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TMI Blog2022 (6) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption u/s 10(23C)(v) of the Act, in the given facts of the case, particularly the assessee failed to furnish Audit report in Form No. 10BB u/s 10(23C)(v) r.w.r. 16CC. 2. The Ld. CIT(A), has erred in granting exemption u/s 11 of the Act by accepting Form No. 10 filed during the course of assessment proceedings, even though the Trust is not registered u/s 12A of the Act." 3. Briefly, the facts of the case are that the respondent-assessee is a religious and charitable trust engaged in the work of managing the administration and functioning of Sikh Gurdwara Sachkhand Shri Hazur Sahil, Nanded. It is to be noted that "The Nanded Sikh Gurudwara Sachkhand Hazur Apchchalnagar Sahib" as anonymous body constituted by the Government under the N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) of the Act. The Trust should also enjoy the registration u/s 12AA of the Act and finally the mere fact that the respondent-assessee generated surplus does not lead to conclusion that the funds were not properly utilized by the respondent-assessee trust. The ld. CIT(A) considering the following decisions relied upon by the respondent-assessee (i) Hon'ble Suprme Court in the case of (i) CIT vs. Nagpur Hotel Owner's Association, 247 ITR 201 (SC), (ii) Hon'ble Gujarat High Court in the case of ACIT vs. Stock Exchange Ahmedabad, 25 Taxmann.com 469 (Guj.) and (iii) Hon'ble Delhi High Court in the case of Association of Corporation & Apex Societies of Handlooms vs. ADIT, 351 ITR 287 (Delhi) held that furnishing of audit report before completion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e findings of the Assessing Officer that the funds were not properly utilized, administered and supervised is bald in the absence of any material on record controverting the findings of the Assessing Officer. He further submitted that the respondent-assessee trust was granted registration u/s 12AA only on 15.05.2017 which is applicable from financial year 2016-17 onwards. Thus, in the absence of any registration u/s 12AA, the respondent-assessee trust is not entitled for benefit of exemption under the provisions of section 10(23C)(v) of the Act. 7. On the other hand, ld. AR for the respondent-assessee trust submitted that the observation of the ld. CIT(A) that the finding of the Assessing Officer that the funds of trust were not properly u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) The respondent-assessee trust does no enjoy the registration under the provisions of section 12AA of the Act. (iii) The audit report in the prescribed form was not filed within the stipulated date i.e. along with return of income filed u/s 139(1) of the Act. 9. On appeal before the ld. CIT(A), the ld. CIT(A) was of the opinion that the Assessing Officer was not justified in observing that the funds of the trust were not properly utilized without bringing any material on record. Further, as regards to the filing of audit report in the prescribed form, the ld. CIT(A) placing reliance on the decision of the Hon'ble Supreme Court in the case of CIT vs. Nagpur Hotel Owner's Association, 247 ITR 201 (SC) held that if the audit report was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar effect in the decision of the Hon'ble Supreme Court in the case of Aditanar Educational Institution vs. Addl.CIT, 224 ITR 310 (SC). Therefore, the Assessing Officer cannot jump to the conclusion that the respondent-assessee trust is not religious and charitable trust merely because it generated surplus income. 11. We have carefully gone through the provisions of section 10(23C)(v) which does not prescribe any stipulation, which makes the registration u/s 12AA as a condition precedent for availing the exemption u/s 10(23C)(v) of the Act. In fact, the provisions of section 11 and section 10(23C)(v) are two parallel regimes and operate independently in their respective realms. This position was clarified by CBDT Circular No.14 of 2015 da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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