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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI SAKTIJIT DEY
The instant appeal of the assessee is directed against the order dated 30.4.2014 for the Assessment Year 2006-07. Though the assessee has raised multiple issues in the grounds of appeal, but the core issue relates to disallowance of assessee’s claim of exemption u/s 11 of the Income Tax Act, 1961 (in short ‘the Act’).
2. Briefly put, the facts are that assessee a public charitable trust stated to be established in the year 1885 is registered under the Societies Registration Act. The trust was also granted registration u/s 12A of the Act by DIT(E), Mumbai vide order dated 16.10.1984. For the impugned assessment year, assessee filed its return of income on 27.10.2006 declaring NIL income after claiming exemption u/s 11 of the Act. The Assessing Officer having found that the registration granted u/s 12A of the Act was withdrawn by DIT(E) vide order dated 4.3.2011 from the date of registration, reopened the assessment u/s 147 of the Act. During the assessment proceedings, the Assessing Officer called upon the assessee to explain why exemption claimed u/s 11 of the Act should not be disallowed in view of withdrawal of registration u/s 12A of the Act. Though, assessee objected to the proposed disallowance, however, the Assessing Officer, rejecting the explanation of the assessee, disallowed assessee’s claim of exemption u/s 11 of the Act on the ground that registration granted u/s 12A of the Act having been withdrawn, assessee is not eligible for exemption u/s 11 of the Act. Accordingly, he completed the assessment by treating the receipts of assessee as income from other sources. Being aggrieved by such assessment order, assessee preferred an appeal before CIT(A). Ld. CIT(A) also confirmed the assessment order passed by the Assessing Officer on the reasoning that registration granted u/s 12A having been withdrawn, assessee is not eligible for exemption u/s 11 of the Act. Being aggrieved, assessee is before us.
The ld. AR submitted that against the order of cancellation of registration u/s 12A of the Act, assessee had filed an appeal before the ITAT and ITAT vide order dated 10.8.2012 in had restored the matter back to the file of DIT(E) to consider the issue afresh. It was submitted that ld. DIT(E) on re-hearing the matter pursuant to directions of the ITAT has restored the registration granted u/s 12A of the Act vide order dated 19.5.2014. He, therefore, submitted that since the reason on the basis of which assessee’s claim of exemption was denied no longer exists, the matter may be remanded back to the file of Assessing Officer for deciding afresh assessee’s claim of exemption u/s 11 of the Act.
The ld. DR has not opposed the aforesaid contention of the assessee.
We have considered the submission of the parties and perused the material on record. It is evident from record that the only reason on the basis of which the Assessing Officer disallowed assessee’s claim of exemption u/s 11 of the Act and ld. CIT(A) also sustained such disallowance is that registration granted u/s 12A of the Act to the assessee has been withdrawn. However, as brought to our notice by the ld. AR, the DIT(E) in pursuance to the directions of Tribunal considered the issue afresh and vide order dated 19.5.2014 has restored the registration granted u/s 12A of the Act. As the aforesaid development was not either before the Assessing Officer or before the CIT(A), in our considered opinion, the matter has to go back to the Assessing Officer to consider the assessee’s claim of exemption u/s 11 of the Act afresh as the registration granted u/s 12A of the Act has been restored in the meantime. Accordingly, we set aside the impugned order of CIT(A) and restore the matter back to the file of Assessing Officer for deciding afresh after considering all facts and material on record and only after due opportunity of being heard to the assessee.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 23rd September, 2016.