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2015 (12) TMI 1796 - AT - Income TaxRenewal of approval u/s. 80G(5), grant of continuation of registration u/s. 12A and application for fresh registration u/s. 12A rejected - assessee has not been able to show that the assessee was earlier granted registration u/s. 12A - HELD THAT - Assessee had furnished sufficient evidence in support of his claim that it has been earlier enjoying the benefit u/s. 80G in the past and categoric statement of the assessee that the original registration certificate issued u/s. 12A has been misplaced, there was no occasion for the Commissioner of Income Tax to ask for any further document in support of earlier registration granted u/s. 12A of the Act. Revenue has not been able to explain as to how the assessee was granted approval/extension u/s. 80G on regular intervals in the absence of registration u/s. 12A of the Act. Thus, we are of the considered view that the Commissioner of Income Tax has erred in rejecting the application of the assessee for issuing certificate of registration u/s. 12A of the Act as well as rejecting application for approval/renewal u/s. 80G of the Act. Commissioner of Income Tax is directed to issue registration u/s. 12A and approval u/s. 80G w.e.f. assessment year 2010-11, i.e. the assessment year in which the benefit of section 80G was first denied to the assessee by the Assessing Officer.
Issues Involved:
1. Rejection of application for renewal of approval under section 80G(5). 2. Denial of continuation of registration under section 12A. 3. Rejection of application for fresh registration under section 12A(a). Detailed Analysis: 1. Rejection of Application for Renewal of Approval under Section 80G(5): The assessee, a Public Charitable Trust formed in 1970, had been enjoying the benefit of exemption under section 80G since 1978. During the scrutiny assessment for the assessment year 2010-11, the Assessing Officer denied the benefit of section 80G as the assessee could not produce the registration certificate under section 12A. The assessee contended that the certificate was misplaced but argued that the consistent benefit under section 80G implied registration under section 12A. The Commissioner of Income Tax rejected the application for approval under section 80G(5) on the grounds that the assessee failed to show registration under section 12A, which is a mandatory condition for approval under section 80G(5). The Tribunal found that the assessee had provided sufficient evidence of enjoying the benefit under section 80G from 1978 to 2008, and the Department had consistently granted this benefit. The Tribunal concluded that the Department's reason for rejecting the approval under section 80G due to the absence of a registration certificate under section 12A was not sustainable. The Tribunal directed the Commissioner of Income Tax to issue registration under section 12A and approval under section 80G from the assessment year 2010-11. 2. Denial of Continuation of Registration under Section 12A: The assessee's application for the continuation of registration under section 12A was also rejected by the Commissioner of Income Tax due to the inability to furnish the earlier certificate of registration. The Tribunal observed that the Department had granted the benefit of section 80G over several years, which presupposed registration under section 12A. The Tribunal referenced the case of Sardar Bhavan Trust, where it was held that the onus is on the Department to prove that the trust was not registered under section 12A if it had previously been granted exemption. Given the evidence provided by the assessee and the lack of contradictory evidence from the Department, the Tribunal concluded that the rejection of the application for continuation of registration under section 12A was erroneous. The Tribunal set aside the impugned orders and directed the Commissioner of Income Tax to issue the registration certificate under section 12A. 3. Rejection of Application for Fresh Registration under Section 12A(a): The Commissioner of Income Tax had rejected the application for fresh registration under section 12A(a) on the grounds that the assessee's activities were commercial rather than charitable. The Tribunal found that since the appeal for continuation of registration under section 12A was accepted, the appeal for fresh registration under section 12A(a) became infructuous. The Tribunal dismissed this appeal as academic. Conclusion: The Tribunal allowed the appeals for renewal of approval under section 80G and continuation of registration under section 12A, directing the Commissioner of Income Tax to issue the necessary certificates from the assessment year 2010-11. The appeal for fresh registration under section 12A(a) was dismissed as infructuous. The Tribunal emphasized the Department's responsibility to maintain records and the onus on the Department to disprove the assessee's claims of earlier registration under section 12A.
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