2017 (12) TMI 915 - AT - Income Tax

Eligible for exemption u/s 11 - proof of charitable activities - Held that - We are of the considered view that Ld. CIT(A) has rightly dismissed the appeal of the assessee by holding that as on date the Assessee is not in possession of registration u/s. 12AA of the Act, which is mandatory for availing the exemption u/s. 11 to 13 of the I.T. Act, 1961. As perused the Appeal File and we are of the view that assessee has not filed any Certificate of Registration granted u/s. 12AA of the I.T. Act, 1961, which is mandatory for availing the exemption u/s. 11 to 13 of the Act, before the AO as well as Ld. CIT(A) and even before the Tribunal. Therefore, in the absence of the same, we are unable to accept the request of the Assessee for grant of exemption u/s. 11 to 13 of the I.T. Act. See case of Jammu Development Authority vs. UOI (2014 (7) TMI 1160 - SUPREME COURT OF INDIA), we uphold the impugned order passed by the Ld. CIT(A) and reject the grounds raised by the Assessee by dismissing the Appeal filed by the Assessee.

Summary

Issues:
1. Dismissal of appeal by Commissioner of Income Tax (Appeals) based on lack of registration u/s 12A.
2. Eligibility for exemption u/s 11 to 13 of the Income Tax Act.
3. Compliance with registration requirements for availing tax exemptions.
4. Adherence to legal procedures and precedents in tax matters.

Issue 1: Dismissal of appeal by Commissioner of Income Tax (Appeals) based on lack of registration u/s 12A:
The appellant challenged the order of the Commissioner of Income Tax (Appeals) dismissing the appeal due to the absence of registration u/s 12A. The appellant contended that the assessing officer had assessed surplus income based on the rejection of registration u/s 12A, despite favorable decisions by the ITAT and the Allahabad High Court. The matter was sub-judice before the Supreme Court, with no stay granted against the High Court's decision. The Tribunal upheld the CIT(A)'s decision, emphasizing the mandatory requirement of registration u/s 12AA for tax exemption u/s 11 to 13 of the Act. The Tribunal noted the absence of the registration certificate submitted by the appellant, leading to the rejection of the appeal.

Issue 2: Eligibility for exemption u/s 11 to 13 of the Income Tax Act:
The appellant's eligibility for tax exemption u/s 11 to 13 of the Income Tax Act was contingent upon possessing registration u/s 12AA. The assessing officer denied the exemption due to the absence of such registration, resulting in the surplus income being taxed under normal provisions. The CIT(A) upheld this decision, stating that without registration, the appellant could not avail of the exemption. The Tribunal concurred, highlighting the importance of compliance with registration requirements for claiming tax benefits under the specified sections of the Act.

Issue 3: Compliance with registration requirements for availing tax exemptions:
The crux of the dispute revolved around the appellant's failure to obtain registration u/s 12AA, a prerequisite for claiming exemptions u/s 11 to 13 of the Income Tax Act. Despite favorable decisions by lower authorities, the absence of the registration certificate proved detrimental to the appellant's case. The Tribunal stressed the significance of adhering to statutory requirements for tax benefits, emphasizing the need for proper documentation and compliance with registration procedures to avail of exemptions under the Act.

Issue 4: Adherence to legal procedures and precedents in tax matters:
The Tribunal, after considering the arguments presented by the Department and reviewing relevant precedents, concluded that the CIT(A) had correctly dismissed the appeal based on the lack of registration u/s 12AA. Citing a similar case decided by the Supreme Court, the Tribunal upheld the principle that registration was essential for claiming tax exemptions under the specified sections of the Act. By aligning with established legal precedents and emphasizing the importance of registration compliance, the Tribunal affirmed the dismissal of the appeal, underscoring the need for consistency in interpreting tax laws and following established legal procedures.

This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal ITAT DELHI in the case, emphasizing the significance of registration requirements for claiming tax exemptions under the Income Tax Act and the adherence to legal procedures and precedents in tax matters.