N.D. RAGHAVAN, VICE PRESIDENT ORDER General Clauses Act, 1897, s. 21 This is appeal of assessee challenging as erroneous order dt. 26th July, 2004, of CIT (Central), Hyderabad, cancelling registration granted to assessee under s. 12AA of IT Act, 1961. 2.1 Facts of case, as gathered from record, are briefly these : 2 . 2 appellant assessee, Sri Chaitanya Educational Committee (SCEC), is society registered (No. 26/87) with registrar of societies, Machilipatnam, Krishna District, Andhra Pradesh, under Societies Registration Act, 1860. It is engaged in academic field. It was formed with Shri Boppana Satyanarayana Rao as President and his wife Smt. Boppana Jhansi Lakshmi Bai, as Secretary. Other members of society consist of their close relatives like daughters, Ms. Sushmassree and Ms. Seema and brother Shri B. Rajendra Prasad. It was formed with various objects, more specifically set out in trust deed dt. 26th Jan., 1987, and noted in para 1.2 of impugned order dt. 26th July, 2004 of CIT. assessee society had applied for registration under s. 12A of IT Act, 1961 on 9th Jan., 1992 and it was granted registration by letter H. qrs. No. III/69/91-92 dt. 14th Aug., 1992 by CIT, Visakhapatnam. assessee society has been filing returns of income showing details of fees and collections and expenditure of all colleges run by it. assessee has claimed exemption under s. 10(22) of Act till asst. yrs. 1998-99, and from 1999-2000 onwards it has been claiming benefit of exemption under ss. 11 and 12 of Act. Assessments were completed under s . 143(3) of Act for asst. yrs. 1993-94 to 1996-97. Department seems to have accepted claim of assessee that its income is exempt under s. 10(22) of Act. 2.3 IT authorities seem to have carried out search and seizure operations under s. 132 of Act on 2nd July, 2002 on assessee and seized cash, FDRs and other material. On going through material gathered during course of search, CIT (Central) found that there have been several instances of violation of provisions of ss. 11 to 13 of IT Act, 1961. He accordingly issued show-cause notice on 15th Nov., 2003 to assessee, calling for its explanation within ten days from receipt thereof, in face of various instances of violation and also proposing to cancel registration granted under s. 12A of Act. 2.4 By its letter dt. 4th Feb., 2004, assessee society, besides referring to explanations offered to AO in quantum proceedings with reference to various violations pointed out, reiterated that it is undisputedly running educational institutions and imparting education to students. Besides thus defending itself against proposed action of cancellation of registration granted to it, assessee also questioned legality of action proposed and authority of CIT to cancel registration, once granted to it. Relying on decision of Delhi Bench of Tribunal in Kailashanand Mission Trust vs. Asstt. CIT (2004) 83 TTJ (Del) 418 : (2004) 88 ITD 125 (Del), it was further contended before CIT that power to cancel registration was conferred on CIT by insertion of s. 12AA of Act, only w.e.f. 1st Oct., 2004. 2.5 On careful consideration of matter, CIT for reasons detailed at great length in his order impugned before this Tribunal, did not accept explanations offered or objections raised by assessee, and consequently cancelled registration granted under s. 12A of Act. Hence, instant appeal by assessee before us. 3.1 learned counsel for assessee submitted in brief that : 3.2 learned CIT (Central) erred in cancelling registration granted to assessee-society under s. 12A of IT Act. He has assumed power which is not vested in him by IT Act in cancelling registration granted under s. 12A of Act. He has erred in concluding that assessee is not pursuing objects for which it was established, as in fact assessee society has established colleges and has been imparting intermediate education to students, and colleges run by assessee are recognised by Government of Andhra Pradesh. findings of CIT that assessee is not pursuing objects for which it was established, and that it is running only coaching centers for courses like EAMCET, IIT-JEE entrance, etc., are incorrect. provisions of General Clauses Act are applicable only to orders issued in terms of delegated/subordinate legislation and not to judicial or quasi-judicial orders, and as such those provisions have no application to order in nature of quasi- judicial ones, passed under IT Act. Under provisions of s. 12AA of IT Act, as amended by Finance (No. 2) Act, 2004, CIT has power to cancel registration granted under s. 12A of Act, with effect from only 1st Oct., 2004. CIT has not referred to full text of notes on clauses forming part of Finance Bill (No. 2) 2004, but has referred to only selective potion thereof in pick and choose manner. perusal of totality thereof clearly indicates that prior to above amendment to provisions of s. 12AA, there was no power vested in CIT to cancel registration once granted. 3.3 In instant case, since CIT has cancelled registration under s. 12AA of Act by his impugned order dt. 26th July, 2004, i.e. much prior to amendment noted above, it is bad in law and illegal, and, therefore, liable to be cancelled. observations of CIT that prior to insertion of s. 12AA w.e.f. 1st April, 1997 CIT was not in position to examine activities of trust, is not correct, as on application of assessee to CIT, Visakhapatnam, then CIT passed under s. 12A order dt. 14th Aug., 1992 granting registration, only after following due procedure and only after calling for necessary records, documents and information and after carrying on necessary enquiries as well as on satisfying himself about genuineness of activities of assessee. reliance of learned CIT, on s. 21 of General Clauses Act is also misplaced, as it applies only to such orders which are issued by way of delegated/subordinate legislation and which can be equated with notifications, rules or bye-laws, which are procedural in nature and applicability of those provisions do not extend to judicial or quasi-judicial orders, as one impugned in instant case. Cancellation of registration granted under s. 12A of Act by impugned order amounts to review of earlier order, which is not permissible in law. 3.4 In support of above contentions reliance is placed on number of 3.4 In support of above contentions reliance is placed on number of decisions, and paper book containing copies of copious decisions together with index-cum-digest of provisions laid down therein, running into 204 pages has been filed by assessee before us. Some of decisions relied on by learned counsel for assessee are following (1) Kailashanand Mission Trust vs. Asstt. CIT (supra) (2) Namra Mahila Avam Bal Kalyan Samiti vs. CIT (2004) 89 TTJ (Jab) 780 (3) M.P. Madhyam vs. Jt. CIT (2004) 89 TTJ (Ind) 770 (4) Aditanar Educational Institution etc. vs. Addl. CIT (1997) 139 CTR (SC) 7 : (1997) 224 ITR 310 (SC) (5) Victoria Technical Institute vs. Addl. CIT (1991) 94 CTR (SC) 153 : (1991) 188 ITR 57 (SC) (6) Bachchu Lal & Anr. vs. State AIR 1951 All 836 (7) Bullion & Agricultural Produce Exchange (P) Ltd., Agra vs. Forward Markets Commission, Bombay AIR 1979 All 332 (8) Jagdish Prasad Pradhan vs. District Board, Farrukhabad AIR 1966 All 26 (9) Institution of Civil Engineers vs. IRC (1931) All ER 454 (10) IRC vs. Yorkshire Agricultural Society (1927) All ER 536 (11) Patel Narshi Thakershi & Ors. vs. Pradyumansinghji Arjunsinghji AIR 1970 SC 1273 (12) State of Madhya Pradesh (Now Maharashtra) vs. Haji Hasan Doda AIR 1966 SC 905 (13) S.J.S. Fernandes vs. V. Ranganayakulu Chetty AIR 1953 Mad 236 (14) Mahalaxmi Motors Ltd. vs. Dy. CIT (2004) 186 CTR (AP) 739 : (2004) (2) ALD (NOC) 115 (15) CIT vs. Hyderabad Race Club Charitable Trust (2003) 183 CTR (AP) 454 : (2003) (6) ALD (NOC) 177 (16) CIT vs. Bhawani Prasad Girdhari Lal & Co. (1990) 87 CTR (All) 176 : (1991) 187 ITR 257 (All) (17) Kanmarlapudi Lakshiminarayana Chetty & Ors. vs. ITO AIR 1957 AP 159 (18) CIT vs. Jagabandhu Roul (1984) 145 ITR 153 (Ori) (19) East India Hotels Ltd. & Anr. vs. C.R. Shekhar Reddy, Dy. CIT (1998) 144 CTR (Kar) 570 : (1998) 230 ITR 622 (Kar) (20) Uppala Peda Venkataramanaiah vs. ITO (1964) LII (Short Notes of Current Cases) 2 (21) Harlal vs. Lala Prasad AIR 1931 Nag 138 (22) R. Kapilanath (dead) through L/Rs vs. Krishna AIR 2003 SC 565 (23) Munnalal Lachhiram vs. Manakchand AIR 1950 MP 119 (24) Madhya Pradesh State Road Transport Corporation vs. State Transport Appellate Tribunal AIR 1993 MP 95 (25) J.P. Jani, ITO vs. Induprasad Devshanker Bhatt AIR 1969 SC 778 (26) Lingareddy Venkatareddy & Ors., In re AIR 1956 Andhra 24 (27) Y. Arul Nadar vs. Authorised Officer, Land Reforms, Thanjavur AIR 1990 Mad 33 (28) Maharaja Chintamani Saran Nath Shahdeo vs. State of Bihar & Ors. AIR 1999 SC 3609 (29) Director of IT vs. Bharat Diamond Bourse (2003) 179 CTR (SC) 225 : 2003 (1) SCC 741 (30) Garikapati Veeraya vs. N. Subbiah Coudhry AIR 1957 SC 540 (31) STO vs. Oriental Coal Corporation AIR 1988 SC 648 (32) Baburam vs. C.C. Jacob & Ors. 1999 (3) SCC 362 (33) Mst. Fazi vs. Mohammad Bhat AIR 1979 J&K 69 (34) Govinddas vs. ITO AIR 1977 SC 552 (35) Agastyar Trust vs. Commissioner & Secretary to Government Revenue Department & Anr. 2005 (3) SCC 516 (36) St. Don Bosco Educational Society vs. CIT (2004) 84 TTJ (Luck) 805 : (2004) 90 ITD 477 (Luck) (37) CIT vs. Mohan Meakin Breweries Ltd. (1992) 101 CTR (HP) 22 : (1991) 192 ITR 134 (HP) (38) Vijayalakshmamma & Anr. vs. B.T. Shankar (2004) 4 SCC 558 (39) S. Sundaram Pillai vs. V.R. Pattabiraman AIR 1985 SC 582 (40) Mahabir Prasad vs. District Magistrate, Kanpur AIR 1955 All 501 (41) Board of High School & Intermediate Education, UP, Allahabad vs. Ghanshuyam Das Gupta AIR 1962 SC 1110 (42) Gadde Venkateshwara Rao vs. Government of Andhra Pradesh AIR 1966 SC 828 (43) Land Acquisition Officer-cum-DSWO, AP vs. B.V. Reddy & Sons (2002) 3 SCC 463 (44) State of Andhra Pradesh vs. S.M.K. Parasurama Gurukal AIR 1973 SC 2237 (45) CIT vs. U.P. Forest Corporation (1998) 145 CTR (SC) 402 : AIR 1998 SC 1125 (46) Shyam Sunder & Ors. vs. Ram Kumar & Anr. (2001) 8 SCC 24 (47) Province of Bombay vs. Khushaldas S. Advani AIR (37) 1950 SC 222 (48) Board of Revenue, UP, Allahabad vs. Sardarni Vidyawati AIR 1962 SC 1217 (49) State of Bihar vs. D.N. Ganguly & Ors. AIR 1958 SC 1018 (50) Gharurul Hasan & Ors. vs. State of Rajasthan AIR 1967 SC 107 4.1 On other hand, learned standing counsel of Revenue, for and on behalf of Departmental Representative CIT, to say in brief, by defending order impugned, countered that : 4.2 In spite of several specified objects, assessee was merely content with running certain colleges and hostels on commercial lines. only activity of assessee was to train/coach students to appear for competitive entrance examinations such as IIT-JEE, as also entrance examination for medical and engineering courses in State of Andhra Pradesh. Except running certain coaching centres and hostels for intermediate colleges, assessee, as noted by CIT, did not devote its attention for fulfilment of any other stated objects and it did never open or run orphanages, care homes, balwadis and night schools for adult education to remove illiteracy, as per objects specified in trust deed. Running of private coaching institute for purpose of training students to appear at some specified examinations upon taking specified sum from trainees, would not enable assessee to claim its activities to be of charitable nature. availability of exemption should be evaluated each year to find out whether institutions existed during relevant year solely for educational purposes and not for purposes of profit, and decisive or acid test is as to whether object of society is not to make profit. In instant case, as noted at length by CIT in impugned order, several instances have come to light in course of search indicating following (a) There was diversion of committee s funds for non-charitable objects; (b) trustees have used trust funds for personal benefits of trustees; (c) Several payments were made from undisclosed sources outside books of accounts of trust which proves handling of monetary transactions outside books of accounts; (d) There were unaccounted fee collections which were not recorded in books of accounts; (e) There were unaccounted investments which were not recorded in books of accounts and as such were acquired from undisclosed sources. 4.3 Examination of papers and documents seized during course of search operations conducted under s. 132 of Act has brought to light plethora of instances where funds of assessee were diverted for personal use and benefit of trustees and their relatives as defined in Expln. 1 to s. 13. These violations of provisions of s. 10(22) and s. 13, as noted by CIT, in nutshell in para 6 of impugned order at pp. 4 and 5 thereof, are as follows : "(i) Income and funds of trust (SCEC) were diverted, used and applied for personal expenses ranging from petty items like cinema tickets, train tickets, cold drinks, rice consumption in house etc. to major items like foreign education and marriage expenses of daughters of Dr. B.S. Rao, and Dr. Jhansi Lakshmi Bai. (ii) Floating numerous bank accounts in names of daughters, employees, relatives, benamies, in which huge amounts of funds of SCEC were diverted and subsequently withdrawn for personal use of Dr. B.S. Rao/Dr. Jhansi Lakshmi Bai and their family members. (iii) Dr. B.S. Rao and Dr. Jhansi Lakshmi Bai floated company Sri Chaitanya Infosystem Co. Ltd. (SCIL) for doing business in software and call centre. They have got substantial interest in company within meaning of Expln. 3 to s. 13 inasmuch as they hold almost 100 per cent equity shares in company. Huge amount of funds of SCEC were diverted to aforesaid company for meeting various day-to-day and other expenses of SCIL. In fact, company SCIL was set up and run on day-to-day basis with money of SCEC. diversion of funds was without adequate security or compensation. (iv) income and funds of SCEC were diverted for acquisition of assets like land etc. in names of Dr. B.S. Rao, Dr. Jhansi Lakshmi Bai, their two daughters and also in benami names. (v) Mercedes Benz car was purchased with funds of SCEC and made available for personal use of Shri Ch. Srinivas, husband of Smt. Seema and son-in-law of Dr. B.S. Rao and Dr. Jhansi Lakshmi Bai. (vi) Mr. B. Rajendra Prasad, brother of Dr. B.S. Rao, is proprietor of Classic Financial Services. Funds of SCEC were diverted to aforesaid concern. Dr. B. Rajendra Prasad is trustee in SCEC." 4 . 4 CIT by way of illustration, noted at length certain instances of violations of above nature financial yearwise, in para 8 of impugned order at pp. 5 to 9. In para 9 of impugned order, at pp. 9 to 15 thereof, he extracted relevant portions of statements of Smt. B. Jhansi Laxmi Bai, one of directors of committee, recorded on 1st Nov., 2002 and 2nd Nov., 2002, at time of search and of Shri B.S. Rao, president of appellant-society recorded on 19th Nov., 2002. Those statements of Smt. B. Jhansi Laxmi Bai and Shri B.S. Rao amply testified wilful, continuous and conspicuous gross violation of provisions of s. 13 of IT Act, by blatantly misusing fund of trust for personal benefits of trustees and their near and dear. While even single instance of misutilization of trust fund would be sufficient to deny benefit provided under ss. 11 and 12 of IT Act, personal profit motive in running educational institutions is unerringly visible in instant case. 4 . 5 Insofar as legal objections of assessee are concerned, registration under s. 12A is always granted with specific condition that said registration does not ipso facto exempt income under s. 11 and that it is for AO to satisfy that conditions stipulated under ss. 11 and 13 are not violated. registration granted should not override powers of AO in deciding exemption under s. 11 and that may become starting point for examining activities of assessee, leading to detection of violations which make assessee ineligible for benefit. Even otherwise, as observed by CIT in impugned order, well prior to amendment of provisions of s. 12AA too, CIT enjoyed powers of cancellation of registration, in terms of provisions of s. 21 of General Clauses Act, 1897. This position is also clear from notes on clauses forming part of Finance (No. 2) Bill, 2004, which specifically noted that although power of cancellation of registration flows from power to register, same has not been specifically provided in IT Act thereby leading to unnecessary litigation. Accordingly, CIT was justified in passing impugned order to cancel registration in exercise of powers that were always available with him. 4.6. Besides distinguishing case laws relied upon by assessee, learned standing counsel for Revenue in support of above contentions, placed reliance on decisions following (a) Bihar Institute of Mining & Mine Surveying vs. CIT (1994) 121 CTR (Pat) 312 : (1994) 208 ITR 608 (Pat) (b) Agappa Child Centre vs. CIT (1997) 137 CTR (Ker) 295 : (1997) 226 ITR 211 (Ker) (c) Action for Welfare & Awakening in Rural Environment (AWARE) vs. Dy. CIT (2003) 183 CTR (AP) 631 : (2003) 263 ITR 13 (AP) (d) N.T.R. Estate vs. CIT (1985) 49 CTR (AP) 85 : (1986) 157 ITR 285 (AP) (e) S. Gopal Reddy vs. CIT (1990) 181 ITR 378 (AP) (f) Fifth Generation Education Society vs. CIT (1990) 87 CTR (All) 169 : (1990) 185 ITR 634 (All) (g) AIR 1959 SC 107 @ paras 11A and 48 (h) Aligarh Muslim University & Ors. vs. Mansoor Ali Khan (2000) 7 SCC 529 (i) Madhya Pradesh Madhyam (2002) 175 CTR (MP) 92 : (2002) 256 ITR 277 (MP) (j) Motichand Jain vs. M. Jaikumar & Ors. (2004) 1 ALD 250 (AP)(FB) (k) Rajendra Kumar vs. Kalyan (Dead) by LRs (2000) 8 SCC 99 @ 107 paras 14 to 16 and @ 109 paras 18 to 19. 5. learned counsel for assessee, in his rejoinder, distinguished case laws relied upon by Revenue and submitted that impugned order of CIT is illegal and invalid as well as liable to be cancelled, without even going into merits of matter, besides also distinguishing that ratio laid down by Hon ble Andhra Pradesh High Court in case of Motichand Jain vs. M. Jaikumar (supra) rendered by Full Bench of three Judges, relied upon by Revenue, has been overruled by larger Bench of five Judges in case of Vallabhaneni Lakshmana Swamy & Anr. vs. Valluru Basavaiah & Ors. (2004) (5) ALD 807 (LB) (AP), copy of which is also filed before us. 6. Further, both parties before us, to strengthen their stand respectively for and against, have also referred to following provisions of law, including under different enactments, which are detailed below Provision of Marginal Note law Sec. 2(7A) of Definitions AO IT Act Sec. 12AA of Procedure for registration IT Act Insertion by Finance (No. 2) Act, 2004 for Sec. 12AA(3) cancelling registration w.e.f. 1-10-2004 Sec. 120 of Jurisdiction of IT authorities Jurisdiction of IT authorities IT Act Sec. 136 of Proceedings before IT authorities to be judicial IT Act proceedings Sec. 254(2A) Orders of Tribunal of IT Act Sec. 21 of Power to issue to include to add to, amend, General Clauses vary or rescind notifications, orders, rules or bye-laws Act Sec. 11 of Civil Procedure Res judicata Code Order 47 r. 1 Civil Procedure Application for review of judgment Code 7.1 Rival submissions heard and relevant records perused, including order impugned and provisions of law and case laws relied upon by both sides. After doing so, we are of considered opinion that stand of assessee has substantial force than defence of Revenue particularly on preliminary point for reasons following : 7.1.A At outset, we may note that this appeal against order of CIT dt. 26th July, 2004 has been instituted by assessee on 24th Sept., 2004, as per order sheet entry of registry of Tribunal dt. 14th March, 2005. No stay petition has been filed by assessee before Tribunal. Soon after filing of appeal before Tribunal, assessee filed with registry of Tribunal petition to have early hearing of appeal but before Tribunal could get comment of Department that was asked for in this regard, prematurely writ petition was parallelly filed by assessee unnecessarily burdening constitutional authority of Hon ble High Court of Andhra Pradesh, against CIT (Central) and Asstt. CIT (Circle-V) both respondents at Hyderabad, though Tribunal has not rejected early hearing prayed for. Hon ble High Court by its oral order dt. 30th March, 2005 in said WP No. 6753 of 2005, has directed as follows : "The only grievance made in this writ petition is that petitioner filed appeal before Tribunal against order passed by 1st respondent-CIT, Hyderabad, dt. 26th July, 2004, and same is pending. In meanwhile, he has resorted to coercive steps, and therefore, he seeks appropriate direction. 2. After hearing learned counsel for petitioner and learned standing counsel, we find it appropriate to direct Tribunal to dispose of appeal filed by petitioner within three weeks from date of receipt of copy of this order. Till such time, respondents shall not resort to any coercive steps. 3. Within direction indicated above, writ petition is disposed of. No costs." 7.1.B above order of Hon ble AP High Court giving directions to this Tribunal, which is not party to writ proceedings, was received by registry of this Tribunal on 8th April, 2005 along with letter of assessee dt. 6th April, 2005. Thereupon, in compliance with order of Hon ble High Court, case was posted for hearing immediately on 13th April, 2005, in spite of finalization of cause list and framing of constitution of that week already. On that date, peculiarly at request of assessee s counsel, filing his vakalat on that date, case was adjourned to 20th April, 2005, which was not objected to by Revenue, to be heard as first case of that date, as announced in open Court itself, which has been duly noted by learned counsel for assessee and for Revenue as well. On 20th April, 2005 Department strangely requested this time for adjournment on ground that senior standing counsel would appear on behalf of Department (!), but Bench refused adjournment in view of Hon ble High Court s order. However, petition for adjournment was offered to be filed by assessee too, which was filed bearing same date of 20th April, 2005 which will be relevant to extract hereinbelow "Before Hon ble Tribunal B Bench, Hyderabad ITA No. 887/Hyd/2004 Sri Chaitanya Educational Committee .. Appellant vs. CIT .. Respondent Petition filed seeking adjournment : It is submitted, above matter was posted for hearing today i.e. 20th April, 2005. counsel appearing for appellant is engaged before Hon ble High Court and due to work pressure, appellant is requesting to adjourn matter to some other date. summer vacation holidays to Hon ble High Court is from 30th April, 2005. In view of summer vacation there is heavy work pressure on counsel and therefore we are requesting Hon ble Tribunal to adjourn matter either to 25th April, 2005 or in 1st week of May, 2005. Dt. 20th April, 2005 Sd/- Counsel for Appellant" Thus, at request of both parties (!), Bench was forced to adjourn case to 21st April, 2005 as first case, at same time making it clear that no further adjournment would be granted to either or both parties in view of directions of Hon ble High Court. On 21st April, 2005, surprisingly, learned Departmental Representative (CIT) again requested in writing for adjournment (!) on ground that standing counsel could not come and would be ready only on 25th April, 2005. Departmental Representative (CIT) s letter in that respect is extracted below "Office of Departmental Representative (CIT) Tribunal, Hyderabad. Dt. 21st April, 2005 ITA No. 887/Hyd/2004/DR ITAT/2003-04 To Assistant Registrar, Tribunal, Hyderabad. Sir, Sub : Appeals before Tribunal B Bench, Hyderabad ITA No. 887/Hyd/2004 in case of Sri Chaitanya Educational Committee, Poranki, Vijayawada Regarding. appeal in above case is posted for hearing before Hon ble B - Bench Tribunal, Hyderabad on 20th April, 2005. 2. senior standing counsel Sri S.R. Ashok who is to argue case on behalf of Department was prepared to argue case on *25th April, 2005. However, counsel for assessee preferred case to be heard on **26th April. Therefore it is requested that case may be posted for hearing either on 25th or 26th April, 2005. 3. This letter of request may kindly be put up before Hon ble Members for their kind consideration. Yours faithfully, Sd/- (Y.R. Rao) Departmental Representative (CIT) Tribunal, Hyderabad. 1. Copy to assessee. *Wrongly mentioned in letter as 21st April, 2005 **Wrongly mentioned in letter as 25th April" Thus, learned counsel for assessee submitted that his case before Hon ble High Court posted for that day would come up on 25th April, 2005. Ultimately, both parties agreed to argue matter on 26th April, 2005, to which date case finally got adjourned, Tribunal making it again clear that no more adjournment would be granted in matter in view of Hon ble High Court s directions. On 26th April, 2005, matter was heard upto some length and was adjourned to 3rd May, 2005, under circumstances following "For continuance of this case, Authorised Representative prayed not to have this week and desired to have in next week. Standing counsel expressed his busyness in High Court on eve of summer vacation and in spite of difficulty he could manage to appear this week. Authorised Representative filed petition to have case continued in first week of May due to his heavy pressure of work on summer vacation eve before High Court. He also undertook to file memo before High Court as case was directed to be disposed of within three weeks i.e. before this week end, as pointed out by Bench in open Court. Departmental Representative raised no objection to this. To this effect assessee s petition with endorsement of no objection by Department has also been filed by Authorised Representative. Under these circumstances and with condition imposed above to file memo before High Court this partly heard case is adjourned as such to 3rd May, 2005 as first case in cause list. Pronounced in open Court." (Emphasis, italicised in print, supplied) On 3rd May, 2005, learned Departmental Representative CIT again requested in writing for adjournment to next day for standing counsel to come and argue submitting that he was engaged in vacation Bench of High Court in very important matter on 3rd May, 2005. However, learned counsel for assessee was heard in completion and case was again adjourned as requested by Department (!) to 4th May, 2005 for Department to counter. While so countering on 4th May, 2005, certain written arguments were sought to be filed on behalf of Department very shortly thereafter and leave was granted, but it proved to be only endless wait even until this day, since 5th May, 2005 when case was finally concluded in hearing both parties. 7.1.C To inform that, as advised by Tribunal, assessee could not on account of summer vacation file application before Hon ble High Court seeking enlargement of time prescribed by it having got already expired at request of adjournments by both parties simultaneously and also alternatively, above sequence of events in matter of hearing before Tribunal has been summarized by learned counsel in his petition dt. 4th May, 2005, in following words : "It is submitted that Hon ble High Court in WP No. 6753/2005 vide orders dt. 4th April, 2005 directed to dispose of appeal within three weeks and said order was submitted to this Hon ble Tribunal on 8th April, 2005 and this Hon ble Tribunal posted matter to 13th April, 2005 for hearing. On that day arguments were not completed and due to preoccupation and pressure of work, appellant s counsel requested this Hon ble Tribunal for adjournment and this Hon ble Tribunal adjourned matter to 20th April, 2005. On 20th April, 2005 appellant s counsel again sought adjournment either to 25th April, 2005 or in 1st week of May, 2005 due to presure of work on last working days before summer vacation, but this Hon ble Tribunal posted matter to 21st April, 2005 and later to 26th April, 2005. On 26th April, 2005, matter was heard in part and Hon ble Tribunal adjourned matter to 3rd May, 2005 on request made by respondent s counsel. On 3rd May, 2005, respondent filed memo seeking adjournment to 4th May, 2005 and this Hon ble Tribunal after hearing arguments of appellant s counsel, adjourned matter to 4th May, 2005, for which appellant s counsel represented that he has no objection to adjourn matter to 4th May, 2005. delay is due to requests made by counsel of parties and not this delay is due to requests made by counsel of parties and not this Hon ble Tribunal. Hon ble Tribunal advised counsel of appellant to file application before Hon ble High Court for enhancement of time fixed by Hon ble High Court but appellant could not file application in view of summer vacation. Hence this memo." 7.1.D These sequence of events are narrated at length only to point out inconsistencies in stand of assessee as to so-called urgent need for disposal of appeal(!), on one hand approaching Hon ble High Court for appropriate directions for early disposal of appeal by Tribunal, and on other hand contributing handsomely to delay in disposal of appeal by praying for adjournment even beyond deadline date prescribed by Hon ble High Court! 7.1.E Not to lag behind, Department too adopted conflicting stands with regard to so-called urgency in matter of disposal of appeal, on one hand for delay in disposal of this appeal, not only by seeking adjournments during course of hearing, but also thereafter, on one hand, putting Tribunal on wait for its written submissions promised to be filed at time of conclusion of arguments on 5th May, 2005 which are alluding even to date, and on other hand seeking early disposal of appeal on ground that high stakes are involved. letter dt. 19th Oct., 2005 addressed to assistant registrar of this Tribunal written by one Shri K. Hariprasada Rao, Addl. CIT, Central Range-2, Hyderabad, is worthwhile, for showing more indifference of parties, to be extracted below "No. CR-2/Chaitanya/2005-06 Office of Addl. CIT, Central Range-2, Hyderabad. Dt. 19th Oct., 2005 To Asstt. Registrar, Tribunal, Shapoorwadi, Adarshnagar, Hyderabad Sir, Sub : Request to release order in case of Sri Chaitanya Educational Committee (ITA No. 887/Hyd/2004) Reg. As directed by Hon ble High Court of Andhra Pradesh, case was heard on 20th April, 2005; 26th April, 2005; 3rd May, 2005 and 5th May, 2005 by Hon ble Tribunal B Bench, Hyderabad in above mentioned case. Till now orders are not received by this office. As heavy demand of Rs. 54.46 crores is locked up and Department is not able to pursue collection because of Hon ble Court s order, it is requested that Hon ble Tribunal may release orders in above case at earliest. Yours faithfully, Sd/- (K. Hariprasada Rao) Addl. CIT, Central Range-2, Hyderabad. Copy submitted to Director General of IT (Inv.), Hyderabad for kind information. Copy submitted to CIT (Central), Hyderabad, for kind information. Copy to Departmental Representative, Tribunal, Hyderabad, for information." We deprecate above said letter, for its tone and tenor by observing that Shri K. Hariprasada Rao has no locus standi to intervene, as he is neither party to these proceedings nor Departmental Representative who appeared, assisted or/and presented this case before this Tribunal. Neither could said Addl. CIT or anybody interfere as this, when case is sub judice, nor is Tribunal subordinate to him or Department which is only litigant as one of parties before this Tribunal. Such letter and endorsement of its copies to various authorities high sounding to him mentioned above therein, gives impression to us that attempt is made either to threaten this Tribunal treating it like assessee before Department, or belittle image of Tribunal in minds of those authorities. That apart, neither any stay has been granted by this Tribunal, much less any stay petition has been filed before this Tribunal, nor any stay could arise in this appeal as no demand could be made by Department since subject-matter of appeal is only validity of cancellation of registration. If at all, concerned Departmental Representative (CIT) or assessee s representative or either or both concerned parties to these proceedings could have moved application directly before this Tribunal or for being mentioned, if still there could be any valid urgency to expedite. While so, not even whisper in this regard has been made until this day by anybody including concerned Departmental Representative (CIT), who is yet to file his promised papers containing salient features of Departmental stand. We, however, take lenient view over Addl. CIT in matter, duly acknowledging his innocence exhibited by him having got ourselves experienced also in his earlier representations when he was Departmental Representative before us in his erstwhile posting in this Tribunal, and further advising him in his interest that said letter writer of Department realizes his folly at least now, so as not to interfere and wrongly commit floccinaucinihilipilification as this at least hitherafter in any judicial proceeding including before any forum higher than him. 7.1.F Assessee claims coercive steps taken by Department for recovery of huge stakes as reason for urgency of disposal of this appeal which appears to have prompted it to approach Hon ble High Court within months of institution of appeal without even awaiting response of Tribunal to request of assessee for early hearing. Department also points out very same high stakes involved and heavy demand of Rs. 54.46 crores locked up as reason for urgency of disposal of appeal. 7.1.G We are constrained to observe at this juncture that though high stakes involved is queerly reason for early disposal of this appeal as emphasised by parties, actually no demand arises out of CIT s order dt. 26th July, 2004 impugned in instant case, which is merely order cancelling registration of assessee, and alleged orders involving stakes as high as heavy demand of Rs. 54.46 crores as put by Revenue, are not impugned in this appeal. This is also self-evident from very fact that this appeal stated to be involving heavy stakes has been instituted on payment of appeal fee of Rs. 500 only, which is barest minimum against maximum of Rs. 10,000 payable on assessed income of Rs. 10,00,000 and above. From pleadings of parties from stage of institution of this appeal to its conclusion in different stages not only before Tribunal but also even before Hon ble High Court, it is clear that parties have been in guise of such so-called high stakes and coercive steps, indulging in acts of misleading not only each other by alleged coercive steps of Department and consequent directions against Department appearing to have been erroneously obtained by assessee from Hon ble High Court, but also Hon ble High Court and this Tribunal, pressing for urgent disposal of appeal, against order of CIT that has not given rise to any demand of even single paise (!) filed barely year back, while many appeals filed years back are awaiting their turn even to be posted for hearing(!!). 7.1.H We are prompted to dwell at this length and make above observations in this order on no issue on account of pressure sought to be brought upon us, as if this Tribunal has refused their requests, for early hearing and disposal of appeal, in guise of high stakes and coercive steps of Department, initially by assessee, and subsequently by Department consequent upon Hon ble High Court s directions against Department, though both sides have contributed to delay in their own handsome measure! But, both parties tend to ignore their own contributions to delay in disposal of appeal, narrated above, to height of even daring to make Hon ble High Court s order itself as infructuous, by their prayers of adjournment before Tribunal exceeding time-limit prescribed by Hon ble High Court for disposal itself! 7.2.A Now let us turn to merits of appeal before us. As already noted above, considering violations of provisions of s. 10(22) and s. 13 stated to have been committed by assessee and came to light on account of search and seizure operations under s. 132 conducted on premises of assessee, CIT passed impugned order dt. 26th July, 2004 cancelling registration of assessee by turning down legal objection of assessee and observing that though provisions of sub-s. (3) of s. 12AA was inserted by Finance (No. 2) Act, 2004, w.e.f. 1st Oct., 2004 only, even prior to such insertion power to withdraw or cancel registration was always enjoyed by Revenue authorities, or at least by retrospective operation of same amendment and in terms of s. 21 of General Clauses Act, 1897, power to issue order for registration under s. 12AA of IT Act, includes power to rescind order. For this purpose, reliance was also placed on portion of "notes on clauses" forming part of Finance (No. 2) Bill, 2004, which we have already mentioned hereinabove and extracted in para 7.3.B herein. 7.2.B In this appeal, therefore, two issues arise for consideration before us. They are (a) Whether CIT as on 26th July, 2004 has power to cancel registration ? (b) If so, whether violations of provisions of s. 10(22) and s. 13 stated to have come to light as result of search operations conducted under s. 132 of Act, warrant cancellation of registration of assessee ? 7.2.C As for first issue, with regard to legality and validity of order dt. 26th July, 2004, contentions of Revenue with reference to legal objections of assessee on competence of CIT to cancel registration by impugned order, are two pronged i.e. (a) provisions of sub-s. (3) of s. 12AA inserted by Finance Act, 2004 w.e.f. 1st Oct., 2004 are merely procedural and come to rescue of Department in validating impugned order dt. 26th July, 2004 by retrospective operation of amendment; and (b) Secondly, even prior to insertion of sub-s. (3) of s. 12AA, whether power to cancel registration always existed, though it was specifically so provided by amendment w.e.f. 1st Oct., 2004 only; 7.3.A Interpretation of statutes postulates search for true meaning of words used in statute. If language in statute is plain, obvious meaning is to be applied. Rules of interpretation are applied only to resolve ambiguities. When two interpretations are possible, interpretation which favours aggrieved should be preferred. approach and purpose of interpretation is to ascertain mens legis, i.e. intention of law as evidenced in statute. key to opening of every law is reason and spirit of law. While interpreting statutory provision, Judge must first search relevant facts, then arrive at correct law and ultimately reach its core-soul. Justice Bernard Botin has said that law will never be entirely clear to any Judge just as beautiful woman is always bit of mystery to her lover! Were it otherwise, each would lose part of her charm. But wise Judge, like wise lover, will be master of his true love, although he may not understand her completely and though she is at times too difficult for him! There is no possibility of mistaking moon for midnight, but at what precise moment twilight becomes darkness is difficult to determine. Words in any language are not scientific symbols conveying any precise or definite meaning. Language has imperfect meaning to convey one s thought. That is why in England, people preferred unwritten law (lex non scripta) to written law (lex scripta). fundamental rule of law is that no statute shall be construed to have retrospective operation unless such construction appears very clearly in terms of Act. Words are used in statute as medium of expression. particular thought is communicated through words. When language is misunderstood even in ordinary conversation, person who has spoken words can only and shall alone be approached for clarification. Legislature cannot be approached because it becomes functus officio after enactment of Act. It is, therefore, left to judiciary to make proper interpretation of language used in statute. famous jurist Rt. Hon ble Lord Denning. Master of Rolls, said, "we do not sit here to pull language of Parliament to pieces and make nonsense of it. That is easy thing to do. We sit here to find out intention of Parliament and carry it out. We do better by filling in gaps and making sense of enactment than by opening to destructive analysis." Viscount Simonds called it "a naked usurpation of legislative function under thin guise of interpretation". We wish therefore to follow aforesaid principles in their true sense, letter and spirit. When language in statute is transparent and plain, it is wrong to give it colour according to temper and time. When language employed by enactment is clear, there is no question of interpreting provisions in any manner, except by giving them their plain and obvious meaning. Nebulous concept of legislative intent cannot be used to curtail explicit provisions in statute. When meaning of word is plain, it is not duty of Court to busy itself with supposed intention. There is no scope for importing into statute words which are not there. Casus Omissus cannot be supplied by Court except in case of absolute necessity and when reason for it, is found in four corners of statute itself, since function of Court is only to expound and not to expand i.e. legislate. On other hand, it is duty of Court to construe provision of law in such way as to carry out and effectuate to fullest extent, intention of law (sentetic legis) legislated by Parliament or legislature irrespective of consequences. language of statute must be understood in sense it was understood when it was enacted, and that is what we are following and doing in instant case in succeeding paras, so as to maintain fiat justitia i.e. let justice be done. 7.3.B Now, first contention of Revenue based on ground that amendment is only procedural, we do not find merit in same, for reason that cancellation of registration is substantive power to be exercised by competent authority in furtherance of statutory power following due process of law. At this juncture, we may extract below explanatory notes on clauses forming part of Finance (No. 2) Bill, 2002, to extent relevant for purpose as below : "Power to CIT for cancelling registration under s. 12AA Under existing provisions of s. 12AA procedure for registration of trust or institution by CIT is provided. Although power of cancellation of registration flows from power to register, same has not been specifically provided in IT Act thereby leading to unnecessary litigation. It is proposed to provide that if CIT is satisfied that activities of any trust or institution are not genuine or are not being carried out in accordance with objects of trust or institution, he shall, after giving reasonable opportunity of being heard to concerned trust or institution, pass order in writing, cancelling registration granted under said section. proposed amendment will take effect from 1st Oct., 2004." (Emphasis, italicised in print, supplied) amendment in question has vested in CIT new judicial/quasi- judicial power of cancelling registration. So, what is aimed at by amendment is not change in procedure envisaged in s. 12AA dealing with grant of registration but conferment of additional power under that section for cancellation of registration granted earlier duly following provisions set out in amendment itself. Such amendment cannot be termed as mere procedural one, so as to be retrospective and applicable to all pending matters, but has to be deemed to be substantive one effective only from date specified in Act itself. 7.3.C In this context, we may refer to decision of Hon ble Kerala High Court in case of N.T. John vs. CIT (1997) 137 CTR (Ker) 656 : (1997) 228 ITR 314 (Ker) wherein considering question whether s. 158BA contained in Chapter XIV-B is retrospective or prospective in operation, Hon ble Kerala High Court held, as per relevant portion of headnote (at pp. 314-315) as under : "Normally, change in law of procedure operates retrospectively. In case of Chapter XIV-B, there was no change of procedure, but special procedure was provided. Sec. 158BA would not apply in case where search was initiated under s. 132 before 30th June, 1995. In that view, it cannot be said that Chapter XIV-B has retrospective operation." 7.3D Similarly, in case of Jayalakshmi Leasing Co., In re (1997) 142 CTR (ITSC)(SB) 91 : (1997) 228 ITR 1 (SB)(AT) Special Bench of Income-tax Settlement Commission, examining jurisdiction to admit and deal with applications in respect of cases of block periods arising under Chapter XIV- B of IT Act, on interpretation of statutory provisions observed, vide relevant portion of headnote on pp. 2 and 3, as follows : ".The failure to specifically bar application of Chapter XIX-A to proceedings under Chapter XIV-B could be taken to indicate legislative intent not to exclude provisions of Chapter XIX-A to block assessment proceedings. Sec. 158BH would also support this view. conclusion that later enactment repeals earlier enactment is to be resorted to only if two enactments are so inconsistent with or repugnant to each other that they cannot stand together. Act must be construed as it stands today and harmonious construction of all provisions in Act is called for in this context. Any construction which renders any provision of Act nugatory and defeats object of that provision must, if it is possible, be avoided. Even if two views were possible it would be preferable to adopt view which will allow applicability o f "simplified procedure laid down in Chapter XIX-A to all assessees including assessees falling within ambit of Chapter XIV-B, than truncated view denying benefits of this procedure, when in fact there is no express specific provision in this regard and express permission can be read from s. 158BH." 7.3.E Similarly, apex Court in K.M. Sharma vs. ITO (2002) 174 CTR (SC) 210 : (2002) 254 ITR 772 (SC) examining retrospective or otherwise nature of amendment to provisions of s. 150(1) w.e.f. 1st April, 1989, held as per headnote (773-774) as under : "Held, reversing decision of High Court, that provisions of s. 150(1) as amended w.e.f. 1st April, 1989, did not enable authorities to reopen assessments which had become final due to bar of limitation prior to 1st April, 1989, and this position was equally applicable to limitation proposed on basis of order passed under IT Act or under any other law. provision of fiscal statute, more particularly one regulating period of limitation, must receive strict construction. law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation of litigants for indefinite period on future unforeseen events. Proceedings which had attained finality under existing law due to bar of limitation cannot be held to be open for revival unless amended provision is clearly given retrospective operation so as to allow upsetting of proceedings which had already concluded and attained finality. taxing provision imposing liability is governed by normal presumption that it is not retrospective and settled principle of law is that law to be applied is that which is in force in assessment year unless otherwise provided expressly or by necessary implication. Even procedural provision cannot, in absence of clear contrary intendment expressed therein be given greater retrospectivity than is expressly mentioned so as to enable authorities to affect finality of tax assessments or to reopen liabilities which have become barred by lapse of time." (Emphasis, italicised in print, supplied) In light of observations of apex Court underlined above, law that applies to impugned proceedings taken up by CIT for withdrawing registration benefit to assessee, is one in force at relevant point of time, i.e. from period immediately prior to initiation of those proceedings to date of passing of impugned order, i.e. 26th July, 2004, and not amended provisions of s. 12AA which came into effect only from 1st Oct., 2004 in absence of any express or implied indication in amended provisions imputing retrospective operation to same. 7.3.F We may also refer to decision of apex Court in CIT vs. Dhadi Sahu (1992) 108 CTR (SC) 444 : (1993) 199 ITR 610 (SC), wherein considering effect of amendment to provisions of s. 274(2) by Taxation Laws (Amendment) Act, 1970 w.e.f. 1st April, 1971, apex Court vide relevant portion of headnote on pp. 611-612 of report (199 ITR) held as follows : "The general principle is that law which brings about change in forum does not affect pending actions unless intention to contrary is clearly shown. One of modes by which such intention is shown is by making provision for changeover of proceedings from Court or Tribunal where they are pending to Court or Tribunal which under new law gets jurisdiction to try them. It is also true that no litigant has any vested right in matter of procedural law; but where question is of change of forum, it ceases to be question of procedure only. forum of appeal or proceedings is vested right as opposed to pure procedure to be followed before particular forum. right becomes vested when proceedings are initiated in Tribunal or Court of first instance and unless legislature has, by express words or by necessary implication, clearly so indicated, that vested right will continue in spite of change of jurisdiction of different Tribunals or forums." 7.3.G We may now refer to decision of apex Court in National Agricultural Co-operative Marketing Federation of India Ltd. & Anr. vs. Union of India & Ors. (2003) 181 CTR (SC) 1 : (2003) 260 ITR 548 (SC), wherein Court was concerned with nature of amendment made to provisions of s. 80P(2)(a)(iii). Facts before apex Court in that case are that s. 80P(2)(a)(iii) of IT Act, 1961 as originally inserted provided that in case of co-operative society engaged in "(iii) marketing of agricultural produce of its members" whole of amount of profits and gains of business attributable to such activity would be deducted from gross total income. Supreme Court in Assam Co-operative Apex Marketing Society Ltd. vs. Addl. CIT (1993) 113 CTR (SC) 58 : (1993) 201 ITR 338 (SC) rendered under corresponding earlier proviso, s. 81, held that phrase "produce of its members" must refer to agricultural produce actually "produced by its members." In later decision, Kerala State Co-operative Marketing Federation Ltd. vs. CIT (1998) 147 CTR (SC) 29 : (1998) 231 ITR 814 (SC), larger Bench of Supreme Court overruled decision in case of Assam Co-operative Apex Marketing Society Ltd. (supra) and held that exemption under s. 80P(2)(a)(iii) was not restricted only to primary societies and that "produce of its members" in that provision had to be construed as including "produce belonging to" member- society. Immediately thereafter, in 1999 provisions of s. 80P(2)(a)(iii) were amended by IT (Second Amendment) Act, 1998 (No. 11 of 1999) with retrospective effect from 1st April, 1968, by substituting sub-cl. (iii) to read "the marketing of agricultural produce grown by its members". When validity of retrospective amendment to s. 80P(2)(a)(iii) is challenged, apex Court affirming view taken by High Court upholding validity, held, vide relevant portion of headnote on p. 550 of reports (260 ITR) as follows "The legislative power either to introduce enactments having retrospective effect for first time or to amend enacted law with retrospective effect is not only subject to question of competence but is also subject to several judicially recognized limitations. first is requirement that words used must expressly provide for or clearly imply retrospective operation. second is that retrospectivity must be reasonable and not excessive or harsh, otherwise it runs risk of being struck down as unconstitutional. third is where legislation is introduced to overcome judicial decision, here power cannot be used to subvert decision without removing statutory basis of decision." (Emphasis, italicised in print, supplied) In instant case, very first condition, i.e. words must expressly provide for or clearly imply retrospective operation , is not fulfilled, inasmuch as provisions of s. 12AA confer power on CIT to withdraw registration already granted, only from 1st Oct., 2004 by Finance (No. 2) Bill, 2004, those powers having not been either expressly or impliedly conferred with retrospective operation. 7.3.H We may now refer to decision of Madras High Court in CIT vs. Pooshya Exports (P) Ltd. (2003) 179 CTR (Mad) 557 : (2003) 262 ITR 417 (Mad), wherein examining issue with regard to retrospective or otherwise nature of amendment in s. 80HHC by Finance (No. 2) Act, 1991, Hon ble Madras High Court held, as per relevant portion of headnote on p. 417, as follows : "If provision is introduced with view to confer benefit, which had not been conferred before such introduction, even though provision to which amendment was incorporated is beneficial provision, that does not necessarily imply that amendment is to be given retrospective effect even without declaration to that effect from legislature. Where intention of legislature is clearly conveyed and wherever language is clear intention of legislature is to be gathered from language used. construction which requires for its support, addition or substitution of words or which results in rejection of words has to be avoided. Court is to pronounce judgment and not to make law." (Emphasis, italicised in print, supplied) In instant case there is pronouncement by legislature itself that amendment is effective from 1st Oct., 2004. Therefore, in view of ratio of Madras High Court noted above, there cannot be retrospectivity against intention of legislature. 7.3.I Similarly, in case of M.G. Pictures (Madras) Ltd. vs. Asstt. CIT (2003) 185 CTR (Mad) 185 : (2003) 263 ITR 83 (Mad), examining issue with regard to retrospective or otherwise nature of amendment to s. 40A(3) restricting disallowance w.e.f. 1st April, 1996, Hon ble Madras High Court held, as per relevant portion of headnote on p. 83, as follows : "An amendment must have in its language something pointing towards its retrospectivity. In order to hold statute retrospective, it should be specifically so provided. In order to hold provision to be having retrospective operation, it would have to be shown that it is of procedural nature." (Emphasis, italicised in print, supplied) On procedural or substantive nature of provision under consideration in that case, High Court held as per relevant portion of consideration in that case, High Court held as per relevant portion of headnote as follows : "Held : (ii) That it was clear from language of s. 40A(3) that language did not in any manner suggest retrospectivity. Considering tense used in section, amendment was prospective. amendment limiting discretion of assessing authorities and creating right on assessee to plead for remaining eighty per cent, expenditure as allowable expenditure could not be viewed as mere procedural provision. It would have to be held as provision dealing with substantive right of assessee. Thus, amended provision was not of retrospective nature. Tribunal was right in holding that amended provision was only prospective." In instant case, provisions of s. 12AA conferring CIT with power to withdraw registration granted earlier, and laying down specific procedure for that purpose is clearly substantive provision, and cannot be said to be mere procedural one, and in absence of specific provision in statute providing for retrospective operation, provision of s. 12AA cannot have retrospective effect. 7.3.J Now we may refer to decision of Hon ble Karnataka High Court in Kardicoppal Estate vs. State of Karnataka & Anr. (2004) 188 CTR (Kar) 68 : (2004) 266 ITR 20 (Kar), wherein interpreting retrospective amendment made to s. 15 of Karnataka Agricultural IT Act, 1957, brought about subsequent to decision of that Court in Ashok Plantation vs. Asstt. Commissioner of Commercial Taxes, High Court held that retrospective amendment is invalid. In that case, Court noted that in Ashok Plantation, High Court did not point out any lacuna and, on other hand, Court only noticed both provisions and interpreted law as it stood then, in light of judgment of apex Court in CIT vs. Kulu Valley Transport Co. (P) Ltd. (1970) 77 ITR 518 (SC) and held that retrospective amendment of provision must not be only for purpose of nullifying judgment where there was no lacuna or defect pointed out in parent Act. It was also observed that retrospective amendment takes away right given to petitioner and that cannot be done in guise of curing non-existing lacuna by respondents. 7.3.K Similarly, in case of Gem Granites vs. CIT (2004) 192 CTR (SC) 481 : (2004) 271 ITR 322 (SC), apex Court, examining retrospective or otherwise nature of amendment to provisions of s. 80HHC by Finance Act, 1991, whereby benefit of s. 80HHC has been extended to specific kind of mineral, apex Court held that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. It was also held therein that subsequent legislation may be looked into to fix proper interpretation to be put on statutory provision as it stood earlier. In this case, Hon ble apex Court has also approved view taken by Hon ble Madras High Court in CIT vs. Pooshya Exports (P) Ltd. (supra). 7.3.L Further in case of CIT vs. New Rajasthan Trading Co. (2004) 186 CTR (Raj) 268 : (2004) 271 ITR 511 (Raj), on retrospectivity of proviso inserted in s. 272A(2) by Finance (No. 2) Act, 1991 w.e.f. 1st Oct., 1991, Hon ble Rajasthan High Court held that : "The proviso inserted by Finance (No. 2) Act, 1991 w.e.f. 1st Oct., 1991, to s. 272A(2) of IT Act, 1961, has not been given retrospective effect. In absence of any retrospective effect to such provisions, this proviso cannot have any impact with regard to any default relating to asst. yr. 1989-90 requiring assessee to file return on or before 30th April, 1989, for period ending on 31st March, 1989. No law can have retrospective effect unless it is so provided specifically by law itself." (Emphasis, italicised in print, supplied) 7.3.M In CWT vs. B.R. Theatres and Industrial Concerns (P) Ltd. (2004) 188 CTR (Mad) 63 : (2005) 272 ITR 177 (Mad) examining retrospective or otherwise nature of amendment of s. 40 of Finance Act, 1983 by Finance Act, 1988, for purposes of WT Act, Hon ble Madras High Court held : "The test to be applied for deciding as to whether later amendment should be given retrospective effect, despite legislative declaration specifying prospective date as date from which amendment is to come into force, is as to whether without aid of subsequent amendment, unamended provision is capable of being so construed as to take within its ambit subsequent amendment. exclusion of stock-in-trade from ambit of levy of wealth-tax on assets of closely held companies in s. 40(3) of Finance Act, 1983 could not per se be regarded as "obvious omission" nor is giving it immunity from levy of wealth-tax necessary for reasonably interpreting unamended provision. amendment effected to s. 40 of Finance Act, 1983, by Finance Act, 1988, exempting stock-in-trade is only prospective and not retrospective." (Emphasis, italicised in print, supplied) 7.3.N Further, in Gujarat Ambuja Cements Ltd. & Anr. vs. Union of India & Anr. (2005) 194 CTR (SC) 428 : (2005) 274 ITR 194 (SC) legislative powers to remove infirmities in earlier legislation and to make retrospective amendment were examined. As per relevant portion of headnote, Court observed that decision of Hon ble Supreme Court in Laghu Udyog Bharati vs. Union of India (1999) 6 SCC 418 : (1999) 115 STC 616 (SC) was solely on basis that there was conflict between each of ss. 65, 66, 68(1A) and 71 of Finance Act, 1994, as amended in 1997 on one hand and cls. (xii) and (xviii) of r. 2(1)(d) of Service-tax Rules, 1994, on other. There was no question of Parliament overruling decision of Supreme Court by passing Finance Act, 2000, and Finance Act, 2003, to amend provisions retrospectively. It was held in that context that legislature is competent to remove infirmities retrospectively and make any imposition of tax declared invalid, valid. 7.3.O In case of Kanmarlapudi Lakshminarayana Chetty (supra) relied upon by assessee before us, Hon ble Andhra Pradesh High Court examining retrospective or otherwise nature of amendment to IT Act, by way of insertion of sub-s. (5) to s. 35 by IT (Amendment) Act, 1953, observed that said sub-s. (5) is not declaratory of pre-existing law but it clearly affects vested rights which have accrued to assessee, and as such well-settled rule of construction precludes Court from construing section as retrospective. It was held in that case that statute affecting vested rights is prima facie prospective unless statute expressly or by necessary implication indicates to contrary. Even where it is retrospective in operation, Courts should confine its operation only to extent language renders it necessary. 7.3.P Further, in case of Uppala Peda Venkataramanaiah (supra) relied upon by assessee, examining retrospective or otherwise nature of provisions of s. 155 of IT Act, 1961, Hon ble Andhra Pradesh High Court held as follows : "(ii) that in absence of express words or necessary implication to contrary statute which was not purely procedural had only prospective and not retrospective operation; s. 155 of IT Act, 1961 had only prospective operation. (iii) that as appellate orders were passed before coming into force of IT Act, 1961, statutory provisions which were in force at time when appellate orders were passed governed those rectification proceedings and Act of 1961 did not in any manner destroy rights and privileges acquired under these statutory provisions or liabilities incurred thereunder;" (Emphasis, italicised in print, supplied) 7.3.Q Similarly, in case of Harlal vs. Lala Prasad (supra) relied upon by assessee, then Hon ble Nagpur High Court examining retrospective or otherwise nature of amendment made to Transfer of Property Act, observed as under : "Unless intention to contrary is clear, Act is to be construed as operating only on cases or facts which come into existence after Act, and not retrospectively on cases or facts which had come into existence before Act." (Emphasis, italicised in print, supplied) 7.3.R Further in case of Madhya Pradesh State Road Transport Corporation (supra), relied upon by assessee, considering retrospective or otherwise nature of amendment made to Motor Vehicles Act, 1988, Hon ble Madhya Pradesh High Court held as follows "Vested or substantive rights cannot be taken away by enactment which i s ex facie or by implication not retrospective. Before giving construction of retrospectivity to Act of Parliament one would require that it should either appear very clearly in terms of Act or arise by necessary and distinct interpretation, and perhaps no rule of construction is more firmly established than this that retrospective operation is not to be given to statute so as to impair existing right or obligation otherwise than as regards matter of procedure, unless that effect cannot be avoided without doing violence to language of enactment. If enactment is expressed in language which is fairly capable of either interpretation it ought to be construed as prospective only." (Emphasis, italicised in print, supplied) 7.3.S Further, in case of J.P. Jani vs. Induprasad Devshankar Bhatt (supra) relied upon by assessee Hon ble Supreme Court, examining scope of s. 297(2)(d)(ii) of new Act, i.e. IT Act, 1961, held as follows "On proper construction of s. 297(2)(d)(ii) of new Act, ITO cannot issue notice under s. 148 in order to reopen assessment of assessee in case where right to reopen assessment was barred under old Act at date when new Act came into force. principle is based on well-known rule of interpretation that unless terms of statute expressly so provide or unless there is necessary implication, retrospective operations should not be given to statute so as to affect, alter or destroy any right already acquired or to revive any remedy already lost by efflux of time." (Emphasis, italicised in print, supplied) 7.3.T Further, in case of Y. Arul Nadar (supra), relied upon by assessee, considering retrospective or otherwise nature of amendment made to statute, Hon ble Madras High Court held as follows "The general rule is, when amendment is introduced in statute governing case already pending, rights and obligations of parties should be decided only according to law, which existed when action was begun, unless clear contrary intention is evident in amending Act. There could not be imputation of retrospective operation to amending Act and that could be done only by amending Act either expressly or by necessary implication. In instant case amending Act has indicated that amendments introduced shall have only prospective operation and pending proceedings should continue as if amending Act had not been passed." (Emphasis, italicised in print, supplied) 7.3.U Similarly in case of Maharaja Chintamani Saran Nath Sahdeo (supra), relied upon by assessee, considering retrospective or otherwise nature of amendment made to Bihar Land Reforms Act, Hon ble apex Court held that amending provision restricting compensation to three times of net income has no retrospective application, as amendment affects substantive right. It was also held that substituted legislation cannot be said to have retrospective operation as golden rule of construction applies even to substituted legislation and substituted legislation cannot be held to be retrospective in absence of anything in enactment to show that it is to have retrospective operation. It is apt to extract hereunder comments of apex Court with regard to power of Board of Revenue "But in Act, authorities and their powers have been specified and we do not find any provision which vests power on Board of Revenue, so we have to proceed on assumption that Board of Revenue has no power." In instant case too, provisions of s. 12AA, as they stood at relevant point of time merely conferred with power to grant or refuse to grant registration and did not vest CIT with power to cancel registration. That being so, in view of ratio decidendi of above decision, one has to assume that CIT at relevant point of time did not have power to cancel registration. 7.3.V Similarly in case of STO vs. Oriental Coal Corporation (supra), relied upon by assessee, considering retrospective or otherwise nature of provision in amending Act, Hon ble Supreme Court observed that where statute thus, on its face, clearly indicates retrospective effect where intended, there can be no justification to read retrospectivity into amendment made by cl. (a) of s. 6 of amending Act which does not contain any word to that effect. 7.3.W Further, in case of Govinddas & Ors. (supra), relied upon by assessee, Hon ble Supreme Court examining retrospective or otherwise nature of provisions of s. 171(6), held that unless terms of statute expressly so provide or necessarily require it, retrospective operation should not be given to statute so as to take away or imply existing right or create new obligation or impose new liability otherwise than as regards matters of procedure. 7.3.X In case of Agastyar Trust (supra), relied upon by assessee, Hon ble Supreme Court, considering assessee s claim for exemption under Tamil Nadu Urban Land Tax Act, 1966 on basis of recognition by subsequent order of Tribunal of assessee as public charitable trust under s. 12A(a) of IT Act, 1961, it was held as follows "Since order recognizing appellant trust as charitable trust under s. 12A(a) of IT Act was passed on 29th April, 1977 by Tribunal, appellant could not claim benefit of that order as exemption of land from payment of urban land tax was claimed only for period 1965 to 1976. said order could not be given retrospective effect." (Emphasis, italicised in print, supplied) 7.3.Y This Hyderabad Bench of Tribunal in case of AP State Civil Supplies Corporation Ltd. vs. Dy. CIT (2003) 78 TTJ (Hyd) 988 : (2002) 83 ITD 398 (Hyd) had occasion to consider applicability of amended provisions of s. 254(2A) inserted by Finance Act, 2001 w.e.f. 1st June, 2001, to matters where stay had already been granted prior to that date. After discussing at length case-law on point in light of K.J. Aiyer s Judicial Dictionary (8th Edn. 1980 at p. 836) : Commentaries by Sampath Iyengar on Law of Income-tax, Eighth Edn. (revised by Hon ble Supreme Court Justice Mr. S. Ranganathan) Vol. 1 at p. 239, Tribunal concluded that no retrospectivity could be read into those amended provisions. Relevant portion of headnote of said decision reads as under "Sub-s. (2A) and (2B) have been inserted by Finance Act, 1999 w.e.f. 1st June, 1999 and provisos to aforesaid section were inserted by Finance Act, 2001 w.e.f. 1st June, 2001. Nowhere in language employed in aforesaid section, particularly in said sub-s. (2A) and especially in footnote provided whereunder, word retrospectively has been couched by Parliament. It simply states "provisos inserted by Finance Act, 2001 w.e.f. 1st June, 2001". One cannot appreciate stand of Department that said provisos are inserted by Finance Act, 2001 w.e.f. 1st June, 2001 retrospectively. One cannot read language as if word retrospectively has been introduced into it as interpreted by Department when it had not been done so by Parliament. In instant case, where stay had been granted by Tribunal already, i.e. prior to 1st June, 2001, i.e. date of coming into force of aforesaid amendment by inserting proviso to s. 254(2A), right had accrued in favour of assessee and against Department by virtue of Tribunal s order staying recovery proceedings on assessee for collection of demand in dispute. Such right accrued to assessee by virtue of Tribunal s order coming into effect, could get impaired if proviso to s. 254(2A) is read as retrospective when it has been actually not effectuated so but only w.e.f. 1st June, 2001 by Finance Act, 2001. If at all, said insertion of proviso might be applicable only to stay petition which had been filed prior to said date of 1st June, 2001 but which has not come up for hearing until said date of 1st June, 2001, but in instant stay petitions except for asst. yr. 1997- 98, orders had been passed by Tribunal very much prior to date of 1st June, 2001. As concerned proviso inserted by amendment Act was not retrospective but only prospective w.e.f. 1st June, 2001 as spelt out by amendment Act itself, stay already granted by Tribunal on various dates prior to 1st June, 2001 would hold good and continue to be in force pending disposal of relevant appeals out of which stay petitions had arisen.." (Emphasis, italicised in print, supplied) ratio decidendi of above decision squarely applies to facts of present case wherein Revenue seeks to press into service provisions of sub-s. (3) of s. 12AA brought on to statute book w.e.f. 1st Oct., 2004, to give life to order of CIT dt. 26th July, 2004 impugned in this appeal. 7 .3 .Z In view of foregoing discussion and considering ratio decidendi laid down in case-laws not only cited before us, but also others being fortifying our view taken in light of judicial precedents cited before us, first contention of Revenue based on retrospective nature of amendment to provisions of s. 12AA, though came into statute book w.e.f. 1st Oct., 2004, is liable to be rejected. 7.4.A As for existence of power in CIT to cancel registration once granted, even prior to amendment of provisions of s. 12AA w.e.f. 1st Oct., 2004, contentions in brief are that grant of registration is subject to fulfilment of specific conditions year after year, whenever there is breach in fulfilment of those conditions, registration so granted can always be withdrawn/cancelled; power to grant conferred by statute also includes power to withdraw and even provisions of General Clauses Act come to rescue of Department in that behalf. We do not find merit even in these contentions of Revenue for reasons discussed hereunder. 7.4.B As on date when impugned order dt. 26th July, 2004 has been passed, there is no provision in IT Act, enabling CIT to cancel registration once granted. Such provision now is sub-s. (3) of s. 12AA, inserted by Finance (No. 2) Act, 2004 w.e.f. 1st Oct., 2004. As such, there is no legal sanctity for impugned order dt. 26th July, 2004. We do not find merit in contentions of learned standing counsel for Revenue, based on provisions of s. 21 of General Clauses Act, 1897, that even prior to insertion of sub-s. (3) of s. 12AA CIT enjoyed power of cancellation of registration in deserving cases. question here is as to whether quasi-judicial order passed by statutory authority can be said to be covered by provisions of s. 21 of General Clauses Act, which reads as follows "21 : Where by any Central Act or regulation, power to issue notifications, orders, rules or bye-laws is conferred, then that power includes power, exercisable in like manner and subject to like sanctions and conditions (if any) to add to, amend, vary or rescind any notifications, orders, rules or bye-laws so issued." Just as man is known by company he keeps, so is word known in company of its words. In other words, word is expected to be interpreted with reference to its accompanying words. This is principle enshrined in doctrine of ejusdem generis, broader version of which is noscitur sociius, i.e. meaning of doubtful word may be ascertained by reference to meaning of words associated with it. Applying said principle, as pointed out by learned counsel for assessee, therefore, we have to hold that said provision of General Clauses Act apply to such orders which can be equated with notifications, rules or bye-laws, which are procedural in nature, and not to orders which are passed, in quasi-judicial or judicial proceedings. 7.4.C It is worthwhile to refer to decision of Tribunal in case of Kailashanand Mission Trust (supra), relied upon by assessee, wherein Delhi Bench had occasion to examine power of CIT to review or rescind/withdraw registration granted under s. 12A. Examining similar arguments, advanced on basis of provisions of General Clauses Act, Tribunal, observed, as per headnote below "The perusal of s. 21 of General Clauses Act shows that word orders is coupled with other words "notifications, rules and bye laws". 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 word order was used by legislature in widest sense or in restricted sense. Therefore, to resolve such issue, Courts/Tribunals have resorted to rules of interpretation. In such cases, rule of noscitur sociis is applied. If aforesaid principle is applied to provision of s. 21 of GCA, word orders would not include judicial or quasi-judicial orders. This word is associated with words notification, rules and bye-laws . So, word order should be construed in context in which associated words are used. Associated words are in nature of subordinate legislation. Therefore, word order contemplated in this section would be restricted to such orders which are issued by way of delegated/subordinate legislation. In view of above discussion, it is held that s. 21 of GC Act would include only those orders which are in nature of subordinate legislation and would not include other orders particularly judicial or quasi-judicial orders. Consequently, order of CIT passed under s. 12A in 1974 could not be rescinded/withdrawn by impugned order by virtue of s. 21 of GCA..." (Emphasis, italicised in print, supplied) 7.4.D In case of Bachchu Lal & Anr. vs. State (supra), considering scope of provisions of s. 21 of General Clauses Act and its applicability to judicial orders, Hon ble Allahabad High Court held as follows "The words notification orders, rules or bye-laws have no reference to judicial orders passing and cancellation whereof is subject to and regulated by procedural law of land. Obviously, words, notifications, orders, rules and bye-laws with which expression orders is associated must be deemed to limit scope of word orders to non-judicial orders." (Emphasis, italicised in print, supplied) 7.4.E Similarly, considering applicability of provisions of s. 21 of General Clauses Act to Forward Contract (Regulation) Act, 1952, Hon ble Allahabad High Court in case of Bullion & Agricultural Produce Exchange (P) Ltd. (supra) held as follows ".In our opinion, s. 21 of General Clauses Act may not apply inasmuch s that section does not obviously confer power of review on authority exercising judicial or quasi-judicial power. Judicial or quasi-judicial authorities can review their order only if such power is specifically provided for." (Emphasis, italicised in print, supplied) 7.4.F Similarly, interpreting provisions of s. 21 of UP General Clauses Act in context of order passed under UP District Boards Act, Hon ble Allahabad High Court in case of Jagdish Prasad Pradhan (supra) as per relevant portion of headnote, held as follows "The State Government acts as Tribunal with quasi-judicial powers and it will have no power to rescind, modify or review its decision once taken, unless it is provided by statute. power of review is not inherent in Court or Tribunal but has to be conferred by statute, AIR 1964 All 148 (151) Ref. (Para 12) .. word order in s. 21 of UP General Clauses Act, refers to executive orders or subordinate judicial orders, passing and cancellation whereof is subject to and regulated by procedural laws. word is not capable of being interpreted as including judicial or quasi-judicial orders since word is associated with notifications, rules and bye-laws.. (Para 13)" (Emphasis, italicised in print, supplied) 7.4.G In case of Kailashanand Trust (supra), Delhi Bench of Tribunal concluded that CIT had no power to rescind/withdraw registration granted in absence of specific power conferred in that behalf, with following observations ".Hence, impugned order was without jurisdiction. If legislature had intended so, it could have easily conferred powers of cancellation to CIT under s. 12A. In absence of such enactment, by implication, CIT has no power to cancel registration granted earlier. reason is obvious as legislature has specifically granted power to deny exemption under s. 11 on year to year basis if there is any contravention of provision of s. 11 or s. 13. If under given facts of case, funds of trust are being misused, AO is fully equipped with power to deny exemption to such trust. But registration, once granted cannot be cancelled by CIT in absence of any specific power." (Emphasis, italicised in print, supplied) above decision of Delhi Bench of Tribunal, which followed several decisions including decisions of Allahabad High Court in CIT vs. Bhawani Prasad Girdhari Lal & Co. (supra) of Madras High Court in Fernandes vs. Ranganayakule and of apex Court in P.N. Thakershi vs. Pradyumansinghji, also cited before us and noted above, squarely applies to facts of present case and from ratio of that decision, it is very much clear that prior to insertion of sub-s. (3) to s. 12AA w.e.f. 1st Oct., 2004, there was no power conferred on CIT to review/rescind registration. above decision brings forth fact that different mechanism was in operation prior to insertion of sub-s. (3) to s. 12AA, to check contravention of provisions of s. 11 or s. 13 or misuse of funds as AO was fully equipped with power to deny exemption to such trust on year to year basis. That being so, amendment to provisions of s. 12AA by insertion of sub-s. (3) has brought change in mechanism to check misuse of funds or contraventions to provisions of s. 11 or s. 13, w.e.f. 1st Oct., 2004. 7.4.H Reiterating ratio laid down in above decision, it was also held by Jabalpur Bench of Tribunal in Namra Mahila Avam Bal Kalyan Samiti (supra), relied upon by assessee that CIT is not empowered to withdraw registration already granted under s. 12A. 7.4.I Similarly, in case of M.P. Madhyam (supra), Indore Bench of Tribunal made comparison between provisions of ss. 12A and 12AA and concluded that those provisions are not meant for withdrawal or cancellation of registration already granted. observations of Tribunal as per relevant portion of headnote are as follows "A careful perusal of provisions of ss. 12A and 12AA shows that these provisions are meant for conditions and procedure for registration and not for withdrawal or cancellation of registration already granted on earlier occasion. Admittedly, no application for registration was pending before CIT to allow or deny same as per initial requirement of provisions laid down in these two sections. At same time, granting of registration was earlier prima facie act of authority under s. 12A. benefit of principle of promissory estoppel, however, cannot be denied to assessee who had been enjoying registration for last so many years under same facts and circumstances unless there is breach of condition laid down for granting registration in specific term." (Emphasis, italicised in print, supplied) 7.4.J Similarly, examining scope of powers of CIT, while granting registration, to verify as to whether assessee trust or institution is carrying on such activities, which may prima facie indicate that he is entitled to get benefit under s. 11/13, Lucknow Bench of Tribunal in case of St. Don Bosco Educational Society vs. CIT (supra) held as follows ".Here scope of powers of CIT is confined to examine genuineness of activities of trust or institution and to examine object of trust or institution. Once CIT has not doubted genuineness of activities of assessee society nor doubted object, his powers end and he cannot be allowed to travel beyond it and to enter into scope to find out as to whether assessee is charitable institution or not or whether assessee is carrying on any activity which is covered under definition of s. 2(15). It is AO who will be having exclusive jurisdiction to examine this aspect of matter when assessee will claim any tax benefit and then observation of CIT in impugned order may be relevant, but not at this stage." (Emphasis, italicised in print, supplied) 7.4.K fact that CIT does not have power to cancel registration once granted is evident also from subsequent amendment to provisions of s. 12AA made by Finance (No. 2) Act, 2004 w.e.f. 1st Oct., 2004, whereby through insertion of sub-s. (3) specific power has been conferred on CIT to cancel registration granted under cl. (b) of sub-s. (1). Both sides have relied on explanatory notes on clauses forming part of Finance (No. 2) Bill, 2004 in support of their respective contentions in this behalf. We have already extracted relevant portion of said explanatory note at para 7.3B of this order hereinabove. While assessee relied on it to emphasise that it should be read in totality, such total reading evidences that amendment in question was effective only from 1st Oct., 2004. relevant portion of explanatory note relied upon by Revenue, though already extracted above, may be noted once again hereunder, as it is pressed into service to give life to impugned order of CIT "Although, power of cancellation of registration flows from power to register, same has not been specifically provided in IT Act thereby leading to unnecessary litigation." (Emphasis, italicised in print, supplied) 7.4.L In above extract, we do not find any support to contentions of Revenue with regard to power of CIT to cancel registration existing even prior to amendment to provisions of s. 12AA w.e.f. 1st Oct., 2004. above explanatory note specifically notes that there was no specific provision in IT Act, and exercise of power of cancellation of registration flowing from power to register has led to litigation. Whether litigation was unnecessary or otherwise, as stated in aforesaid note, it appears that specific provision in IT Act has become necessary to overcome such litigation. amendment brought about by insertion of sub-s. (3) to s. 12AA has contemplated statutory procedure to be followed and quasi-judicial proceeding to be conducted for cancelling registration once granted. Such procedure even if followed, and quasi-judicial proceeding even if conducted, as in instant case, by statutory authority constituted under IT Act, there can be no legal sanctity for order that ensues such proceeding, in absence of statutory power under that Act to do what is contemplated under that order. What is sought to be exercised by impugned order is substantive power to cancel registration granted earlier and it was sought to be exercised by quasi-judicial authority. In absence of specific provision in statute under which that quasi-judicial authority is constituted, i.e. IT Act, such substantive power cannot be exercised. principles of natural justice followed and nature of proceedings conducted cannot lend legal sanctity to action of authority exercising such power, in absence of specific provision in statute conferring such power in that authority. 7.4.M As it may be noted here, even this power of cancellation, was only with regard to registration granted under cl. (b) of sub-s. (1) of s. 12AA. In instant case, it is undisputed fact, registration to assessee was granted under s. 12A by CIT, Visakhapatnam on 14th Aug., 1992, based on application of assessee dt. 9th Jan., 1992 after calling for necessary records, documents and information and after carrying out necessary enquiries and satisfying himself about genuineness of activities of assessee. 7.4.N In light of case laws and reasons already discussed above, there is equally no merit in contention of Revenue that power to grant also vests in authority competent to grant, with such power to withdraw or cancel. What is contemplated in instant case is exercise of substantive power by statutory authority. Unless statute itself confers such power duly specifying procedure for exercise of such power, same cannot be exercised. statute in this case has conferred such power w.e.f. 1st Oct., 2004 only by insertion of sub-s. (3) to s. 12AA. 7.5.A case laws relied upon by learned standing counsel for Revenue are clearly distinguishable for simple reason that issue before us is confined to question as to whether CIT as on date of impugned order, i.e. 26th July, 2004, was having power to cancel registration granted to assessee. For detailed discussion made hereinabove, in absence of specific power conferred under provisions of s. 12AA as it stood on relevant date, we have to hold that CIT does not have such power to cancel registration under s. 12AA of IT Act or by virtue of General Clauses Act, and subsequent amendment made to provisions of s. 12AA by insertion of sub-s. (3) thereunder specifically w.e.f. 1st Oct., 2004 equally cannot come to rescue of Revenue. That being so, case laws relied upon by Revenue are clearly distinguishable from facts of case on hand and accordingly cannot come to its aid. 7.5.B For instance, in case of Madhya Pradesh Madhyam vs. CIT (supra), relied upon by Revenue, Hon ble Madhya Pradesh High Court noted that it was simply case of issuance of show-cause notice, against which it was open to petitioner to file reply to show cause against proposed action before CIT, Bhopal. As such, High Court observed that it was not inclined to interfere at that stage of proceedings. ratio of that decision cannot hold good in context of facts and circumstances of instant case, where registration has in fact and indeed been cancelled by CIT by impugned order. It was also observed therein that right to conduct proceedings of cancellation in accordance with law cannot be denied to respondent/Department. What is important in these observations of High Court is right to conduct proceedings of cancellation in accordance with law . When statute has not conferred on CIT prior to 1st Oct., 2004 power to cancel, same cannot be exercised in accordance with law even as per said decision held by Hon ble Madhya Pradesh High Court. Even in this case of Madhya Pradesh Madhyam, it appears, when registration was ultimately cancelled by CIT, assessee carried matter before Tribunal. By its decision, extracted in para 7.4, hereinabove, Tribunal quashed such order of cancellation passed by CIT. 7.5.C Similarly, Full Bench decision of Hon ble Andhra Pradesh High Court relied upon by Revenue in case of Motichand Jain vs. M. Jaykumar (supra) holding that amendment raising pecuniary jurisdiction of District Court to entertain appeals from Rs. 30,000 to Rs. 1 lakh is retrospective in nature and that therefore appeal filed after amendment Act came into force is maintainable only in District Court and not in High Court, has been overruled, as submitted and relied upon by assessee, in case of Vallabhaneni Lakshmana Swamy vs. Valluru Basavaiah (2004) (5) ALD 807 (LB), wherein larger Bench consisting of five learned Judges, presided over by Hon ble Chief Justice of jurisdictional Andhra Pradesh High Court, specifically held that any appeal having been presented before amended Act could come into force and appeals pending as on said date are required to be disposed of, by Courts wherever they were pending and that amendment would not have any effect on pending appeals either presented or pending. 7.5.D Further one more instance is that Revenue placed reliance on decision of Hon ble Supreme Court in case of Aligarh Muslim University vs. Mansoor Ali Khan (supra) to bring in theory of useless/idle formalities, and contended that even if Department s stand is not accepted and order impugned herein dt. 26th July, 2004 is quashed on ground that as on that date CIT does not have power under s. 12AA to cancel registration once granted, considering specific power conferred on CIT by amendment to that section w.e.f. 1st Oct., 2004, registration of assessee could be cancelled now again with retrospective effect invoking amended provisions. As such, quashing of order impugned, by Tribunal in these proceedings, would give way to mere academic exercise by Tribunal and also useless/idle formalities of initiation of fresh proceedings to cancel same again which, in light of ratio decidendi of Hon ble Supreme Court in case of Aligarh Muslim University noted above, should be avoided, Department highlighted. In our considered view, even such contentions of Revenue do not hold water. As propounded by Hon ble Supreme Court in case itself, applicability of aforesaid theory of useless formality may depend upon facts of any particular case. That being so, that theory cannot have universal application, since it depends on facts and circumstances of each and every case. As for facts and circumstances of instant case, we have already expressed our view based on several case laws that insertion of sub-s. (3) of s. 12AA does not have retrospective operation, and if we look at position existing prior to amendment made, especially when substantive right of party would be affected, and more so when it is not merely matter of procedure as submitted by Revenue, besides fact that granting of exemption is done by AO on year to year basis being himself also fully equipped to reject such claim for exemption if circumstances of any case so warrants, theory of useless formality, propounded by Hon ble Supreme Court in aforesaid case, has no field to play in instant case. It may be that, even if we cancel order impugned herein, CIT might again be invoking amended provisions of s. 12AA to cancel registration of assessee even for earlier periods. But, that cannot deter us from correctly judging legality and validity of order impugned herein. It is more so, because every time CIT invokes provision to exercise power conferred on him under statute, he is instituting new quasi-judicial proceeding, which may give rise to further appellate proceedings, and validity of his order passed in each proceeding has to be judged independently and judicially. That being so, even if CIT again cancels registration of assessee retrospectively, legality, validity and reasonableness of his order, including permissibility of retrospectivity, would have to be examined in appellate proceedings, if instituted by assessee. 7.6 In light of foregoing discussion, we find that CIT has no power to cancel registration, prior to insertion of sub-s. (3) of s. 12AA by Finance Act, 2004 w.e.f. 1st Oct., 2004 nor does said amendment have any retrospective operation and as such impugned order dt. 26th July, 2004 has no legal sanctity. We are fortified in this behalf by following corroborative features that indicate legal deficiencies in this case (a) impugned order of CIT dt. 26th July, 2004 bears title order of cancellation of registration granted under s. 12AA of IT Act, 1961 . Neither registration in this case was granted earlier under s. 12AA as it was granted under s. 12A, nor is there any power conferred on CIT by statute under s. 12A to cancel registration granted earlier, prior to 1st Oct., 2004. (b) impugned proceedings have been initiated by CIT (Central) and have been concluded by that very authority. same does not arise out of any other proceedings, viz. assessment or otherwise. Thus, moot order, that has given rise to cause of action for assessee, is impugned order of CIT dt. 26th July, 2004. As such, in impugned order, strangely, there is no endorsement of copies of such order to anyone else than assessee, though normally orders of CIT or CIT(A) are marked to various authorities including AO. In absence of these details in endorsement, AO is not identifiable, resulting strangely in CIT (Central) Hyderabad, himself being made respondent in this appeal and concerned AO is not even impleaded as party to this appeal even by Revenue. Similarly, strange is fact that there is no assessment year involved in these proceedings initiated by CIT (Central) Hyderabad, as matter apparently relates to cancellation of benefit of registration to assessee insofar as concurrent or other proceedings that may be taken up for determining tax or penalty. (c) In view of above, though impugned order of CIT dt. 26th July, 2004 has been passed under s. 12AA after following due procedure and complying with principles of natural justice to be observed in all quasi- judicial/judicial proceedings, same has been passed to exercise power that has not been conferred by s. 12AA viz. at relevant point of time, i.e. to cancel registration granted earlier, because such power was conferred under s. 12AA only by insertion of sub-s. (3) thereunder w.e.f. 1st Oct., 2004, and prior to that date orders under s. 12AA could be either granting or refusing to grant registration, and it is only against latter type of orders passed under s. 12AA, first appeal before Tribunal was provided by statute by Finance Act, 1999 w.e.f. 1st June, 1999. That being so, questions do arise to contemplate even as to maintainability of this appeal itself firstly because of appealability of order cancelling registration and secondly because of misjoinder of parties. However, we are not inclined to make excursion in those areas having not been identified by Revenue before us in its arguments, more so, Revenue itself having been at fault on its side on first count for having exercised power of cancellation of registration not vested with it by statute as held supra and on next count CIT s order impugned itself having not left any clue as to AO by marking copies of same to him or to any other authorities. 7 . 7 In view of foregoing discussion and reasons, after duly and carefully considering rival submissions of both parties, and in light of ratio decidendi of case-laws, relied upon and thrashed out hereinabove, we have no other alternative than to hold that amended provisions of law have no retrospective operation and under pre-amended provisions of law there is no power vested in CIT to review or rescind registration once granted, as result of which CIT does not or cannot have any power to cancel registration granted by him as well as that s. 21 of General Clauses Act is not applicable to instant proceedings under s. 12AA being judicial/quasi-judicial in nature. In that view of matter, on this legal ground itself, order of CIT impugned herein is liable to be cancelled. We therefore quash it accordingly. 7.8 In view of our finding on legality and validity of impugned order 7.8 In view of our finding on legality and validity of impugned order of CIT on first issue going in favour of assessee, it has become redundant for us to go into merits of second issue relating to justification for passing impugned order in light of violations of provisions of s. 10(22) and s. 13 stated to have been committed and come to light on account of Department s search proceedings on assessee. Thus, our hands are tied up by legal hurdle for attempting to rescue Department which we express with restraint. 8.1 Before parting with this case, wherein assessee, in guise of coercive steps by Department, and Department in guise of high stakes involved, have pressed into service various measures some of which amount to not only misleading each other but also Hon ble High Court and this Tribunal, and exerting undue pressure on this Tribunal for securing release o f order with undue sense of urgency, which we have critically noted at length in foregoing paras, for early hearing and speedy disposal of this appeal filed barely year back, while several other much older matters are awaiting their turn in record rooms of this Tribunal and High Court, we feel that it is fittest case where costs should be awarded on either or both parties, for their own individual contributions to delay in disposal of this appeal. However, taking lenient view of matter and considering fact that latches prevailed on both parties as revealed supra, and Hon ble High Court of Andhra Pradesh seems to be seized of connected matters, we would like to leave question of awarding costs untouched as such. 8.2 At same time, in this case, where Department appears to have stronger case on merits as made out at elaborate length by CIT in order impugned, while on preliminary point of presence or absence of statutory power in CIT to cancel registration granted assessee appears to have stronger case, resulting in both sides strenuously arguing at length in their respective fields of strength to get appeal clinched in their favour on basis of their respective stronger points, we wish to place on record without hesitation that both parties before us have well exercised their talents to highlight their respective stand and also exhibited their zeal and efforts torrentially referring to copious case-laws and relevant provisions of different legislations too, apart from tax enactments, particularly learned standing counsel on behalf of Departmental Representative CIT for Revenue evincing his pleasant manners, good Court-craft, while presenting case of Department in his own inimitable style with gift of gab, particularly withstanding our interruptions by arrows of relevant questions from Bench whenever warranted and answered by him on his legs efficiently. Indeed it is duty of Bench to appreciate them when they deserve, while Bench has also equally chosen to depreciate them for their own contributions to delay by their prayers of adjournment simultaneously or alternatively in spite of High Court directions, non-filing until this day of relevant papers sought to be filed by Department during or at least after hearing, and even more papers loosely filed during hearing without compilation or indexing or page numbering in such heavy matter, consequently compounding our exercise, while care and attention have to be taken in our lengthy deliberations over each point and every case law argued at length by both parties. 9. In result, appeal of assessee is allowed hereby. *** SRI CHAITANYA EDUCATIONAL COMMITTEE v. COMMISSIONER OF INCOME TAX