Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (11) TMI 403 - AT - Income TaxExemption u/s 11 - registration application u/s 12AA is pending before the Registration Authority - status has been taken as AOP and the entire surplus along with corpus donations have been taxed - HELD THAT:- In the present case admittedly, the application of the assessee was pending since 1998, and no order was passed against the assessee for grant of registration, however, the Assessing Officer continues to treat the assessee as a charitable entity for the period ending up to the assessment year 2013-14. In our considered opinion, once the registration application is pending before the Registration Authority under the Income Tax Act, then the assessee has the right to know the reasons within reasonable time for not according to the registration. In the present case as mentioned hereinabove till date, no order had been passed by the lower authorities either accepting or rejecting the application of registration filed by the assessee on 12.05.1998; however it is undeniable that the assessee continues and imparts the education in the field of Homeopathic Medical College and Hospital and running Graduate, under Graduate and post Graduate courses under the name of M/s Mahavira Homeopathic Medical College and Hospital. Though there is a lapses on the part of the assessee for not pursuing the registered application after the insertion of the amendment whereby the record of the registration was transferred from ITO to CIT(E) and thereafter - negligence on the part of the assessee cannot legalize the action on the part of the Assessing Officer/CIT(E) for not passing appropriate order on the application of registration dated 12.05.1998. Admittedly, until the assessment year under consideration, the assessee continued to be treated as a charitable entity without any formal registration order by the lower authorities. Even in the assessment years under review, the Assessing Officer has not denied that the assessee is charitable and imparting education within the four corners of section 2(15) of the Income Tax Act. In any case, the assessee’s registration application should have been decided expeditiously and more particularly within the period of 6 months after the insertion of the amendment capping the time limit for grant of registration. Then the authorities are obliged to decide the application within 6 months. Failure on the part of the CIT(E) / ITO to decide the application, gave rise to crystallize right in favour of the assessee for treating the assessee, as deemed charitable society. The registration should have been considered to have deemed to had been granted to the assessee u/s 12AA. As relying on SOCIETY FOR THE PROMN. OF EDN., ALLAHABAD [2016 (2) TMI 672 - SC ORDER] assessee is deemed to be registered u/s 12AA for all the assessment years 2014-15 to 2016-17 and till the registration is subsequently granted by the CIT(E) vide order dated 12.11.2020. As in view of the amended provisions inserted to Act u/s 12A by the Explanation, the registration can be granted retrospectively if the activities of the assessee continue that the same activities of the assessee - we held that the assessee is entitled to the registration u/s 12AA on the basis of deeming provision and also on account of Explanation to section 12A.
|