2017 (6) TMI 12 - AT - Income Tax

Appellant wins appeal; granted Section 12A registration & Section 11 exemption under Income Tax Act.

The judgment rules in favor of the appellant, allowing all grounds of the appeal related to registration under Section 12A and exemption claim under ... Registration U/s 12A - proof of charitable purposes - Held that:- The assessee was registered with the society of Registration, Jaipur on 16/1/1999 vide certificate No. 508/98-99. The assessee applied for registration U/s 12A of the Act on 03/3/2000 alongiwth Form No. 10A and certified copy of Trust Deed. This fact is evident from the inward register maintained in the office of ITO. The copy of the same is placed at page No. 7 of the paper book. The relevant entries were at sl. No. 159 and 160. The assessee got a letter dated 22/6/2000 from the ITO, Ward-2, Jodhpur, in this regard. The assessee replied to the same on 10/7/2000, which is evident from page No. 8 of the paper book. Thus, the assessee’s claim that he has applied for registration U/s 12AA of the Act alongwith necessary documents is well established. The assessee had also complied with the queries raised by the authorities. Therefore, the CIT has failed in making any order either registering the assessee Trust under 12A or refusing the same within six months. While making order U/s 143(3) of the Act, the Assessing Officer has accepted the status of the assessee as registered U/s 12A. The Assessing Officer records that the assessee engaged in the charitable activities for educational purpose at Jodhpur, Pali, Marwar and Barmer. The Assessing Officer also held that the income of assessee is exempted U/s 11 of the Act. Considering all these facts and circumstances, we hold that the assessee society shall be entitled for all the benefits available for assessee registered U/s 12A of the Act. The assessee shall be entitled for the benefit of Section 11 of the Act. - Decided in favour of assessee. Issues:1. Selection of case for scrutiny2. Registration under Section 12A of the Income Tax Act3. Exemption claim under Section 114. Proof of application for registrationAnalysis:Issue 1 - Selection of case for scrutiny:The appeal challenges the selection of the case for scrutiny, arguing it is bad in law and facts. However, the judgment primarily focuses on the subsequent issues related to registration and exemption claims.Issue 2 - Registration under Section 12A:The main contention revolves around the registration under Section 12A of the Income Tax Act. The appellant established that the trust was created in 1999 and applied for registration in 2000. The appellant provided evidence of the application and compliance with queries raised by the authorities. The Assessing Officer accepted the registration status of the trust under Section 12A, considering the timelines and relevant provisions of the Act. The judgment cites legal precedents and the decision of the Hon'ble Supreme Court regarding deemed registration in cases where no response is received within the stipulated timeframe.Issue 3 - Exemption claim under Section 11:The appellant claimed exemption under Section 11 and argued that the income earned from providing education should be exempted. The Assessing Officer acknowledged the charitable activities conducted by the trust and granted the exemption under Section 11 of the Act. The judgment upholds this decision, allowing the appellant to benefit from the provisions of Section 11.Issue 4 - Proof of application for registration:The appellant contended that the authorities failed to make any order regarding the registration under Section 12A within the prescribed six-month period. The judgment supports the appellant's claim, referencing the decision of the Hon'ble Supreme Court to validate the deemed registration of the trust. The Assessing Officer's acceptance of the registration status further strengthens the appellant's case.In conclusion, the judgment rules in favor of the appellant, allowing all grounds of the appeal related to registration under Section 12A and exemption claim under Section 11. The appellant is deemed entitled to the benefits available for a trust registered under Section 12A of the Income Tax Act.