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2018 (2) TMI 1627 - AT - Income TaxRejection u/s. 12AA(1)(b)(ii) - Held that - CIT(A)has not considered the findings of the AO narrated in the assessment order as well as broadly in the rejection order dated 28.03.2016 u/s 12AA(1)(b)(ii) of the CIT(E), Lucknow and he has not appreciated the fact mentioned in consequential factual finding of the CIT(E) order dated 28.03.2016 u/s 12AA(1)(b)(ii) that the claim of the applicant for registration u/s 12AA on basis-of form no 10A claimed to have been filed before JCIT-1, Kanpur on 22.08.2008 has been found to be false and assessee was not granted registration u/s 12A. Assessee society should have moved separate appeal to appropriate authority against the rejection order dated 28.3.2016 u/s. 12AA(1)(b)(ii) of the CIT(E), Lucknow. After considering the facts and circumstances of the case, we are of the considered view that the impugned order is contrary to the law and facts on the file, hence, is not sustainable in the eyes of law. The impugned order is contrary to the law and facts on the file, hence, is not sustainable in the eyes of law. Therefore, in the interest of justice, we are setting aside the issue in dispute to the file of the Ld. CIT(A) to thoroughly consider the contention raised in the grounds of appeal raised by the Revenue - Appeal filed by the Revenue stands allowed for statistical purposes.
Issues:
1. Consideration of findings by Ld. CIT(A) in relation to rejection order u/s 12AA(1)(b)(ii) of I.T. Act, 1961. 2. Treatment of society as trust and deletion of additions despite rejection order u/s 12AA(1)(b)(ii) of IT Act. 3. Ex-parte decision due to non-appearance of assessee. 4. Assessment of income without registration u/s 12A. 5. Allowance of benefits of exemption by Ld. CIT(A) and subsequent appeal by Revenue. Analysis: 1. The first issue revolves around the Ld. CIT(A)'s consideration of findings in relation to the rejection order u/s 12AA(1)(b)(ii) of the I.T. Act, 1961. The Revenue contended that the Ld. CIT(A) did not adequately consider the findings of the AO and the rejection order issued by CIT(E), Lucknow. The Revenue argued that the registration claim under form no 10A was false, leading to non-granting of registration u/s 12A. The Tribunal found merit in the Revenue's contentions and set aside the impugned order, directing the Ld. CIT(A) to reconsider the issue in dispute thoroughly and pass a speaking order after giving the assessee an opportunity to be heard. 2. The second issue pertains to the treatment of the society as a trust and the deletion of additions despite the rejection order u/s 12AA(1)(b)(ii) of the IT Act. The AO treated the society as an Association of Persons (AOP) due to lack of registration u/s 12A. However, the Ld. CIT(A) allowed the appeal of the assessee, granting benefits of exemption until the formal registration order was received by the AO. The Tribunal acknowledged the Revenue's argument that the Ld. CIT(A) did not fully consider the AO's findings and the rejection order by CIT(E), Lucknow. Consequently, the Tribunal set aside the impugned order for a fresh consideration. 3. The third issue arose from the ex-parte decision due to the non-appearance of the assessee during the hearing. Despite sending notices, the assessee did not appear, leading to an ex-parte decision. The Tribunal, after hearing the Ld. DR, proceeded with an ex-parte decision, considering the facts and circumstances of the case. 4. The fourth issue concerns the assessment of income without registration u/s 12A. The AO assessed the income of the assessee as an AOP due to the absence of registration u/s 12A. The Tribunal noted that the assessee failed to produce the registration certificate u/s 12A, leading to the assessment of income without the benefits of exemption. 5. The fifth issue involves the allowance of benefits of exemption by the Ld. CIT(A) and the subsequent appeal by the Revenue. The Ld. CIT(A) granted benefits of exemption to the assessee until the formal registration order was received by the AO. However, the Revenue contended that the Ld. CIT(A) did not adequately consider the AO's findings and the rejection order by CIT(E), Lucknow. The Tribunal agreed with the Revenue's contentions and set aside the impugned order for a fresh consideration by the Ld. CIT(A). In conclusion, the Tribunal allowed the appeal filed by the Revenue for statistical purposes, setting aside the impugned order and directing a fresh consideration of the issues in dispute.
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