Denial of Tax Exemption to AOP for Lack of Registration under Section 12A

The Tribunal upheld the decision of the CIT(A) in denying exemption u/s. 11 of the Act to the assessee, treated as an Association of Persons (AOP) instead of a charitable trust, due to the absence of registration u/s. 12A for the relevant year. The appeal was dismissed on 30th September, 2022.

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Issues:
Whether the CIT(A) was justified in confirming the order of AO in denying exemption u/s. 11 of the Act treating the assessee as AOP instead of charitable trust in the facts and circumstances of the case.

Analysis:
The appeal was filed by the assessee against the order passed by the Commissioner of Income Tax (Appeals)-10, Pune for assessment year 2008-09. The main issue revolved around the denial of exemption u/s. 11 of the Act by treating the assessee as an Association of Persons (AOP) instead of a charitable trust. The trust was formed for educational purposes for the benefit of all sections of society. The AO rejected the application for registration u/s. 12A of the Act, leading to the denial of exemption u/s. 11. The CIT(A) upheld the AO's decision, stating that the registration granted later was not applicable to the year under consideration. The Tribunal found no infirmity in the CIT(A)'s decision and dismissed the appeal.

An alternative argument regarding the applicability of the proviso to sub-section (2) of section 12A of the Act was raised before the CIT(A). The proviso stated that registration granted in subsequent years could apply to preceding years where assessment proceedings were pending. However, the CIT(A) held that the proviso introduced in Finance Act 2014 was not applicable to the assessment year 2008-09. The Tribunal agreed with this finding, emphasizing that no assessment proceedings were pending for the year under consideration when the registration was granted.

The assessee also sought to extend the benefit of exemption u/s. 11 to prior assessment years pending before the AO. Citing a Kolkata Tribunal case, the assessee argued for the extension of benefits. However, the CIT(A) noted that no assessment for the year under consideration was pending before the AO when the registration was granted. As there was no registration u/s. 12A for the relevant year, the assessee was not entitled to claim the exemption u/s. 11. The Tribunal concurred with the CIT(A)'s decision, dismissing the grounds raised by the assessee and upholding the denial of exemption.

In conclusion, the Tribunal dismissed the appeal, affirming the decision of the CIT(A) in denying the exemption u/s. 11 of the Act due to the absence of registration u/s. 12A for the year under consideration. The judgment was pronounced on 30th September, 2022.

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