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2022 (11) TMI 362 - AT - Income TaxExemption u/s 11 - assessee trust was not registered u/s 12AA - HELD THAT - Undisputedly, the assessee trust though a charitable trust registered under Bombay Public Trust Act, has not been got itself registered under section 12AA of the Act, however got itself registered u/s 12A only on 24.09.2018 i.e. after completion of the assessment proceedings. It is also not in dispute that the assessee has claimed deduction on account of certain expenses claimed to have incurred on the object of trust, on account of legal and miscellaneous expenses etc. which have been disallowed by the AO on the sole ground that the assessee trust has not been registered under section 12A of the Act. Appeals filed by the assessee are dismissed.
Issues:
1. Disallowance of expenditure by AO due to non-registration under section 12A of the Act. 2. Challenge to the assessment orders by the assessee trust. 3. Interpretation of relevant provisions of law regarding registration under section 12AA and 12A. 4. Consideration of judgments and orders in support of the assessee's contentions. 5. Failure of the assessee to provide details/evidences to support its claim for expenses. Issue 1: Disallowance of expenditure by AO due to non-registration under section 12A of the Act The appellant, a charitable trust not registered under section 12AA but under Bombay Public Trust Act, filed returns for A.Y. 2013-14, 2014-15 & 2015-16. The AO disallowed expenditures totaling Rs.19,61,761/-, Rs.20,80,024/- & Rs.29,69,710/- respectively, as the trust was not registered under section 12A. The Ld. CIT(A) upheld this disallowance, leading to the appeal before the Tribunal. The Tribunal noted the absence of details/evidences supporting the claim for expenses under normal provisions of the Act due to non-registration. The appellant failed to appear before the Tribunal despite notice, resulting in the dismissal of the appeals. Issue 2: Challenge to the assessment orders by the assessee trust The assessee challenged the assessment orders before the Ld. CIT(A), who dismissed the appeals, leading to the appeals before the Tribunal. The Ld. CIT(A) upheld the AO's addition of disallowed expenditures due to the trust not being registered under section 12A, which formed the basis of the challenge by the assessee trust. Issue 3: Interpretation of relevant provisions of law regarding registration under section 12AA and 12A The Ld. CIT(A) analyzed the provisions of section 12A(2) of the Act in response to the appellant's contentions. The appellant argued that the case should not have been reopened under section 147 due to non-registration under section 12A, citing judgments and provisions of the Act. However, the Ld. CIT(A) found that the provisions of section 12A(2) did not apply as the assessment order was passed before the trust applied for registration under section 12A. Issue 4: Consideration of judgments and orders in support of the assessee's contentions The appellant relied on judgments and orders to support its claim for deduction of expenses despite non-registration under section 12AA. However, the Ld. CIT(A) found these references irrelevant as the appellant failed to provide details during assessment proceedings, unlike the cases cited. The Ld. CIT(A) concluded that the appellant's contentions did not align with the prevailing provisions of the law. Issue 5: Failure of the assessee to provide details/evidences to support its claim for expenses The Tribunal noted the absence of details/evidences supporting the claim for expenses by the assessee trust. Despite opportunities, the trust did not provide necessary documents to substantiate its claim for deduction of expenses under the normal provisions of the Act. This failure to present evidence contributed to the dismissal of the appeals by the Tribunal. This detailed analysis of the judgment highlights the key issues, arguments, and conclusions reached by the authorities involved in the case.
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