2023 (11) TMI 1271 - AT - Income Tax

Application for registration u/s 12A(1)(ac)(iii) - application filed by the assessee is premature as the earlier order in Form 10AC is still valid till A. Y. 2026- 2027 - HELD THAT - CIT(Exemption) did not adjudicate the applications on merit. He simply treated the applications as infructuous on the ground that the assessees are already enjoying registration. It is pertinent to mention that clause (c) of section 12AB, sub-section (1) provides for grant of provisional registration for a period of three years from the assessment year from which the registration is sought. The assessees are having provisional registration but they have applied grant of registration u/s 12AB(1), clause (b) and nothing else. Commissioner was required to call for the documents and information satisfies himself and then grants the registration, which is valid for five years. The application was meant for grant of registration and not for provisional. Therefore, CIT has misconstrued the application itself and erroneously dismissed them by treating premature in nature. The impugned orders are set aside and the issues are relegated to the ld. CIT (Exemption) for fresh adjudication. Appeals of the assessees are allowed for statistical purposes .

Summary

Issues:
Appeal against orders of CIT regarding registration under section 12AB of the Income Tax Act.

Analysis:
The Appellate Tribunal ITAT Kolkata heard two appeals by assessees against orders of the CIT regarding registration under section 12AB of the Income Tax Act. The assessees claimed that the CIT failed to grant registration under section 12AB, subsection (1), clause (b)(ii) of the Income Tax Act. The Tribunal noted that the appeals were slightly time-barred due to a calculation error but decided to condone the delay and proceed to hear the appeals on merit.

Upon reviewing the case, the Tribunal found that the CIT did not adjudicate the applications on merit but rather treated them as infructuous since the assessees already had provisional registration. However, the assessees had applied for registration under section 12AB(1), clause (b), not for provisional registration. The Tribunal highlighted that the CIT misunderstood the nature of the applications and wrongly dismissed them as premature. As per section 12AB, sub-section (1), the assessees were entitled to apply for registration valid for five years, not provisional registration for three years. Therefore, the Tribunal set aside the CIT's orders and remanded the issues for fresh adjudication by the CIT (Exemption).

In conclusion, the appeals of the assessees were allowed for statistical purposes, and the Tribunal pronounced the order on 30/11/2023.