PIME WELFARE SOCIETY,ELURU vs. ASSISTANT COMMISSIONER OF INCOME TAX (EXEMPTIONS), VIJAYAWADA

Briefly stated the facts of the case are that the assessee is a Charitable Society registered initially U/s. 12A of the Income Tax Act, 1961 (“the Act”). Pursuant to the amendment brought in Statute with effect from 01/06/2022, all the Charitable Trusts were supposed to apply for registration U/s. 12AB of the Act even though they were already holding registration. For such application of renewal, the Central Board of Direct Taxes (“CBDT”) vide Circular dated 31/03/2022 extended the time till 30/09/2022.

The assessee, however, applied for renewal of registration U/s. 12AB of the Act (as amended) on 27/03/2022 and obtained the same by 04/04/2022. However, in view of the last date for filing of the return of income for the AY 2021-22 being 31/03/2022, the assessee filed the return of income by giving the old Registration Number in its ITR-7.

The CPC, Bangalore, by way of Intimation U/s. 143(1) of the Act, denied the total exemption claimed by the assessee by stating that as per the amended provisions of section 12AB of the Act w.e.f., 01/06/2022, all the entities have to get new registration approval at their end and since the assessee’s renewal of registration details were not available in the ITR-7, the exemption claimed by the assessee in Sl. No. 4(i) to 4(vii) in the Schedule – Part B-TI of the ITR-7 was not allowed.

The learned Addl/JCIT(A)-2, Noida also held that mere filing of the return of income with the existing Registration Number does not entitle the assessee to claim exemption U/s. 11 of the Act for the AY: 2021-22 and on that ground the learned Addl/JCIT(A)-2, Noida confirmed the disallowance and dismissed the appeal.

The assessee is, therefore, before us in this appeal by stating that the assessee applied for the renewal of the registration on 27/03/2022 well within the time permitted by the CBDT and obtained the same on 04/04/2022. In view of this fact, it was impossible for the assessee to give the new registration particulars in ITR-7 which was filed on 13/03/2022. The Learned Authorized Representative (“learned AR”) submitted that in view of the extension of time for filing the renewal applications U/s. 12AB of the Act in all the cases of earlier registered entities up to 30/09/2022, the existing registration continues to be valid for claiming exemption U/s. 11 of the Act for the AY 2021-22 till such time the renewal was communicated. The learned AR placed reliance on the decision taken by the Coordinate Bench of the Tribunal in the case of Shambhu Dayal Modern School vs. ITO (Exemption) in (AY: 2021-22), dated 02/08/2024.

Though the learned Departmental Representative (“learned DR”) vehemently opposed the request of the assessee, he could not contradict the fact that the CBDT by its Circular No. 08/2022, dated 31/03/2022 extended the time for filing the renewal applications in case of the entities, like the assessee, till 30/09/2022 and also the fact that the assessee submitted its application well within such time and the renewal communication was received by the assessee on 04/04/2022.

On a careful consideration of all these facts, we are of the considered opinion that the view taken by the Coordinate Bench of this Tribunal in the case of Shambhu Dayal Modern School vs. ITO (Exemption) (supra), is applicable to the facts of the assessee’s present case. Apart from that, the CBDT was permitting the new applications U/s. 12AB of the Act in all the cases of earlier registered entities upto 30/09/2022 which means that the filing of application by the assessee on 27/03/2022 was well within the time. When the assessee received the communication of renewal on 04/04/2022, it was not possible for the assessee to mention such details in ITR-7 which was filed on 13/03/2022. Law does not require the performance of the impossible act. It was impossible for the assessee to mention the renewal details obtained on 04/04/2022 in ITR-7 which was filed on 13/03/2022. The learned Revenue Authorities should have taken a constructive view in this matter.

With this view of the matter, we set-aside the impugned order and restore the issue to the file of the learned AO to complete the assessment in accordance with law by taking the furnishing of the old Registration Number as proper compliance with. It is ordered accordingly.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 19th November, 2024.