2016 (3) TMI 1447 - AT - Income Tax

Exemption u/s 11 denied - registration of the Society u/s 12A(a) cancelled - HELD THAT - We find that the Hon ble Tribunal 2015 (9) TMI 1550 - ITAT AMRITSAR has cancelled the order of CIT by which he had cancelled the registration u/s 12A(a) of the Act therefore the basis on which the exemption u/s 11 has been denied does not survive. In view of the above we are in agreement with argument of learned AR that after restoration of registration by Hon ble Tribual the assessee is eligible for exemption u/s 11. Appeal filed by assessee is allowed.

Summary

Issues:
Appeal against denial of exemption under section 11 of the Income Tax Act, 1961 due to cancellation of registration under section 12A(a).

Analysis:
The case involved an appeal by the assessee against the order of the learned CIT(A) denying the benefit of exemption under section 11 of the Income Tax Act, 1961, for the Assessment Year 2011-12. The Assessing Officer had denied the exemption under section 11 on the grounds that the registration of the Society under section 12A(a) was cancelled by the CIT. The learned CIT(A) upheld this decision, leading to the appeal by the assessee.

The key contention of the assessee was that the denial of exemption under section 11 was solely based on the cancellation of registration under section 12A(a). The assessee presented a copy of the Tribunal Order dated 29.09.2015 in another case, where the cancellation of registration was set aside, making the assessee eligible for exemption under section 11. The learned DR, however, supported the decisions of the authorities below.

After hearing both parties and examining the relevant material, the Tribunal noted the findings of the learned CIT(A) regarding the cancellation of registration and the denial of exemption under sections 11 and 12. The Tribunal observed that the basis for denying the exemption, i.e., the cancellation of registration, no longer stood valid as per the Tribunal's order. Consequently, the Tribunal agreed with the argument put forth by the learned AR that with the restoration of registration by the Tribunal, the assessee was indeed eligible for exemption under section 11.

Therefore, the Tribunal allowed the appeal filed by the assessee, emphasizing that the cancellation of registration no longer justified the denial of exemption under section 11. The order in favor of the assessee was pronounced on 18th March 2016.