BHARTIYA AADARSH SHIKSHAN SAMITI,MANDSAUR vs. DCIT (EXEMPTION), BHOPAL, BHOPAL

ITA 612/IND/2025Status: DisposedITAT Indore19 February 2026AY 2018-1910 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee is entitled to exemption under Section 11/12 of the Income-tax Act, 1961, in terms of the proviso to Section 12A(2). The Tribunal found no merit in the CIT(A)'s premise that processing under Section 143(1) does not constitute pending assessment proceedings. It reasoned that the proviso to Section 12A(2) refers to 'assessment proceedings' generally, and Section 143(1) itself is titled 'Assessment' and involves adjustments and the issuance of an intimation, thus remaining an assessment proceeding until the intimation is issued. The Tribunal also addressed the revenue's contention regarding the timing of the return filing versus registration, stating that the assessee had a strong expectation of registration and that the eligibility for exemption under the proviso to Section 12A(2) is paramount once its conditions are met. However, the Tribunal noted that the AO needs to verify if the assessee's objects and activities remained the same for AY 2018-19 as at the time of registration, and also to verify the application and accumulation of income for exemption under Sections 11/12. Therefore, the matter was remanded to the AO for these verifications, with directions to allow exemption as admissible after providing the assessee an opportunity to submit necessary information. The appeal was allowed for statistical purposes, subject to the assessee paying a cost of Rs. 10,000/- to the Prime Minister National Relief Fund.

What were the facts?

The assessee, Bhartiya Adarsh Shikshan Samiti, Mandsaur, filed its return of income for Assessment Year (AY) 2018-19 on January 7, 2019, declaring a gross income of Rs. 4,52,77,591/- and claiming exemption of the same amount under Section 11/12 of the Income-tax Act, 1961. The assessee also obtained an audit report in Form No. 10B. The Assessing Officer (AO), CPC, Bangalore, processed the return under Section 143(1) and issued an intimation on February 26, 2020, denying the exemption on the grounds that the assessee lacked registration under Section 12A/12AA, which was mandatory. The assessee appealed to the Commissioner of Income-Tax (Appeals) [CIT(A)], arguing that it had obtained 12AA registration from AY 2019-20 and that the proviso to Section 12A(2) allowed exemption for preceding assessment years where assessment proceedings were pending. The CIT(A) rejected the claim, holding that processing under Section 143(1) did not constitute pending assessment proceedings. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the assessee is eligible for exemption under Section 11 of the Income-tax Act, 1961, for AY 2018-19, considering it obtained registration under Section 12AA from AY 2019-20 and relied on the proviso to Section 12A(2). Assessee's Contention: The assessee argued that it is a genuine charitable society engaged in educational activities and possesses a 12AA registration certificate dated July 29, 2019, effective from AY 2019-20. It contended that the proviso to Section 12A(2) mandates that if registration is granted, Sections 11 and 12 shall apply to preceding assessment years for which assessment proceedings are pending before the AO as on the date of registration. The assessee cited a previous ITAT order in its own case for AY 2017-18, which allowed similar benefit. The assessee also argued that the AO erred in disallowing revenue expenditure. Revenue's Contention: The revenue, through the CIT(A), argued that processing under Section 143(1) does not constitute pending assessment proceedings. It also raised a point that the assessee filed its return before obtaining registration, questioning how exemption could be claimed prior to registration. The revenue relied on the AO's intimation and the CIT(A)'s order.

Which sections of the Income-tax Act were involved?

Section 11,Section 12,Section 12A,Section 12A(2),Section 12AA,Section 143(1),Section 143(1)(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI

For Appellant: Shri Rajesh Mehta, AR
For Respondent: Shri Anup Singh, CIT- DR
Hearing: 04.02.2026Pronounced: 19.02.2026

Per B.M. Biyani, A.M.:

Feeling aggrieved by appeal-order dated 05.06.2025 passed by learned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-6, Kolkata [“CIT(A)”] which in turn arises out of intimation dated 26.02.2020 passed by learned CPC, Bangalore [“AO”] u/s 143(1) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2018-19, the assessee has filed this appeal on following grounds:

Bhartiya Adarsh Shikshan Samiti, Mandsaur ITA No. 612/Ind/2025 - AY 2018-19

“1. The Ld. AO, CPC and the Ld. JT. CIT(A) have erred in not allowing exemption u%. 11 of the Act:

1.1.

On the facts and in the circumstances of the case and in law, t

The order continues below.

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