERS TO WITHDRAW OR REVOKE THE REGISTRATION ALREADY GRANTED . WHILE DEALING WITH THE ARGUMENT THAT PARTY WHICH GRANTS THE REGISTRATION I S ALSO EMPOWERED TO CANCEL THE SAME THEIR LORDSHIP HAVE HELD THAT WHAT IS TO BE RESCINDED BY THE CIT IS NOT A NOTIFICATION RULE OR BY-LAW. WHAT IS RESCINDED IS A QUASI-JUDICIAL ORDER WHICH HAD BEEN PASSED BY THE CIT U/S 12A. SU CH A QUASI-JUDICIAL ORDER DOES NOT FALL IN THE CATEGORY OF ORDERS MENTIONED I N THE SECTION 21 OF THE GENERAL CLAUSES ACT 1897. THUS BY VIRTUE OF SECTI ON 21 THE CIT HAD NO POWER TO RESCIND THE ORDER PASSED EARLIER BY THE CI T GRANTING REGISTRATION TO THE ASSESSEE/PETITIONER SOCIETY. WE HAVE ALSO GONE THROUGH THE OTHER CASE LAWS REFERRED TO BY THE ASSESSEES AND WE FIND THAT IN ALL THOSE CASE LAWS SIMILAR VIEW WAS EXPRESSED EITHER BY THE TRIBUNAL O R THE HIGH COURT. 13. FOLLOWING THE AFORESAID CASES WE ARE OF THE CO NSIDERED VIEW THAT CIT HAS NO JURISDICTION TO CANCEL THE REGISTRATION EAR LIER GRANTED U/S 12A TO THE ASSESSEES. WE THEREFORE SET ASIDE THE ORDER OF THE CIT DENYING THE REGISTRATION. ONCE THE ORDER OF THE CIT DENYING TH E REGISTRATION U/S 12A IS SET ASIDE THE ASSESSEE IS ENTITLED FOR THE RENEWAL OF EXEMPTION U/S 80G OF THE ACT BECAUSE IT WAS ONLY DENIED FOR THE REASONS THAT REGISTRATION U/S 12A WAS CANCELLED. WE THEREFORE SET ASIDE THIS ORDER OF T HE CIT DENYING THE EXEMPTION U/S 80G OF THE ACT AND DIRECT THE CIT TO GRANT RENEWAL OF EXEMPTION U/S 80G OF THE ACT. 14. ACCORDINGLY BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED. 10 15. IN THE RESULT APPEALS OF THE ASSESSEE ARE ALLOW ED AND THAT OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 29.3.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 29 TH MARCH 2010 COPY TO 1 ACIT CIRCLE-2(1) GUNTUR 2 NAGARJUNA EDUCATIONAL SOCIETY J.K.C. COLLEGE CAM PUS GUNTUR 3 THE CIT GUNTUR 4 THE CIT(A) GUNTUR 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM