SINE INTERNATIONAL ENTERPRISE,JAIPUR vs. CIT (EXEMPTION), JAIPUR

At the outset, it is noted that there has been a delay of 172 days in filing the present appeals. In this regard, the ld AR submitted that the appeals against the order of the ld CIT(A) dated 22.03.2021 has been filed with the Registry on 9.11.2021 and the same may be taken as filed within the extended limitation period in view of the Hon’ble Supreme Court decision whereby the limitation in all such proceedings, irrespective of limitation prescribed under the general law or under any special laws, whether compoundable or not has been extended due to continued Covid -19 pandemic and restrictions imposed by the respective State Governments. Per contra, the ld. CIT DR fairly submitted that & 234/JP/2021 Sine International Enterprise, Jaipur vs. CIT(E), Jaipur as per the orders of the Hon’ble Supreme Court, the Revenue has no objection where the appeals of the assessee are admitted for adjudication. Taking into considerations the submissions made by both the parties and respectfully following the decision of the Hon’ble Supreme Court, both the appeals are admitted for adjudication on merits.

With the consent of both the parties, the appeal of the assessee in against rejection of application u/s 12AA is taken as the lead case for the purposes of present discussions as the other appeal wherein registration u/s 80G(5)(vi) has been denied is consequential to grant of registration u/s 12AA of the Act.

Briefly stated, the facts of the case are that the assessee filed an online application in Form No. 10A on 28.09.2020 seeking registration u/s 12AA of the Act. Thereafter, notices were issued by the ld CIT(E) to the assessee society dated 17.12.2020, 20.02.2021 and finally on 22.03.2021 and thereafter, the application of the assessee seeking registration u/s 12AA was rejected for the reasons that the assessee failed to produce details and documents in support of its claim for seeking registration u/s 12AA of the Act in spite of providing sufficient opportunity. Against the said findings and directions of the ld. CIT(E), the assessee is in appeal before us.

During the course of hearing, the ld. AR submitted that as per clause (ac) to sub-section (1) of section 12A of the Act which was introduced by Finance Act, 2020, a trust or institution already registered u/s 12AA was required to move an application in the prescribed form and manner to the ld Pr.CIT or ld. CIT for registration of the trust or institution within 3 months from the date on which the said clause came into effect. It was submitted that thereafter, Ministry of Finance vide press note dated 09.05.2020 has deferred 2 & 234/JP/2021 Sine International Enterprise, Jaipur vs. CIT(E), Jaipur the implementation of new procedure for approval/registration/notification of certain entities to 1st October, 2020 and as per the said press release, the entities already registered u/s 12AA would be required to file intimation within 3 months from 01.10.2020. It was further submitted that vide the Taxation and other laws (Relaxation and Amendment of Certain Provisions) Act, 2020 dated 29.09.2020, the said clause (ac) to sub-section (1) of section 12A introduced by the Finance Act, 2020 was omitted and a new clause (ac) of sub-section (1) of section 12A was inserted w.e.f 01.04.2021 and as per the said amended provisions, a trust or institution already registered u/s 12AA was required to make an application to the ld Pr. CIT or ld CIT for registration of the trust or institution within 3 months from 01.04.2021 instead of 01.06.2020. It was further submitted that on the date of filing of the application in Form No. 10A on 28.09.2020, there were no provision under Rule 17A which states that a trust or institution already registered u/s 12AA is required to make an application in Form No. 10A for seeking registration u/s 12AA of the Act. It was submitted that in the instant case, the assessee was validly registered u/s 12AA w.e.f 19.12.2008 and a copy of the order granting registration u/s 12AA was also submitted with the ld. CIT(E) along with application in Form No. 10A. It was submitted that while making the application in Form No. 10A, the assessee has mistakenly considered that the provisions of clause (ac) of sub-section (1) of section 12A of the Act as inserted by Finance Act, 2020 as applicable to the assessee and was unaware that the Ministry of Finance has deferred the procedure for registration to 01.10.2020. It was submitted that the assessee had mistakenly filed Form No. 10A for granting registration u/s 12AA whereas the assessee was already granted registration u/s 12AA of the Act. It was further submitted that the said clause (ac) inserted by Finance Act, 2020 was also omitted by the Taxation and other laws Act, 2020 and was made effective prospectively from 1st April, 2021 and thus, not applicable at the relevant point of time when the assessee mistakenly moved the present application. It was 3 & 234/JP/2021 Sine International Enterprise, Jaipur vs. CIT(E), Jaipur submitted that the order so passed by ld. CIT(E) is therefore bad in law for want of valid jurisdiction u/s 12A read with Rule 17A of the Act.

It was further submitted that once the assessee came to the notice that the application in Form No. 10A for registration u/s 12AA has been mistakenly filed, the assessee filed a response via email with ld. CIT(E) on 24.02.2021 mentioning that assessee has already registered u/s 12AA and we have mistakenly applied for registration u/s 12AA vide Form No. 10A on 28.09.2020 and the earlier application for registration applied may kindly be treated as withdrawn which was not considered by the ld CIT(E).

It was further submitted that the ld. CIT(E) passed the order u/s 12AA(1)(b)(ii) and a perusal of section 12AA shows that it is only applicable and can be invoked on the application filed under section 12A(1)(a) or (aa) or (ab). As the assessee is already registered under section 12A(1)(ab) and therefore not required to file a fresh application even for sake of discussion for renewal under clause (ac) to section 12AA(1). It is a case of rejection of an application, not a cancellation. However, the ld. CIT(E) ignored the submission filed on 24.02.2021, legal provision exceeds the jurisdiction by passing the order u/s 12AA(1)(b)(ii) of rejecting the 12AA registration of the assessee, which is against the principle of natural justice and law.

It was finally submitted that ld. CIT(E) may kindly be directed to allow the withdrawal of application wrongly filed u/s 12AA of the Act.

Per contra, the ld. DR submitted that it is not a case of cancellation of registration u/s 12AA already granted to the assessee w.e.f 19.12.2008. It is a case where the assessee moved a fresh application seeking registration u/s 12AA of the Act and in absence of the requisite information/documentation, the 4 & 234/JP/2021 Sine International Enterprise, Jaipur vs. CIT(E), Jaipur same was rejected and treated as filed by the ld. CIT(E). It was submitted that even where the assessee prayer for withdrawal of the application is considered, the ld. CIT(E) has to dismiss the application as withdrawn. It was submitted that in either case whether the assessee has suo moto withdrawn the application or the fact that the law has been amended and its applicability has been deferred to a subsequent period where the assessee has to again move a an application before the competent authority, the present application has to be dismissed by the ld. CIT(E).

We have heard the rival contentions and purused the material available on record. There is no dispute that the assessee was already registered u/s 12AA of the Act by order dated 23.06.2009 effective from 19.12.2008 at the time of moving the present application on 28.09.2020, a fact duly mentioned in the said application filed in Form no. 10A and admittedly and undisputedly, the impugned order passed by the ld CIT(E) doesn’t any impact or consequences as far as the existing registration u/s 12AA which continues to remain valid as on date. There has however been amendment in the law by virtue of Finance Act 2020 where an assessee already registered u/s 12AA has to intimate/apply to the jurisdictional PCIT or CIT within the prescribed time period with requisite documentation and the implementation of which has been deferred initially by the Ministry of Finance as intimated through a press release dated 9.05.2020 and thereafter, there has been amendment in the Act by virtue of The Taxation And other laws (Relaxation and amendment of certain provisions) Act, 2020 where the earlier amended provisions have been replaced with new set of provisions and the said new provisions have been made effective from 1.04.2021. Therefore, as far as the present application filed on 28.09.2020 is concerned, we find that there was no requirement at first place to move such an application by the assessee at the relevant point in time and secondly, for the ld CIT(E) to initiate any action on such application where there were no 5 & 234/JP/2021 Sine International Enterprise, Jaipur vs. CIT(E), Jaipur provisions to move such an application at first place by the assessee which is already registered u/s 12AA of the Act. We also note that during the course of proceedings before the ld CIT(E), the assessee has also moved an application stating that it wishes to withdraw its application seeking registration as it is already registered u/s 12AA of the Act as evident from assessee’s paperbook page no. 22 which has not been disputed by the Revenue. During the course of hearing as well, the ld AR has also submitted that the assessee has mistakenly moved the present application where there was no requirement at first place and has sought directions to the ld CIT(E) to allow the withdrawal of application wrongly filed u/s 12AA of the Act.

In light of the aforesaid discussion and in the entirety of facts and circumstances of the case, we hereby modify the directions of the ld CIT(E) where the application dated 28.09.2020 u/s 12AA is to be treated as withdrawn due to non-applicability of the relevant provisions of law at the relevant point in time for moving such an application and whose implementation has been deferred to a subsequent date, and the fact that the assessee has also requested for withdrawal of its application. The order of the ld CIT(A) thus stand modified and the application of the assessee stand withdrawn.

Now, coming to both parties fairly submitted that the subject matter of present appeal is denial of registration u/s 80G consequent to denial of registration u/s 12AA of the Act and respective contentions advanced supra in ITA no. 235/JP/2021 may be considered.

After hearing both the parties and perusal of material on record, it is noted that the assessee’s application has been rejected in consequence to denial of registration u/s 12AA of the Act. Given that we have directed to treat the assessee’s application u/s 12AA be treated as withdrawn, on parity of reasoning, the order of the ld CIT(A) thus stand modified and the application of the assessee u/s 80G stand withdrawn. 6 & 234/JP/2021 Sine International Enterprise, Jaipur vs. CIT(E), Jaipur In the result, both the appeals filed by the assessee are allowed in light of aforesaid directions.