2014 (6) TMI 402 - AT - Income Tax

Tribunal grants registration under Income-tax Act, directs reassessment post-approval

UP. State Highways Authority Versus Income Tax Officer

The Tribunal ruled in favor of the appellant, directing the Commissioner to grant registration under section 12A of the Income-tax Act, deeming it ... Denial of exemption u/s 11 of the Act – Registration not granted u/s 12AA of the Act – Held that:- Earlier the Tribunal directed the CIT to re-adjudicate the issue of grant of registration u/s 12A of the Act - Despite lapse of almost two years, the CIT has not passed any consequential order – thus, Following Harshit Foundation, Jaunpur vs. CIT, Faizabad [2014 (6) TMI 298 - ITAT LUCKNOW] - where Commissioner does not pass any orders even after six months from receipt of Tribunal's order remitting the matter to him - The registration will be deemed to have been granted - this is subject to exercise of Commissioner's power u/s.12AA(3) in appropriate cases, but the registration will be deemed to have been granted - without grant of registration by the CIT, benefit of exemption u/s 11 of the Act cannot be allowed to the assessee – thus, the matter is required to be remitted back to the AO to re-adjudicate the issue of claim of exemption u/s 11 of the Act – Decided in favour of Assessee. Issues:1. Denial of claim of exemption under section 11 of the Income-tax Act.2. Condonation of delay in filing the appeal.Issue 1: Denial of claim of exemption under section 11 of the Income-tax Act:The appellant challenged the assessment of income at Rs. 80,805 made by the Assessing Officer under section 143(3) of the Act. The appellant contended that its application for registration under section 12AA was pending before the ld. CIT(A) as per the direction of the ITAT Lucknow Bench. The appellant argued that it deserved exemption under section 11 of the Act as it was constituted for charitable purposes under U.P. Act No. 19 of 2004. The appellant also claimed that it should be assessed based on provisions of section 11 read with section 12 of the Act. The Tribunal noted a delay in filing the appeal, which was condoned after considering the reasons provided by the appellant.The Tribunal observed that despite the lapse of almost two years, the ld. Commissioner of Income-tax had not passed any order regarding the registration under section 12A of the Act. Citing the judgment in the case of Harshit Foundation, the Tribunal held that registration should be deemed to have been granted to the appellant. Therefore, the Tribunal directed the Commissioner to issue approval of registration, emphasizing that without registration, the benefit of exemption under section 11 could not be allowed. The matter was remanded to the Assessing Officer to re-adjudicate the claim of exemption under section 11 after receipt of the Commissioner's order under section 12A, following the Tribunal's directions and relevant legal provisions.Issue 2: Condonation of delay in filing the appeal:During the hearing, it was noted that there was a delay of 10 days in filing the appeal. The appellant explained the delay by stating that the concerned Officer was occupied with preparations for meetings with various Government Departments. An affidavit supporting the reasons for delay was submitted. After examining the affidavit and the application for condonation of delay, the Tribunal found merit in the explanations provided and decided to condone the delay of 10 days, allowing the appeal to be admitted for hearing.In conclusion, the Appellate Tribunal, in the case under consideration, addressed the denial of exemption under section 11 of the Income-tax Act and the condonation of delay in filing the appeal. The Tribunal emphasized the importance of registration under section 12A for claiming exemption under section 11 and directed the Commissioner to issue registration approval. The Tribunal also considered and accepted the reasons for the delay in filing the appeal, ultimately allowing the appeal for statistical purposes.