S. 254(2B): Even though action of the CIT in canceling registration u/s 12AA(3) is illegal, costs cannot be awarded as the said action is in discharge of duty & not mala fide

Parkar Medical Foundation vs. DCIT (ITAT Pune)

(ii) The CIT has passed the order u/s 12AA(3) of the Act during the course of discharge of her duty as CIT. While discharging her duty, her action might have caused some hardship to the assessee due to error of judgement but that in our opinion does not warrant levy of cost on the department. In Pooran Mal vs. Director 93 ITR 505 (SC), it was noted that s. 132 causes serious invasion of the privacy of a person. Still it was held that even though the innocent is likely to be harassed by a raid for the purpose of search and seizure, that cannot be helped. In the instant case, there is no such action of search and seizure which causes serious invasion in the privacy of the person. The CIT was discharging her quasi-judicial duty. Further, there is nothing on record to suggest that the action of the CIT was mala fide. Therefore, there is no merit in the claim for award of costs for the action of the CIT in cancelling the registration granted earlier u/s 12AA of the Act (UOI vs. Raja Mohammed Amir Mohammad Khan (SC), Urban Improvement Trust, Bikaner vs. Mohanlal (2010) (1 SCC 512) (SC) & Charanjilal Tak Shyam Parwani vs. UOI252 ITR 333 (Raj) distinguished)