2024 (7) TMI 506 - AT - Income Tax

Rectification u/s 154 - deduction was not allowed u/s 11 as new registration details under new provisions of section 12AB were not furnished in return of income - as argued CIT(A) should have allowed the rectification petition since there was glaring mistake of CPC apparent from record that the assessee trust was registered u/s 12A, the old registration number were duly mentioned in the return of income and the action of CPC in denying exemption u/s 11 to the assessee trust in the intimation u/s 143(1) for not mentioning the new registration number in the return of income when the date for making application for obtaining new registration number was extended by the CBDT which was much after the date of the intimation. HELD THAT - We find that the assessee s application for new registration in Form 10A, which was granted in Form 10C on 05.04.2022 granted from A.Y 2022-23 to A.Y 2026-27, however, the ld. CIT(A) failed to appreciate that old registration u/s 12A was valid till fresh registration was granted to the assessee. However, this fact was never examined by the Assessing Officer while passing the main order by simply rejecting the appeal of the assessee. We, therefore, direct the ld. CIT(A) to re-examine the issue after affording reasonable opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues Involved:
Appeal against order u/s 154 for denial of exemption u/s 11 to a charitable trust due to failure in furnishing new registration details u/s 12AB in return of income.

Analysis:
1. The appeal was filed by the assessee against the order passed by the CIT(A) dismissing the appeal against the order u/s 154 for denial of exemption u/s 11. The assessee contended that there was no mistake apparent from the record as the trust was registered u/s 12A, and the old registration number was mentioned in the return of income. The CPC denied exemption u/s 11 due to the absence of the new registration number, even though the application deadline for the new number was extended by the CBDT. The CIT(A) erred in not allowing the rectification petition based on these grounds.

2. The assessee, a charitable trust registered u/s 12A, filed its return of income for the relevant assessment year without furnishing details of the new registration approval u/s 12AB to be eligible for exemption u/s 11/12. The Assessing Officer, while processing the return u/s 143(1), disallowed the exemption claim due to the absence of the new registration details, leading to a demand raised on the assessee. Subsequently, the rectification request u/s 154 was rejected by the CPC on the same grounds, which was challenged by the assessee before the CIT(A).

3. The Tribunal noted that the assessee had applied for new registration on Form 10A, granted in Form 10C, and the old registration u/s 12A remained valid until the new registration was granted. However, the Assessing Officer did not consider this aspect while passing the order, leading to the dismissal of the appeal by the CIT(A). The Tribunal directed the CIT(A) to re-examine the issue after providing a reasonable opportunity for the assessee to be heard, ultimately allowing the appeal for statistical purposes.

In conclusion, the Tribunal's decision highlighted the importance of considering the validity of old registration in cases of applying for new registration, emphasizing the need for a thorough examination of relevant facts before denying exemptions to charitable trusts.