IMPORTANT POINTS
In the case of an order passed u/s 12A which is neither executive nor legislative but quasi judicial in nature; section 21 of General Clauses Act would not apply. Therefore in absence of express provision, it could not be cancelled by CIT.
Section 12AA inserted in 2004 gives power to CIT to cancel a registration u/s 12A but prospectively wef 01.10.2004.

JUDGMENT :

Abhay Manohar Sapre, J.

1. This appeal is directed against the final judgment and order dated 14.03.2007 passed by the High Court of Madhya Pradesh at Gwalior in Misc. Appeal(Income Tax) No.6 of 2005 whereby the Division Bench of the High Court allowed the appeal filed by the respondent and set aside the order passed by the ITAT and restored the order of the Commissioner of Income Tax.

2. The question involved in the appeal lies in a narrow compass. Few facts, however, need mention to appreciate the same.

3. The appellant is a limited company registered under the Companies Act. It is a State Government Undertaking which is established with a view to develop and assist the State in the development of industrial growth centers/areas, to promote, encourage and assist the establishment growth and development of industries in the State of M.P. The appellant is an "assesse" under the Income Tax Act, 1961 (hereinafter referred to as “the Act”).

4. On 10.02.1999, the appellant filed an application in the format prescribed under Section 12-A of the Act to the Commissioner of Income Tax (hereinafter referred to as “the CIT”) for grant of registration. According to the appellant, since they were engaged in public utility activity which, according to them, was for a charitable purpose under Section 2(15) of the Act, they were entitled to claim registration as provided under Section 12 (A) of the Act. Since the application for registration was delayed in its filing, the appellant also made an application for condonation of delay in filing the application.

5. By order dated 13.04.1999, the CIT (Gwalior) condoned the delay and granted the registration certificate as prayed for by the appellant. In clause 3 of the registration certificate, it was mentioned that the certificate is granted without prejudice to the examination on merits of the claim of exemption after the return is filed.

6. On 27.11.2000, the CIT issued a show cause notice to the appellant stating therein as to why the registration certificate granted to the appellant by order dated 10.02.1999 under Section 12A of the Act be not cancelled/withdrawn. The show cause notice also set out the factual grounds for the withdrawal of the registration certificate. The appellant was asked to reply the show cause notice. The appellant accordingly filed their reply and opposed the grounds on which the withdrawal/cancellation of the certificate was proposed.

7. By order dated 29.04.2002, the CIT did not find any substance in the stand taken by the appellant in their reply and accordingly cancelled/withdrawn the certificate issued to the appellant.

8. The appellant felt aggrieved and filed rectification application under Section 154 of the Act before the CIT on 04.07.2002 contending therein that the order of the CIT dated 29.04.2002 cancelling/withdrawing the registration certificate contains an error apparent and, therefore, it is required to be rectified or/and recalled. It was contended that once the CIT grants the registration certificate under Section 12A, he has no power to cancel/recall the certificate granted to the Assessee.

9. On 20.12.2002, the CIT rejected the application filed by the appellant for rectification holding that there was no error in his order cancelling the registration certificate granted to the appellant. In other words, the CIT held that he had the power to cancel the certificate once granted by him and, therefore, the order for cancelling the registration certificate is legal and proper.

10. Aggrieved by the said order, the appellant filed an appeal before the Income Tax Appellate Tribunal, Agra Bench. By order dated 26.08.2004, the ITAT allowed the appellant's appeal and set aside the order dated 29.04.2002 passed by the CIT by which he had cancelled/withdrawn the registration certificate.

11. The Revenue felt aggrieved by the order of the ITAT and filed appeal in the High Court at Gwalior Bench under Section 260-A of the Act. The High Court, by impug