LOKMANYA SHIKSHAN PRASARA K MONDAL, SANGLI,SANGLI vs. INCOME TAX OFFICER, EXEMPTION, WARD-KOLHAPUR, KOLHAPUR

Under the facts and circumstances of the case and in law, Ld.Assessing Officer is erred in not granting benefit under section 11 on the ground that assessee could not submit the Registration certificate u/s 12A.

The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal if deemed necessary at the time of hearing of the appeal.”

Ld.AR for the Assessee submitted that Assessee had filed Return of Income for A.Y.2016-17 on 31.08.2018. Assessee is running primary and secondary school. Assessee is duly registered under Bombay Public Trust Act, 1950. Assessee is also registered under section 12A of the Act, vide Commissioner of Income Tax, Kolhapur - order dated 19.02.1991. Ld.AR submitted copy of the same at page no.1 of the paper book.

1 Ld.AR submitted that during the year, in the Return of Income, assessee had claimed exemption under section 11 of the Act. Ld.AR invited our attention to page no.3 to page no.19 which was Return of Income for A.Y.2016-17. Ld.AR invited our attention to internal page 2 of the Return of Income which had 3 specifically mentioned the Registration Number of the Trust under section 12AA of the Act. Ld.AR further submitted that during the assessment proceedings, Assessing Officer denied assessee’s claim of exemption stating that assessee failed to file registration certificate under section 12A of the Act. Ld.AR submitted that assessee filed appeal before ld.CIT(A). Ld.AR submitted that Assessee filed all the necessary documents and also filed copy of Registration Certificate under section 12A of the Act. Ld.CIT(A) dismissed the appeal of the assessee on the ground that there was no valid reason for non-filing of copy of registration certificate during assessment proceedings. Ld.AR further submitted that for subsequent years, assessee has always got benefit of exemption under section 11 of the Act. Ld.AR invited our attention to order under section 143(1) for A.Y.2017-18. Ld.AR pleaded that even under the new procedure, ld.CIT(E) has issued a Certificate under section 12A(1)(ac) of the Act, on 07.04.2022. Ld.AR submitted that assessee’s appeal may be allowed.

The ld.DR for the Revenue relied on the order of the Assessing Officer and ld.CIT(A). Ld.DR submitted that assessee 4 failed to file original registration certificate under section 12A of the Act, as observed by the AO in the remand report which is reproduced by ld.CIT(A). Therefore, AO was right in denying exemption.

We have heard both parties and perused the records. It is observed that in the assessment order, Assessing Officer(AO) has admitted that assessee is registered under Bombay Public Trust Act. AO also admitted that assessee is running Educational Institution only i.e. primary and secondary school. AO also admitted that assessee had filed Income and Expenditure Account, Copy of Balance Sheet, Trust Deed, Audit Report during the assessment proceedings. AO denied assessee’s claim of exemption under section 11 of the Act, only because assessee failed to file certificate under section 12A of the Act.

1 We have perused the Return of Income filed by the assessee, copy of which is filed in the paper book. In the Return of Income, assessee has specifically mentioned that assessee is registered under section 12A of the Act and the Registration Number mentioned is “KOP/HOIV/39/63/75/90-91”, dated 19.02.1991. 5 Thus, during the assessment proceedings, Assessing Officer was aware about the registration number of the 12A certificate. 12A Certificate is issued by Commissioner of Income Tax, Kolhapur in those days. The Department is custodian of all these documents. The ITO-Kolhapur, who passed the assessment order sits in Income Tax Office, Kolhapur, and Commissioner of Income- Kolhapur also sits in the same. However, the ITO did not bother to visit the Commissioner of Income Tax-Kolhapur to verify the registration number issued by Commissioner of Income Tax, Kolhapur in 1991. Every office of the Commissioner of Income Tax used to maintain a register for a Certificate issued under section 12A & 80G of the Act. Subsequently, during the appellate proceedings before ld.CIT(A), assessee filed copy of registration certificate under section 12A of the Act. The ld.CIT(A) called-for a remand report from the Assessing Officer. The ITO in his remand report stated that additional evidence is not admissible, ITO further stated that assessee has not produced original copy of registration certificate under section 12A of the Act. Thus, the entire allegation of the Department in denying exemption claim under section 11 of the Act to the assessee is that original registration certificate under section 12A of the Act, was not filed. Thus, it is an admitted fact that copy of registration certificate was 6 filed by the assessee. In these facts and circumstances of the case, when Department is custodian, the Department cannot blame assessee for not filing original certificate. We have also observed that for A.Y.2017-18, assessee was granted exemption under section 11 of the Act.

2 In these facts and circumstances of the case, we are of the opinion that Assessing Officer had erred in denying Assessee’s claim of exemption under section 11 of the Act, accordingly, we direct the Assessing Officer to allow the exemption under section 11 of the Act. We find support from the ITAT Pune’s order in ITA No.1853/PUN/2018 of Rotary Club Poona Downtown Charitable पुणे / Pune; ᳰदनांक / Dated : 09 Jan, 2024/ SGR* 7 आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “एस एम सी” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER,