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Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: DR. MANISH BORAD & SONJOY SARMA
order
: March 6th, 2024 ORDER
Per Manish Borad, Accountant Member:
This appeal filed by the assessee is directed against the order passed u/s 12AB of the Income Tax Act, 1961 (in short the ‘Act’) by the Commissioner of Income Tax (Exemption), Kolkata [hereinafter referred to ld. ‘CIT (Exemption)’] dated 08.08.2023.
Registry has informed that the appeal is time barred by 9 days. Condonation application has been filed by the assessee. After perusing the same, we find force in the reasons mentioned therein and are satisfied that the assessee was prevented for reasonable I.T.A. No.: 1113/KOL/2023 Assessment Year: N.A. Susamskar Foundation. cause in filing the instant appeal within statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication 3. The assessee is in appeal before this Tribunal raising the following grounds: “
1) That the impugned Order of the Ld. Commissioner of Income Tax (Exemptions), Kolkata is arbitrary, illegal, contrary to the material on records and in excess of his jurisdiction while issuing the Order. 2) That the Rejection of Registration u/s 12AB: The Ld. Commissioner of Income Tax (Exemptions), Kolkata erred in law and fact having not to grant the benefit of permanent Registration u/s 12AB of the Income Tax Act, 1961 of the Institution without any prejudice, merely quoting in the order that “the assessee is treated as nonmaintainable” under the Income Tax Act. Although, the Appellant complied necessary Rule 17A of Income Tax Rules, 1962 for application along with requisition documents for application and also complied the section 12AB(1)(b)(i) time to time for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961. Therefore, your Appellant prays before the Hon’ble Members of the Appellate Tribunal for direction to grant the permanent Registration u/s 12AB of the Income Tax Act, 1961 against decision made by the Ld. of Commissioner of Income Tax (Exemptions), Kolkata. The Appellant craves the leave of the Hon’ble Members of Income Tax Appellate Tribunal to urge further ground(s) at the time of hearing and to produce the documents in support of its argument, if required.”
4. The brief facts of the case are that the assessee is a Trust and filed an application u/s 12A(1)(ac)(iii) of the Act on Form 10AB for the final registration of the Trust. However, ld. CIT (Exemption) rejected the application of the assessee treating it as non- maintainable on the ground that the assessee has already been granted provisional registration which is valid till AY 2026-27. Ld. CIT (Exemption) therefore, held that application of the assessee is premature. Page 2 of 7 I.T.A. No.: 1113/KOL/2023 Assessment Year: N.A. Susamskar Foundation.
5. Aggrieved with the order of ld. CIT (Exemption), the assessee is now in appeal before this Tribunal. Ld. Counsel for the assessee submitted that though the assessee was granted provisional registration, but it was required to file an application for permanent/final registration and without considering the application, ld. CIT (Exemption) erred in treating the application as non-maintainable.
6. On the other hand, ld. D/R vehemently argued supporting the order of ld. CIT (Exemption).
We have heard rival contentions and perused the records placed before us. The sole grievance of the assessee is that ld. CIT (Exemption) erred in law and on fact for not granting the benefit of permanent registration u/s 12AB of the Act. We observe that the assessee is a charitable Trust registered u/s 12AA of the Act vide order u/s 12AA(1)(b)(i) of the Act effective from 01.05.2018 (AY 2018-19). Subsequent to the amendments brought in the Act by Finance Bill, 2020, there was a requirement of provisional registration as well as final registration for new as well as existing Institutions/Trusts. The assessee has been granted provisional registration up to AY 2026-27 and before the expiry of the period, the assessee has applied for final registration. However, ld. CIT (Exemption) has treated the said application as non-maintainable only on the ground for being premature and that the assessee has already been granted provisional registration valid till AY 2026-27.
We find that under the similar set of facts and circumstances, this Tribunal in the case of Ramkrishna Mandal Institute of Education vs. CIT (Exemption) in order Page 3 of 7 I.T.A. No.: 1113/KOL/2023 Assessment Year: N.A. Susamskar Foundation. dated 20.02.2024 in which one of the co-signatory is the author of this order and the issue has been examined and decided in the following manner: “3. We have heard the rival contentions and gone through the record. The assessee-institution has been granted registration u/s 12AB(l)(a) of the Act for five years vide order dated 28.05.2021 which is valid from A.Y 2022-23 to A.Y 2026-27. As per the provisions of section 12A(l)(ac)(iii) of the Act, the assessee-institution is supposed to apply for final registration after grant of provisional registration u/s 12AB of the Act. The relevant part of the provisions of section 12A(l)(ac) of the Act is reproduced as under: “12A(1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely [(ac) notwithstanding any contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution, - (iii) where the trust or institution has been provisionally registered under section 12AB, at least six months prior to expiry of period of the provisional registration or within six months of commencement of its activities, whichever is earlier; ...and such trust or institution is registered under section 12AB.”
4. A perusal of the aforesaid provisions of section 12A(1)(ac)(iii) of the Act would reveal that where the trust or the institution was provisionally registered u/s 12AB of the act, the application for final registration can be made at least six months prior to the expiry of the period of provisional registration or within six months of the commencement of its activity, whichever is earlier, which means that the application for final registration has to be made at the earliest possible event i.e. either within six months of the commencement of the activities or at least six months prior to the expiry of the provisional registration. The aforesaid provision does not mean that there is any bar on the applicant to move an application before the period of six months from the expiry of the provisional registration. What has been provided is that the application must be made before the expiry of six months from the date of expiry of final registration. There is no bar in Page 4 of 7 I.T.A. No.: 1113/KOL/2023 Assessment Year: N.A. Susamskar Foundation. moving the application at the earliest possible event, rather, i.e. it is expected from the assessee-trust to do so. In view of this, the impugned order of the ld. CIT(Exemptions) is set aside and the matter is restored to the ld. CIT(Exemptions) to consider the application of the assessee for final registration and grant the same if the same is otherwise so admissible to the assessee.”
Similar issue also came for consideration in the case of Fatika Nazrul Sukanta Educational Training Center vs. CIT(Exemptions) in order dated 30.11.2023 wherein the issues have been dealt and decided in the following manner: “3. In response to the notice of hearing, no one has come present on behalf of the assessees. With the assistance of ld. CIT(DR), we have gone through the record carefully. For the facility of reference, we reproduce the relevant part of the impugned order passed in ITA No. 963/KOL/2023, which reads as under:- “The assessee has filed an application for registration under section 12A(l)(ac)(iii) of the Income Tax Act, 1961 in Form No. 10AB. This application was found to be primafacie non-maintainable and accordingly vide letter dated 14.06.2023, certain clarifications were sought from the assessee. The application filed by the assessee is premature as the earlier order in Form 10AC is still valid till A.Y. 2026-2027. Accordingly the application filed by the assessee is treated as non- maintainable and for statistical purpose the application filed by the assessee is treated as ‘rejected’. However, no adverse inference is drawn against the assessee. MANISH KANOJIA CIT (EXMPTION), KOLKATA”
Verbatim same order is passed in ITA No. 967/KOL/2023 except variation in the date of the letter i.e. 15th June, 2023 instead of 14th June, 2023 mentioned in the order reproduced by us. Therefore, we do not deem it necessary to reproduce the relevant part of the impugned order in ITA No. 967/KOL/2023.
A perusal of the above orders would reveal that Id. CIT(Exemption) did not adjudicate the applications on merit. He simply treated the applications as infructuous on the ground that the assessees are already enjoying registration. It is pertinent to mention that clause (c) Page 5 of 7 I.T.A. No.: 1113/KOL/2023 Assessment Year: N.A. Susamskar Foundation. of section 12AB, sub-section (1) provides for grant of provisional registration for a period of three years from the assessment year from which the registration is sought. The assessees are having provisional registration but they have applied grant of registration under section 12AB(1), clause (b) and nothing else. Ld. Commissioner was required to call for the documents and information satisfies himself and then grants the registration, which is valid for five years. The application was meant for grant of registration and not for provisional. Therefore, ld. CIT has misconstrued the application itself and erroneously dismissed them by treating premature in nature. The impugned orders are set aside and the issues are relegated to the ld. CIT (Exemption) for fresh adjudication.
In the result, the appeals of the assessees are allowed for statistical purposes.”
From perusal of the above finding and also considering the fact that facts and issues are verbatim similar. We therefore, hold that there is no bar in moving the application for final registration at the earliest possible. We accordingly, set aside the impugned order and restore the matter back to the file of ld. CIT (Exemption) to consider the application of the assessee for final registration and grant the same for if the same is admissible to the assessee as per the provisions of the Act. Accordingly, all the grounds of appeal
raised by the assessee are allowed for statistical purposes.
11. In the result, the appeal filed by the assessee is allowed for statistical purposes. Kolkata, the 6th March, 2024.