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Facts
The assessee's initial application for Section 12A/12AA registration was rejected, but a fresh application filed on 17.04.2019 was subsequently granted on 14.10.2019. For Assessment Year 2019-20, the CPC denied benefits under Sections 11 and 12, arguing registration was effective from AY 2020-21, but the CIT(A) allowed the claim. The Revenue appealed the CIT(A)'s decision to the ITAT.
Held
The Tribunal upheld the CIT(A)'s decision, relying on the proviso to Section 12A(2) of the Act. It affirmed that if registration is granted and assessment proceedings are pending for a preceding assessment year with consistent objectives and activities, benefits of Sections 11 and 12 apply. Since the assessee's registration was granted on 14.10.2019 and proceedings u/s 143(1) for AY 2019-20 were pending, the assessee was eligible for the benefits.
Key Issues
Whether the benefits under Sections 11 and 12 of the Income-tax Act, 1961, are applicable for Assessment Year 2019-20, given that the assessee's Section 12A/12AA registration was granted on 14.10.2019, but assessment proceedings for the said AY were pending.
Sections Cited
11, 12, 12A, 12AA, 12A(2), 12M, 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘B’: NEW DELHI
(Assessment Year: 2019-20) DCIT, Exemption Circle, vs. Central Footwear Training Institute, Ghaziabad. C – 41 and 42, Site Industrial Area Sikandra, Agra – 282 007 (Uttar Pradesh). (PAN : AACAC4416H) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Mukesh Upadhyay, Office Superintendent REVENUE BY : Ms. Pooja Swaroop, CIT DR Date of Hearing : 25.06.2025 Date of Order : 25.06.2025 O R D E R
PER S.RIFAUR RAHMAN, ACCOUNTANT MEMBER :
This appeal is filed by the assessee against the order of ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT (A)] dated 09.06.2023 for Assessment Year 2019-20.
At the time of hearing, ld. DR of the Revenue brought to our notice that assessee has applied for registration under section 12A/12AA of the Income- tax Act, 1961 (for short ‘the Act’) and the same was granted vide order dated 14.10.2019, therefore, the assessee is eligible to claim the benefit under section 11 and 12 of the Act from AY 2020-21. He submitted that the assessee has filed its return of income and in proceedings u/s 143(1), the CPC has issued the notice u/s 143(1) and rightly denied the benefit u/s 11 and 12 of the Act and further he brought to our notice page 10 of the First Appellate Order wherein ld. CIT (A) has allowed the claim of the assessee. Accordingly, he prayed that the assessee does not have a valid registration certificate u/s 12A/12AA for AY 2019-20 as the registration was rejected and prayed that the benefit granted by the ld. CIT (A) may be rejected.
On the other hand, ld. AR of the assessee submitted that the ld. DR raised two issues as under :- “1. That the Registration under section 12A / 12AA of the assessee for AY 2018-19 i.e. the year in question was rejected vide order dated 24.10.2018. and 2. The registration under section 12A / 12AA produced before CIT(A) (refer PB 21 to 23) is applicable from A.Y. 20-21 only Incidentally both the aforementioned issues have been adequately dealt with in the appellate order passed by Ld. CIT (Appeals). In this regard the reply of the assessee is as under-
1. 1. Regarding registration u/s 12A / 12AA – The assessee holds valid registration certificate u/s 12aa and is given at PB 21 to 23. Hence the allegation of the Ld. DCIT that the assessee does not hold the valid registration certificate is erroneous on the face of record.
2. Registration u/s 12A / 12AA is valid for the A.Y. 2019-20 – The allegation of the appellant that the registration under section 12AA is only applicable from A.Y. 2020-21 and not A.Y. 2019-20 is not correct in light of the provisions contained in section 12A (2) which are reproduced as under- "Where an application has been made on or after the 15t day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the Assessment Year immediately following the Financial Year in which such application is made; Provided that where registration has been granted to the trust or institution under section 12M, then, the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the Assessing Officer as on the date of such registration and the objects and activity of such trust or institution remain the same for such preceding assessment year." Hence the ground raised by the appellant is not in accordance with the provisions of the Act.”
Considered the rival submissions and material placed on record. We observe that the assessee has applied for registration u/s 12A/12AA on 30.04.2018 which was rejected by order dated 24.10.2018. Subsequently, assessee preferred an appeal before the ITAT, Agra Bench and the matter was remanded back to the ld. CIT (E). However, in the meantime, assessee applied for registration afresh u/s 12A/12AA dated 17.04.2019 and the same was granted vide order dated 14.10.2019. Since the assessee got the registration u/s 12AA, as per the provisions of section 12A sub-section (2), as per which provisions of section 11 and 12 shall apply in relation with the income from the assessment year immediately following the financial year in which second application is made. As per the proviso to above section, any proceedings are pending before the Assessing Officer as on the date of such registration and the objectives and activities of the Trust remain the same for such preceding assessment year, the assessee is eligible to claim the benefit u/s 11 and 12 of the Act. Therefore, in the present case, assessee has received the registration granted vide order dated 14.10.2019 and the proceedings were pending before the Assessing Officer u/s 143(1), therefore, assessee is eligible to claim the benefit u/s 11 and 12 of the Act. Accordingly, ld. CIT(A) has rightly applied the provisions of the Act and we do not see any reason to disturb the findings of the ld. CIT (A).
In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open court on this 25th day of June, 2025 after the conclusion of the hearing.