2022 (5) TMI 166 - AT - Income Tax

Tribunal Upholds Assessee's Exemption: Revenue Appeal Dismissed

ITO (E) Ward – 2 (1), New Delhi Versus Sarv Hitkari Education Society

The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision in favor of the assessee regarding the withdrawal of registration u/s 12A, ... Exemption under section 11 & 12 - Registration u/s 12A of the Act was withdrawn by CIT(A) - ITAT allowed the appeal of the assessee and cancelled the order of CIT(E) - HELD THAT:- Before us, Revenue has not placed any material on record to demonstrate that the aforesaid order of Tribunal wherein the order of CIT(E) cancelling the registration has been set aside/overruled or stayed by higher judicial forum. We therefore find no reason to interfere with the order of CIT(A). Thus the ground of the Revenue is dismissed. Issues:- Appeal against order relating to Assessment Year 2009-10- Exemption under section 11 & 12 of the Act- Dispute regarding registration u/s 12A- Benefit of exemption u/s 11 of the ActAnalysis:The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)-40, Delhi concerning the Assessment Year 2009-10. The case revolved around the withdrawal of registration granted u/s 12A of the Act to the assessee society, leading to the exemption u/s 11 & 12 of the Act being no longer available, resulting in the income escaping assessment for the relevant year. The Assessing Officer (AO) issued a notice u/s 148, and upon scrutiny, the assessment was framed u/s 147 r.w.s 143(3) of the Act. The assessee then appealed to the CIT(A) who granted substantial relief. The Revenue raised grounds questioning the allowance of exemption under sections 11 & 12 of the Act to the assessee despite alleged 'sham activities.' The hearing proceeded ex parte as the assessee did not appear, and the Learned DR represented the Revenue.The Learned DR acknowledged that the re-assessment was initiated due to the cancellation of registration u/s 12A, which was subsequently challenged before the ITAT. The ITAT allowed the appeal of the assessee and cancelled the order of CIT(E) withdrawing the registration. The CIT(A) directed the AO to allow the benefit of exemption u/s 11 of the Act after considering the ITAT's order. The Revenue failed to provide any material demonstrating that the ITAT's decision had been overruled or stayed by a higher judicial forum. Consequently, the Tribunal found no reason to interfere with the CIT(A)'s order, leading to the dismissal of the Revenue's appeal.In conclusion, the Tribunal dismissed the appeal of the Revenue, upholding the CIT(A)'s decision in favor of the assessee. The order was pronounced in the open court on 28.04.2022.