ITO (EXEMPTIONS) ROHTAK , ROHTAK vs. MANOHAR EDUCATION SOCIETY , HARYANA

Aggrieved, the assessee preferred appeal before the CIT(A). The CIT(A) reversed the denial of exemption and granted relief to the assessee in following terms: “5. Decision 5.1 All the grounds of the appeal pertain to denial of exemption u/s 10(23A) and 12A of the Act to the appellant. The facts of the case are as under: 5.2 The appellant is an education society running a school named Cambridge School and is eligible for claim of exemption u/s 10(23C)(iiiad) of the Act. During the relevant year, the appellant has shown total receipts of Rs 4.52.75.138/-. While processing the return for the relevant return, the AO has not considered the claim of expenses claimed by the appellant and has proceeded to levy a tax of 30% on the total receipts claimed without allowing any exemption to the appellant, hence, this appeal. 5.1.1 On perusal of the details filed, it is seen that the appellant is registered under 12A of the Act. In its submissions, the appellant has placed reliance on the decision of the Punjab & Haryana High Court in the case of CIT(Exemption) Vs Shanti Devi Education Trust (2019) 261 Taxman 339 where on the similar grounds, the appeal has been decided in favour of the assessee. 5.1.2 Apart from this, the denial of registration u/s 12A of the Act could be uncalled for within the purview of Section 143(1) of the Act. The registration already granted can be denied only after observing due process of law, after bringing on record material evidence which warrants such denial and after granting opportunity of being heard to the appellant.

When the matter was called for hearing, none appeared before the Tribunal. It is seen from the record that the notices were served by the assessee on multiple occasions. At one instance, adjournment letter was received by post. However, the assessee remained absent all along. We are thus constraint to proceed ex parte based on the material available on record and submissions made on behalf of the Revenue in the absence of the representation from the assessee.

The Learned DR for the Revenue submitted at the outset that on the very first page of return of income, the assessee has taken a stand that it seeks to claim exemption under Section 10(21) of the Act. The learned DR submitted that Section 10(21) of the Act embodies exemption in relation to income of a research association for the time being approved for the purposes of section 35(1)(iii) thereof. The assessee however is not engaged in any of such activities. The learned DR thereafter, adverted to the First Appellate order and submitted that the CIT(A) has proceeded on a different tangent and given its finding in favour of the assessee based on the ground that the assessee has obtained registration under Section 12A of the Act. In this regard, the learned DR submitted that the registration under Section 12A of the Act was made available from 19.06.2020 and therefore, the concerned Financial Year i.e. 2018-19 relevant to A.Y. 2019-20 is not covered within the sweep of the registration. The learned DR thus assailed the order of the learned CIT(A) on the premise that the relief has been granted on a whole in an appropriate basis not sustainable in law. Learned DR thus urged for appropriate relief in the matter.

In the result, appeal of the Revenue is allowed for statistical purposes.