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Facts
The assessee trust changed its objects and sought fresh registration under Section 12AA of the I.T. Act for AY 2018-19. Its application was initially rejected by the CIT(Exemption), leading the Assessing Officer to deny exemption under Section 11 and assess the trust as an AOP. Though the rejection order was later set aside by the ITAT and fresh registration granted, it was effective only from AY 2019-20. The CIT(A) upheld the AO's assessment for AY 2018-19.
Held
The Income Tax Appellate Tribunal affirmed the CIT(A)'s decision, ruling that the assessee was not eligible for exemption under Section 11 for the assessment year 2018-19 because it did not possess valid Section 12AA registration for that period. The subsequent registration was prospective, effective from AY 2019-20, thus the denial of exemption for AY 2018-19 was correct.
Key Issues
Whether the assessee was entitled to exemption under Section 11 of the Income Tax Act for AY 2018-19 when its fresh registration under Section 12AA, following a change in objects, was only granted with effect from AY 2019-20.
Sections Cited
Section 253(3), Section 12A, Section 11, Section 143(1), Section 143(2), Section 142(1), Section 10A, Section 12AA, Section 143(3), Section 144B, Section 12A(2), Section 147, Section 254, Section 11(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ALLAHABAD BENCH, ALLAHABAD
Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA, JU DICIAL MEMBER
2018-19 against impugned appellate order dated 30/05/2024 (DIN & Order No.ITBA/NFAC/S/250/2024- 25/1065271437(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short].
This appeal has been filed by the assessee, beyond time limit prescribed under section 253(3) of the I.T. Act. The assessee has submitted an application dated 04/04/2025 for condonation of delay in filing of the appeal pleading that the delay was unintentional and beyond the control of the assessee and has requested to admit the appeal for hearing. The learned Sr. Departmental Representative for Revenue did not express any objection to assessee’s application for condonation of delay in filing of the appeal. In view of the foregoing, and in specific facts and circumstances of the present appeal before us, the delay in filing of this appeal is condoned; and the appeal is admitted for hearing.
The facts of the case, in brief, are that the assessee trust was registered under Section 12A of the I.T. Act on 28/10/1999. The assessee filed its return of income for the year under consideration on 21/09/2018 declaring nil income after claiming exemption u/s 11 of the I.T. Act. The return filed by the assessee was processed u/s 143(1) of the Act. Subsequently, the case of the assessee trust was selected for complete scrutiny. Accordingly, the Assessing Officer issued notices u/s 143(2) and 142(1) of the Act. In response thereto, the assessee filed details as called for by the Assessing Officer. On perusal of the return of income, the Assessing Officer noticed that there was a change in the objects of the assessee trust. The Assessing Officer also noticed that the assessee had filed Form 10A on 10/05/2018 seeking fresh registration u/s 12AA of the Act as per the amended provisions of the Act consequent upon change in the objects of the assessee trust. The CIT(Exemption), Lucknow rejected the application filed by the assessee vide order dated 22/11/2018. Since the application of the assessee, seeking fresh registration u/s 12AA after change in the objects of the assessee, was rejected by learned CIT (Exemptions), the Assessing Officer opined that the assessee trust had become ineligible to claim exemption u/s 11 of the Act and the assessee was treated as AOP. The Assessing Officer issued show cause notice proposing the denial of exemption u/s 11 of the Act and treating the assessee as AOP. In response to show cause notice, the assessee submitted that order passed by the CIT(Exemption) rejecting the fresh application filed for registration u/s 12AA of the Act was set aside by the Hon'ble ITAT, Allahabad and was now pending before the CIT(Exemption), Lucknow. The Assessing Officer did not find the reply of the assessee acceptable and completed the assessment u/s 143(3) read with section 144B of the Act passed on 28/04/2021 assessing total income at Rs.4,91,24,101/- after allowing expenses allowable to the extent of Rs.5,21,98,664/- from the gross receipts of Rs. 10, 13,22,765/-. Aggrieved, the assessee went in appeal before the learned CIT(A), who has dismissed the appeal of the assessee. Aggrieved further, the assessee is in appeal before the Income Tax Appellate Tribunal.
During the course of hearing in the Income Tax Appellate Tribunal, learned Counsel for the assessee strongly opposed the order of Assessing Officer and learned CIT(A). In support of his contention, learned Counsel for the assessee submitted the paper book, containing the following documents:
On the other hand, learned Departmental Representative supported the orders of the authorities below and submitted that since the assessee was not having registration under section 12AA of the Act, it was not eligible to claim exemption under section 11 of the Act. He also submitted that the Assessing Officer had made the addition in absence of registration under section 12AA of the Act for the assessment year 2018-19 and learned CIT(A) has correctly dismissed the appeal of the assessee on this ground.
We have heard the rival parties and have gone through the material placed on record. While dismissing the appeal of the assessee, the learned CIT(A) has observed as under:
u/s 12A of the Act for the AY 2018-19, the addition made by the AO by denying the benefit under section 11 of the Act is hereby confirmed. Accordingly, the ground nos. 2 to 12 are dismissed.”
In view of the foregoing, it is clear that the assessee was not having registration u/s 12AA of the Act consequent to the change of objects of the trust for the assessment year 2018-19, and the registration under section 12AA read with section 254 of the Act granted by CIT (Exemptions), Lucknow on 13/12/2022 is with effect from the assessment year 2019-20 only. We find no infirmity in the above findings of learned CIT(A), which is confirmed and the appeal filed by the assessee is dismissed.
In the result, the appeal of the assessee stands dismissed.
(Order pronounced in the open court on 31/10/2025)