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Facts
The assessee, a society running a gaushala, filed its ITR declaring NIL income and claiming exemption under section 11. However, the assessee did not have valid registration under section 12AA of the Act.
Held
The Tribunal held that the basic condition to avail exemption under section 11 is registration under section 12AA. Since the assessee lacked this valid registration, the impugned order dismissing the appeal was upheld.
Key Issues
Whether the assessee is eligible for exemption under section 11 without valid registration under section 12AA of the Income Tax Act.
Sections Cited
11, 12AA
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Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
Before: SHRI YOGESH KUMAR U.S. & SHRI AVDHESH KUMAR MISHRA
A.Y. 2017-18 Vaish Vyayamshala and Gooshala, Income Tax Officer Janta Colony (Exemption), Janta Colony, Rohtak, Vs. Income Tax Office, Haryana-124001 Rohtak PAN: AAATV4852D (Appellant) (Respondent) Appellant by None Respondent by Sh. Dheeraj Kumar Jain, Sr. DR Date of Hearing 25/08/2025 Date of Pronouncement 29/08/2025 ORDER
PER AVDHESH KUMAR MISHRA, AM
This appeal filed by the assessee for the Assessment Year (‘AY’) 2017-18 is directed against the order dated 27.10.2023 passed by the Addl./Joint Commissioner of Income Tax (Appeal)-13, Mumbai [‘Addl. CIT(A)’].
The sole grievance, raised vide four grounds of appeal
is that the Addl. CIT(A) has not allowed the benefit of exemption under section 11 of the Income Tax Act, 1961 (‘Act’) and has not kept the appeal pending till the registration of the assessee under section 12AA of the Income Tax Act, 1961 (‘Act’) should have been granted by the Commissioner of Income Tax (Exemption), Chandigarh. 1 Vaish Vyayamshala and Gooshala
3. The relevant facts giving rise to this appeal are that the appellant assessee, a society running a gaushala, filed its Income Tax Return (‘ITR’) of relevant year on 07.11.2017 declaring NIL income. The assessee showed gross receipts at Rs.1,03,29,855/- and surplus of Rs.8,58,084/-. The surplus has been claimed exempted under section 11 of the Act. However, the assessee society has not had any registration under section 12AA of the Act. Therefore, the Ao did not allow the benefit of section 11 of the Act and completed the assessment at income of Rs.8,58,084/-. Aggrieved, the assessee filed appeal before the Addl. CIT(A), who dismissed the appeal on the reasoning that the assessee has not fulfilled the basic condition of registration under section 12AA of the Act; hence it can not avail the benefit of section 11 of the Act. The relevant part of the order of the Addl. CIT (A) reads as under:
5. Observation: - In view of the facts and submission of the appellant it is found that the appellant has no valid registration certificate U/s. 12AA of the Act in the name of M/s. Shri Vaishya Vyayamshala and Gaushala. As registration u/s 12AA was not granted to the appellant and its application for Re-registration on u/s 12AA has been rejected by the Competent Authority.
However, the Hon'ble Tribunal Delhi has restored the matter back to the Ld. CIT (Exemption).
Decision: - The assessing officer on the facts of the case has rightly denied the exemption since there exists no valid exemption certificate by M/s. Shri Vaishya Vyayamshala And Gaushala. The matter with regard to granting of exemption certificate to the entity has travelled upto the ITAT stage who has restored back the matter to the Ld. CIT(E) to reconsider the issue. The assessment order passed by the Assessing 2 Vaish Vyayamshala and Gooshala Officer need not be interfered with. In view of the above the appeal is liable to be dismissed.”
Before us, the assessee was not represented by anyone. Therefore, we heard the Ld. Sr. DR, who defended the orders of the Authorities below. We have perused the material available on the record. The basic condition to avail the exemption under section 11 of the Act is the registration under section 12AA of the Act. Undisputedly, the assessee society does not have a valid registration under section 12AA of the Act till passing of the impugned order. Therefore, we do not find any infirmity in the impugned order dismissing the appeal as the assessee has not fulfilled the prime condition of registration under section 12AA of the Act. Keeping appeal pending or not till the disposal of the issue of registration under section 12AA of the Act by the CIT(E) is prerogative of the first appellate authority and we are not empowered in the Act to interfere with such power of the first appellate authority. In case registration under section 12AA of the Act is granted having effect on the relevant year, the assessee will have consequential relief accordingly as per the law. Since there is no infirmity in the impugned order; therefore, it is upheld.