2024 (6) TMI 1274 - AT - Income Tax

Non Grant of registration u/s 12AB from assessment year 2021-22 - Scope of amendment to Clause (ac) to section 12A(1) of the Act was inserted by TOLA - HELD THAT - It is a fact that the assessee trust was already registered under section 12AA of the Act vide order dated 31.03.2018. The assessee has to file an application in Form 10A for fresh registration due to amendment to Clause (ac) to section 12A(1) of the Act was inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ( TOLA ) with effect from 01.04.2021. The assessee has also filed as per amended laws in Form 10A within the due date as permitted by CBDT. We find that there is no justification for the ld. PCIT/CIT in not granting registration from the assessment year 2021-22. The ld. PCIT/ CIT has only granted registration from assessment year 2022-23 to assessment year 2026-27 by his order dated 06.04.2022. In our opinion, the ld. PCIT/CIT ought to have been granted registration from the assessment year 2021-22 onwards. The assessee was not able to file details of registration along with return of income filed by the assessee for the reason that no fresh registration was available with the assessee as per amended law. Thus, the CPC was not correct in denying benefit under section 11 of the Act to the assessee. PCIT/CIT, by following the observations of the CPC, denying the registration to the assessee from the assessment year 2021-22 was also not correct. We find that the assessee is entitled for grant of registration from the assessment year 2021-22. In view of the above, we set aside the order of the ld. PCIT/CIT dated 06.04.2022 in granting registration from 2022-23 to 2026-27 and remit the matter back to the file of the ld. PCIT/CIT with a direction to grant registration from the assessment year 2021-22 onwards and pass order accordingly. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues:
Delay in filing the appeal before the Tribunal, Registration under section 12AB of the Income Tax Act, 1961, Grant of registration from assessment year 2021-22, Compliance with statutory provisions, Interpretation of sections 12A(1)(ac) and 12AB, Correctness of the order passed by the ld. PCIT/CIT.

Analysis:
The appeal was filed with a delay of 283 days, and the assessee submitted a petition for condonation of delay, citing pursuit of alternative remedy of rectification as the reason for the delay. The Tribunal, after considering the submissions and facts, condoned the delay and admitted the appeal for adjudication, with a condition to pay a specified amount to the State Legal Aid Authority. The delay was deemed neither wilful nor wanton.

Regarding the registration under section 12AB, the assessee, a trust, had applied for registration under section 12AA, which was granted initially. Subsequently, an amendment mandated existing charitable trusts to apply for registration under section 12AB. The assessee filed the application within the extended due date, and registration was granted from the assessment year 2022-23 to 2026-27. However, the appeal challenged the registration period, seeking it from the assessment year 2021-22 onwards.

The Tribunal found that the ld. PCIT/CIT erred in not granting registration from the assessment year 2021-22. It noted that the assessee complied with the statutory provisions by filing the application within the permitted due date. The Tribunal interpreted the provisions of sections 12A(1)(ac) and 12AB, emphasizing that the registration should have been granted from AY 2021-22, as the CIT(E) is required to pass an order granting registration for five years upon receiving an application under section 12A(1)(ac)(i).

The Tribunal disagreed with the order passed by the ld. PCIT/CIT, which granted registration from 2022-23 to 2026-27, and remitted the matter back with directions to grant registration from the assessment year 2021-22 onwards. It held that the assessee was entitled to registration from 2021-22, as the CPC's denial of benefits under section 11 was based on the lack of fresh registration, which was not available due to the amended law.

In conclusion, the Tribunal allowed the appeal for statistical purposes, setting aside the order of the ld. PCIT/CIT and directing the grant of registration from the assessment year 2021-22 onwards.