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2022 (10) TMI 568 - AT - Income TaxExemption of income u/s 11 12 - Availability of registration u/s 12AA - HELD THAT - In the instant case, Hon ble Tribunal directed the Ld.CIT(A) to condone the delay in filing the applications for registration u/s 12AA of the Act and also grant registration with retrospective effect. Accordingly, registration u/s 12AA was granted to the assessee. Merely based on the fact that the revenue has preferred an appeal against the order of the Hon ble Tribunal cannot be a reason for rejecting the claim u/s 11 or 12 of the Act for the assessee for the impugned assessment year. Pending adjudication of the appeal by the Hon ble High Court, the assessee is entitled to exemption u/s 11 or 12 of the Act for the year 2006-07. We, therefore, remit the matter back to the file of the AO and direct the Ld.AO to grant exemption u/s 11 or 12 of the Act in accordance with law. Appeal of the assessee is allowed for statistical purpose.
Issues:
1. Assessment of income for the A.Y. 2006-07. 2. Claim of exemption under sections 11 & 12 of the Income Tax Act. 3. Availability of registration under section 12AA. Issue 1: Assessment of income for the A.Y. 2006-07: The appeal was filed against the order of the Commissioner of Income Tax for the A.Y. 2006-07. The assessee initially declared Nil income, which was later scrutinized. Due to the repeal of sec.10(29) by the Finance Act, 2002, Agricultural Market Committees became taxable entities from A.Y. 2003-04 onwards. The Assessing Officer (AO) considered the excess of income over expenditure as the assessable income for A.Y. 2006-07 based on previous decisions and pending departmental appeals. The CIT(A) dismissed the appeal, leading to the appeal before the Tribunal. Issue 2: Claim of exemption under sections 11 & 12 of the Income Tax Act: The appellant raised grounds related to the availability of exemption under sections 11 & 12 of the Act. The Ld.CIT(A) did not entertain the claim as no specific ground was raised by the assessee for claiming exemption under section 11. The Ld.CIT(A) emphasized that the AO must ensure the assessee fulfills conditions for exemption under sections 11, 12AA, and 13. Insufficient material was available for adjudication, leading to the dismissal of the appeal on this ground. The Tribunal remanded the matter back to the AO considering retrospective registration u/s 12AA and directed the AO to grant exemption u/s 11 or 12 in accordance with the law. Issue 3: Availability of registration under section 12AA: The Tribunal highlighted that registration u/s 12AA was granted to the assessee retrospectively based on previous directions. The pendency of a revenue appeal against the Tribunal's decision did not justify rejecting the claim for exemption under sections 11 or 12 for the A.Y. 2006-07. The Tribunal directed the AO to grant the exemption in accordance with the law while the appeal was pending before the High Court. In conclusion, the Tribunal allowed the appeal for statistical purposes, remitting the matter back to the AO to grant the exemption under sections 11 or 12 of the Income Tax Act for the A.Y. 2006-07 in accordance with the law.
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