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Income Tax Appellate Tribunal, JAIPUR BENCHES (SMC
Before: SHRI RAMESH C SHARMAvk;dj vihy la-@ITA No. 476/JP/2017
2 ITA 476 and 861/JP/2017 & 149/Jodh/2017 Evergreen Sewa Samiti Vs ITO vkns'k@ ORDER PER: R.C. SHARMA, A.M. These are the appeals filed by the assessee against the separate orders of the ld.CIT(A), Ajmer dated 15/03/2017, 07/09/2017 and 25/01/2017 respectively for the A.Y. 2008-09, 2009-10 and 2012-13 in the matter order passed U/s 147/143(3) of the Income Tax Act, 1961 (in short the Act).
2. Common grounds have been taken by the assessee in all these appeals. In the appeal for the A.Y. 2008-09, the assessee has taken following grounds: “
1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in confirming the disallowance of deduction claimed U/s 11 of the Income Tax Act, 1961 on the basis of the fact that the registration certificate u/s 12AA of the Act was not granted by the then competent authority, without appreciating the fact that the application for registration U/s 12AA of the IT Act, 1961 was filed on 27/12/2005 and the then CIT did not pass the order granting or refusing registration of trust within the period laid down in Section 12AA(2) of the IT Act, 1961. Total addition of Rs. 2,74,070/- as made by the A.O. on account of disallowance of deductions claimed U/s 11 of the Act and subsequently confirmed by the ld. CIT(A) may kindly be quashed to Rs. Nil by you kind honour and relief to be provided.
2. The assessee craves leave to amend, modify, or alter the ground of appeal on or before the time of hearing and reserve the right to submit more details, documents, information in subject matter.”
3 ITA 476 and 861/JP/2017 & 149/Jodh/2017 Evergreen Sewa Samiti Vs ITO
Rival contentions have been heard and record perused. Facts in brief are that the assessee is a Sewa Samiti (Registered Society) registered under the societies registration Act, 1958 vide No. 99/Bhilwara/2001-02 dated 29.11.2001 with the following objectives:- a. Development of children by the education and the use of new methods of education by keeping in view the present situation of education. b. Arrangement of the education and maintenance of the poor/needy children’s and organizing the literary, cultural and sports programs for the Children’s. c. To make the children’s faithful towards Indian culture and social order and to develop the spirit of national integration. d. Arranging the physical education for children and increase their interest in sports activities. e. Running of hostels, library and reading room for inculcating the good conduct in the students. f. Running the physical and cultural activities for students.
The assessee filed its return after claiming exemption U/s 11 of the Act. However, the A.O. has denied the same by observing as under:
“3. During the year under consideration the assessee has shown its income running an educational institution in the name & style of ‘Evergreen Public School’. On examination of the details and documents furnished by the assessee alongwith the return of income and thereafter during 4 ITA 476 and 861/JP/2017 & 149/Jodh/2017 Evergreen Sewa Samiti Vs ITO the course of assessment proceedings, the A.R of the assessee was asked to submit the copy of the certificate of registration u/s 12AA of the Income Tax Act, 1961, however, he submitted in writing that the assessee had applied for registration u/s 12AA vide application dated 27/12/2005 before the Commissioner of Income Tax, Ajmer, however the 12AA certificate was not received not was the rejection letter received.
The A.R further submitted that since the rejection letter was not received, it was a case of deemed registration, furthermore the assessee may be allowed the exemption u/s 10(23)C(iii)(ad) of the Income Tax Act 1961 as for it no registration is required and the receipts of the assessee are below one crore. The A.R further submitted that the assessee has been granted registration u/s 10(23)C (vi) of the Income Tax Act 1961 vide the order no. 3760 dated 26/3/2014 of the Worthy Chief Commissioner of Income Tax, Udaipur where at the time of granting the certificate the worthiness of the assessee society had been examined. When the certificate has been issued it is proven fact that the assessee society is not being run for the purpose of profit.
The submission of the A.R has been considered but not accepted. The assessee has been claiming exemption u/s 11 and not u/s 10(23)C(iii) (ad) as is being sought now. The Honourable Apex Court in the case of Goetz(I) ltd 284 ITR 323(SC) (2006) has held that an assessee cannot amend a return filed by him for making a claim for deduction other than by filing a revised return. Since the assessee has not laid the claim through the revised return, nor has it made the claim even while filing the return of Income in response to notice u/s 148, hence the claim for claiming exemption u/s 10(23)(iii) (ad) cannot be entertained.
5 ITA 476 and 861/JP/2017 & 149/Jodh/2017 Evergreen Sewa Samiti Vs ITO As regards the deemed registration in absence of non-conveyance of rejection letter reliance is placed on the decision of the Various courts as under:
1 CIT V/s Seela Christian Charitable trust (2013) 354 ITR 478(Mad)
2 Srikhetra A.C Bhakti Vedanta swami Charitable trust v/s Asst. CIT(2006)20 LR 75 3 CIT v/s Muzufar Nagar Development Authority (2015) 372 ITR 0209(All)(FB)
In the above decisions the Honourable courts have held that the time limit which is granted by the statute is normally not mandatory but is directory in the absence of any clear statutory intent to the contrary, hence when the application is not disposed off within six months, it does not mean that the assessee has been granted deemed registration.”
In view of the above discussion, the assessee’s exemption U/s 11 of the Act was declined. By the impugned order, the ld. CIT(A) confirmed the action of the A.O., against which, the assessee is in further appeals before the ITAT.
I have heard the rival contentions and carefully gone through the orders of the authorities below. From the record I found that the assessee had applied for the registration before the then Commissioner of Income-tax, Ajmer under the prescribed form No. 10A. Thereafter the assessee was served a notice by the Income-tax Officer Ward – 1 for 6 ITA 476 and 861/JP/2017 & 149/Jodh/2017 Evergreen Sewa Samiti Vs ITO submitting the details required therein for registration in response to which the assessee submitted the details vide letter receipted on 17th January, 2006. Thereafter no notice / letter was received by the assessee and the assessee kept on filing the returns of income-tax as and when due and claiming exemptions under section 12AA under the bonafide belief that the assessee had been granted exemption under section 12AA. The assessee society was thereafter served with the notice under section 143(2) for assessment proceedings being initiated in respect of the assessment year 2012-13. The assessee, in response to notice under section 143(2) for assessment year 2012-12 has submitted the details as required and in response to the query of exemption it was submitted as under:-
“ 1. The assessee is society registered under Rajasthan Society Registration Act, 1958 & has got Registration Certificate vide No. 99 dated 29/11/2001 issued by Registrar-Society, Bhilwara. The assessee society providing the primary & secondary education to the students and organizing various cultural programs & sports activities for overall development of the students. The assessee society has applied for registration u/s 12AA of the I.T. Act 1961 vides application dated 27/11/2005, however, the assessee has neither received any registration certificate issued u/s 12AA of the I.T. Act 1961 nor any refusal letter of our application from the department till date. (Copy of Proof of submission of application for registration u/s 12AA of the I.T. Act 1961 & copy of registration certificate under Rajasthan Society Registration Act, 1958 were filed before the A.O.
Non receipt of refusal of the application from the department with in a prescribed period of 6 months from the date of application tantamount to 7 ITA 476 and 861/JP/2017 & 149/Jodh/2017 Evergreen Sewa Samiti Vs ITO deemed registration of the society u/s 12AA of the I.T. Act 1961. The same has been decided in various cases before the Hon’ble ITAT/High Courts.
Rev Father Trust Oscar Colasco Memorial Medical association V CIT (2009) 31 SOT 1 (Mum.) 2. Sardar iLal Oberai Memorial Charitable Trust v. ITO (2005) 3 SOT 229 (Delhi) We, therefore, request you to kindly check the relevant records at your end and provide us the copy of registration certificate issued u/s 12AA of the I.T. Act 1961.”
From the record, I found that the assessee had also filed an application under CPGRAM in response to which the it was replied by the Commissioner of Income-tax (Exemptions) as under:-
On examination of the records available with this office it is found that your application was filed before CIT, Ajmer on 27.12.2005 and this office has been created w.e.f. 15.11.2014 and the limitation period of six months has already elapsed, therefore no action can be taken by this office at this point of time.
It is clear from the above letter that the ld. CIT(Exemptions) had accepted the fact of receipt of application for registration on 27/12/2005. Since there is no denial by the department within six months, the assessee was deemingly granted registration by virtue of application under section 12AA not being rejected within the stipulated time period of six months from the date of filing the application for registration. Nowhere, there is any adverse observation of the A.O. and the ld. CIT(A) to the effect that the assessee was not following the object of the society and the assessee is not a charitable institution.
8 ITA 476 and 861/JP/2017 & 149/Jodh/2017 Evergreen Sewa Samiti Vs ITO 9. The Hon’ble Allahabad High Court in the case of Society for The Promotion of Education Adventure Sport & Conservation of Environment Vs CIT & ors. (2015) 372 ITR 222 had held as under:
The effect of non-consideration of the application for registration within time fixed by section 12AA(2) would be a deemed grant of registration. There is no good reason to make assessee suffer merely because the Department is not able to keep its officers under check and control. Therefore, the department is directed to pass order under section 12AA(3) to treat assessee duly registered under section 12AA.
The Hon’ble Supreme Court in the case of CIT, Kanpur Vs Society for Promn. of Edn., Allahabad (2016) 67 taxmann.com 264 (SC) has held as under:
Section 12A, read with section 12AA of the Income-tax Act, 1961 - Charitable or religious trust - Registration of (Deemed registration) - Whether where assessee-society filed an application under section 12A for grant of registration on 24-2-2003 and same was not responded to within six months, registration of application was to be deemed to have taken effect from 24-8- 2003 - Held, yes.
Respectfully following the decisions of the Hon’ble Supreme Court and the Hon’ble High Court, I do not find any merit in the action of the lower authorities for denial of claim of exemption U/s 11 of the Act. In the substantial interest of justice, I restore the matter back to the file of 9 ITA 476 and 861/JP/2017 & 149/Jodh/2017 Evergreen Sewa Samiti Vs ITO the A.O. for deciding afresh after taking into account the fact that the assessee has been granted registration U/s 12AA of the Act.
In the result, all the three appeals of the assessee are allowed for statistical purposes in terms indicated hereinabove.
Order pronounced in the open court on 25/04/2019.
Sd/- ¼jes'k lh 'kekZ½ (RAMESH C SHARMA) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 25th April, 2019 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Evergreen Sewa Samiti, Bhilwara, 1. Rajasthan. izR;FkhZ@ The Respondent- The I.T.O. (Exemptions) Ajmer. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 476 and 861/JP/2017 & 6. 149/Jodh/2017) vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत