2022 (10) TMI 420 - AT - Income Tax

Tribunal Grants Section 12AA Registration! Evidence Accepted, Rule 17A Compliance.

Radheyshyam Mandir Trust Versus CIT (Exemption), Jaipur

The Tribunal allowed the appeal, directing the CIT(E) to grant registration under section 12AA(1)(a) to the assessee. It held that the assessee had ... Exemption u/s 11 - seeking registration u/s. 12AA denied as per Rule 17A r.w.s 12AA(1)(b) of the Act original instrument establishing the trust and other evidences were not filed in original - HELD THAT:- CIT(E) is factually incorrect and unjustifiable where the ld. CIT(E) has failed to observe that the activities carried out by the trust is genuine in nature. We observed that the assessee carried out a charitable activities in accordance with law with main objects and amended objects of the trust deed. A letter which was sent by the assessee on 28.08.2020 which was not considered by the CIT(E). Relevant documents which are also available on record it was produced before the ld. CIT(E) and before us also, the assessee deserves registration u/s. 12AA. Assessee submitted that additional written submissions along with affidavit submitted the audited balance sheet, income and expenditure accounts for A.Ys. 2017-18, 2018-19 and 2019-20, temple photographs, certified copy of trust deed before the ld. CIT(E) along with application form 10A and thereafter also with letters submitted through the ld. AR during the course of hearing. In considered view that as per amended Rule 17A of the Income Tax Rules which are applicable in the case of the assessee, the assessee was not required to fulfill any original copy of the documents rather self certified copy/instrument was sufficient for the purpose of verification by the ld. CIT(E), therefore, ground No. 1 and 2 of the assessee is allowed. Issues Involved:1. Condonation of delay in filing the appeal.2. Denial of registration under section 12AA(1)(a) of the Income Tax Act.3. Requirement of original documents for registration under section 12AA(1)(a).Detailed Analysis:1. Condonation of Delay in Filing the Appeal:The appeal was filed by the assessee with a delay of 15 days due to the COVID-19 pandemic, which restricted the movement of the trustees. The assessee submitted an application for condonation of delay, citing the Supreme Court's decision in Collector, Land & Acquisition v. Mst. Katiji & Others, advocating a liberal approach towards condonation of delay. The Revenue had no objection to the application. After hearing the rival contentions and perusing the materials, the Tribunal found merit in the assessee's prayer and condoned the delay.2. Denial of Registration under Section 12AA(1)(a):The assessee appealed against the order of the CIT(E) denying registration under section 12AA(1)(a) on the grounds that original documents establishing the trust were not submitted, and there was a lack of evidence regarding the trust's activities and financial statements. The CIT(E) argued that the assessee failed to produce the necessary documents despite multiple opportunities. The assessee contended that all required documents were submitted, including self-certified copies of the trust deed, financial statements, and details of charitable activities.3. Requirement of Original Documents for Registration under Section 12AA(1)(a):The Tribunal examined the amended Rule 17A, effective from 19.02.2018, which requires self-certified copies of documents for registration, not original documents. The assessee's application for registration was filed on 06.02.2020, making the amended rule applicable. The Tribunal noted that the CIT(E) erroneously insisted on original documents, contrary to the amended rule. The assessee had submitted self-certified copies of all relevant documents, fulfilling the requirements under Rule 17A.Conclusion:The Tribunal found that the CIT(E) misinterpreted the provisions of Rule 17A and unjustifiably denied the registration. The Tribunal concluded that the assessee had provided sufficient evidence of its charitable activities and compliance with the requirements for registration under section 12AA. The appeal was allowed, and the CIT(E) was directed to grant the registration. The Tribunal emphasized that self-certified copies of documents are sufficient for the purpose of verification under the amended Rule 17A.Order Pronounced:The appeal of the assessee was allowed, and the order was pronounced in the open Court on 26/09/2022.