ITO, BANGALORE vs. ST. GEORGE EDUCATIONAL & CHARITABLE TRUST, BANGALORE

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ITA 1305/BANG/2015Status: DisposedITAT Bangalore22 February 2017AY 2010-114 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that since registration under Section 12AA has now been granted and upheld by the High Court, the exemption under Section 11 needs to be re-examined. The matter was restored to the AO for fresh adjudication.

What were the facts?

The Assessing Officer (AO) denied exemption under Section 11 to the assessee trust because registration under Section 12AA was denied by the CIT(Exemptions). The assessee's appeal to the Tribunal and subsequent appeal to the High Court resulted in the grant of registration under Section 12AA.

What were the issues?

Whether exemption under Section 11 is allowable when registration under Section 12AA was initially denied but subsequently granted and upheld by higher authorities.

Which sections of the Income-tax Act were involved?

Section 11,Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH : BANGALORE

Before: SHRI SUNIL KUMAR YADAV & SHRI S. JAYARAMAN

For Appellant: Smt. Swapna Dass, JCIT (DR)
For Respondent: Shri B.S. Sudheendra, CA
Hearing: 28.12.2016Pronounced: 22.02.2017

Date of hearing : 28.12.2016 Date of Pronouncement : 22.02.2017 O R D E R Per Sunil Kumar Yadav, Judicial Member

This appeal is prepared by the revenue against the order of the CIT(Appeals) inter alia on the following grounds:-

“1) The order of the learned CIT(A) is opposed to the law and facts of the case. 2) The learned CIT(A) erred in holding that the assessee trust was entitled to be registered U/s 12AA of the Income Tax Act and thereby the provisions of section 11 & 12 are applicable to the facts of the case without appreciating the fact that the Order of the Hon’ble High Court in dated

06/08/2012 has not been accepted by the Department and the department has filed a SLP before the Hon’ble Supreme Court. 3) The learned CIT(A) erred in not appreciating the fact that the department has preferred a stay petition before the Hon’ble Supreme Court on operation of the Order of the Hon’ble High Court of Karnataka and hence registration u/s 12AA is not yet granted to the assessee till date. 4) Any other grounds which may arise at the time of hearing. 5) The order of the learned CIT(A) may be set-aside and the order of the AO may be confirmed.”

2.

During the course of hearing the ld. counsel for the assessee has invited our attention to the fact that AO has denied the benefit of exemption u/s 11 of the Act on the ground that the registration u/s 12AA was denied by the CIT(Exemptions). The assessee has filed appeal against the order of CIT(A) denying the exemption before the Tribunal. The Tribunal has granted registration u/s 12A of the Act. The Revenue went in appeal before the Hon’ble High Court of Karnataka and the Hon’ble High Court also dismissed the appeal of the revenue. Therefore, exemption u/s 11 should be allowed to the assessee in the light of registration u/s 12AA granted by the Tribunal. Copy of the order of the Tribunal and the judgment of the Hon’ble High Court of Karnataka is placed on record.

3.

The ld. DR has contented that under these circumstances the matter is to be restored back to the AO to examine the ground of exemption in the light of relevant provisions of the Act as he has not applied his mind to the provisions of the Act while denying the exemption u/s 11 of the Act.

4.

Having carefully examined the orders of the lower authorities, we find that undisputedly exemption was denied by the AO on the ground that registration u/s 12AA was denied by the CIT(E). Now the registration u/s 12AA has been granted to the assessee by the Tribunal and was also upheld by the Hon’ble jurisdictional High Court. Therefore, the exemption u/s 11 of the Act requires to be re-examined afresh in the light of registration granted to the assessee. We accordingly set-aside the order of CIT(A) and restore the matter back to the file of AO with a direction to readjudicate the claim of exemption u/s 11 of the Act in the light of the fact that registration u/s 12AA has been granted to the assessee. Needless to mention here that proper opportunity of being heard be also afforded to the assessee while adjudicating the claim of exemption.

5.

In the result the appeal of revenue is allowed for statistical purposes.

Pronounced in the open court on this 22nd day of February, 2017.

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