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2018 (10) TMI 1176 - AT - Income TaxExemption u/s 11 - assessee is engaged in charitable activity or not - Registration granted u/s. 12A/12AA denied - AO jurisdiction to deny the renewal of registration - Held that:- AO has no jurisdiction to question the continuation of registration u/s. 12A of the Act and thereby deny the claim of the assessee u/s. 11 of the I.T. Act and tax the amount set apart in earlier years on the reason that the assessee is not eligible for continuation of registration u/s. 12A of the Act. To that extent, the CIT(A) is justified in his finding that the Assessing Officer has no jurisdiction to question the same in view of the decision of this Tribunal in the case of Kuttukaran Foundation [2012 (4) TMI 78 - ITAT COCHIN]. CIT(A) could have directed the Assessing Officer to examine whether the activities carried on by the assessee is in accordance with the object clause of the Trust. Neither the CIT(A) nor the Assessing Officer have examined this issue. AO in this case, at the threshold, rejected the claim of the assessee under section 11 of the Act by observing that since the Trust has not obtained the approval of the Commissioner of Income-tax for amendments made by it in the memorandum and rules and regulations, and also not obtained prior approval for expanding its operations beyond the limits of the country, the Trust is not eligible for continuation of the registration granted u/s. 12A of the Act. Being so, the assessee was treated as having no registration u/s. 12A of the Act. Hence, The Assessing Officer has not examined and satisfied himself whether the asessee-Trust has carried on the operations in accordance with provisions of section 11 of the Act so as to grant exemption u/s. 11 of the Act. Since we have observed that the assessee-Trust is entitled for continuation of registration u/s. 12A of the Act and it cannot be questioned by the Assessing Officer unless it is cancelled by the CIT(Exemptions), the Assessing Officer has to examine whether the assessee is carrying on its activities in accordance with the object clause of the Trust and whether there is any violation u/s. 13 of the Act, and thereafter, he has to decide granting of exemption u/s. 11 of the Act. Hence, we remit this issue to the file of the Assessing Officer to examine the issue - Appeal of revenue partly allowed.
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