2022 (5) TMI 891 - AT - Income Tax

Exemption u/s 11 - rejecting the applications filed by the assessee seeking registration u/s 12AA and u/s 80G(5)(vi) - HELD THAT - There is no dispute that the assessee was already registered u/s 12AA by order dated 23.06.2009 effective from 19.12.2008 at the time of moving the present application on 28.09.2020, a fact duly mentioned in the said application filed in Form no. 10A and admittedly and undisputedly, the impugned order passed by the ld CIT(E) doesn t any impact or consequences as far as the existing registration u/s 12AA which continues to remain valid as on date. There has however been amendment in the law by virtue of Finance Act 2020 where an assessee already registered u/s 12AA has to intimate/apply to the jurisdictional PCIT or CIT within the prescribed time period with requisite documentation and the implementation of which has been deferred initially by the Ministry of Finance as intimated through a press release dated 9.05.2020 and thereafter, there has been amendment in the Act by virtue of The Taxation And other laws (Relaxation and amendment of certain provisions) Act, 2020 where the earlier amended provisions have been replaced with new set of provisions and the said new provisions have been made effective from 1.04.2021. Therefore, as far as the present application filed on 28.09.2020 is concerned, we find that there was no requirement at first place to move such an application by the assessee at the relevant point in time and secondly, for the ld CIT(E) to initiate any action on such application where there were no provisions to move such an application at first place by the assessee which is already registered u/s 12AA of the Act. We also note that during the course of proceedings before the ld CIT(E), the assessee has also moved an application stating that it wishes to withdraw its application seeking registration as it is already registered u/s 12AA of the Act as evident from assessee s paperbook which has not been disputed by the Revenue. During the course of hearing as well, the ld AR has also submitted that the assessee has mistakenly moved the present application where there was no requirement at first place and has sought directions to the ld CIT(E) to allow the withdrawal of application wrongly filed u/s 12AA of the Act. We hereby modify the directions of the ld CIT(E) where the application dated 28.09.2020 u/s 12AA is to be treated as withdrawn due to non-applicability of the relevant provisions of law at the relevant point in time for moving such an application and whose implementation has been deferred to a subsequent date, and the fact that the assessee has also requested for withdrawal of its application. The order of the ld CIT(A) thus stand modified and the application of the assessee stand withdrawn.

Issues:
1. Delay in filing appeals
2. Rejection of application for registration u/s 12AA and u/s 80G(5)(vi) of the Act
3. Validity of rejection of registration application u/s 12AA
4. Withdrawal of wrongly filed application u/s 12AA
5. Denial of registration u/s 80G due to rejection of registration u/s 12AA

Delay in filing appeals:
The appeals were filed by the assessee against the order of the ld. CIT(E), Jaipur rejecting the applications for registration u/s 12AA and u/s 80G(5)(vi) of the Act. There was a delay of 172 days in filing the appeals, but considering the extended limitation period due to the Covid-19 pandemic as per the Hon'ble Supreme Court decision, both appeals were admitted for adjudication on merits.

Rejection of application for registration u/s 12AA:
The assessee had mistakenly filed an application seeking registration u/s 12AA despite already being registered. The assessee argued that the law had been amended, and the application was filed before the relevant provisions came into effect. The assessee also requested to withdraw the wrongly filed application. The Tribunal found that there was no requirement for the application at that time, and the application was to be treated as withdrawn due to non-applicability of the relevant provisions.

Validity of rejection of registration application u/s 12AA:
The ld. CIT(E) rejected the application for registration u/s 12AA, stating that the assessee failed to produce necessary details and documents. The Tribunal noted that the rejection was based on a mistaken application filed by the assessee, which was already registered u/s 12AA. The Tribunal modified the directions of the ld. CIT(E) and allowed the withdrawal of the application.

Withdrawal of wrongly filed application u/s 12AA:
The assessee had informed the ld. CIT(E) that the application for registration u/s 12AA was mistakenly filed and requested its withdrawal. The Tribunal considered the assessee's request, the non-applicability of the relevant provisions at the time of filing, and directed that the application be treated as withdrawn.

Denial of registration u/s 80G due to rejection of registration u/s 12AA:
The denial of registration u/s 80G was consequential to the rejection of registration u/s 12AA. As the Tribunal directed the withdrawal of the application u/s 12AA, the denial of registration u/s 80G was also modified accordingly. Both appeals filed by the assessee were allowed in light of the directions provided by the Tribunal.

This judgment highlights the importance of understanding the relevant legal provisions before filing applications for registration and the significance of timely and accurate submissions to avoid unnecessary rejections and complications in the registration process.

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