ITAT Rules PCIT Has Jurisdiction to Cancel 12AA Registration After Transfer

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  • Last Updated on 9 October, 2025

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PCIT jurisdiction to cancel 12AA registration

Case Details: Advantage India v. Principal Commissioner of Income-tax - [2025] 178 taxmann.com 605 (Delhi - Trib.)

Judiciary and Counsel Details

  • Vikas Awasthy, Judicial Member
  • Naveen Chandra, Accountant Member
  • Sanjay Mehra, FCA for the Applicant
  • Javed Akhtar, CIT [DR] for the Respondent

Facts of the Case

The assessee was a society that had been granted registration under Section 12AA. The society was also registered under FCRA. The assessee was engaged in educational and social activities. A search operation was conducted on the Deepak Talwar Group, and a simultaneous survey operation was carried out on the assessee society.

During the said search/survey action, the revenue found incriminating material and documents, which showed that the society was used as a tool and instrumentality for camouflaging huge tax evasion and for channelling unaccounted and tainted funds from overseas clients of the society’s president, along with tax evasion.

Based on the search findings, the Assessing Officer (Central) forwarded a proposal for cancellation of registration to the Principal Commissioner along with a copy of the Inspection Report by the FCRA Wing of the Ministry of Home Affairs, which observed a violation of FCRA. The Principal Commissioner issued a show-cause notice (SCN), leading to the cancellation of the registration granted under Section 12AA. The matter reached the Delhi Tribunal.

Tribunal Held

The Tribunal held that the assessee’s substantial jurisdictional/legal issue concerned the assumption of jurisdiction regarding whether the PCIT(C) had the power to withdraw/cancel the registration granted under Section 12AA of the Act. The other issues related to the invocation of Section 12AA(3) without fulfilling the requisite conditions therein, and the cancellation of registration granted under Section 12AA with retrospective effect.

When the PAN is transferred from the CIT(Exemptions) charge to the Pr. CIT(Central) charge, the entire ‘case’ and the associated ‘proceedings’ will be transferred to the Pr. CIT(Central). In such a situation, the CIT(Exemptions) cannot ‘see’ the case/assessee in his jurisdiction to take action for registration/cancellation under section 12AA. The CIT(Exemptions) will be incapacitated to issue any communications to the assessee, nor will he be able to generate any DIN in respect of the said assessee.

Therefore, the assumption of jurisdiction by the PCIT(C) over the case for cancelling the registration granted under section 12AA was valid and legally permissible.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied