2019 (5) TMI 14 - AT - Income Tax

Exemption u/s 11 - application for registration u/s 12AA - not responded by competent authority within six months - deemed registration - HELD THAT - CIT(Exemptions) had accepted the fact of receipt of application for registration on 27/12/2005. Since there is no denial by the department within six months, the assessee was deemingly granted registration by virtue of application under section 12AA not being rejected within the stipulated time period of six months from the date of filing the application for registration. Nowhere, there is any adverse observation of the A.O. and the ld. CIT(A) to the effect that the assessee was not following the object of the society and the assessee is not a charitable institution. As relying on SOCIETY FOR THE PROMN. OF EDN., ALLAHABAD 2016 (2) TMI 672 - SUPREME COURT and SOCIETY FOR THE PROMOTION OF EDUCATION, ADVENTURE SPORT CONSERVATION OF ENVIRONMENT 2008 (4) TMI 700 - ALLAHABAD HIGH COURT no merit in the action of the lower authorities for denial of claim of exemption U/s 11 of the Act - Decided in favour of assessee.

Summary

Issues:
Appeals against orders of CIT(A) for AYs 2008-09, 2009-10, and 2012-13 regarding disallowance of deduction under Section 11 based on lack of registration certificate under Section 12AA.

Analysis:
1. The assessee appealed against the disallowance of deduction under Section 11 for AYs 2008-09, 2009-10, and 2012-13 due to the absence of a registration certificate under Section 12AA.
2. The AO denied the exemption under Section 11 as the registration certificate was not received despite the application made in 2005, citing the need for a revised return for claiming deductions.
3. The assessee argued that the absence of a rejection letter within six months of application submission led to deemed registration under Section 12AA, supported by relevant case laws.
4. The ITAT found merit in the assessee's argument, noting the acceptance of the application by the CIT(Exemptions) and directed the AO to reconsider the exemption claim under Section 11.
5. Relying on precedents like the Allahabad High Court and the Supreme Court, the ITAT emphasized the deemed registration provision under Section 12AA and overturned the lower authorities' denial of exemption.
6. Consequently, the ITAT allowed the appeals for statistical purposes, restoring the matter to the AO for fresh consideration in light of the granted registration under Section 12AA.

This detailed analysis highlights the legal battle over the denial of exemption under Section 11 due to the absence of a registration certificate under Section 12AA, showcasing the ITAT's decision to uphold the assessee's claim based on the principle of deemed registration and relevant judicial precedents.