CIT(E), KOLKATA V. RAJBALHAT CULTURAL CIRCLE, KOLKATA

MA 39/KOL/2024

AI Insights

The case involves the Rajbalhat Cultural Circle, a charitable trust, which sought clarification on its registration status under Section 12A of the Income Tax Act, 1961. Initially, the trust was registered under Section 12A before the amendment on 01.04.2021. Following the amendment, the trust applied for re-registration, which was granted but mistakenly recorded as provisional. The trust, under the belief that it needed to apply for final registration, did so, but the application was rejected as premature. The Tribunal's earlier decision to set aside the CIT (Exemptions)'s rejection was based on the incorrect assumption that the trust had been granted provisional registration. However, a subsequent circular clarified that the registration was indeed final, leading to the recall of the Tribunal's earlier order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298789 (ITAT-KOLKATA)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside; Charitable institution
• Section: 12A; 10; 80G

Judgement Text

"आयकर अपीलीय अिधकरण कोलकाता 'C' पीठ, कोलकाता म¤ IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA Before SRI SANJAY GARG, JUDICIAL MEMBER & SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER M.A. No.: 39/KOL/2024 In I.T.A. No.: 25/KOL/2024 Assessment Year: N.A. CIT(Exemptions), Kolkata .............. Applicant Vs. Rajbalhat Cultural Circle ………….. Respondent AT & Post: Rajbalhat, District-Hooghly, Pin-712408 (PAN: AABAR5785R] Appearances: Department represented by: Shri Sailen Samadder, Addl. CIT Sr. DR. Assessee represented by: Shri P.K. Ray, Advocate Date of concluding the hearing : January 3rd, 2025 Date of pronouncing the order : January 3rd, 2025 ORDER Per Sanjay Garg, Judicial Member: The present Miscellaneous Application has been moved by the Revenue pleading that a mistake apparent on record has occurred in the order of the Tribunal dated 13.05.2024 passed in ITA No. 25/KOL/2024. 1.1. It has been pleaded in the present Miscellaneous Application that the assessee Trust was an existing charitable Trust u/s 12A of the Income Tax Act, 1961 (in short the 'Act') before 01.04.2021 and the assessee had applied for fresh registration u/s 12A(1)(ac)(i) of the Act and fresh registration was granted vide Form no. 10AC issued on 02.10.2021 which was valid up to AY 2026-27. However, the assessee again applied for registration u/s 12A(1)(ac)(iii) of the Act, which was rejected by the CIT (Exemptions), Kolkata M.A. No.: 39/KOL/2024 In I.T.A. No.: 25/KOL/2024 Rajbalhat Cultural Circle Page 2 of 6 observing that the registration of the assessee was valid till AY 2026-27 and there was no need to apply again. However, the assessee filed appeal before this Tribunal and the Tribunal set aside the order of ld. CIT (Exemption) and held that there was no bar in moving the application for final registration and restored the matter to ld. CIT (Exemption) to consider the application of the assessee for final registration. It has been pleaded that the registration granted to the assessee vide order dated 28.05.2021 was already a final registration and not a provisional registration. That the provisional registration has to be granted to new Trusts and not to those Trusts which were already registered before 01.04.2021. It has therefore been pleaded that a mistake apparent on record has occurred in the order of the Tribunal. 1.2. Ld. Counsel for the respondent has also agreed that the assessee had applied for final registration u/s 12A(1)(ac)(iii) of the Act under a mistaken belief that the earlier was a provisional registration and that the assessee was supposed to apply for final registration u/s 12A(1)(ac)(iii) of the Act. 2. We have considered the rival submission and gone through the record. We find from the record that in this case, the assessee was already registered u/s 12A of the Act as a charitable institution vide order dated 19.02.2015 of ld. CIT (Exemption) with effect from 01.04.2014. An amendment was brought into the relevant provisions, whereby, the institution which stood already registered u/s 12A of the Act on or before 01.04.2021, had to apply for fresh registration under the provisions of Section 12A(1)(ac)(i) of the Act. The assessee accordingly applied for registration u/s 12A(1)(ac)(i) of the Act on 02.05.2021. The said application of the assessee was allowed on 28.05.2021. However, both the assessee as well as the ld. CIT (Exemption) have misconstrued the provisions and were of the view that the said registration was a provisional registration and that the assessee was supposed to apply for final registration. A perusal of the certificate granted in Form no. 10AC by the ld. CIT (Exemption) dated 28.05.2021 reveals that ld. CIT (Exemption) mentioned in the title “Order for provisional registration” and even in column 9 of the said registration the ld. CIT (Exemption) has expressly mentioned that M.A. No.: 39/KOL/2024 In I.T.A. No.: 25/KOL/2024 Rajbalhat Cultural Circle Page 3 of 6 it was an order of provisional registration. The assessee/appellant under the circumstances applied for final registration u/s 12A(1)(ac)(iii) of the Act. Thereafter, ld. CIT (Exemption) also carried out certain enquiries and investigations and called upon the assessee to furnish certain replies and evidences, which were duly furnished by the assessee. Thereafter, ld. CIT (Exemption) vide a small and cryptic order rejected the application of the assessee stating therein that the earlier order in Form no. 10AC was still valid till AY 2026-27 and the application of the assessee was premature. Being aggrieved by the said order of the ld. CIT (Exemption), the assessee preferred appeal before us. 2.1. It is to be noted at this stage that in many other cases, wherein, the Trusts or institutions have been provisionally registered under Item ‘A’, sub- Clause (vi) of Section 12A(1)(ac) of the Act read with Section 12AB(1)(c) of the Act and such institutions had applied for final registration u/s 12A(1)(ac)(iii) of the Act read with Section 12AB(1)(b) of the Act, in such cases also, the ld. CIT (Exemption) has rejected the application for final registration alleging that the same was premature and this Tribunal in many cases has held that there was no bar to the applicant/assessee society to make an application for final registration even at the earliest possible event and it was not required to wait in the expiry of the provisional registration. 2.2. Since in this case also the ld. CIT (Exemption), in his order dated 28.05.2021, has mentioned that the registration granted to the assessee was provisional and further in the impugned order dated 05.07.2023 has rejected the application of the assessee for final/regular registration stating the same as to be premature, hence, under the circumstances, the assessee had come in appeal before us against the said rejection. This Tribunal under the circumstances as narrated above, directed the ld. CIT (Exemption) to consider the application of the assessee for final registration. 2.3. However, Ld. CIT, DR pointed out that this issue has been resolved by the Board by issuance of a Circular bearing No. 11 of 2022 on 3rd June, 2022. The Board has clarified as under:- M.A. No.: 39/KOL/2024 In I.T.A. No.: 25/KOL/2024 Rajbalhat Cultural Circle Page 4 of 6 “5. In view of the above, it is hereby clarified that,- (i) the conditions contained in Form No. 10AC, issued between 01.04.2021 till the date of issuance of this Circular, shall be read as if the said conditions had been substituted with the conditions as provided in the Table 1 with effect from 1st April, 2022; Table 1 Sl. No Section Code Section under which order is passed Conditions 1 01 Clause (a) of sub- section (1) of section 12AB As per Annexure A 2 02 Clause (c) of sub- section (1) of section 12AB As per Annexure B 3 03 to 06 Clause (i) of second proviso to clause (23C) of section 10 As per Annexure C 4 07 to 10 Clause (iii) of second proviso to clause (23C) of section 10 As per Annexure D 5 11 Clause (i) of second proviso to sub-section (5) of section 80G As per Annexure E 6 12 Clause (iii) of second proviso to sub-section (5) of section 80G As per Annexure F (ii) where due to technical glitches, Form No. 10AC has been issued during FY 2021- 2022 with the heading “Order for provisional registration” or “ Order for provisional approval” instead of “Order for registration” or “ Order for approval”, then all such Form No. 10AC shall be considered as an “Order for registration or approval” and, in such cases where Form No. 10AC has been issued, - (a) under section code 01 (applications seeking re-registration),- (i) in the heading and in rows 6, 7, 9 and 10 the words ,“ provisional registration” shall be read as “registration”; M.A. No.: 39/KOL/2024 In I.T.A. No.: 25/KOL/2024 Rajbalhat Cultural Circle Page 5 of 6 (ii) in row 8 the word “ provisionally registered” shall be read as “registered”; (b) under section codes 03, 04, 05, 06 or 11 (applications seeking re-approval),- (i) in the heading and in rows 6, 7, 9 and 10 the words ,“ provisional approval” shall be read as “approval”; (ii)in row 8 the word “provisionally approved” shall be read as “approved”; (iii) row no 5 of Form No. 10AC (issued for all section codes) shall be read as “Unique Registration Number” instead of “Provisional Approval/ Approval Number” or “Provisional Registration/ Registration Number”, as the case maybe”. He pointed out that under sub-clause (ii) of clause 5 of this Circular, it has been contemplated that where due to technical glitches, Form No. 10AC has been issued during FY 2021- 2022 with the heading “Order for provisional registration” or “ Order for provisional approval” instead of “Order for registration” or “ Order for approval”, then all such Form No. 10AC shall be considered as an “Order for registration or approval” and, in such cases where Form No. 10AC has been issued. Therefore, all registrations issued by CPC, Bengaluru under sub-clause (i) of section 12AC(1) would be construed as if granted for regular purposes. 2.4. Now, the Department has come with Miscellaneous Application stating therein that the observation of this Tribunal is based on incorrect assumption of facts and that the Tribunal has assumed that the assessee has been granted provisional registration whereas, the registration granted to the assessee earlier vide order dated 28.05.2021 was a regular/final registration. As noted above, the aforesaid observation of the Tribunal was on account of the aforesaid confusion created on account of incorrect mention in the relevant columns of Form 10AC stating the said order to be a provisional order. However, the said confusion stood clarified by the CBDT under circular No. 11 of l2022 (supra), vide which it has been clarified that the provisional registration will be construed as regular registration u/s 12A(1)(ac)(i) read M.A. No.: 39/KOL/2024 In I.T.A. No.: 25/KOL/2024 Rajbalhat Cultural Circle Page 6 of 6 with Section 12AB(1)(a) of the Act. Therefore, there was no requirement of setting aside this matter to the file of the ld. CIT (Exemption). Therefore, under these circumstances, an inadvertent error apparent on record has occurred in the order of the Tribunal because of not bringing the aforesaid developments before this Tribunal. Therefore, the impugned order of the Tribunal dated 13.05.2024 passed in ITA No. 25/KOL/2024 is hereby recalled. The Registry is directed to restore the appeal at its original number. Since the entire facts and circumstances of the case have already been considered and adjudicated upon by us while deciding this Miscellaneous Application, therefore, no useful purpose will be served in fixing the main appeal on a later date. The Registry is directed to fix the main appeal for hearing for today, itself, so that the same may be adjudicated in light of the observations made in this Miscellaneous Application. Copy of this order be also placed in the main appeal. 3. In the result, the Miscellaneous Application filed by the Department is hereby allowed. Order pronounced in the open Court on 03.01.2025. Sd/- Sd/- [Sanjay Awasthi] [Sanjay Garg] Accountant Member Judicial Member Dated: 03.01.2025 J.Dey (Sr. P.S.) Copy of the order forwarded to: 1. CIT(Exemptions), Kolkata. 2. Rajbalhat Cultural Circle. 3. CIT(DR), Kolkata Benches, Kolkata. 4. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "