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2022 (8) TMI 583 - AT - Income TaxRectification u/s 154 - Entitlement to exemption u/s 11 - expenses so claimed fully entitled to get which made for public charitable purpose according to the provisions of the Act - trust has filed an application for registration u/s 12AA of Income Tax Act, 1961 and ld. Commissioner of Income Tax (Exemption), Jaipur granted registration certificate under section 12AA - HELD THAT - As looking into the entirety of facts and circumstances that the assessee trust is registered under section 12AA w.e.f. 11.07.1966 and continuously getting benefit of section 11 of the IT Act, however, because of change in the system of the Department all the cases were transferred to New Ward (Exemption), therefore, technically the assessee trust again applied registration which was granted vide order dated 06.05.2016. Even the department while considering the entire facts of the case had already allowed expenses under section 11 of the Act for the assessment years 2012-13, 13-14 and 14-15. Therefore, keeping in view the principles of natural justice and consistency, we direct the AO to give benefit of section 11 to the assessee for the year under consideration. The order of ld. CIT (A) is set aside - Appeal of the assessee is allowed.
Issues:
- Rejection of application under section 154 for rectification of exemption claim under section 11 for the assessment year 2015-16. - Interpretation of section 12A(1) regarding registration of trust under section 12AA for income exemption under sections 11 & 12. - Dispute regarding the entitlement of the assessee to claim expenses under section 11 based on registration status under section 12AA. Analysis: - The appeal was filed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, for the assessment year 2015-16, under section 250 of the Income Tax Act, 1961. The assessee challenged the rejection of their application under section 154 for rectification of the exemption claim under section 11, alleging errors by the lower authorities in not considering genuine facts. The appellant sought relief based on entitlement to exemption under section 11 as a trust registered under section 12AA. - The case revolved around the registration status of the assessee trust under section 12AA for claiming income exemption under sections 11 & 12. The appellant had filed its return for the A.Y. 2015-16, claiming exemption under section 11 & 12, but the application was rejected by the ITO Exemption Ward, Ajmer, citing that the benefit of section 11 was applicable from AY 2016-17 due to registration under section 12A(1)(b) granted effective from 01.05.2016. The CIT (A) upheld this decision, emphasizing the requirement of registration under section 12AA for income exemption under sections 11 & 12. - During the appeal, the assessee contended that they had regularly filed returns as a trust, claiming expenses under section 11, and had been granted registration under section 12AA. The appellant highlighted their history of claiming expenses under section 11 based on registration under section 12AA and emphasized the trust's compliance with filing requirements and trust deed objectives. The appellant argued for the allowance of claimed expenses based on their registration status and past treatment by the department. - The Tribunal considered the submissions and found merit in the appellant's argument regarding the registration status under section 12AA and past treatment of expenses under section 11. Acknowledging the principles of natural justice and consistency, the Tribunal directed the AO to grant the benefit of section 11 to the assessee for the year under consideration, setting aside the order of the CIT (A). The appeal of the assessee was allowed, emphasizing the entitlement to claim expenses under section 11 based on registration under section 12AA. This detailed analysis reflects the key issues, arguments presented, and the Tribunal's decision in favor of the appellant based on the interpretation of relevant sections of the Income Tax Act.
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