2025 (2) TMI 1067 - AT - Income Tax

Tribunal Rules Copy of Section 12A Registration Certificate Valid for Exemption; Overturns Denial for 2016-17.

The Appellate Tribunal allowed the appeal of the assessee, overturning the Assessing Officer's denial of exemption under section 11 of the Income-tax Act ... Denial of exemption u/s 11 - assessee failed to file original registration certificate u/s 12A - HELD THAT:- In the Return of Income, assessee has specifically mentioned that assessee is registered u/s 12A. As during the assessment proceedings, AO was aware about the registration number of the 12A certificate. 12A Certificate is issued by Commissioner of Income Tax, Kolhapur in those days. The Department is custodian of all these documents. ITO-Kolhapur, who passed the assessment order sits in Income Tax Office, Kolhapur, and Commissioner of Income- Kolhapur also sits in the same. However, the ITO did not bother to visit the Commissioner of Income Tax-Kolhapur to verify the registration number issued by Commissioner of Income Tax, Kolhapur in 1991. Subsequently, during the appellate proceedings before ld.CIT(A), assessee filed copy of registration certificate under section 12A of the Act. The ld.CIT(A) called-for a remand report from the Assessing Officer. The ITO in his remand report stated that additional evidence is not admissible, ITO further stated that assessee has not produced original copy of registration certificate under section 12A of the Act. Thus, the entire allegation of the Department in denying exemption claim under section 11 of the Act to the assessee is that original registration certificate under section 12A of the Act, was not filed. Thus, it is an admitted fact that copy of registration certificate was filed by the assessee. When Department is custodian, the Department cannot blame assessee for not filing original certificate. We have also observed that for A.Y.2017-18, assessee was granted exemption under section 11 of the Act. Thus, AO had erred in denying Assessee’s claim of exemption u/s 11. Decided in favour of assessee. The appeal in this case was filed by the assessee against the order of the Commissioner of Income Tax(Appeals) for Assessment Year 2016-17. The primary issue raised by the assessee was the denial of exemption under section 11 of the Income-tax Act, 1961 by the Assessing Officer due to the failure to submit the registration certificate under section 12A of the Act. The key legal questions considered by the Appellate Tribunal were whether the failure to submit the original registration certificate under section 12A warranted the denial of exemption under section 11 and whether the copy of the registration certificate provided by the assessee should have been considered sufficient evidence.The Appellate Tribunal analyzed the relevant legal framework and precedents, including the provisions of section 11 and section 12A of the Income-tax Act. The Tribunal noted that the Assessing Officer had acknowledged the assessee's registration under the Bombay Public Trust Act and the submission of various documents during the assessment proceedings. The Tribunal highlighted that the assessee had filed the Return of Income mentioning the registration number under section 12A and had provided a copy of the registration certificate during the appellate proceedings.The Tribunal found that the Assessing Officer's denial of exemption solely based on the failure to submit the original registration certificate was unjustified. The Tribunal emphasized that the Department, as the custodian of such documents, should have verified the registration number issued by the Commissioner of Income Tax. The Tribunal also noted that the assessee had been granted exemption under section 11 for the subsequent year, further supporting the assessee's claim.Based on the analysis of the facts and circumstances, the Tribunal held that the Assessing Officer had erred in denying the assessee's claim of exemption under section 11. The Tribunal directed the Assessing Officer to allow the exemption under section 11. The Tribunal relied on the decision in ITAT Pune's order in a similar case, Rotary Club Poona Downtown Charitable Trust Vs. ITO(Exemption), to support its conclusion.In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing that the denial of exemption based solely on the failure to submit the original registration certificate was unwarranted. The Tribunal's decision established the principle that the submission of a copy of the registration certificate should be considered sufficient evidence to support a claim for exemption under section 11 of the Income-tax Act.