2023 (11) TMI 696 - AT - Income Tax

Denial of Registration u/s 12AA/12AB - Absence of registered instrument - as assessee neither registered with registrar of Public Trust nor it is registered with Companies Act and that assessee failed to file documentary evidence to satisfy the genuineness of such activities against such order - HELD THAT - It is an admitted fact that assessee / Bar Association has not obtained any registration either under Gujarat Public Trust Act or under any other statutory provision. We find that Rule 17A, which deals with the registration u/s 12AB has been substituted with effect from 01.04.2021 and as per substituted provision prescribed under clause-(c) of sub-Rule-2 of Rule 17A, the assessee is required to furnish certified copy of registration with registrar of Companies or registrar of farm and society or registrar of Public Trust, as the case may be. Since, the application of the assessee for registration was pending either before this Tribunal or restored back to ld CIT(E), therefore, this application is treated under section 12AB. In our view, this is a condition precedent for making application under Form 10A or 10AB, however, before us Ld. AR for the assessee vehemently submitted that furnishing of self-certified copy is required only if it is so registered and it was also argued that there is no provision that institute should be constituted under any law. Such submission of Ld. AR for the assessee is not acceptable to us, as clause-(c) of sub-Rule (2) of Rule 17A is clear and unambiguous. Income Tax Rules 1962 amended from time to time is framed to supplement of statutory provision under the Act and have approval of Parliament. Thus, in our view the assessee failed to fulfil the primary condition for registration under registrar of company, registrar of farm and society or registrar of Public Trust and in absence of such registered instrument, the application filed by assessee is premature and cannot be proceeded to examine their object and the activities, if in accordance with their object. Therefore, we do not find any merit in the submission of Ld. AR for the assessee. CIT(E) has duly considered the direction of this Bench and granted full opportunity to the assessee, before passing the order in accordance with law. CIT(E) has nowhere exceeded his jurisdiction while passing the order afresh, rather the assessee itself failed to fulfil the requisite conditions for making application as per the condition of clause-(c) of sub-Rule (2) of Rule 17A. In the result, grounds of appeal raised by assessee are rejected.

Summary

Issues Involved:
1. Delay in filing the appeal.
2. Rejection of application for registration under section 12AA of the Income Tax Act, 1961.
3. Compliance with Rule 17A and Section 12AA requirements.

Summary:

1. Delay in Filing the Appeal:
The appeal was filed with a delay of 26 days. The assessee attributed this delay to the unavailability of some office bearers due to professional engagements, which delayed the decision-making process. The Tribunal found no mala fide or deliberate delay and condoned the delay, allowing the appeal to be heard on merit.

2. Rejection of Application for Registration under Section 12AA:
The assessee, a Bar Association, applied for registration under section 12AA on 09.02.2018. The Commissioner of Income Tax (Exemptions) [CIT(E)] rejected the application on 28.12.2018, citing the failure to submit a copy of the registration certificate evidencing the creation of the trust/institution. The Tribunal had previously set aside this order and directed the CIT(E) to examine the objects and activities of the assessee and pass a speaking order.

3. Compliance with Rule 17A and Section 12AA Requirements:
Upon reconsideration, the CIT(E) again rejected the application, stating that the assessee failed to provide a certified copy of registration with any competent authority, such as the Charity Commissioner or Registrar of Societies. The CIT(E) emphasized that Rule 17A and Section 12AA require such documentation to establish the creation of a trust or institution. The Tribunal upheld this decision, noting that the assessee did not fulfill the primary condition of registration under any statutory authority, making the application premature.

Conclusion:
The Tribunal dismissed the appeal, agreeing with the CIT(E) that the assessee did not meet the necessary conditions for registration under section 12AA. The Tribunal granted the assessee the liberty to apply for fresh registration upon complying with the statutory registration requirements. The appeal was dismissed, and the order was pronounced in open court on 12/10/2023.