Cyriac Joseph, C.J.
1. The petitioner-Welham Boys' School Society-is a society registered under the Societies Registration Act, 1860, and is running a residential school by name Welham Boys School at 5, Circular Road, Dehradun. The petitioner society, was originally registered on September 14, 1957, as Welham Boys Preparatory School Society vide Registration Certificate No. 227/57-58 issued by the Registrar of Societies, Uttar Pradesh. The name was later changed to Welham Boys' School Society.
2. The petitioner has been regularly filing returns under the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). In view of the charitable objects of the petitioner society, it was granted registration Under Section 12AA of the Act. The registration granted to the petitioner society Under Section 12AA of the Act has been continuing in force. By virtue of the registration granted Under Section 12AA of the Act, the petitioner society was entitled to the benefits Under Sections 11 and 12 of the Act. As per Section 11, income derived from property held under trust for charitable or religious purposes was liable to be excluded from the total income of the previous year of the person in receipt of the income. As per Section 12, any voluntary contribution received by a trust created wholly for charitable or religious purposes or by an institution established wholly for charitable or religious purposes shall for the purposes of Section 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section shall apply. As per Section 12A, the provisions of sections 11 and 12 shall not apply in relation to the income of any trust or institution unless the trust or institution is registered Under Section 12AA. Thus, on the basis of the registration granted to the petitioner society Under Section 12AA of the Act, the income derived from any property held under trust by the petitioner society wholly or in part for charitable or religious purposes as well as any voluntary contributions received by the petitioner society were liable to be excluded from the total income of the previous year for the purposes of the income-tax. Admittedly the, petitioner society was being given the benefits of Sections 11 and 12 of the Act.
3. Suddenly, the Commissioner of Income-tax, Dehradun, issued a notice dated March 27, 2002 (annexure 4 to the writ petition), calling upon the petitioner to show cause as to why the registration granted Under Section 12AA be not withdrawn. The said show-cause notice read as follows :
The working of your institution has been reviewed in the light of the provisions of the Income-tax Act, 1961. It appears that the conditions laid down for grant/continuation of registration are not being fulfilled by your institution. Your institution does not appear to be running for a charitable purpose as the same appears to be running for the purpose of profit generating substantial surplus out of the fees, etc., received. While there is no bar in law on running such institutions for the purpose of profit, the concessions available Under Sections 11, 12 etc. can be availed of only if the provisions thereof and conditions for registration Under Section 12A/12AA are strictly fulfilled. From the records it appears that there is no income from property held for charitable purposes but the income is from fees, etc., which is charged for services rendered. Also there appears to be no income from voluntary contributions. Therefore, the institution does not appear to be existing for charitable purpose and therefore, goes outside the purview of Sections 11, 12, 12A and therefore, does not qualify for continuation of registration Under Section 12AA. I therefore, propose to withdraw the registration granted to the institution vide order dated April 10, 1974. Your are hereby allowed to show cause as to why registration granted may not be withdrawn. Your reply may please reach this office within 10 days failing which it will be presumed that the institution has no objection to the withdrawal of registration.
4. In reply to annexure 4 show-cause notice, the petitioner submitted annexure 5 reply dated April 10, 2002, and supplementary reply dated April 22, 2002. In the said reply, the petitioner contended that the petitioner society did not lose its character of a non-profit institution merely because the society had some surplus at the end of the year. According to the petitioner, the entire surplus was credited to the general fund which could be utilised only for the purpose of education and could not be diverted anywhere else. The petitioner asserted that the assessee was a charitable institution existing solely for education and not for the purpose of profits. The petitioner denied the allegation that the income of the institution was not from property held under trust for charitable purposes, but was by way of fees from students. It was contended that income from fees realised by the petitioner from the students was income from property held under trust for charitable purposes. With regard to the allegation that no income was received by way of voluntary contributions, it was stated by the petitioner that the receipt of voluntary contributions was not a pre-condition for grant or continuance of registration Under Section 12AA and that an institution can retain the character of a charitable institution even without receiving voluntary contributions. The petitioner also questioned the power and jurisdiction of the Commissioner of Income-tax to withdraw the registration already granted. According to the petitioner, there was no provision under the Income-tax Act enabling or authorising the Commissioner of Income-tax to withdraw the registration already granted Section 12AA. The petitioner further stated that, in case an institution failed to comply with the requirements as stipulated in law, the only course open to the Income-tax Department was to deny the benefits Under Sections 11 and 12 of the Act at the time of assessment. The petitioner requested the Commissioner of Income-tax to drop the proceedings for withdrawal of the registration, Under Section 12AA.
5. However, as per annexure 6 order dated May 8, 2002, the second respondent (Commissioner of Income-tax) rescinded and withdrew the order granting registration to the petitioner society Under Section 12AA of the Act. In annexure 6 order the second respondent held that the dominant motive of the society was to make profit from the fees collected from the students and that there appeared to be no element of charity in the imparting of education. According to the second respondent, if the students are made to pay more than what is to be spent on them for imparting education, then there is no relief provided and the education imparted is merely a business activity for profit. He also held that no other charitable purpose was being served by the petitioner society by utilising the profits made from the business of imparting education. Purportedly relying on some decisions of the hon'ble Supreme Court, the second respondent held that the Welham Boys School Society was not carrying on any charitable activity and it did not exist for charitable purpose and therefore, it was not entitled to continuation of registration Under Section 12AA. On that basis, the registration granted to the petitioner was rescinded and withdrawn by the second respondent. Though the second respondent noted that there was no provision in the Act for revocation of registration, he overruled the petitioner's objection that he had no power or jurisdiction to withdraw the registration. While overruling the objection, the second respondent observed that even though there was no provision in the Act conferring power on the Commissioner to withdraw the registration, there was also no prohibition in the Act against such exercise of power by the Commissioner and no other authority had been vested with such power. Relying on Section 21 of the General Clauses Act, 1897, the second respondent held that the power to issue registration Under Section 12AA of the Act included the power to rescind the order granting registration.
6. Aggrieved by annexure 6 order passed by the second respondent, the petitioner society has filed this writ petition praying for quashing annexure 6 order and for a direction to the respondents to restore to the petitioner the registration Under Section 12AA of the Act. The petitioner has challenged annexure 6 order on the ground that the second respondent had no power and jurisdiction to withdraw registration as well as on the ground that the reasons stated by the second respondent for withdrawing registration are not factually correct or legally valid. A counter affidavit has been filed on behalf of the respondents justifying and defending annexure 6 order and reiterating the reasons stated in the said order.
7. We have heard Mr. C. Mukund, learned counsel for the petitioner, and Mr. Pitamber Maulekhi, learned counsel for the respondents.
8. The first and the basic question that arises for consideration is whether the petitioner is right in contending that the second respondent-Commissioner of Income-tax had no power and jurisdiction to withdraw the registration granted Under Section 12AA of the Act. If that question is decided in favour of the petitioner, it will be unnecessary to consider the other contentions raised by the petitioner. Hence we shall proceed to consider the contention regarding the power and jurisdiction of the second respondent to withdraw the registration.
9. In the impugned order itself, the second respondent has admitted that there was no provision in the Act conferring power or jurisdiction on the second respondent to withdraw the registration granted Under Section 12AA of the Act or to revoke an order granting such registration. The above position is admitted by learned counsel for the respondents also. However, in the impugned order, the second respondent has taken the stand that even in the absence of such a provision in the Act, review of the activities of such institutions is necessary so as to ensure that such institutions do not become a fraud on the law of the land and do not misuse the benevolent legislation for denying the exchequer its due revenue. It is stated that he carried out such a review and the registration is rescinded and withdrawn since the institution, has miserably failed to show that any charitable activity is being genuinely carried on by it. We cannot approve the above stand of the second respondent. The second respondent is bound to function strictly in accordance with the provisions contained in the Act. Being a statutory functionary, he has no power, jurisdiction or discretion to go beyond the provisions of the statute. He cannot assume any power that is not specifically conferred on him by the statute. If there is any lacuna in the statute or if any amendment is required in the statute for preventing the institutions from misusing the benevolent provisions in the statute, only the Legislature can remedy it and the second respondent cannot assume and exercise any power or jurisdiction which has not been conferred on him. Therefore, the petitioner is right in contending that on the basis of the alleged review of the activities of the petitioner society, the second respondent could not have withdrawn the registration Under Section 12AA of the Act even if it was for ensuring that such institutions did not become a fraud on the law of the land and misuse the benevolent legislation. As rightly pointed out by the petitioner, even if the petitioner society was found to be not carrying on any charitable activity, the second respondent could only deny the benefits of Sections 11 and 12 of the Act to the petitioner society at the time of assessment.
10. Faced with the above position, learned counsel for the respondents contended that though there was no specific provision in the Act conferring the power to withdraw or revoke a registration already granted Under Section 12AA, the authority granting such registration had inherent power to withdraw or revoke the registration. This contention is only to be rejected, as it has no legal basis. If the authority granting registration had such inherent power, there was no necessity to amend Section 12AA for incorporating Sub-section (3) which reads as follows :
3. Where a trust or an institution has been granted registration under clause (b) of Sub-section (1) and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution :Provided that no order under this Sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard.
11. Sub-section (3) was incorporated in Section 12AA only with effect from October 1, 2004. The impugned order (annexure 6) was passed on May 8, 2002. Thus at the time of passing annexure 6 order, the second respondent did not have the power which was subsequently conferred on him by Sub-section (3) of Section 12AA. Therefore, prior to October 1, 2004, the authority granting registration Under Section 12AA had no inherent power to withdraw or revoke the registration already granted. However, learned counsel for the respondents submitted that the object of incorporating Sub-section (3) of Section 12AA was not to confer a new power on the Commissioner, but to clarify a power which was already in existence. This contention also is devoid of merit. If the object of Sub-section (3) of Section 12AA was only to clarify a power which was already in existence, the amendment inserting Sub-section (3) would have been brought into force immediately. On the contrary, in clause (6) of the Finance (No. 2) Bill, 2004, introduced in the Lok Sabha on July 8, 2004, it was clearly stated that in Section 12AA of the Income-tax Act, after Sub-section (2) Sub-section (3) shall be inserted with effect from the first day of October, 2004. The very fact that Sub-section (3) was inserted in Section 12AA with effect from a future date shows that the object of inserting Sub-section (3) was not clari-ficatory or explanatory and that it was to confer on the Commissioner a power which did not exist till then. Therefore, the petitioner's contention that prior to October 1, 2004, the Commissioner had no power to withdraw or revoke the registration already granted Under Section 12AA of the Act has to be upheld.
12. Learned counsel for the respondents then submitted that in view of Section 21 of the General Clauses Act, 1897, the Commissioner of Income-tax who issued the order granting registration Under Section 12AA has the power to rescind or revoke the said order. In our view, this contention also is liable to be rejected. Section 21 of the General Clauses Act, 1897 reads thus :
21. Power to issue, to include power to add to, amend, vary or rescind, notifications, orders, rules or bye-laws.- Where, by any Central Act or Regulation, a power to issue notifications, orders, rules or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction, and conditions (if any), to add to, amend, vary or rescind any notifications, orders, rules or bye-laws so issued.
13. Admittedly, what is rescinded by the Commissioner as per annexure 6 order is not any notification, rule or bye-law. What is rescinded is a quasi-judicial order which had been passed by the Commissioner of Income-tax Under Section 12A of the Act. Such a quasi-judicial order does not fall in the category of 'orders' mentioned in Section 21 of the General Clauses Act, 1897. In Ghaurul Hasan v. State of Rajasthan reported in AIR 1967 SC 107, a Constitution Bench of the hon'ble Supreme Court considered whether apart from the power Under Section 10(2) of the Citizenship Act, the Collector having power to grant the registration certificate under the Citizenship Act, had the power to cancel it by virtue of Section 21 of the General Clauses Act. The hon'ble Supreme Court rejected the contention that by virtue of Section 21 of the General Clauses Act the Collector had such power. According to the hon'ble Supreme Court, the orders mentioned in Section 21 of the General Clauses Act are not orders of the kind contemplated in Section 5 of the Citizenship Act. In Mukand Iron and Steel Works Limited v. V. G. Deshpande reported in [1986] 69 FJR 280 ; [1986] Lab IC 1612, the High Court of Bombay has held that Section 21 of the General Clauses Act applies only to notifications, orders, rules or bye-laws of general application made under enactments and in the manner of subordinate legislation and that it has no application to an order such as the order passed by the Registrar of Trade Unions to cover a specific case. In Indian National Congress (I) v. Institute of Social Welfare reported in [2002] 5 SCC 685, the hon'ble Supreme Court has held that Section 21 of the General Clauses Act has no application where a statutory authority is required to act quasi-judicially. Even learned counsel for the respondents did not dispute that while granting the registration Under Section 12AA, the Commissioner of Income-tax, a statutory authority, was exercising a quasi-judicial power. In the light of the above judicial pronouncements, we have no hesitation to hold that by virtue of Section 21 of the General Clauses Act, the second respondent Commissioner of Income-tax had no power to rescind the order passed earlier by the Commissioner granting registration to the petitioner society.
14. However, learned counsel for the respondents pointed out that in Indian National Congress (I) v. Institute of Social Welfare reported in [2002] 5 SCC 685 the hon'ble Supreme Court has also pointed out that there are exceptions to the principle that the Election Commission had no power to review the order registering a political party for having violated the provisions of the Constitution or for having committed the breach of undertaking given to the Election Commission at the time of registration. The exceptions mentioned by the hon'ble Supreme Court are :
(a) where a political party has obtained registration by practising fraud or forgery;
(b) where a registered political party amends its nomenclature of association, rules and regulations abrogating therein conforming to the provisions of Section 29A(5) of the Representation of the Peoples Act or intimating the Election Commission that it has ceased to have faith and allegiance to the Constitution of India or to the principles of socialism, secularism and democracy or it would not uphold the sovereignty, unity and integrity of India so as to comply with the provisions of Section 29A(5) of the Act; and
(c) any like ground where no enquiry is called for on the part of the Commission.
15. Relying on the above observations of the hon'ble Supreme Court, 15 learned counsel for the respondents contended that even in the absence of specific power conferred by the statute, the Commissioner of Income-tax had power to rescind the order granting registration Under Section 12AA of the Act, if such registration was obtained by practising fraud or forgery. Even assuming that the Commissioner has power to rescind the order of registration on the ground that registration was obtained by practising fraud or forgery, in this case, either in the show-cause notice or in the impugned order, the second respondent has not alleged that the petitioner had obtained the registration by practising fraud or forgery.
16. Learned counsel for the respondents also contended that this writ petition is not maintainable for the reason that the petitioner has not exhausted the alternate remedy of filing an appeal Under Section 253(1)(c) of the Act against the impugned order. The availability of an alternate remedy does not operate as a bar against the exercise of jurisdiction under article 226 of the Constitution of India. Moreover, if the impugned order is an order passed without power and jurisdiction, the aggrieved person is entitled to invoke the jurisdiction of the High Court under article 226 of the Constitution of India without exhausting the alternate remedy. The order impugned in this petition is an order passed by the second respondent without power and jurisdiction and therefore, the petitioner was entitled to approach this court under article 226 of the Constitution of India for quashing the said order without exhausting any alternate remedy of filing appeal. Hence, we reject the contention of learned counsel for the respondents that the writ petition is not maintainable for the reason that the petitioner has not exhausted the alternate remedy of filing appeal before the Tribunal against the impugned order.
17. In the light of the discussion above, we hold that annexure 6 order was passed by the second respondent without power and jurisdiction and therefore, it is liable to be quashed. Accordingly, annexure 6 order dated May 8, 2002, passed by the second respondent withdrawing/rescinding the order granting registration to the petitioner society Under Section 12AA of the Income-tax Act, 1961, is quashed. Consequently, the registration granted to the petitioner society Under Section 12AA of the Income-tax Act, 1961, stands restored.
18. In view of the quashing of the impugned order on the ground of lack of power and jurisdiction, we find it unnecessary to consider the other contentions raised by the petitioner for challenging the impugned order.
19. The writ petition is allowed as above. There will be no order as to costs.