2024 (8) TMI 681 - AT - Income Tax

Denial of exemption u/s 11 by the CPC u/s 143(1) - non furnishing of fresh registration u/s 12AB - assessee having obtained the provisional registration u/s 12AB - whether non uploading of Form 10B within the date prescribed under the Act would become fatal to the claim of exemption u/s 11? - HELD THAT - We find that the assessee was already enjoying the registration u/s 12AA of the Act vide order dated 08.01.2001, though in the instant case the assessee had indeed applied for fresh registration u/s 12AB of the Act in the prescribed form within the time allowed by the statute. That is why the said application has been duly considered by CIT by granting provisional registration in Form 10AC dated 05.04.2022 valid for 5 assessment years commencing from AY 2022-23 to 2026-27. As per the law, fresh registration could be granted only from the year in which application was preferred by the assessee. The said application made by the assessee for seeking fresh registration u/s 12AB of the Act is well within time allowed by CBDT. Hence the original registration obtained u/s 12AA dated 08.01.2001 would protect the assessee up to AY 2021-22 for claim of exemption u/s 11 of the Act as long as other conditions prescribed in section 11 to 13 of the Act have been fulfilled by the assessee. From AYs 2022-23 to 2026-27, the assessee would be eligible for exemption u/s 11 of the At given the fresh registration obtained u/s 12AB of the Act. Hence, for AY 2021-22 the assessee would be duly entitled for claim of exemption u/s 11 - The grounds raised by the assessee are allowed.

Summary

Issues:
1. Denial of exemption u/s 11 of the Income-tax Act by the Commissioner of Income Tax (Appeals) due to non-furnishing of fresh registration u/s 12AB.
2. Consideration of the filing of audit report in Form 10B beyond the due date and its impact on the claim of exemption u/s 11.
3. Interpretation of the law regarding the requirement of fresh registration u/s 12AB and its effect on the claim of exemption u/s 11.

Analysis:
1. The appeal before the Appellate Tribunal ITAT DELHI concerned the denial of exemption u/s 11 of the Income-tax Act by the Commissioner of Income Tax (Appeals) due to the non-furnishing of fresh registration u/s 12AB. The assessee, a society registered u/s 12AA, filed the return for AY 2021-22 claiming exemption u/s 11. Despite obtaining provisional registration u/s 12AB before the due date, the denial was based on the alleged failure to provide details of the fresh registration in the return filed belatedly. The Tribunal noted that the assessee had complied with the law by applying for fresh registration within the allowed time, and the original registration u/s 12AA protected the claim of exemption for AY 2021-22. Citing precedents, the Tribunal allowed the appeal, holding the denial of exemption unjustified.

2. The Tribunal addressed the issue of filing the audit report in Form 10B beyond the due date and its impact on the claim of exemption u/s 11. The audit report was filed after the prescribed deadline, attributed to the first-year requirement under the law. Citing a decision by the Ahmedabad Tribunal, the Tribunal emphasized that the filing deadline for the audit report was a procedural requirement and not fatal to the claim of exemption. As long as the report was made available to the assessing officer before the completion of assessment, the substantive claim of exemption could not be denied. This view was reinforced by a decision of the Dehradun Tribunal, supporting the assessee's position regarding the audit report.

3. The Tribunal delved into the interpretation of the law concerning the requirement of fresh registration u/s 12AB and its impact on the claim of exemption u/s 11. It highlighted that the assessee's timely application for fresh registration, granted provisionally, was in compliance with the statutory provisions. The Tribunal clarified that the original registration u/s 12AA protected the assessee's claim of exemption for AY 2021-22, with eligibility for exemption from subsequent years based on the fresh registration obtained. By upholding the assessee's entitlement to exemption u/s 11 for AY 2021-22, the Tribunal underscored the significance of fulfilling conditions under sections 11 to 13 of the Act for claiming exemptions in subsequent assessment years.