Income Tax Appellate Tribunal - Jabalpur
Namra Mahila Avam Bal Kalyan Samiti vs Cit on 27 February, 2004
Equivalent citations: [2005]1SOT224(JAB)
ORDER
P.M. Jagtap, AM This appeal is preferred by the assessee against the order of the learned CIT-II, Jabalpur withdrawing registration under section 12A and exemption under section 80G granted to the assessee trust.
2. The relevant facts of the case giving rise to this appeal are that the assessee trust was granted registration under section 12A as well as exemption under section 80G by the learned CIT-II, Jabalpur vide his letter No. CIT-II/Jbp/Tech/4/01-02 dated 15-10-2001 and No. CITAP Jbp/Tech/80G-1 dated 18-3-2002 respectively. A survey was carried out in the premises of the assessee trust on 3-9-2002. During the course of survey and further investigations, it was found that the funds claimed to have been raised by the assessee-trust by way of donations have been received only in the month of March, 2002 and that too within a period of 14 days ie., 18-3-2002 onwards. It was also noticed that a total expenditure of Rs. 1,94,42,849 has been claimed by the assessee during the said period. The assessee-trust, therefore, was required by the learned CIT to furnish the details and evidence of incurring such expenditure as well as the details of activities carried out by it. Meanwhile during the course of these investigations by the department in the affairs of the trust, large number of donees denied of having given any donations to the assesseetrust and revised the returns for assessment year 2002-03 withdrawing the claim for exemption under section 80G. Further, some of the donors who were issued refund vouchers by the department on account of their claim for donations made to the assessee-trust returned to the said refund vouchers to the assessee-trust as they had not given any such donations and Shri Girish Mishra, President of the assessee-trust handed over the same to the concerned Income Tax Officer having jurisdiction over the donors. On the basis of these findings of fact, the learned CIT was of the view that the assessee-trust is engaged in the activity of issuing of bogus receipts of donations and since such activity was in no way a charitable activity as specified in the trust deed, he issued a notice to the assessee to show cause as to why the registration under section 12A as well as exemption under section 80G granted by him to it should not be withdrawn. In reply, the assessee-trust after seeking number of adjournments of the hearing before the learned CIT submitted vide its letter dated 5-8-2003 that the inspection of the relevant documents has not been provided by the assessing officer as requested and in the absence of the same, it is not in a position to offer a suitable explanation in the matter. The learned CIT called for a remand report in the matter from the concerned assessing officer and in such report filed before the learned CIT, the concerned assessing officer submitted that the photocopies of 947 pages as desired by the assessee-trust have already supplied on 9-7-2003. He also stated in the said report that despite giving specific and sufficient opportunity to the assessee-trust for inspection of the relevant documents on 17-7-2003, nobody attended on behalf of the assessee trust for such inspection. From the submission made by the assessing officer in his report, the learned CIT noticed that the assessee trust is purposely not attending the office of the assessing officer for inspection of the relevant documents and keeping in view the fact that copies of 947 papers/documents have already been obtained by the assessee, he held that the assessee-trust could reasonably be treated as having provided full inspection and proper opportunity for inspection of the relevant record by the assessing officer. He also held that the assessee-trust is purposely trying to keep the matter pending and is not complying with the requirements and accordingly proceeded to cancel the registration granted to the assessee-trust under section 12A with retrospective effect from 15-10-2001 holding that it is not a Charitable Institution. Aggrieved by the order of the learned CIT withdrawing the registration under section 12A, the assessee has preferred this appeal before the Tribunal on the following grounds:
(1) That the withdrawing registration under section 12A of the Act to the society is illegal and without jurisdiction, perverse, prejudicial and in utter disregard of the canons of justice.
(2) That the learned CIT has erred in passing the order under section 12A of the Act which is inserted with effect from and which is not applicable for cancelling or withdrawing the registration granted on 15-10-2001 under section 12A of the Income Tax Act, when no application for registration was pending before the CIT.
(3) That the order impugned is conspicuously silent as to what material was taken by the learned CIT into consideration, it amounts to violation of rule of natural justice.
(4) That the order impugned is silent as to what documents specifically were asked for by the assessee to put up his defence in the matter, other than what were supplied to him. Thus, the cancellation or withdrawing the registration in the absence of confrontation of documents collected behind the back of appellant is against all fairness and principles of natural justice and as such it has no legal force and is invalid.
(5) That the learned CIT cancelled the registration without confronting the documents to the appellant. By not confronting the enquiries made by the department, the learned CIT has not followed the dictates of established law and as such the cancellation of registration is illegal.
(6) That the order passed under section 12A of the Act be quashed inasmuch as no opportunity of being heard was allowed before rejecting application under section 12A as required under section 12AA(1)(b)(ii) of the Income Tax Act, 1961.
(7) That the learned CIT has not acted judiciously in not acceding the assessee's request to supply the copies of statements recorded and to allow inspection, rather than twisting the facts in the capricious manner in his order.
3. We have heard the arguments of both the sides and also perused the relevant material on record. In ground Nos. 1 and 2, the assessee has challenged the validity of order passed by the learned CIT withdrawing registration under section 12A on the ground that the learned CIT has no jurisdiction to pass such order under section 12A which is not applicable for cancelling or withdrawing the registration already granted. It is observed that similar issue arose for consideration before the Delhi Bench of Income Tax Appelate Tribunal in the case of Kailashchand Mission Trust v. Asstt. CIT (2004) 88 ITD 125 (Del) and while considering the first question in this context as to whether the CIT can review its earlier order passed under section 12A, the Tribunal held that the CIT could not exercise the power of review inasmuch as neither he had any such power under the Act or he had any inherent powers of review, after discussing the various judicial pronouncements in this context in para Nos. 6 and 7 of its order as follows:
"6. Contentions of the rival parties have been considered carefully in the light of case law referred to. The first question to be considered is whether the CIT can review its earlier order ? Normal rule is that the remedy by way of review is a creature of statute and if the statute does not contain such powers then no authority under the Act can review his own order. As a result thereof, no authority can be said to have an inherent right of review. Similar is the position with the right of appeal. The Hon'ble Supreme Court has repeatedly said that right of appeal inheres in no one and, therefore, an appeal for its maintainability must have the clear authority of law. Reference can be made to the decisions of the Hon'ble Supreme Court in the case of CIT v. Ashoka Engg. Co. (1992) 194 ITR 645 (SC) wherein at page 649 it has been held that "It is true that there is no inherent right of appeal to any assessee and that it has to be spelt from the words of the statute, if any, providing for an appeal". What is true to an appeal is also true to review since both the remedies are creature of statutes.
7. Now, we may directly refer to the case law dealing with the powers of review. In S.J.S. Fernades v. V. Ranganayakulu AIR 1953 Mad. 236 (Mad), the Hon'ble Madras High Court ruled as under:
"So far as the invocation of the inherent powers of court is concerned, it has been held repeatedly and has now become well-settled law that the power to review is not an inherent power of judicial officer but such a right must be conferred by statute. This is based upon the common sense principle that prima facie a party who had obtained a decision is entitled to keep it unassailed unless the legislature has indicated the mode by which it can be set aside. A review is practically the hearing of an appeal by the same officer who decided the case. Therefore, the course of decisions in this country has been to the effect that a right to review is not an inherent power: See David Nadarv. Manicka Vachaka Desika Gmuna Sambanda Pandara Sannathi (l910) ILR 33 Mad. 65, Lala Prayag Lal v. Jai Narayan Singh (1895) ILR 22 Cal. 419, Baijnath Ram Goenka v. Nand Kumar Singh (1895) LR 34 Cal. 677 and Anantharaju Shetty v. Appu Hegade (1919) 37 MLJ 162."
Further, there is a direct judgment of Hon'ble Supreme Court on this issue. In the case of Patel Narshi Thakershi (supra), the court had to consider whether the CIT had inherent power to review the earlier order passed under the provisions of Saurashtra Land Reforms Act, 1951. The Apex Court ruled as under:
"The first question that we have to consider is whether Mr. Mankodi had competence to quash the order made by the Saurashtra Government on 22-10-1956. It must be remembered that Mr. Mankodi was functioning as the delegate of the State Government. The order passed by Mr. Mankodi in law amounted to a review of the order made by Saurashtra Government. It is well-settled that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication. No provision in the Act was brought to our notice from which it could be gathered that the government had power to review its own order. If the government had no power to review its own order, it is obvious that its delegate could not have reviewed its order."
In our view, the above judgment concludes the issue. It is on the basis of this principle, it has been repeatedly held by the courts that neither the Tribunal under section 254(2) nor any other income-tax authority under section 154 can review its earlier order. It is not necessary to cite various judgments on this issue and it would be sufficient to cite the jurisdictional High Court judgment in the case of Bhawani Prasad Girdhari Lal & Co. (supra) wherein it has been held that an Income Tax Officer under section 154 can only rectify the mistake but cannot review his order. In view of these binding judgments, it is held that CIT could not exercise the power of review inasmuch as neither he had any such power under the Act nor he had any inherent powers of review."
4. Thereafter the Tribunal proceeded to consider the next relevant question as to whether the CIT could rescind/withdraw the registration granted earlier under section 12A on the basis of section 21 of General Clauses Act and held that the order passed under section 12A could not be rescinded /withdrawn by the CIT for the following reasons given in para Nos. 8 to 10 of its order :
"8. The next question for consideration is whether the CIT could rescind/ withdraw the registration granted earlier under section 12A in 1974 on the basis of section 21 of GCA. This section reads as under:
"21. Where by any Central Act or regulation, a power to issue notifications, orders, rules or bye laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanctions and conditions (if any) to add to, amend, vary or rescind any notifications, orders, rules or bye laws so issued."
The perusal of the above section shows that the word 'orders'is coupled with other words'notifications, rules and bye-laws". The word'order'is of widest amplitude and would include all kinds of orders including administrative orders, judicial orders and legislative orders. It is not clear whether the word 'order'was used by the legislature in widest sense or in restrictive sense. Therefore, to resolve such issue, the courts/Tribunals have restored to the rules of interpretation. In such cases, rule of Noscitur a sociisis applied. As per Black's Dictionary (Sixth Edition page 1060) this rule is stated thus "It is known from its associates. The meaning of the word is or may be known from the accompanying words. Under the doctrine of Noscitur a sociis, the meaning of questionable or doubtful words or phrases in a statute may be ascertained by reference to the meaning of other words."
According to Maxwell on interpretation of statutes, this rule is stated as under:
"When two or more words which are susceptible of analogous meaning are coupled together, they are understood to be used in their cognate sense and they take their colour from each other, ie., the more general is restricted to a sense analogous to less general."
This rule has been applied by the Hon'ble Supreme Court in various cases. Reference can be made to the judgment of Hon'ble Supreme Court in the case of Pradeep Agarbati v. State of Punjab 109 STC 561 (sic). In this judgment the Apex Court at page 565 observed as under:
'Entries in the schedules of sales-tax and excise statute list some articles separately and some articles are grouped together. When they are grouped together, each word in the entry draws colour from the other words therein. This is the principle of Noscitur a sociis.' In this case, the court was required to consider as to whether Dhoop and Agarbati could be included within the meaning of the word 'perfumery' associated with other words 'cosmetics and toilet goods'. Applying the principle of Noscitur a sociis, it was held that the word 'perfumery'was used in restricted sense and would include only those items which are used, as cosmetics and toilet goods, upon the person and consequently, would not include dhoop and agarbati.
9. If the aforesaid principle is applied to the provisions of section 21 of GCA, we are of the view that word 'orders'would not include judicial or quasi-judicial orders. This word is associated with the words'notification, rules and bye-laws'. So the word'order'should be construed in the context in which the associated words used. Associated words are in the nature of subordinate legislation. Therefore, the word 'order'contemplated in this section would be restricted to such orders which are issued by way of delegated subordinate legislation. For example, orders issued by the Central Board of Direct Taxes under section 119 of the Act would fall within the scope of section 21 of GCA as such orders would be in the nature of subordinate legislation. This view is also fortified by the Supreme Court judgment in the case of Ghaurul Hasan v. State of Rajasthan AIR 1967 SC 107 (SC) wherein it was held as under:
"The only other point that was taken by the respondents was that the Collector having the power to grant the registration certificate under the Citizenship Act had by virtue of section 21 of the General Clauses Act, and apart from section 10(2) of the Citizenship Act, the power to cancel it. We are entirely unable to agree that section 21 conferred on the Collector any such power. The orders mentioned in that section are not orders of the kind contemplated in section 5 of the Citizenship Act."
In Bherumaly v. Motutnal AIR 1956 (Ajmer) 67, it has been held that the word'order'in section 21 of GCA refers to subordinate legislation and not to judicial orders. Thejurisdictional High Court in the case of Bachchu Lal Gupta v. Rex AIR 1951 (All.) 404 has held that the word 'order' must be limited to non-judicial orders.
10. In view of the above discussion, it is held that section 21 of GCA would include only those orders which are in the nature of subordinate legislation and would not include other orders particularly judicial or quasi-judicial orders. Consequently, the order of CIT passed under section 12A in 1974 could not be rescinded/withdrawn by the impugned order by virtue of section 21 of GCA. Hence, the impugned order was without jurisdiction."
5. The Tribunal thus has held in the case of Kailashchand Mission Trust (supra) that the learned CIT having no powers either incidental or specifically provided in the statute to review his own order nor being empowered to rescind/withdraw the registration already granted under section 12A as per the provisions of section 21 of the General Clauses Act, his order withdrawing the registration already granted under section 12A was without jurisdiction. To the similar effect is the decision of Indore Bench of Income Tax Appelate Tribunal in the case of M.P. Madhyan v. CIT (IT Appeal No. 75 (Ind.) of 2002 dated 30-9-2002 cited by the learned counsel for the assessee wherein it has been held that provisions of section 12A are meant for conditions and procedure for registration and not for withdrawal or cancellation of registration already granted on earlier occasion. Since the ratio of the aforesaid decisions of Delhi Bench and Indore Bench of Income Tax Appelate Tribunal is directly applicable in the present case, we hold, respectfully following the same, that the learned CIT was not empowered to pass the impugned order withdrawing registration already granted to the assessee-trust under section 124 and such order being invalid having passed without jurisdiction, is liable to be quashed. We order accordingly.
6. Keeping in view our decision rendered hereinabove on ground Nos. 1 and 2 quashing the impugned order passed by the learned CIT, we do not deem it necessary to consider and decide the other grounds raised by the assessee in the present appeal which have been rendered merely of academic nature.
7. In the result, the appeal of the assessee is allowed.