Wp/7110/2008 Of Vellore Institute Of v. Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26-04-2021 CORAM THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM WP NO.7110 OF 2008ANDMP NO.1 OF 2008ANDMP NO.1 OF 2012 Vellore Institute of Technology,Represented by Chairman and Managing Trustee, Mr.G.Viswanathan,No.54, Thennamaram Street,Kosapet, Vellore-632 001. .vs. Commissioner of Income Tax (Central-I),New Building (III Floor),No.46, Nungambakkam High Road,Chennai-600 034. .. Petitioner.. Respondent Prayer: Writ Petition is filed under Article 226 of the Constitutionof India, praying for the issuance of a Writ of CertiorarifiedMandamus, calling for the records of the case and quash theimpugned order No.PAN: AAATN 0569 M dated 13.03.2008 passed bythe respondent herein and to forbear the respondent fromcancelling the registration of the petitioner Trust underSection 12AA(3) of the Income Tax Act, 1961. For Petitioner : Mr.R.V.Easwar, Senior Counsel assisted by Ms.Rubal Bansal and Mr.Suhrith Parthasarathy. For Respondent : Mr.A.P.Srinivas, Senior Standing Counsel for Income Tax. O R D E R The proceedings dated 13.03.2008, cancelling theregistration made under Section 12AA(3) of the Income Tax Act isunder challenge in the present writ petition. 2. The reasons furnished for cancellation of registration issought to be assailed on the ground that Section 12AA(3) of theIncome Tax Act, 1961 (hereinafter referred to as the 'Act', inshort), was amended by Finance Act 2010 with effect from01.06.2010 inserting a clause. 3. In view of the fact that the amendment came into forcewith effect from 01.06.2010, the same cannot be invoked for thepurpose of cancellation of registration made prior to 01.06.2010retrospectively, which is impermissible. 4. The learned Senior Counsel, appearing on behalf of thewrit petitioner, mainly contended that the writ on hand rest onthe jurisdiction with reference to the amended Finance Act ofthe year 2010, which was given effect to from 01.06.2010. Thelearned Senior Counsel solicited the attention of this Courtwith reference to Section 12A of the Act regarding conditionsfor applicability of Sections 11 and 12 of the Act. 5. The writ petitioner-Institution was registered on09.07.1984 under Section 12A(a) of the Act, vide C.No.2039(18)/84. Accordingly, the petitioner-Institution was extended certainbenefits as permissible under the provisions of the Act. While-so, Section 12AA of the Act deals with "procedure forregistration". Sub clause (3) contemplates the "procedure to befollowed for cancellation of registration under Section 12A ofthe Act". 6. Learned Senior Counsel for the petitioner distinguishedSection 12AA(3) of the Act by stating that a specific clause hasbeen inserted through Finance Act 2010, which came into forcewith effect from 01.06.2010. 7. As far as the case of the petitioner is concerned, theregistration was granted on 09.07.1984 and accordingly thebenefit of exemptions were granted. The impugned order ofcancellation was issued on 13.03.2008 and the amendment inFinance Act 2010 came into force with effect from 01.06.2010.The insertion made in Finance Act 2010 is that “or has obtainedregistration and at any time under Section 12A [as it stoodbefore its amendment by the Finance (No.2) Act, 1996 (33 of1996)]. 8. In view of the fact that the insertion conferring poweron the Commissioner to cancel the registration was granted withreference to the registration done under Section 12-A of the Actwith effect from 01.06.2010 vide the Finance Act, 2010, theorder impugned passed during the year 2008, cancelling theregistration done under Section 12A of the Act is untenable andwithout jurisdiction. In other words, on the date of passing ofthe impugned order, the respondent is not vested with any poweror jurisdiction to cancel the registration made under Section12A of the Act, granting exemption to the writ petitioner-Institution. 8. In view of the fact that the insertion conferring poweron the Commissioner to cancel the registration was granted withreference to the registration done under Section 12-A of the Actwith effect from 01.06.2010 vide the Finance Act, 2010, theorder impugned passed during the year 2008, cancelling theregistration done under Section 12A of the Act is untenable andwithout jurisdiction. In other words, on the date of passing ofthe impugned order, the respondent is not vested with any poweror jurisdiction to cancel the registration made under Section12A of the Act, granting exemption to the writ petitioner-Institution. 9. In this regard, the learned Senior Counsel for thepetitioner, in nutshell, contended the facts by stating thatSection 12A of the Act, provides for compulsory registration ofa Charitable Trust under the Act as a condition for enjoyingexemption from taxation under Sections 11 and 12 of the Act witheffect from 01.04.1973. 10. The writ petitioner-Vellore Institution of Technologywas created as a Charitable Trust by a registered documentNo.94/84 in the Office of SRO, Vellore on 08.05.1984. On09.07.1984, the petitioner-Institution obtained registrationunder Section 12A(a) of the Act vide C.No.2039(18)/84. Section 11. Section 12AA was inserted by Finance (No.2) Act, 1996with effect from 01.04.1997 to provide for a “procedure forregistration” of Charitable Trusts under the Act. The saidSection 12AA provides for the procedure for registration of aTrust or an Institution where an application for registration ismade under Section 12A(1)(a) or 12A(1)(aa) or 12A(1)(ab) of theAct. 12. On 01.10.2004, sub-section (3) was inserted into Section12AA by Finance (No.2) Act, 2004 to provide for power to cancelregistration granted to a Charitable Trust under Section 12AA(1)(b), on two grounds viz., (a) activities of the Trust are notgenuine; or (b) activities of the Trust are not being carriedout in accordance with the objects of the Trust. 13. On 08.01.2008, first show cause notice was issued to thepetitioner-Institution under Section 12AA(3) of the Act, to showcause as to why registration under Section 12A should not becancelled by invoking Section 12AA(3) of the Act. 14. The writ petitioner-Institution submitted their reply on29.01.2008, inter alia, stating that Section 12AA(3) can beinvoked only where Trust has been granted registration after01.04.1997 under Section 12AA(1)(b) of the Act, and cannot beinvoked where the Trust was granted registration under Section https://hcservices.ecourts.gov.in/hcservices/ 12A prior to 01.04.1997. Thereafter, the respondent sent asecond show cause notice on 06.02.2008 to the writ petitionerunder Section 12AA(3) of the Act. 15. The petitioner-Institution again submitted their replyon 25.02.2008. The third show cause notice was issued to thewrit petitioner on 03.03.2008 under Section 12AA(3) of the Act.For the said show cause notice also the petitioner submittedtheir reply on 06.03.2008. Thereafter, on 13.03.2008, theimpugned order of cancellation of registration was issued by therespondent under Section 12AA(3) of the Act, by overruling theobjections raised with reference to the power/jurisdiction tocancel the registration granted to the writ petitioner witheffect from 09.07.1984, which is prior to 01.04.1997. 12A prior to 01.04.1997. Thereafter, the respondent sent asecond show cause notice on 06.02.2008 to the writ petitionerunder Section 12AA(3) of the Act. 15. The petitioner-Institution again submitted their replyon 25.02.2008. The third show cause notice was issued to thewrit petitioner on 03.03.2008 under Section 12AA(3) of the Act.For the said show cause notice also the petitioner submittedtheir reply on 06.03.2008. Thereafter, on 13.03.2008, theimpugned order of cancellation of registration was issued by therespondent under Section 12AA(3) of the Act, by overruling theobjections raised with reference to the power/jurisdiction tocancel the registration granted to the writ petitioner witheffect from 09.07.1984, which is prior to 01.04.1997. 16. The learned Senior Counsel, appearing on behalf of thepetitioner, contended that sub-section (3) to Section 12AA wasinserted with effect from 01.10.2004 conferring power to thePrincipal Commissioner or to the Commissioner for the first timeto cancel registration granted to any Trust or Institution underSection 12AA(1)(b) of the Act. However, there was no provisionto cancel the registration made under Section 12A of the Act inthe Finance Act 2004, which came into force from 01.10.2004.Subsequently, sub-section (3) to Section 12AA was amended andinsertion was made, which came into force with effect from01.06.2010 with new words “or has obtained registration at anytime under Section 12A [as it stood before its amendment by theFinance (No.2) Act, 1996 (33 of 1996)]”, was inserted in FinanceAct 2010, which came into force with effect from 01.06.2010. 17. Circular No.1 of 2011 dated 06.04.2011, issued by theCentral Board of Direct Taxes (hereinafter referred to as“CBDT”, in short), which contains 'Explanatory Notes to theprovisions of the Finance Act, 2010, wherein paragraph-7 revealsthat the amendment made by the Finance Act 2010 and paragraph7.4 states that the amendment came into effect from 01.06.2010and is applicable for the assessment year 2011-2012 andsubsequent assessment years. The said proposition was consideredby the Hon'ble Supreme Court in the case of K.P. Varghese vs.Income Tax Officer [(1981) 131 ITR 597], wherein in paragraph-11, it has been held as under:- “11. There is also one othercircumstance which strongly reinforces theview we are taking in regard to theconstruction of sub-section (2). Soon afterthe introduction of sub-section (2), theCentral Board of Direct Taxes, in exercise ofthe power conferred under Section 119 of theAct, issued a circular dated July 7, 1964 explaining the scope and object of sub-section (2) in the following words: “Section 13 of the Finance Act hasintroduced a new sub-section (2) in Section52 of the Income Tax Act with a view tocountering evasion of tax on capital gainsthrough the device of an understatement ofthe full value of the consideration receivedor receivable on the transfer of a capitalasset. The provision existing in Section 52 ofthe Income Tax Act before the amendment[which has now been re-numbered as sub-section (2)] enables the computation ofcapital gains arising on transfer of acapital asset with reference to its fairmarket value as on the date of its transfer,ignoring the amount of the considerationshown by the assessee, only if the followingtwo conditions are satisfied: (a) the transferee is a person who isdirectly or indirectly connected withassessee, and (b) the Income Tax Officer has reason tobelieve that the transfer was effected withobject of avoidance or reduction of theliability of assessee to tax on capitalgains. The provision existing in Section 52 ofthe Income Tax Act before the amendment[which has now been re-numbered as sub-section (2)] enables the computation ofcapital gains arising on transfer of acapital asset with reference to its fairmarket value as on the date of its transfer,ignoring the amount of the considerationshown by the assessee, only if the followingtwo conditions are satisfied: (a) the transferee is a person who isdirectly or indirectly connected withassessee, and (b) the Income Tax Officer has reason tobelieve that the transfer was effected withobject of avoidance or reduction of theliability of assessee to tax on capitalgains. In view of these conditions, thisprovision has a limited operation and doesnot apply to other cases where the taxliability on capital gains arising ontransfer of capital assets between partiesnot connected with each other, is sought tobe avoided or reduced by an understatement ofthe consideration paid for the transfer ofthe asset.” The circular also drew the attention ofthe Income Tax authorities to the assurancegiven by the Finance Minister in his speechthat sub-section (2) was not aimed atperfectly honest and bona fide transactions https://hcservices.ecourts.gov.in/hcservices/ where the consideration in respect of thetransfer was correctly disclosed or declaredby the assessee, but was intended to dealonly with cases where the consideration forthe transfer was understated by the assesseeand was shown at a lesser figure than thatactually received by him. It appears thatdespite this circular, the Income Taxauthorities in several cases levied tax byinvoking the provision in sub-section (2)even in cases where the transaction wasperfectly, honest and bona fide and there wasno understatement of the consideration. Thiswas quite contrary to the instructions issuedin the Circular which was binding on the TaxDepartment and the Central Board of DirectTaxes was, therefore, constrained to issueanother circular on January 14, 1974 wherebythe Central Board, after reiterating theassurance given by the Finance Minister inthe course of his speech, pointed out:“It has come to the notice of theBoard that in some cases the IncomeTax Officers have invoked theprovisions of Section 52(2) even whenthe transactions were bona fide. Inthis context reference is invited tothe decision of the Supreme Courtin NavnitlalC.Javeri v.K.K.Sen [AIR 1965 SC 1375 : (1965) 1 SCR909 : 56 ITR 198] and Ellerman LinesLtd. v. C.I.T. [(1972) 4 SCC 474 :1974 SCC (Tax) 304 : 82 ITR 913] ,wherein it was held that the Circularissued by the Board would be bindingon all officers and persons employedin the execution of the Income TaxAct. Thus, the Income Tax Officersare bound to follow the instructionsissued by the Board.”and instructed the Income Tax Officers that“while completing the assessmentsthey should keep in mind theassurance given by the Minister ofFinance and the provisions of Section52(2) of the Income Tax Act may notbe invoked in cases of bona fidetransactions”. These two circulars of the Central Boardof Direct Taxes are, as we shall presentlypoint out, binding on the Tax Department inadministering or executing the provisionenacted in sub-section (2), but quite apartfrom their binding character, they areclearly in the nature of contemporaneaexpositio furnishing legitimate aid in theconstruction of sub-section (2). The rule ofconstruction by reference to contemporaneaexpositio is a well-established rule forinterpreting a statute by reference to theexposition it has received from contemporaryauthority, though it must give way where thelanguage of the statute is plain andunambiguous. This rule has been succinctlyand felicitously expressed in Crawford onStatutory Construction, (1940 Edn.) where itis stated in para 219 that These two circulars of the Central Boardof Direct Taxes are, as we shall presentlypoint out, binding on the Tax Department inadministering or executing the provisionenacted in sub-section (2), but quite apartfrom their binding character, they areclearly in the nature of contemporaneaexpositio furnishing legitimate aid in theconstruction of sub-section (2). The rule ofconstruction by reference to contemporaneaexpositio is a well-established rule forinterpreting a statute by reference to theexposition it has received from contemporaryauthority, though it must give way where thelanguage of the statute is plain andunambiguous. This rule has been succinctlyand felicitously expressed in Crawford onStatutory Construction, (1940 Edn.) where itis stated in para 219 that “administrative construction (i.e.contemporaneous construction placedby administrative or executiveofficers charged with executing astatute) generally should be clearlywrong before it is overturned; such aconstruction, commonly referred to aspractical construction, although non-controlling, is nevertheless entitledto considerable weight; it is highlypersuasive”. The validity of this rule was alsorecognised in Baleshwar Bagarti v. BhagirathiDass [ILR 35 Cal. 701] where Mookerjee, J.,stated the rule in these terms:“It is a well-settled principle ofinterpretation that courts inconstruing a statute will give muchweight to the interpretation putupon it, at the time of itsenactment and since, by those whoseduty it has been to construe,execute and apply it.”and this statement of the rule was quotedwith approval by this Court in DeshbandhuGupta & Co. vs. Delhi Stock ExchangeAssociation Ltd. [(1979) 4 SCC 565] It isclear from these two circulars that theCentral Board of Direct Taxes, which is thehighest authority entrusted with the execution of the provisions of the Act,understood sub-section (2) as limited tocases where the consideration for thetransfer has been understated by the assesseeand this must be regarded as a strongcircumstance supporting the constructionwhich we are placing on that sub-section.” 18. The learned Senior Counsel for the petitioner relied onthe judgment of the Hon'ble Supreme Court of India in the caseof Director of Income Tax (Exemptions) vs. Mool Chand KhairatiRam Trust [(2011) 339 ITR 622]. The learned Senior Counsel is ofthe opinion that the said case also deals with the registrationgranted under Section 12A of the Act. In the said case, theregistration granted on 04.12.1974 under Section 12A wascancelled by order dated 23.03.2008, which was prior toconferment of cancellation of registration by Finance Act 2010with effect from 01.06.2010. Thus, the very same point wasdecided by the High Court of Delhi also. 19. The facts as stated by the petitioner are not seriouslydisputed with reference to the registration done by thepetitioner under Section 12A(a) of the Act on 09.07.1984. Thepower of cancellation under the Income Tax Act, 1961 is the onlypoint which is disputed between the parties to the lis on hand.Thus, it is suffice to consider the provisions as it is withreference to the powers conferred to the Commissioner under theAct for cancellation of registration made under Section 12A ofthe Act. 19. The facts as stated by the petitioner are not seriouslydisputed with reference to the registration done by thepetitioner under Section 12A(a) of the Act on 09.07.1984. Thepower of cancellation under the Income Tax Act, 1961 is the onlypoint which is disputed between the parties to the lis on hand.Thus, it is suffice to consider the provisions as it is withreference to the powers conferred to the Commissioner under theAct for cancellation of registration made under Section 12A ofthe Act. 20. The learned Senior Standing Counsel, appearing on behalfof the respondent, disputed the contentions raised on behalf ofthe petitioner, by stating that de hors the amendment made inFinance Act 2010, which came into force with effect from01.06.2010, the Commissioner of Income Tax is vested with thepower for cancellation. Admittedly, sub-clause (3) to Section12A of the Act was inserted by Finance (No.2) Act 2004 witheffect from 01.10.2004. The provision existed at that point oftime confers power on the Commissioner to cancel theregistration made under Section 12A of the Act and in thepresent case, the impugned cancellation order was issued by theCommissioner on 13.03.2008 well after the amendment made inFinance (No.2) Act 2004 with effect from 01.10.2004. Thus, theorder passed by the Competent Authority is having jurisdictionand there is no infirmity as such. 21. The learned Senior Standing Counsel, appearing on behalfof the respondent, reiterated by stating that the insertion bythe Finance Act 2010 with effect from 01.10.2010 inserting newwords “or has obtained registration and at any time under Section 12A [as it stood before its amendment by the Finance(No.2) Act, 1996 (33 of 1996)]” is only a clarificatoryamendment and cannot be construed as an amendment madeconferring power on the Commissioner for the first time. TheCommissioner was vested with the power to cancel theregistration granted under Section 12A of the Act in Finance Act2004, which came into force from 01.10.2004. Thus, it isclarificatory amendment and therefore, such clarificatoryamendment issued would not take away the power originallyconferred on the Commissioner to cancel the registration underFinance (No.2) Act 2004 with effect from 01.10.2004. Thus, theCommissioner gets power to cancel the registration on the groundstipulated under the provisions with effect from 01.10.2004 andthe 2010 insertion is clarificatory in nature. Thus, theclarificatory amendment would not take away the powers alreadyconferred on the Commissioner to cancel the registration throughFinance (No.2) Act 2004 with effect from 01.10.2004. 22. This Court is of the considered opinion that sub-clause(3) if read before Finance Act 2010 and after Finance Act 2010would throw light with reference to the powers conferred on theCommissioner. In order to get clarity, this Court is inclined toextract sub-clause (3) to Section 12A of the Act, prevailingprior to Finance Act 2010, which reads as follows:- “Where a Trust or an Institution has beengranted registration under clause (b) of sub-section (1) and subsequently the PrincipalCommissioner or Commissioner is satisfied thatthe activities of such Trust or Institution arenot genuine or are not being carried out inaccordance with the objects of the Trust orInstitution, as the case may be, he shall pass anorder in writing cancelling the registration ofsuch Trust or Institution. Provided that no order under this sub-section shall be passed unless such Trust orInstitution has been given a reasonableopportunity of being heard.” 23. The amended Section 12AA(3) of the Act after Finance Act2010 with effect from 01.06.2010 reads as follows:- “Where a Trust or an Institution has beengranted registration under clause (b) of sub-section (1) and subsequently the PrincipalCommissioner or Commissioner is satisfied thatthe activities of such Trust or Institution arenot genuine or are not being carried out inaccordance with the objects of the Trust orInstitution, as the case may be, he shall pass anorder in writing cancelling the registration ofsuch Trust or Institution. Provided that no order under this sub-section shall be passed unless such Trust orInstitution has been given a reasonableopportunity of being heard.” 23. The amended Section 12AA(3) of the Act after Finance Act2010 with effect from 01.06.2010 reads as follows:- “(3) Where a Trust or an Institution hasbeen granted registration under clause (b) ofsub-section (1) or has obtained registrationat any time under Section 12A [as it stoodbefore its amendment by the Finance (No.2)Act, 1996 (33 of 1996] and subsequently the https://hcservices.ecourts.gov.in/hcservices/ Principal Commissioner or Commissioner issatisfied that the activities of such Trustor Institution are not genuine or are notbeing carried out in accordance with theobjects of the Trust or Institution, as thecase may be, he shall pass an order inwriting cancelling the registration of suchTrust or Institution. Provided that no order under this sub-section shall be passed unless such Trust orInstitution has been given a reasonableopportunity of being heard.” 24. Let us now consider the provisions existing prior to01.06.2010, which reveals that registration granted under clause(b) of sub-section (1). Thus, the same indicates with referenceto the registraion granted under clause (b) of sub-section (1)to Section 12AA of the Act. The said sub-clause (b) of section(1) denotes that "after satisfying himself with the objects ofthe Trust or Institution and the genuineness of its activitiesas required under sub-clause(b) to sub-section (1) of Section12AA of the Act comply with the requirements under sub-clause"he (1) shall pass order in writing registration of Trust orInstitution (2) shall if he is not so satisfied shall pass orderwith reference to Registration of Trust or Institution and acopy of the order shall be sent to the applicant". 25. Cogent reading of Section 12A along with clause (b) ofsub-section (1) to Section 12AA would reveal that Section 12Adeals with conditions for applicability of Sections 11 and 12and sub-clause (b) of sub-section (1) to Section 12AA "procedurefor registration". Thus, Section 12AA sub-clause (b) firstportion denotes procedures under which the registration is madeand the same shall include the conditions for applicability ofSections 11 and 12 with reference to the registration made underSection 12A of the Act. In other words,Sections 11 and 12, 12Aand 12AA are to be read cogently and each Section cannot bedissected for the purpose of diluting the purpose and object ofthe amendments providing power of cancellation to theCommissioner with effect from 01.10.2004. Accordingly, inrespect of the registration granted and after such registrationif the Principal Commissioner or Commissioner is satisfied thatthe activities of the Trust or Institution are not genuine orare not being carried out in accordance with the objects of theTrust, as the case may be, he shall pass an order in cancellingthe registration of such Trust or Institution. The provisionsare unambiguous even prior to the Finance Act 2010 introducedwith effect from 01.06.2010. 26. Even before the said insertion, the Commissioner wasempowered to cancel the registration on such circumstances asnarrated in the provision. The question arises whether there isany other provision for registration. The answer is no. 26. Even before the said insertion, the Commissioner wasempowered to cancel the registration on such circumstances asnarrated in the provision. The question arises whether there isany other provision for registration. The answer is no. 27.In the absence of any other provision for registrationwhich is traceable under the provisions of the Income Tax Act,1961, it is to be construed that the registration made underSection 12A of the Act alone is referred in the provisions underSection 12AA (3) of the Act, even prior to the insertion ofFinance Act 2010 with effect from 01.06.2010. Thus, it is madeclear that even prior to the Finance Act, 2010, the PrincipalCommissioner or Commissioner is empowered to exercise the powerof cancellation by invoking sub-clause (3) to Section 12AA ofthe Act and the insertion made in Finance Act 2010 is only toclarify the provisions under which the registration is made i.e.under Section 12A and the said insertion would not affect thepower of the Commissioner already existing. The insertion wouldhave been made, since several Trusts or Institutions raised theground of jurisdiction and the Legislators thought fit toclarify the same and accordingly, the provision was furtherclarified by way of insertion by the Finance Act, 2010 statingthat the registration obtained at any time under Section 12A isalso amenable to Section 12AA(3) of the Act. Thus, it isunambiguous that the insertion in Finance Act 2010 is onlyclarificatory in respect of the powers already existing undersub-clause (3) to Section 12AA of the Act. 28. In view of the fact that all registrations are doneunder Section 12A of the Act, sub-clause (3) to Section 12AAexisting prior to 01.06.2010 conferred powers on theCommissioner as the subsequent portion of the pre-amended sub-clause (3) itself clarifies that the Principal Commissioner orCommissioner is empowered to cancel the registration if they aresatisfied that the activities of such Trusts or Institutions arenot genuine or are not being carried out in accordance with theobjects of the Trust or Institution, as the case may be. 29. Section 11 of the Act enumerates "income from propertyheld for charitable or religious purposes". Section 12 dealswith "income of Trusts or Institutions from contributions".Section 12A provides "conditions for applicability of Sections11 and 12". 30. Section 12A contemplates conditions for applicability ofSections 11 and 12. 31. It is pertinent to note that the last insertion made tosub-clause (a) of sub-section (1) to Section 12A is substitutedby the Finance (No.2) Act 1996 with effect from 01.04.1997). The said insertion "whichever is later" and such Trust orInstitution registered under Section 12AA also denotes thatSection 12A is to be read cogently along with Section 12AA ofthe Act. 32. These provisions cannot be read in isolation as all theregistrations are done under Section 12A of the Act. The saidprovision contemplates the conditions for applicability ofSections 11 and 12 regarding exemptions. Thus, the provisionsare unambiguous with regard to the powers conferred on thePrincipal Commissioner or Commissioner to cancel theregistration of such Trust or Institution, as the case may be,by invoking sub-clause (3) to Section 12AA of the Act. said insertion "whichever is later" and such Trust orInstitution registered under Section 12AA also denotes thatSection 12A is to be read cogently along with Section 12AA ofthe Act. 32. These provisions cannot be read in isolation as all theregistrations are done under Section 12A of the Act. The saidprovision contemplates the conditions for applicability ofSections 11 and 12 regarding exemptions. Thus, the provisionsare unambiguous with regard to the powers conferred on thePrincipal Commissioner or Commissioner to cancel theregistration of such Trust or Institution, as the case may be,by invoking sub-clause (3) to Section 12AA of the Act. 33. Constructive interpretation of the above provisionsdealt with in the aforementioned paragraphs would clarify thatthe judgments cited by the petitioner as well as therespondents, which all are closely relatable to those facts andcircumstances of those cases need not be applied with referenceto the case on hand. The cases cited reveal that few are infavour of the petitioner and others are in favour of therespondents. Thus, the facts and circumstances dealt with inthose cases cannot be related to the facts and circumstances ofthe present case and thus, this Court has independentlyconsidered the facts and circumstances with reference to theprovisions of the Income Tax Act. 34. The provisions of law, effect and implications ofamendments are to be dealt independently with reference to thefacts and circumstances of each case. Thus, the judgments reliedupon by the parties in the present writ petition need not beapplied with reference to the facts and circumstances of thepresent case. 35. In view of the elaborate discussions made with referenceto the scope of Sections 11, 12, 12A and 12AA of sub-clause (3)in the aforementioned paragraphs, the Principal Commissioner orCommissioner was vested with the power even prior to 01.06.2010to cancel the registraion made under Section 12A of the Act, ifthe Commissioner is satisfied that the activities of such Trustor Institution are not genuine or are not being carried out inaccordance with the objects of the Trust or Institution, as thecase may be, and he shall pass an order in writing cancellingthe registration of such Trust or Institution. 36. In the present case, the Commissioner of Income Tax inimpugned proceedings dated 13.03.2008 considered the merits anddemerits of the case and assigned reason for cancellation ofregistration, which reads as under:- “3. Coming to the merits, search andseizure operations on 06.06.2007 at yourpremises, inter alia, have brought to lightthe following violations: a) Capitation Fee was collected by theassessee Trust. b) The funds of the Trust at least tothe tune of Rs.22 crores have been misusedby the Trustees. c) The provisions of Tamil NaduEducational Institutions [Prohibition ofCapitation Fee] Act, 1992 have been grosslyviolated. d) The provisions of Section 11(2) ofthe I.T. Act, 1961, have not been adheredto.” 37. The reasons assigned for the purpose of cancellation areundoubtedly in consonance with the powers conferred on theCommissioner under sub-clause (3) to Section 12AA of the Act andtherefore, the order of cancellation can at any stretch of timebe stated as infirm or perverse. 38. Accordingly, the writ petition fails and it standsdismissed. However, there shall be no order as to costs.Consequently, connected miscellaneous petitions are alsodismissed. Sd/- Assistant Registrar(CS IV)//True Copy// Sub Assistant Registrar SvnTo Commissioner of Income Tax (Central-I),New Building (III Floor),No.46, Nungambakkam High Road, Chennai-600 034. +1cc to Mr.A.P.Srinivas, Senior Standing Counsel, S.R.No.25395+1cc to Mr.Arunkarthik, Advocate, S.R.No.25152 KV(CO)CS/08/07/2021 WP.No.7110 of 2008 https://hcservices.ecourts.gov.in/hcservices/