JUDGMENT
Arun Mishra, J.
1. The petitioner is assailing the issuance of show-cause notice as to why registration be not cancelled under the provisions of Section 12A read with Section 12AA of the Income-tax Act, 1961. The petitioner was granted registration as charitable institution. The petitioner is an undertaking of the State of Madhya Pradesh According to the petitioner, it is undertaking charitable activities in the very nature which are defined in Section 2(15) of the Income-tax Act, 1961.
2. The petitioner submits that this question was adjudicated by the Income-tax Department whether the petitioner can avail of such an exemption ; considering the nature of the activities while passing the assessment order for the year 1994-95, an order was passed by the Income-tax Appellate Tribunal, Indore Bench, Indore (annexure P/5), in which the view was taken that till registration stands, the authorities are bound by it and cannot take a different view as to the nature of the activities. On the facts also an examination appears to have been made of the expression “any other object of general public utility” and it was found that it is difficult to hold that the object of the assessee/institution was not for general public utility. The petitioner submits that once this finding was recorded by the Income-tax Appellate Tribunal, it was not open to issue a show-cause notice annexure P/4 which was issued on January 23, 2002, by the Government of India, Ministry of Finance (Department of Revenue), office of the Commissioner of Income-tax, Bhopal, it is quoted below :
“Sub : Show-cause notice for cancellation/withdrawal of registration under Section 12A read with Section 12AA of the Income-tax Act, 1961 –regarding.
You had applied for registration under Section 12A of the Income-tax Act, 1961, vide your application dated March 27, 1985. This application was entered at serial No. Regn./BPL/3 of 1985-86 in the register of applications under Section 12A(a). The certificate of registration was forwarded to you vide this office endorsement F. No. Regn/BPL/3 of 1985-86 of dated January 29, 1986.
2. From the material on record it emerges that you are engaged in the following activities : —
(i) publication and sale of weekly magazine Rozgar and Nirman ;
(ii) production documentary films, TV reports, etc., for the State Government Departments and public sector undertakings ;
(iii) acting as advertising agency for the State Government Departments and public sector undertakings for publication of their advertisements in the newspapers.
The State Government Departments and public sector undertakings pay commission to you besides reimbursing the actual expenditure incurred by you for providing the above services as per bills raised by you.
3. The above activities are clearly in the nature of commercial activities intended to earn profit and, therefore, you were/are not entitled for registration under Section 12A of the Income-tax Act, 1961. Your claim before the authorities below that you are like a State Government Department is also not correct because you are registered as a society under the Madhya Pradesh Societies Registration Act, 1973, and, therefore, you are an independent entity covered within the definition of ‘person’ in terms of the provisions of Section 2(31) of the Income-tax Act, 1961. In the circumstances, I propose to cancel the registration under Section 12A of the Income-tax Act, 1961, granted to you on January 29, 1986.
4. In case, you have any objection to the proposed action, you may kindly file such objections before me at 3 p.m. on January 31, 2002, either personally or through a duly authorised representative. In case, no objections are received on the aforesaid date, it shall be presumed that you have nothing to say in this matter and the decision in this regard will be taken on merits.”
3. Learned counsel for the petitioner, Shri B. L. Nema, strenuously submits that for the last 16 years benefit has been enjoyed and once the Appellate Tribunal has found that the activities are of general public utility, no show-cause notice could be issued by the Commissioner of Income-tax, Bhopal.
4. After hearing learned counsel and perusing the documents on record, I am of the opinion that the scope of the proceedings of registration and its cancellation is different than the assessment proceedings. The income-tax authorities are bound by registration, once they have registered an institution as charitable one they cannot go behind the registration in assessment proceedings. They are prima facie bound by such a registration which was also the view taken by the Income-tax Appellate Tribunal. The right to conduct the proceedings of cancellation in accordance with law cannot be denied to the respondent/Department.
5.
It is simply a case of issuance of show-cause notice. It is open to the petitioner to file reply to the show cause against the proposed action before the Commissioner of Income-tax, Bhopal. It cannot be said that issuance of show-cause notice is without jurisdiction as such I am not inclined to interfere at this stage of the proceedings in the writ jurisdiction of this court.
6. The writ petition is dismissed with the aforesaid observations.