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Income Tax Appellate Tribunal, “B” BENCH, CHENNAI
Before: HON’BLE SHRI V. DURGA RAO, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आयकर अपीलीय अिधकरण “बी” �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHENNAI माननीय �ी वी. दुगा� राव, �ाियक सद! एवं माननीय �ी मनोज कुमार अ&वाल ,लेखा सद! के सम)। BEFORE HON’BLE SHRI V. DURGA RAO, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ (िनधा�रण वष� / Assessment Year: 2018-19) M/s. Sambaviga Educational Trust CIT (Exemptions) बनाम Sambaviga Higher Secondary School, Chennai. / Vs. Rahinipatti, Sivagangai-630 561. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAJTS-5793-D (अपीलाथ�/Appellant) : (!"थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri Sendamarai Kannan, (Advocate)-Ld.AR !"थ�कीओरसे/Respondent by : Shri S.Senthil Kumaran (CIT)- Ld.DR सुनवाईकीतारीख/Date of Hearing : 25-07-2023 घोषणाकीतारीख /Date of Pronouncement : 27-07-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. The sole issue in the captioned appeal is assessee’s registration u/s 12AA of the Act. The appeal is in second round of appeal before us since the matter, in the first round, was remitted back by the Tribunal vide dated 16.02.2022 as under: - 10. We heard both the parties. The assessee, trust is running the schools and the main object of the assessee is running the educational institution. The identification of the trust is not in question. The activity of the trust is running the school. But the Ld. CIT(E) rejected the application on a ground that the genuineness of the charitable trust is under question. But the Ld. CIT(E) has not pointed out on what material it came to a conclusion that genuineness of the charitable trust is in question.
10.1 Section 12AA of the Act mostly focused on the two issues (i) the genuinity of the trust (ii) the activity of the trust is similar with the main object of the trust as discussed above. The assessee in its paper book has annexed the approval of Tamil Nadu School Education under Govt of Tamil Nadu which was granted by the Additional Directorate (Higher Secondary Tamil Nadu School Education). The Nursery, Primary and Higher Secondary schools are running under the Trust. Mere, application was made after survey or earlier the fees were collected by the secretary of the trust should not be the reason for rejecting application made U/s 12AA of the Act. The ld CIT(E) correctly pointed out that the assessee had the lack of genuinity. But it was before the application of registration. But after the application made U/s 12AA of the Act, no such irregularities were found out by the revenue authority. The different financial statements are filed with the paper book and the trust invested in fixed assets for running the institutions. The Income Tax assessments of the assessee were made by the revenue in different years. The copies of the orders are annexed in Paper Book-5 of assessee in page no 1-236. It is very clear from the assessment orders that the existence, activity & genuinity are not in question.
Considering, our above observation & ratio of judgments, the application filed by the assessee Trust for grant of registration under Sec. 12AA of the IT Act is restored to the file of the CIT(E) for fresh adjudication in terms of our aforesaid observations.
In the result, the appeal of the assessee is allowed under statistical purpose.
Pursuant to aforesaid directions, Ld. CIT(E) has granted registration to the assessee w.e..f. AY 2019-20 by observing as under: -
To comply with the directions of the Hon'ble ITAT, a hearing notice was sent to the assessee on 16.11.2022, requesting for details in support of its claim. The Authorised Representative for the assessee appeared on 01.12.2022 and submitted documents in support of the claim of the assessee trust. Further details were called for vide hearing notice 28.12.2022 and the same were submitted by the assessee vide its letter dt.03.01.2023. Subsequently, the Authorised Representative for the assessee also attended a hearing in person on 09.01.2023 and explained the assesee's case. The documents submitted by the assessee have been carefully examined.
As per the findings of the Hon'ble ITAT, the assessee had the lack of genuineness before the date of application for registration u/s.12AA of the Act i.e. before 26.12.2017 and the irregularities before this period have been covered by Survey action u/s.133A of the Act on 21.11.2017. Income detected during the course of survey have been duly brought to tax protectively in the hands of Shri A.M. Sekar. Further, assessments in the case of assessee trust i.e. 'Sambaviga Educational Trust' have been completed treating the assessee as AOP, in the absence of registration u/s.12AA of the Act, from the A.Ys. 2013-14 to 2018-19 (period upto the date of survey i.e. 21.11.2017), as verified from records. 6.Further, the Hon'ble ITAT in its Order, in dated 16.03.2022 has observed and confirmed that "Para 10.1 The Ld.CIT(E) correctly pointed out the assessee had the lack of genuinity. But it was before the application of registration."
Thus, the assessee is eligible for obtaining registration u/s.12AA of the Act from the date of application of registration 26.12.2017. Further, as per the relevant provisions of Sec.12A of the Act, the assessee is eligible for registration u/s.12AA of the Act from the first day of the Assessment Year relevant to the period in which the application is made. Thus, in this case, though the assessee is eligible for registration u/s.12AA of the Act from the A.Y. 2018-19, the same cannot be granted from the A.Y.2018-19, since the date of survey 21.11.2017 falls in the relevant period where there was lack of genuinity as per the findings of the Hon'ble ITAT, in its order dated 16.03.2022.
Accordingly, considering the action taken by the Department subsequent to survey action as discussed in para (5) above and after careful examination of the submissions made by the assesses on 01.12.2022 & 03.01.2023, the assessee's application in Form No.1 0A for registration u/s.12AA of the Act filed on 26.12.2017 is considered and the assesses-trust is granted registration u/s.12AA of the Act from the A.Y.2019-20 onwards, as the assesses had lack of genuinity till the A.Y.2018-19, as per the findings of the Hon'ble ITAT.
In view of the above, the direction of the Hon'ble ITAT vide Order in dated 16.03.2022, has been complied with.
Still aggrieved, the assessee is in further appeal before us.
We find that the assessee filed application for registration on 26.12.2017. The assessee was subjected to survey u/s 133A on 21.11.2017 wherein certain irregularities were noted. Accordingly, registration was rejected. The Tribunal held that the assessee lacked genuineness before the date of application for registration u/s.12AA i.e., before 26.12.2017. Considering the same, Ld. CIT(E) granted registration from AY 2019-20 onwards. Since the action of Ld. CIT(E) is in accordance with the observations of Tribunal, no interference is called for in the same.
4. The appeal stand dismissed. Order pronounced on 27th July, 2023