No Deeming provision in Income Tax for Section 12AA Registration: ITAT

Brief facts of the case are that the assessee is claiming itself to be registered as a public charitable trust. The Trust was set up on 13/01/2010. The applicant Trust filed an application for registration under Section 12AA of the Income Tax Act, 1961 (in short, the Act) on 13/12/2018. The assessee trust was granted registration under Section 12AA vide order dated 19/06/2019 w.e.f. 13/12/2018 i.e. from the date of application. Still aggrieved by the action of ld. CIT(E) in granting registration from the date of application, the assessee trust has filed the present appeal before this Tribunal.

The ld. AR of the assessee submits that initially the assessee trust, filed an application for its registration on 29/12/2011 before the ld. CIT(E), Surat. Alongiwth registration application, the assessee furnished certificate of Assistant Charity Commissioner granted on 22/03/2011. No intimation of any kind was received nor any detail was sought from the assessee. The assessee on safer side moved fresh application on 13/12/2018 before the ld. CIT(E), Ahmedabad for granting registration under Section 12AA of the Act. The registration was granted from date of application which is 13.12.2018 i.e. from A.Y. 2019-20.

During the intervening period i.e. A.Y. 2011-12 to 2018-19, the Assessing Officer scrutinize and passed assessment orders. In A.Y. 2016-17, the Assessing Officer disallowed the expenditure claimed to be exempt on the ground of non-registration under Section 12AA of the Act. The ld. AR further submits that the assessee is a public charitable trust having object of charity consisting of medical health, public health, guiding for education and cottage industry activity. Since the assessee filed an application in December, 2011, the assessee was under bonafide belief that they will be granted registration from A.Y. 2012-13. The ld. AR submits that newly amended Section 12A(2) allowed granting of registration only from the financial year in which registration sought to apply and not the back date since inception of trust by condoning the delay, however, the case of assessee is difference, the case of assessee never falls under clutches of delay as they have applied registration since inception. There was no malafide on the part of assessee for applying registration belatedly.

The ld. AR of the assessee submits that they may be granted registration since inception i.e. from Financial year 2011-12. To support its submission, the ld. AR of the assessee relied upon the following decisions:

(i) Snjeevamma Hanumanthe Gowda Charitable Trust Vs DCIT(Exemption) 285 ITR 327 (Kar).

(ii) Rama Rao Adik Education Society, Mumbai Vs CIT, ITA No. 5742/Mum/2007 dated 11/02/2008

(iii) Saint Kabir Education Trust Vs CIT 41 DTR (Asr)(Trib) 267

(iv) Church of our Lady Grace Vs CIT 9 ITR (Trib) 505 (Mum)

(v) PCIT Vs Jawaharlal Nehru Technological University ITA No. 1769/Hyd/2019 order dated 27/04/2021.

In support of its claim, the assessee also filed copy of trust deed with English translation, Income tax return, computation, auditor’s report, profit and loss account and balance sheet from A.Y. 2017-18 to A.Y. 2020-21, application for registration of trust under Form 10A for registration under Section 12A dated 29/12/2011.

On the other hand, the ld. CIT-DR for the revenue submits that there is no infirmity or illegality in granting registration under Section 12AA of the Act vide order dated 19/06/2019. The Assessee trust filed an application under Form 10A on 23/12/2018. The ld. CIT(E) granted registration from the date of application. The assessee is eligible for registration only from the date of application and not for retrospective date i.e. date of inception of assessee trust. The ld CIT-DR for the revenue submits that Hon’ble Supreme Court in a recent decision in in Harshit Foundation Vs CIT (2022) 447 ITR 372 (SC) held that there is no provision of deemed registration in the income tax Act, so the assessee cannot claim on the basis of application allegedly filed on 29.12.2011 for deemed registration on registration from retrospective date. The ld. CIT-DR prayed for dismissal of this appeal.

ITAT Order:

ITAT retreated the decision of the Hon’ble Supreme Court in matter of Harshit Foundation Vs CIT 447 ITR 372 (SC) wherein the court has held that there is no specific provision in the Income Tax Act that non-deciding the registration application under Section 12AA within a period of six months there shall be a deemed registration.

Thus, the ratio of this decision is directly applicable on the facts of the present case. Even otherwise, the law declared by the Hon’ble Apex Court is a binding precedent by virtue of Article 141 of the Constitution of India.

In the result, this appeal of assessee is dismissed.

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