TMI Blog2012 (6) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) is not justified in sustaining the order of the Assessing officer in denying exemption claimed under section 11 of the Act. 4. The brief facts of the case are that the assessee filed return of income on 23.07.2002 admitting NIL income after claiming deduction under section 11 of the Act. The return was processed under section 143(1) on 25.09.2002. Later on notice under section 148 was issued on 30.03.2009 and in response to the said notice, the assessee filed letter to treat the return filed on 23.07.2002 as the return filed in response to the notice issued under section 148. The assessee also filed a letter on 29.04.2009 requesting for reasons for reopening of assessment under section 147. 5. The Assessing Officer completed the assessment under section 143(3) read with section 147 on 04.11.2009 determining the income of the assessee at ₹ 7,68,370/-. While completing the assessment, the Assessing Officer denied the exemption claimed under section 11 to the assessee on the ground that the assessee is not a Registered Trust under section 12A of the Act. 6. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) contending that the reopeni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er application on 17.03.2008 and the registration was granted on 22.07.2008. The counsel submitted that by promissory estoppel, the Department has accepted that the assessee as Registered Trust. The counsel relied on the decision of Hon ble Supreme Court in the case of Motilal Padampat Sugar Mills Co. v. State of UP [118 ITR 326]. The counsel submitted that the Director of Income Tax (Exemptions) shall not keep an assessee, which is not eligible to deduction under section 11 under its records. All such assessees are assessed by other Circle/Ward. The counsel submitted that the Assessing Officer is not at all justified in reopening the assessment under section 147 and denying exemption under section 11, when the Department has accepted the assessee as a registered trust since 1973 till the assessment year 2001-02. 9. The counsel for the Revenue relied on the orders of lower authorities and submitted that the Assessing Officer is justified in reopening the assessment under section 147 and denying exemption under section 11 in the absence of proof of registration under section 12A of the Act. 10. We have heard both sides, perused the orders of lower authorities and materials ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing such exemption under section 11 for all these assessment years till 2001-02. Only in the assessment year 2002-03, the Assessing Officer denied exemption under section 11 and 12 for want of registration under section 12AA. The assessee s counsel submitted that the assessee trust was registered under section 12A and since no orders were passed by the CIT or the Director of Income Tax (Exemptions) withdrawing the registration under section 12A, at any point of time in earlier assessment years prior to insertion of section 12AA w.e.f. 01.04.1997, there is no need for the assessee trust for applying and getting the registration under section 12AA once again. The assessee s counsel submitted that prior to 1972, there was no condition for administering the trust under the provisions of Income Tax Act. In other words, charitable and religious trusts having such objects are subjected to assessment and on fulfillment of condition that 75% of their income from property held under the trust were applied to charitable or religious purposes, as the case may be, were granted relief from taxation under the provisions of sections 11 to 13 of the Act. The unapplied portion of income below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. No specific order under s.12A was being passed in those days and only an acknowledgment for the receipt of the application used to be given. In your case also, no order was passed. However, the fact of registration was accepted and assessments have been made on that basis. 3. In view of the above position, no fresh order under s. 12AA is now passed. Yours faithfully Sd/- (A. SELVARAJ) Director of Income tax 13. Referring to the above letter, the ld. Counsel for the assessee submitted that no specific order under section 12A was passed on those days granting registration under section 12A to the charitable trust/institutions, who have filed application for registration under section 12A of the Act. It was submitted that only acknowledgement for the receipt of the application was given to the assessees. It is also submitted by the assessee s counsel that there is no need for the assessee to obtain registration under section 12AA when the trust already filed an application for registration under section 12A and when the Department is accepting all the returns filed by the assessee claiming exemption under section 11 and 12 of the Act. He submitted that the DIT(E) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll pass an order in writing either granting or refusing to grant registration under section 12AA, whereas no such specific requirement of passing an order in writing is provided under the provisions of section 12A. Provisions of sub-section 3 of section 12AA provides that registration granted to the trust/institution either under section 12AA after 01.04.1997 or registration granted under section 12A prior to 01.04.1997 shall be cancelled by the CIT by passing an order in writing if the Commissioner is satisfied that the activities of such trust or institutions are not genuine or are not being carried out in accordance with the objects of the trust or institution. However, in the assessee s case, no such order has been passed by the CIT withdrawing the registration under section 12A, which was granted to the assessee on filing of an application after 01.04.1973. Keeping in view all the facts and peculiar circumstances in this case, we are of the opinion that the Assessing Officer is not correct in denying the exemption under section 11 of the Act to the assessee stating that the assessee is not a registered trust under section 12AA of the Act. Without verifying earlier years record ..... 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