M.P.SHAH MEDICAL COLLEGE DEVELOPMENT SOCIETY,JAMNAGAR vs. INCOME TAX OFFICER EXEMPTION WARD 2, RAJKOT

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ITA 619/RJT/2026Status: DisposedITAT Rajkot23 July 2026AY 2021-224 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the issues of subsequent registration and correct income computation require examination by the Assessing Officer. The matter was restored to the AO for a fresh decision after verifying contentions.

What were the facts?

The assessee claimed exemption under Section 11 but was denied as it had not obtained registration under the amended Section 12AB. The assessee argued that even without exemption, income should be computed normally, not taxed as gross receipts by CPC.

What were the issues?

Whether the CPC was justified in denying exemption and taxing gross receipts under Section 143(1) when registration under Section 12AB was pending. Whether the income should be computed under normal provisions if exemption is denied.

Which sections of the Income-tax Act were involved?

Section 11,Section 12AB,Section 143(1),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Shri Sonjoy Sarma

For Appellant: Shri Sagar Shah, Ld. AR
For Respondent: Shri Ganesh Iyer, Ld. Sr. DR
Hearing: 15/07/2026Pronounced: 23/07/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Shri Sonjoy Sarma, Judicial Member

आयकर अपील सं./ITA No. 619/RJT/2026 [ �नधा�रण वष�/Assessment Year: 2021-22 ] M.P.Shah Medical College Income Tax Officer (Exemption) Development Society Ward 2, Vs. G.G. Hospital Road, M.P. Shah Income Tax-Office, New Aayakar Medical College, Jamnagar-361001, Bhawan, Vatiaka, Rajkot-360001 Gujarat Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AACAM9743M (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri Sagar Shah, Ld. AR Respondent by : Shri Ganesh Iyer, Ld. Sr. DR Date of Hearing : 15/07/2026 Date of Pronouncement : 23/07/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2021-22, is directed against the order under section 250 of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] passed by the Commissioner of Income Tax(Appeal) [hereinafter referred to as ‘Ld.CIT(A)’], dated 30.01.2026, which in turn arises out of an order passed by assessing officer u/s. 154 of the Act, dated 07.03.2023.

2.

The brief facts of the case are that the assessee, M.P Shah Medical College Development Society, filed its return of income for the assessment year under

ITA No. 619/RJT/2026 M. P. Shah Medical Collage Development Society consideration. The return was processed under section 143(1) of the Act by CPC, Bengaluru, wherein the exemption claimed under section 11 of the Act was denied on the ground that the assessee had not obtained registration/approval under the amended provisions of the Act, namely section 12AB, as introduced by the Finance Act, 2020. Aggrieved by the intimation issued under section 143(1), the assessee filed an application under section 154 before the CPC contending that the denial of exemption was a mistake apparent from the record. However, the CPC rejected the rectification application holding that the assessee had not obtained registration under section 12AB nor filed Form No. 10AB within the prescribed time and, therefore, was not eligible for exemption under section 11 of the Act.

3.

The assessee carried the matter in appeal before the learned Commissioner of Income-tax (Appeals), who confirmed the action of the CPC.

4.

Aggrieved, the assessee has preferred the present appeal before the Tribunal. There is a delay of 21 days in filing the present appeal. Having considered the reasons stated in the application for condonation of delay and being satisfied that sufficient cause prevented the assessee from filing the appeal within the prescribed period, the delay of 21 days is condoned and the appeal is admitted for adjudication.

5.

At the time of hearing the Ld. AR submitted that the assessee is an Association of Persons (AOP) engaged in charitable activities. It was contended that although the renewal of registration under section 12AB could not be obtained during the relevant previous year, the assessee subsequently obtained registration on 24.04.2023. It was further argued that even if exemption under section 11 of the Act was not available for the year under consideration, the CPC was not justified in taxing the gross receipts by way of adjustment under section 143(1). According to

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ITA No. 619/RJT/2026 M. P. Shah Medical Collage Development Society the learned Authorised Representative, the income ought to have been computed in accordance with the normal provisions of the Act after allowing admissible expenditure, which exercise could not have been undertaken by the CPC while processing the return. It was, therefore, submitted that the matter requires examination by the jurisdictional Assessing Officer.

6.

On the other hand, the Ld. DR supported the orders of the lower authorities.

7.

We have heard, the rival submissions and perused the material available on record. It is an admitted position that the assessee had not obtained renewal/registration under section 12AB for the assessment year under consideration. At the same time, the assessee has contended that registration was subsequently granted on 24.04.2023. The assessee has also raised the plea that, in the absence of exemption under section 11, its income should have been computed under the normal provisions of the Act after allowing eligible expenditure, instead of making adjustments while processing the return under section 143(1).In our considered opinion, these aspects require proper verification and examination by the jurisdictional Assessing Officer. The issue involves appreciation of facts and examination of the effect of the subsequent grant of registration as well as the correct method of computation of taxable income, which cannot appropriately be adjudicated in the present proceedings. Accordingly, without expressing any opinion on the merits of the case, we restore the matter to the file of the jurisdictional Assessing Officer with a direction to examine all the contentions raised by the assessee and decide the issue afresh in accordance with law after affording a reasonable opportunity of being heard to the assessee.

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ITA No. 619/RJT/2026 M. P. Shah Medical Collage Development Society The assessee is also directed to extend full cooperation and comply with all notices that may be issued by the Assessing Officer during the fresh proceedings.

8.

Accordingly, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on this 23rd day of July, 2026.

Sd/- Sd/- [ Dr. Arjun Lal Saini ] [ Shri Sonjoy Sarma ] लेखा सद�य/Accountant Member �याियक सद�य/Judicial Member राजकोट/Rajkot िदनांक/ Date: 23/07/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot

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