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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI
ORDER Date of Pronouncement 10.09.2020 PER K. NARASIMHA CHARY, JM: Aggrieved by the order dated30.08.2019 under section 12AA(1)(b) r/w section 12A of the Income Tax Act, 1961 by the learned Commissioner of Income Tax (Exemption), New Delhi, (“Ld. CIT(E), the ICSI Registered Valuers Organization, New Delhi (“the assessee”) filed this appeal.
Brief facts of case, as could be culled out from the record are that the ICSI Registered Valuers Organization is a company incorporated on 22.11.2017 and registered under Section 8 of the Companies Act, 2013, wholly owned subsidiary of the Institute of Company Secretaries of India and registered with Insolvency and Bankruptcy Board of India (IBBI) framed with the objective of educating, regulating and monitoring the discipline of Registered Valuers.
On 21.02.2019 assessee filed applications in Forms No. I0A seeking Registration Under section 12AA of the Income Tax Act 1961 and the assessee claims to have filed various documents as required by the LD. CIT(E). LD. CIT(E), however, rejected the request of the assessee for registration undersection 12AA of the IT Act by invoking provisions of Section 12AA(1)(b) of Income TaxAct by holding that the activities of assessee organization as non-genuine in nature on the basis of the application of income.
Assessee is therefore, before us in this appeal contending that the activities of the assessee, inter alia, includes the main activity of "providing Valuers course” to create skilled Registered Valuers in the country and is duly covered under "education” & "advancement of any other object of general public utility” as provided in Section 2(15) of the Income Tax Act; that the fruits of various activities like trainings and seminars would be available to the public at large without any profit motive and not for the benefit of small group of individuals as assessee is a Section 8 Company; that the learned CIT(Exemptions) rejected the application by looking into the application of income which are to be examined at the time of assessment only and on the basis of assumptions, presumptions and apprehensions without appreciating the factual, legal and statutory position for grant of registration.
He further submitted that there are various other organizations like ICAI Registered Valuers Organization, Indian Institute of Insolvency Professionals of ICAI, ICSI Insolvency Professional Agency, Practising Valuers Association of India etc. with similar objects as that of the assessee and such organizations are granted registration under Section 12A whereas such registration is denied to the assessee unjustly.
Per contra, Ld. DR argued that the activity of the assessee is only conducting some sort of training which does not indicate any charitable activity of education as contemplated under law. Further, the Ld. CIT(E) being the authority at the threshold is bound to look into the actual conduct of activities vis-à-vis the objects of the assessee and, therefore, Ld. CIT(E) is justified from declining to grant registration for the reasons recorded by him in the impugned order. She placed reliance on the observations of the Ld. CIT(E) in paragraph No 3 of the impugned order.
We have gone through the record in the light of the submissions made on either side. Impugned order clearly shows that the Ld. CIT(E) based the accounts and activities undertaken by the assessee for rejecting the registration. There is no dispute in respect of the objects of the assessee.Ld. CIT(E) did not find any of the objects of MOA to be in the nature of Trade or Business or Commerce. Revenue also does not dispute the similarity of the objects of the assessee and the objects of other institutions like ICAI Registered Valuers Organization, Indian Institute of Insolvency Professionals of ICAI, ICSI Insolvency Professional Agency, Practising Valuers Association of India etc. or the claim of the assessee that such organizations are granted registration.
In the case of a similarly placed organization, namely, M/s. ICAI Registered Valuers Organization vs. Ld. CIT(E) in ITA.No. 8158/Del/2018 by order dated 03.09.2019 a coordinate Bench of this Tribunal held that, -
3.4. Learned Counsel for the Assessee further submitted that there are various other similar organisations i.e., Indian Institute of Insolvency Professionals of ICAI, Insolvency Professional Agency of Institute of Cost Accountants of India, Practicing Valuers Association of India, ICSI Insolvency Professionals Agency etc., which have been granted registration under section 12A which are having similar objects as that of the assessee which can also be verified from the chart submitted on record. He has, therefore, prayed that assessee may be granted registration under section 12AA of the Income Tax Act.
… … … … … … 5. ……….. At the time of granting of registration under section 12AA of the Income-Tax Act, the Ld. Ld. CIT(E) is required to satisfy himself about the objects of the Trust or Institution and the genuineness of its activities. The assessee has produced sufficient evidence on record that assessee-company is involved in charitable activities and have also held Seminars and Training Sessions for training of the registered valuers. The decisions relied upon by Learned Counsel for the Assessee squarely apply to the facts and circumstances of the case. The objects as noted above have not been disputed by the Ld. LD. CIT(E). Further, in similar assessee’s having the same objects, registration under section 12AA have been granted in their favour. These facts, therefore, show that assessee has satisfied the conditions of Section 12AA of the Income Tax Act, 1961. Accordingly, there were no justification for Ld. Ld. CIT(E) to reject the application for registration under section 12A of the Income-Tax Act.
Further,it is the settled principle of law that the certificate of 9. registration is only an enabling provision to claim exemption, and by merely granting a certificate, income is not exempted. Even if the registration is granted, the exemption from the provisions of the Income Tax Act in particular sections 11 and 12 is not automatic and it is only when the assessee satisfies the learned Assessing Officer in respect of the returns filed every year, the assessee would be entitled to the exemption.It is always open for the learned Assessing Officer to look into the application of income and actual activities of the assessee, and if not satisfied, then to deny the exemption by recording the reasons. In these circumstances, we setaside the impugned order and direct theLd. CIT(E) to grantregistration under section 12AA of the Income Tax Act to theassessee.
Appeal of the assessee is, accordingly, allowed.
Order pronounced in the Open Court on 10.09.2020.