2023 (5) TMI 422 - SCH - Income Tax

Registration u/s 12A denied - requirement of issuance of any certificate of registration - Suo Motu revision by the Commissioner u/s 263 as set aside the assessment order on the ground that the AO mechanically granted the benefit of exemption u/s 12A without in fact verifying whether any registration in favour of the assessee was issued under Section 12A of the Act or not - HELD THAT - As taking into consideration that since 1987 from the date on which the assessee applied for registration under Section 12A the assessee continued to avail the benefit of exemption u/s 12A at least up to the assessment year 2007-2008. The aforesaid is not disputed by revenue. It is required to be noted that even post 1997 also the assessee continued to avail the exemption u/s 12A on the basis of its registration in the year 1987. AO was justified in granting the benefit of exemption u/s 12A for the assessment year 2010-2011. What was required to be considered was the relevant provision prevailing in the year 1987 namely the day on which the assessee applied for the registration. At the relevant time there was no requirement of issuance of any certificate of registration. The fact remains that for all these years after 1997 till the year 2007-2008 when the assessee continued to avail the benefit of exemption solely on the basis of the registration in the year 1987 and it was never the case on behalf of the revenue and even the Commissioner that in the earlier years there was any certificate of registration or the registration was not granted. Even from the material on record namely a communication dated 03.6.2015 which was considered by the ITAT it is apparent that the assessee was granted registration on 22.9.1987. Therefore it cannot be said that there was no registration at all. The impugned judgment and order passed by the High Court 2017 (1) TMI 1006 - ALLAHABAD HIGH COURT is erroneous and is unsustainable. The order passed by the ITAT is hereby restored. 2015 (7) TMI 1181 - ITAT LUCKNOW

Summary

Issues involved:
The issues involved in the judgment are related to the application for registration under Section 12A of the Income Tax Act, 1961, the requirement of issuance of a certificate of registration under Section 12A, the grant of exemption under Section 12A, the assessment order, the Commissioner's revision under Section 263 of the Act, the order passed by the Income Tax Appellate Tribunal (ITAT), the High Court's decision on the appeal(s) by the revenue, and the review application filed by the assessee.

Application for Registration under Section 12A:
The assessee applied for registration under Section 12A of the Income Tax Act, 1961, in the year 1987, and continued to be granted exemption under Section 12A. An amendment in 1997 required the issuance of a certificate of registration under Section 12A. Despite this, the assessee continued to avail the exemption under Section 12A post-1987 till the assessment year 2007-2008.

Assessment Order and Commissioner's Revision:
The Assessing Officer granted the benefit of exemption under Section 12A for the assessment year 2010-2011 based on registration in 1987. However, the Commissioner set aside the assessment order under Section 263 of the Act, stating that the benefit was granted without verifying the issuance of the registration certificate. The ITAT later set aside the Commissioner's order.

High Court's Decision and Review Application:
The High Court allowed the revenue's appeal, setting aside the ITAT's order, on the grounds that the assessee failed to produce the certificate of registration. The review application filed by the assessee was dismissed, leading to the present appeals challenging the High Court's decision.

Judgment and Conclusion:
The Supreme Court found that since the assessee had been availing the benefit of exemption under Section 12A since 1987, even post-1997 without a certificate of registration, the Assessing Officer was justified in granting the benefit for the assessment year 2010-2011. The Court held that the High Court's decision was erroneous as there was evidence of registration in 1987. Therefore, the High Court's judgment was quashed, the ITAT's order was restored, and the appeals were allowed with no costs.