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2025 (4) TMI 1090 - HC - Income TaxDenial of exemption u/s 11 and 12 - non-production of registration certificate issued u/s 12AA - HELD THAT - The factum of the registration of the petitioner trust u/s 12A of the Act by issuance of the certificate u/s 12AA is an undisputed fact. The respondent authority has also not disputed regarding the loss of certificate of the petitioner in the year 2012. The respondent authorities are therefore required to issue copy of the certificate u/s 12AA of the Act by reconstructing their own file as it is reported that the old records have been lost and the respondent authorities are unable to trace the original file. The only remedy available is to direct the respondent to reconstruct the file of original records on the material available with the respondent with the help of the petitioner and issue a copy of registration certificate u/s 12AA of the Act with Registration Certificate so as to enable the petitioner to claim the exemption u/s 11 and 12 of the Act without any hindrance. Such exercise shall be completed within a period of 12 weeks from the date of receipt of copy of this order. The petition is accordingly disposed of.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of Registration under Section 12A and Issuance of Registration Certificate under Section 12AA Relevant legal framework and precedents: Section 12A of the Income-Tax Act provides for registration of charitable trusts to enable them to claim exemption under sections 11 and 12. Section 12AA empowers the Commissioner of Income Tax to grant such registration by issuing a certificate. The procedure for application is prescribed under Rule 17A of the Income-Tax Rules, 1962, requiring filing of Form 10A. Court's interpretation and reasoning: The Court noted that the petitioner trust had filed the application for registration in Form 10A on 22.11.2002 before the Commissioner of Income Tax, Gandhinagar Range. The respondent authority did not dispute the fact that the registration certificate bearing number CIT/GNR/12AA/PTN-8/2002-03 was issued pursuant to the application, thereby granting registration under section 12A. Key evidence and findings: The petitioner's returns of income filed regularly reflected the registration number. The respondent authority did not deny the registration or the registration number stated by the petitioner. Application of law to facts: The Court concluded that the registration of the petitioner trust under section 12A by issuance of the certificate under section 12AA is an undisputed fact. Treatment of competing arguments: The respondent did not contest the validity of registration but only the availability of the certificate copy. Conclusion: The petitioner trust was validly registered under section 12A of the Act by issuance of the certificate under section 12AA. Issue 2: Obligation of Respondent Authority to Furnish Copy of Registration Certificate under Section 12AA Relevant legal framework and precedents: The Income-Tax Act does not explicitly provide a procedure for issuance of duplicate registration certificates. However, the Right to Information Act, 2005, mandates disclosure of public records unless exempted. The petitioner's application under RTI was rejected on the ground that the records were lost. Court's interpretation and reasoning: The Court observed that the respondent authority admitted loss of the original certificate and related records due to torrential rainfall in 2012. The petitioner's request for a copy was refused on this basis. The Court held that mere loss of records does not absolve the respondent from reconstructing records and issuing a copy of the certificate, especially since the registration is an admitted fact and the registration number is known. Key evidence and findings: The respondent's inability to trace the original file was confirmed even after a Court order to produce the records. The petitioner's RTI application and subsequent rejection order dated 28.12.2018 were part of the record. Application of law to facts: The Court directed the respondent to reconstruct the file from available material and issue a duplicate registration certificate to the petitioner within 12 weeks. Treatment of competing arguments: The respondent's argument that records were lost and thus no copy could be issued was rejected as insufficient. The Court emphasized the duty of the authority to reconstruct and provide necessary documents to enable lawful claims by the petitioner. Conclusion: The respondent authority is obligated to reconstruct the records and furnish a copy of the registration certificate under section 12AA to the petitioner trust. Issue 3: Entitlement to Claim Exemption under Sections 11 and 12 in Absence of Physical Certificate Copy Relevant legal framework and precedents: Sections 11 and 12 of the Income-Tax Act provide exemption of income for charitable trusts registered under section 12A. The registration certificate under section 12AA is a prerequisite for claiming such exemption. The petitioner's inability to produce the certificate for AY 2013-14 led to disallowance of exemption. Court's interpretation and reasoning: The Court noted that the petitioner did not challenge the disallowance order for AY 2013-14, which was accepted due to the small amount involved. However, the Court recognized that the petitioner's entitlement to exemption for other years depends on possession of the registration certificate copy. Key evidence and findings: The petitioner's regular filing of returns claiming exemption based on the registration certificate number was accepted by the respondent under section 143(1) for other years. Application of law to facts: The Court reasoned that to avoid future complications and to enable the petitioner to claim exemption under sections 11 and 12, the petitioner must be provided with the registration certificate copy. Treatment of competing arguments: The respondent argued that non-appeal against the disallowance order precludes exemption claims. The Court did not expressly rule on the finality of that disallowance but focused on enabling the petitioner to claim exemption going forward by furnishing the certificate copy. Conclusion: The petitioner is entitled to claim exemption under sections 11 and 12 provided the registration certificate copy is furnished by the respondent. Issue 4: Remedies under Article 226 of the Constitution for Enforcement of Rights Regarding Registration Certificate and Exemption Claims Relevant legal framework and precedents: Article 226 empowers High Courts to issue writs including mandamus to enforce fundamental rights and other legal rights. The petitioner invoked this jurisdiction seeking mandamus directing the respondent to furnish the registration certificate copy and stay assessment proceedings. Court's interpretation and reasoning: The Court found the petitioner's prayers for issuance of writs appropriate given the respondent's failure to provide the certificate copy and the ongoing assessment proceedings. The Court exercised its jurisdiction to direct reconstruction of records and issuance of the certificate copy. Key evidence and findings: The petitioner's RTI application, the respondent's refusal, and the inability to trace records despite Court orders were crucial in justifying the writ relief. Application of law to facts: The Court ordered the respondent to reconstruct the file and issue the certificate copy within a stipulated time frame, thereby granting effective relief under Article 226. Treatment of competing arguments: The respondent's inability to produce records was not accepted as a defense against the writ petition. Conclusion: The petitioner's invocation of Article 226 was justified and the Court granted appropriate writ relief directing issuance of the registration certificate copy. Issue 5: Effect of Non-Appeal Against Disallowance of Exemption for AY 2013-14 Relevant legal framework and precedents: Appeals against assessment orders are the normal remedy to challenge disallowance of exemption. Non-appeal generally results in finality of the order for that year. Court's interpretation and reasoning: The Court noted the petitioner's acceptance of the disallowance order for AY 2013-14 without appeal but did not hold that this precludes exemption claims for other years or future periods. Key evidence and findings: The petitioner's non-appeal was due to the smallness of the amount involved. Application of law to facts: The Court implicitly distinguished the disallowance for one year from the petitioner's general entitlement to exemption based on valid registration. Treatment of competing arguments: The respondent relied on the non-appeal to argue against exemption entitlement, but the Court focused on procedural fairness and enabling the petitioner to claim exemption by providing the registration certificate copy. Conclusion: The non-appeal against the disallowance order for AY 2013-14 does not bar the petitioner from claiming exemption under sections 11 and 12 for other years once the registration certificate copy is furnished. 3. SIGNIFICANT HOLDINGS The Court held:
Core principles established include the obligation of tax authorities to reconstruct lost records and provide certified copies of registration certificates to enable lawful claims of exemption by charitable trusts. The Court recognized that loss of records does not extinguish the rights of the registered trust and that procedural fairness requires facilitating access to necessary documents. Final determinations on each issue are:
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