The Income Tax Appellate Tribunal, Delhi, ruled that fresh registration of charitable trusts could be granted only from the year of preferring application.
The tribunal noted that the return for AY 2021-22 was filed by the assessee on 31.03.2022 u/s 139(4) of the Act declaring Nil income claiming exemption 11 of the Act. Infact the last date for filing return of income for AY 2021-22 u/s 139(4) of the Act was 31.03.2022 as per CBDT Circular No. 17/2021 dated 09.09.2021. Pursuant to the amendments brought in statute, all charitable trusts were supposed to apply for fresh registration u/s 12AB of the Act despite the fact that they were already holding registration u/s 12AA of the Act. Due date for preferring the application for seeking fresh registration u/s 12AB of the Act was extended by CBDT from time to time giving leeway to the assessee that the assessee trusts should not be put to any undue hardship.
It was further noted by the tribunal that the provisional registration u/s 12AB of the Act was indeed granted to the assessee by the Pr. CIT. The return of income was processed by the CPC, Bengaluru u/s 143(1) of the Act stating that the details of fresh registration u/s 12AB of the Act obtained by the assessee were not filled by the assessee in the relevant column of the ITR and consequently exemption u/s 11 of the Act was to be denied.
The bench noted that the return of income was filed belatedly on 31.03.2022. The registration u/s 12AB of the Act was obtained by the assessee only on 05.04.2022. Hence, it would be impossible for the assessee to mention the details of registration obtained u/s 12AB of the Act in the relevant column of the ITR filed on 31.03.2022. However, the assessee had furnished the entire details of registration obtained u/s 12AB of the Act on 05.04.2022 before the CIT(A).
The tribunal observed that despite the same, the CIT(A) ignores the fact of assessee having obtained the provisional registration u/s 12AB of the Act and proceeds to uphold the denial of exemption u/s 11 of the Act on the ground that the assessee had not furnished the details of fresh registration obtained.
The bench said that the action of the CIT(A) is highly condemnable as it is directly contrary to the facts on record.
Issue Raised
Whether non uploading of Form 10B within the date prescribed under the Act would become fatal to the claim of exemption u/s 11 of the Act ?
The bench observed that this aspect has been duly considered by the coordinate bench decision of Ahmedabad Tribunal in the case of ITO Vs. Takshshila Foundation (NGO) in ITA NO. 118/Ahd/2024 and CO No. 08/Ahd/2024 dated 02.07.2024 wherein, it was held that the requirement of filing of audit report in Form 10B was only procedural requirement of law and as long as the same was made available to the ld AO before the completion of assessment either u/s 143(1)/ 143(3)/ 144/ 147 of the Act, the substantive claim of exemption u/s 11 of the Act cannot be denied to the assessee.
The tribunal found that the only reason for denial of claim of exemption u/s 11 of the Act to the assessee in the case is for non furnishing of fresh registration u/s 12AB of the Act.
It was further found that the assessee was already enjoying the registration u/s 12AA of the Act vide order dated 08.01.2001, though in the instant case the assessee had indeed applied for fresh registration u/s 12AB of the Act in the prescribed form within the time allowed by the statute.
The tribunal held that the original registration obtained u/s 12AA of the Act dated 08.01.2001 would protect the assessee up to AY 2021-22 for claim of exemption u/s 11 of the Act as long as other conditions prescribed in section 11 to 13 of the Act have been fulfilled by the assessee. From AYs 2022-23 to 2026-27, the assessee would be eligible for exemption u/s 11 of the Act given the fresh registration obtained u/s 12AB of the Act. Hence, for AY 2021-22 the assessee would be duly entitled for claim of exemption u/s 11 of the Act.
Case Information
Case Name: Shambhu Dayal Modern School v/s ITO (Exemption), Rohtak
Judicial Level & Location : ITAT New Delhi
Case Number : ITA No. 1236/Del/2024
Date of Decision : 02/08/2024
Decision in favor of: Appellant
Judges: Shri M. Balaganesh, Accountant Member And Shri Anubhav Sharma, Judicial Member
