Tribunal grants tax exemption to trust, emphasizing burden of proof lies with Revenue The Tribunal overturned the decision of the CIT(A) and directed the Assessing Officer to grant exemption under section 11 of the Income Tax Act to the ...
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Tribunal grants tax exemption to trust, emphasizing burden of proof lies with Revenue
The Tribunal overturned the decision of the CIT(A) and directed the Assessing Officer to grant exemption under section 11 of the Income Tax Act to the trust. The Tribunal emphasized that the burden of proving non-registration under section 12A lies with the Revenue, and the denial of exemption based on missing documents was unjustified. The Tribunal considered the trust's efforts to obtain the registration certificate and the consistent renewal of exemption under section 80G as evidence of registration under section 12A, ultimately ruling in favor of the trust.
Issues Involved: Refusal of granting exemption u/s.11 of the Income Tax Act, 1961 due to lack of registration u/s.12A.
Analysis: 1. The appeal by the assessee challenges the addition of Rs. 9,40,110 made by the AO for denying exemption u/s.11 due to unavailability of registration u/s.12A. 2. The assessee, a trust registered under the Bombay Public Trust Act, failed to produce the registration certificate u/s.12A during assessment. 3. The AO denied exemption u/s.11, leading to the addition of Rs. 9,40,110 in the assessee's income. 4. The CIT(A) upheld the AO's decision citing non-furnishing of the registration certificate. 5. The assessee argued that efforts were made to obtain the certificate, even filing an RTI application, but it was not provided by the Revenue. 6. The assessee contended that consistent renewal of exemption u/s.80G indicated registration u/s.12A, supported by documentary evidence. 7. The Tribunal noted the Revenue's failure to prove non-registration u/s.12A and emphasized that denial based on missing documents was unjustified. 8. Citing precedents, the Tribunal held that the onus is on the Revenue to prove non-registration and the assessee cannot be penalized for the Department's record-keeping lapses. 9. Considering the assessee's efforts and the consistent renewal of exemption, the Tribunal directed the AO to grant exemption u/s.11. 10. Consequently, the appeal was allowed, and the order of the CIT(A) was set aside in favor of the assessee trust.
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