2023 (5) TMI 422 - SCH - Income Tax

Supreme Court upholds exemption benefit under Section 12A for long-term non-registered assessee.

M/s. Maharishi Institute Of Creative Intelligence U.P. Lucknow Versus Commissioner Of Income Tax (Exemption) Lucknow

M/s. Maharishi Institute Of Creative Intelligence U.P. Lucknow Versus Commissioner Of Income Tax (Exemption) Lucknow - [2023] 454 ITR 533 (SC) Issues involved:The issues involved in the judgment are related to the application for registration under Section 12A of the Income Tax Act, 1961, the requirement of issuance of a certificate of registration under Section 12A, the grant of exemption under Section 12A, the assessment order, the Commissioner's revision under Section 263 of the Act, the order passed by the Income Tax Appellate Tribunal (ITAT), the High Court's decision on the appeal(s) by the revenue, and the review application filed by the assessee.Application for Registration under Section 12A:The assessee applied for registration under Section 12A of the Income Tax Act, 1961, in the year 1987, and continued to be granted exemption under Section 12A. An amendment in 1997 required the issuance of a certificate of registration under Section 12A. Despite this, the assessee continued to avail the exemption under Section 12A post-1987 till the assessment year 2007-2008.Assessment Order and Commissioner's Revision:The Assessing Officer granted the benefit of exemption under Section 12A for the assessment year 2010-2011 based on registration in 1987. However, the Commissioner set aside the assessment order under Section 263 of the Act, stating that the benefit was granted without verifying the issuance of the registration certificate. The ITAT later set aside the Commissioner's order.High Court's Decision and Review Application:The High Court allowed the revenue's appeal, setting aside the ITAT's order, on the grounds that the assessee failed to produce the certificate of registration. The review application filed by the assessee was dismissed, leading to the present appeals challenging the High Court's decision.Judgment and Conclusion:The Supreme Court found that since the assessee had been availing the benefit of exemption under Section 12A since 1987, even post-1997 without a certificate of registration, the Assessing Officer was justified in granting the benefit for the assessment year 2010-2011. The Court held that the High Court's decision was erroneous as there was evidence of registration in 1987. Therefore, the High Court's judgment was quashed, the ITAT's order was restored, and the appeals were allowed with no costs.