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2021 (3) TMI 115 - AT - Income TaxExemption u/s 11 - Registration u/s 12AA and 80G(5)(vi) denied - Charitable activity u/s 2(15) - HELD THAT:- Under the amended law as are applicable in the instant case, once the ld. CIT(E) is satisfied about the objects and the genuineness of the activities of the trust and the sufficient compliance of other law for time being in force as are material for the purpose of achieving its objects, the provisions of sections 11 and 12 shall apply from the assessment year following the financial year in which such application is made. In the instant case, the assessee has made an application on 04.02.2020 and in light of the aforesaid provisions, we find that where the registration has been granted by the ld CIT(E) after satisfying himself about the objects and genuineness of its activities, the provisions of sections 11 and 12 shall apply in the case of the assessee from 01.04.2020 i.e. from A.Y 2020-21 onwards. It is a case where the ld. CIT(E) has sought certain explanation/clarification from the assessee trust regarding its objects vide show cause dated 11.09.2020 which has been suitably explained by the assessee by way of its affidavit dated 22nd September, 2020 and basis such clarification, ld. CIT(E) was satisfied about the charitable nature of the objects of the assessee foundation and therefore, once, the objects have been found to be charitable in nature, there is no discretion left with the ld CIT(E) to restrict the applicability of provisions of section 11 and 12 from date of furnishing of such affidavit and rather, as per the provisions of sub-section 2 to section 12A, the provisions of section 11 and 12 shall apply from 01.04.2020 i.e. from A.Y 2020-21 onwards and the assessee shall be entitled to claim exemption under section 11 and 12 from A.Y 2020-21. In any case, the requirements of proviso to Section 2(15) remain mandatory in nature and the compliance thereof has to be examined by the AO on a yearly basis including that for A.Y 2020-21 while framing the assessment as per law. In the result, the ld. CIT(E) is directed to grant registration u/s 12AA effective from A.Y 2020-21 instead of A.Y 2021-22. Following the aforesaid discussions, the ld. CIT(E) is also directed to grant registration u/s 80G(5)(vi) effective from A.Y 2020-21 instead of A.Y 2021-22 - Appeal of assessee allowed.
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