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Income Tax Appellate Tribunal, ‘ C’ BENCH (SMC
Before: SHRI ABRAHAM P. GEORGE
आदेश / O R D E R
Assessee in this appeal is aggrieved that it was denied exemption claimed by it u/s.11 of the Income Tax Act, 1961 (in short ‘’the Act’’). One other grievance raised by the assessee is that income received by it from its members was exempt under the principles of mutuality.
ITA No.2559/Mds/2014. :- 2 -:
Ld. Counsel for the assessee at the outset submitted that registration granted to the assessee u/s.12A(a) of the Income Tax Act, 1961 (in short ‘’the Act’’) on 25.09.2007 was cancelled by Director of Income Tax (Exemptions) on 09.12.2011 invoking powers vested on him u/s.12AA(3) of the Act. As per ld. Counsel assessee had filed a Writ Petition challenging the order of the Director of Income Tax (Exemptions) before Hon’ble Madras High Court. Ld. Authorised Representative submitted that Hon’ble High Court had granted a stay of recovery of tax. In any case as per ld. Authorised Representative on merits issue was covered in favour of the assessee by the decision of Co-ordinate Bench in the case of Madras Chamber of Commerce and Industry vs. ACIT (2016) 46 CCH 681 and also that of Kolkata Bench of the Tribunal in the case of Indian Chamber of Commerce vs. ITO [(2015) 113 DTR 553)].
Conta, ld. Departmental Representative submitted that 3. admittedly assessee was not having registration required u/s.12A (a) of the Act and therefore could not claim exemption u/s.11 and 12 of the Act.
I have considered the rival contentions and perused the orders of the authorities below. Threshold condition for claiming exemption u/.11 of the Act is that a person who is claiming such exemption is registered u/s.12A(a) of the Act. Ld. Commissioner of Income Tax
ITA No.2559/Mds/2014. :- 3 -:
(Appeals) had noted this at para 3.2 of his order that registration earlier granted to the assessee stood cancelled by Director of Income Tax (Exemptions) on 09.12.2011 w.r.f. 01.04.2009, invoking powers vested on him under subsection 3 thereof. No doubt as pointed out by the ld. Authorised Representative assessee had moved a Writ Petition before Hon’ble Jurisdictional High Court against cancellation of that registration. In the petition praying for an interim stay of the operation of the order of the Director of Income Tax (Exemptions) cancelling the registration, Hon’ble High Court had given the following direction on 22nd March, 2012 in MP No.2/2012 in W.P.
No.7037 & 7038/2012.
‘’There shall be a order of stay of recovery alone’’.
Thus, the stay is only for recovery and nothing else. Operation 5. of the order of the Director of Income Tax (Exemptions) had not been stayed. Thus merits of the case apart, assessee having not satisfied with threshold condition for claiming exemption u/s.11 of the Act, I am of the opinion that assessee was correctly denied claim of such exemption under the said section. Further, fees received by the assessee for issuing certificates of origin were for both its members as well as non members, thereby ruling out the application of principle of ITA No.2559/Mds/2014. :- 4 -: mutuality. In the above circumstances, I am not inclined to interfere with the order of the ld. Commissioner of Income Tax (Appeals).
However, if assessee succeeds in its appeal or Writ Petition against cancellation of registration u/s.12A(a) of the Act, it can definitely move a petition for reviving its appeal, in so far as it relates to application of sections 11 & 12 of the Act. With these observations, we dismiss the appeal of the assessee.
In the result, the appeal of the assessee is dismissed. 6.
Order pronounced on Wednesday, the 25th day of January, 2017, at Chennai.