Taxmann Daily – Editorial Team
The instant appeal was filed by the assessee against the order of the Commissioner of Income-tax (CIT) granting registration under section 12AB. The CIT had granted registration to the assessee subject to fulfilment of certain conditions and registration is liable to be withdrawn if violated any condition prescribed.
The grievance of the assessee was the CIT erred in imposing conditions based on which the registration was granted. There is no provision under the Income Tax Act which permits the CIT to grant conditional registration.
The Mumbai Tribunal held that on a perusal of conditions subject to which the registration was granted, it was found that these conditions were with respect to the conduct of the trust and the circumstances in which the registration was granted to the assessee can be canceled.
These are the matters which are regulated by the specific provisions of law, and the observations of the Commissioner cannot have the independent force of law no matter how well intended.
While looking at the scheme of Section 12AB, there is a limited role that the CIT could have played under section 12AB(1).
It was open to him to call for such documents or information from the trust or institution as he thinks necessary to satisfy himself about the genuineness of trust activities. Thereafter he may proceed to take a call on whether to grant the registration under section 12A or not.
Further, there are specific provisions of law that govern the cancellation of registration, and these provisions can neither be diluted nor supplemented by the learned Commissioner. It is not for CIT to decide at the point of time of granting registration as to when and how should cancellation of registration be made.
The Income-tax Dept. has carried out search and seizure operations on prominent business conglomerates engaged in diversified fields of Textiles, Chemicals, Packaging, Real estate, and Education.
Various incriminating evidence in the form of documents and digital data has been found and seized. The evidence reveals that the group has been engaged in large-scale tax evasion by adopting various methods, including, by way of unaccounted cash sales outside the books of account, booking of bogus purchases, and on-money receipts from real estate transactions.
The search action has resulted in unearthing unaccounted transactions exceeding Rs. 1,000 crores. So far, unaccounted cash of Rs. 24 crore and unexplained jewellery bullion, etc. valued at Rs. 20 crores have been seized during the search.
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