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Facts
The assessee, a charitable institution, filed its return for Assessment Year 2015-16 claiming exemption under Sections 11 and 12, declaring NIL income against gross receipts of Rs. 69,06,720/-. The CPC denied this claim via an order under Section 143(1) dated 28.02.2018, stating that the assessee did not have registration under Section 12AA. The assessee subsequently obtained 12AA registration on 05.09.2017, but the CIT(A) upheld the denial of exemption for AY 2015-16.
Held
The Income Tax Appellate Tribunal (ITAT) dismissed the appeal, noting the assessee's non-appearance and finding no infirmity in the CIT(A)'s order. The ITAT confirmed that, as per Section 12A(2) of the IT Act, the benefits of Sections 11 and 12 apply from the assessment year immediately following the financial year in which the application for 12AA registration is made. Since the application was made in FY 2017-18, the exemption was applicable only from AY 2018-19, thus rightly denying the claim for AY 2015-16.
Key Issues
1. Whether exemption under Sections 11 and 12 of the Income Tax Act is available for Assessment Year 2015-16 when the assessee obtained 12AA registration in September 2017. 2. The correct interpretation and application of Section 12A(2) regarding the effective date of 12AA registration for claiming exemptions.
Sections Cited
11, 12, 12A, 12A(2), 12AA, 143(1), 253(3), 288
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ALLAHABAD BENCH, ALLAHABAD
Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA
2015-16 against impugned appellate order dated 30/11/2022 (DIN & Order No.ITBA/NFAC/S/250/2022- 23/1047733485(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. Grounds of appeal are as under:
“1. The Ld. C.I.T. (A), NFAC erred on facts and in law in upholding the Order of Ld. A.O. by not allowing the benefit of Section 11 by wrongly not considering the explanation of Section 12A(2) which reproduced as under:-
"Provided Further that where registration has been granted to the Trust or institution under section 12AA or section 12AB, then, the provisions of section 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the Assessing Officer as on the date of such Registration and the objects and activities of such trust or institution remain the same for such preceding assessment year."
The Ld. C.I.T. (A) failed to appreciate that as per the explanation of section 12A(2) of I. T. Act, the income has to be computed under section 11 of I. T. Act as Order u/s 143(1) of I.T. Act dated 28.02.2018 for A. Y. 2015-16 is passed much after the Registration u/s 12AA of I.T. Act dated 05.09.2017.
WITHOUT PREJUDICE TO ABOVE
The Ld. C.I.T. (A) erred On facts and in law in upholding the Income of the Trust being Gross Receiving Rs.69,06,710/- without allowing the deduction incurred for educational purpose as per Audited Income and Expenditure Account and where after deducting the expenditure, the net deficit of Rs.51,216/-.
The Addition upheld is contrary to the facts, law and principle of natural justice and without allowing sufficient time and opportunity to have its say on the reasons relied upon by Ld. C.I.T. (A).”
(A.1) This appeal has been filed by the assessee, beyond time limit prescribed under section 253(3) of IT Act. The assessee has submitted application 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.
(B) The facts of the case, in brief, are that in this case the assessee Bhartiya Shiksha Sammittee Kashi Pradesh has filed its return of income for assessment year under consideration on 21/12/2016 disclosing NIL income along with audited receipt & payment account, Income & Expenditure Account and Balance Sheet for the year ending 31.03.2015. In the return of income the assessee has shown gross receipts of Rs.69,06,720/- which has been claimed as exempt u/s 11 & 12 as the amount applied to charitable and religious purposes during the previous year. The claim of the assessee was denied by DC/ACIT- CPC, Bangalore vide order dated 28/02/2018 passed u/s 143(1) of the Act. Aggrieved with the order passed by DC/ACIT-CPC, Bangalore dated 28/02/2018, the assessee carried the matter in appeal before learned CIT(A). The learned CIT(A) dismissed the appeal of the assessee observing as under:
(C) During the course of hearing before us, none was present on behalf of the assessee. In the absence of any representation from the side of the assessee, learned Departmental Representative for Revenue was heard, and the material available on record was perused. Learned Departmental Representative for Revenue relied on the orders of the authorities below. On careful perusal of the impugned order of the learned CIT(A), and other materials available on record, we find no infirmity in it. No material has been presented from either side to justify any interference with or modification of the impugned order of learned CIT(A). Therefore, the impugned order of learned CIT(A) is upheld and the appeal of the assessee is dismissed.
(D) In the result, the appeal of the assessee is dismissed.
(Order pronounced in the open court on 16/05/2025)