2022 (1) TMI 883 - AT - Income Tax

Denial of registration u/s. 12AA(1)(b) r.w.s. 12A - main activities of the assessee includes Providing valuers course to create skilled registered valuers in the country - assessee has failed to respond to the requirements of the CIT(E) to enable him to appreciate the relevant facts for the purposes of registration - as submitted that the registration sought under section 12AA could not be denied to the assessee where on similar facts, various other organizations like ICAI registered valuers organization, Indian Institute of Insolvency Professionals of ICAI, ICSI Insolvency Professional agency, Practising Valuers Association of India carrying similar objects as that of assessee, have been duly granted registration - HELD THAT - As simultaneously noticed that the assessee has filed certain replies IN DAK before the CIT(E). On a reading of the impugned order, it appears that the CIT(E) has taken a view against the assessee unilaterally and without taking note of the main objects of the assessee as well as the decisions rendered in other cases placed in similar situation as claimed. The impugned order appears to be somewhat cryptic and requires elucidation on facts and law. We, therefore, deem it appropriate to restore the matter back to the file of the CIT(E)/other competent registering authority in force to examine matter DENOVO after taking cognizance of the factual position and contentions of the assessee. It shall be upon to the assessee to submit all relevant facts and its contentions before registering authority. The registering authority shall pass speaking order in accordance with law after taking note of the various submissions and contentions of the assessee. The impugned order under section 12AA(1)(b) r.w.s. 12A under challenge is thus set aside in terms observations hereinabove - Appeal of the assessee is allowed for statistical purpose.

Summary

Issues: Challenge to denial of registration under section 12AA of the Income Tax Act, 1961

Analysis:
The appeal was filed by the assessee trust challenging the order passed under section 12AA(1)(b) r.w.s. 12A of the Income Tax Act, 1961 by the Commissioner of Income Tax (Exemption), New Delhi. The assessee contended that the denial of registration was unjustified as its main activities included providing valuers course to create skilled registered valuers without any profit motive. The assessee highlighted its registration under section 8 of the Companies Act, 2013, and being a subsidiary of the Institute of Cost Accountant of India, emphasizing its objective of educating, regulating, and monitoring registered valuers. The assessee argued that similar organizations with comparable objectives had been granted registration under section 12AA, and thus, requested the reversal of the decision and registration under section 12AA.

The Revenue, represented by the Ld. CIT(DR), argued that the assessee failed to fulfill the onus of supporting its registration claim under section 12AA before the CIT(E), leaving no option for the revenue but to deny registration. The Revenue contended that the CIT(E)'s decision was justified due to the lack of factual support from the assessee.

Upon careful consideration of the submissions, the Appellate Tribunal noted that while the assessee had not adequately responded to the CIT(E)'s requirements for registration, certain replies were submitted before the CIT(E). The Tribunal observed that the CIT(E) appeared to have decided against the assessee without fully considering the main objects of the assessee and decisions in similar cases. Finding the order somewhat cryptic and lacking clarity on facts and law, the Tribunal decided to remand the matter back to the CIT(E) or another competent registering authority for a fresh examination. The assessee was directed to provide all relevant facts and contentions, and the registering authority was instructed to issue a detailed order in accordance with the law after considering the submissions. The impugned order under section 12AA(1)(b) r.w.s. 12A was set aside, and the appeal of the assessee was allowed for statistical purposes.

In conclusion, the Tribunal's decision highlighted the importance of considering all relevant facts and contentions before denying registration under section 12AA, emphasizing the need for a detailed examination by the registering authority in such matters.