2022 (1) TMI 883 - AT - Income Tax

Appellate Tribunal directs fresh examination for denial of registration under section 12AA.

ICMAI Registered Valuers Organisation Versus CIT (Exemption), New Delhi

ICMAI Registered Valuers Organisation Versus CIT (Exemption), New Delhi - TMI Issues: Challenge to denial of registration under section 12AA of the Income Tax Act, 1961Analysis:The appeal was filed by the assessee trust challenging the order passed under section 12AA(1)(b) r.w.s. 12A of the Income Tax Act, 1961 by the Commissioner of Income Tax (Exemption), New Delhi. The assessee contended that the denial of registration was unjustified as its main activities included providing valuers course to create skilled registered valuers without any profit motive. The assessee highlighted its registration under section 8 of the Companies Act, 2013, and being a subsidiary of the Institute of Cost Accountant of India, emphasizing its objective of educating, regulating, and monitoring registered valuers. The assessee argued that similar organizations with comparable objectives had been granted registration under section 12AA, and thus, requested the reversal of the decision and registration under section 12AA.The Revenue, represented by the Ld. CIT(DR), argued that the assessee failed to fulfill the onus of supporting its registration claim under section 12AA before the CIT(E), leaving no option for the revenue but to deny registration. The Revenue contended that the CIT(E)'s decision was justified due to the lack of factual support from the assessee.Upon careful consideration of the submissions, the Appellate Tribunal noted that while the assessee had not adequately responded to the CIT(E)'s requirements for registration, certain replies were submitted before the CIT(E). The Tribunal observed that the CIT(E) appeared to have decided against the assessee without fully considering the main objects of the assessee and decisions in similar cases. Finding the order somewhat cryptic and lacking clarity on facts and law, the Tribunal decided to remand the matter back to the CIT(E) or another competent registering authority for a fresh examination. The assessee was directed to provide all relevant facts and contentions, and the registering authority was instructed to issue a detailed order in accordance with the law after considering the submissions. The impugned order under section 12AA(1)(b) r.w.s. 12A was set aside, and the appeal of the assessee was allowed for statistical purposes.In conclusion, the Tribunal's decision highlighted the importance of considering all relevant facts and contentions before denying registration under section 12AA, emphasizing the need for a detailed examination by the registering authority in such matters.