D K AJMERA FOUNDATION TRUST, MUMBAI-400077 V. PRINCIPAL COMMISSIONER OF INCOME TAX , BANGALORE

ITA 1279/MUM/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9412 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 22-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 12; 11; 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI M.BALAGANESH, ACCOUNTANT MEMBER ITA No.1281/Mum/2022 (Assessment Year :2022-23) & ITA No.1279/Mum/2022 (Assessment Year :2022-23) D K Ajmera Foundation Trust 101, Khandwala Building Joshi Lane Ghatkopar (E) Mumbai- 400077 Vs. Principal Commissioner of Income Tax / Commissioner of Income Tax CPC, Bangalore PAN/GIR No.AAATD2165K (Appellant) .. (Respondent) Assessee by Shri Makarand Palkar Revenue by Shri T. Shankar Date of Hearing 18/08/2022 Date of Pronouncement 07/09/2022 आदेश / O R D E R PER AMIT SHUKLA (JM): These appeals in ITA No.1281/Mum/2022 & 1279/Mum/2022 preferred by the order against the revision order of the ld. Principal Commissioner of Income Tax u/s.80G & 12AA of the Act respectively dated 28/05/2021 for the A.Y.2022-23. ITA No.1281/Mum/2022 & 1279/Mum/2022 M/s. D K Ajmera Foundation Trust 2 2. At the outset we find that appeals filed by the assessee are time barred by 326 days. We find that the order granting registration u/s.12AA (1) (b) and exemption u/s.80G of the Act has been granted by the ld. PCIT(Exemptions) during the Covid period and the due date of filing the appeals before us also falls within the Covid period. Pursuant to the relaxation granted by the Hon’ble Supreme Court, we are inclined to condone the delay in filing of the appeals by the assessee and admit the same for adjudication. 3. The assessee has raised the following grounds in ITA No.1281/Mum/2022:- Ground No. 1: a. Your Appellant was prevented from filing the Appeal in time before your honor and prays to condone the delay of 326 days. Ground No. 2: a. The Hon. Principal Commissioner of Income Tax / Commissioner erred in passing "order for provisional registration" in Form 10AC Order for Provisional registration in Form 10AC under Sub clause (i) of clause (ac) of sub-section (1) of section 12A r/w. rule 17A/11AA/2C, where the appellant had applied for the re-registration of the existing trust under the provisions of section 12A(1)(ac)(i) of the Act. Relief claimed: To issue of "Order for registration" in Form 10AC under Sub clause (i) of clause (ac) of sub-section (1) of section 12A r/w. r.w. rule 17A/11AA/2C. Ground No. 3 The Hon. Principal Commissioner of Income Tax / Commissioner erred in not taking cognizance of letter dated 19th January 2022, requesting to issue the "order of registration" instead of "order for provisional registration", followed by grievance raised regarding the same on the income tax portal on 04th of May, 2022. ITA No.1281/Mum/2022 & 1279/Mum/2022 M/s. D K Ajmera Foundation Trust 3 Relief Claimed: In view of the above facts, the appellant humbly requests you to issue "Order for Registration" u/s. 12A of the Act. Ground No. 4: The appellant prays for your leave to add, alter, amend or modify any of the above grounds. 4. The assessee has raised the following grounds in ITA No.1279/Mum/2022. Ground No. 1: a. Your Appellant was prevented from filing the Appeal in time before your honor and prays to condone the delay of 326 days. Ground No. 2: a. The Hon. Principal Commissioner of Income Tax / Commissioner erred in passing "order for provisional approval" in Form 10AC under Sub clause (i) of first proviso to sub-section (5) of section 80G r/w. rule 17A/11AA/2C, where the appellant had applied for the re-registration of the existing trust under the provisions of section 80G(5) of the Act. Relief claimed: To issue of "Order for approval" in Form 10AC under Sub clause (i) of first proviso to sub-section (5) of section 80G r/w. rule 17/11AA/2C. Ground No. 3 a. The Hon. Principal Commissioner of Income Tax / Commissioner erred in not taking cognizance of letter dated 19th January 2022, requesting to issue the "order for approval" instead of "order for provisional approval", followed by grievance raised regarding the same on the income tax portal on 04th of May, 2022. Relief Claimed: In view of the above facts, the appellant humbly requests you to issue "Order for Approval" u/s 80G of the Act. Ground No. 4: The appellant prays for your leave to add, alter, amend or modify any of the above grounds. ITA No.1281/Mum/2022 & 1279/Mum/2022 M/s. D K Ajmera Foundation Trust 4 5. The only grievance of the assessee in present appeals is against grant of Provisional Registration instead of Regular Registration under section 12AB of the Income Tax Act, 1961 ("the Act"). 5.1. The assessee is a public Charitable Trust and granted registration u/s.12A of the Act vide Registration No.TR/27137 dated 11/08/1989 and registered u/s.80G of the Act vide Registration No. DITE/MC/80G/502/2008/2008-09 dated 07/11/2008. The assessee trust made an application on 29/04/2021 in Form No.10A for registration as per Section 12A(1)(ac)(i) of the Act and also u/s.80G of the Act dated 07/05/2021. The DIT (CPC) vide impugned order dated 28/05/2021 granted provisional registration in Form No.10AC to the assessee trust subject to certain conditions. Similar order for provisional approval in form No.10AC was passed granting exemption u/s.80G(5) of the Act subject to certain conditions. Being aggrieved, assessee has preferred these appeals before us. 5.2. During the course of hearing, ld. AR appearing for the assessee submitted that as the assessee trust was registered under section 12A, application for registration was filed by the assessee as per provisions of section 12A(1)(ac)(i) of the Act. The ld. AR further submitted that in cases where application is made under provisions of section 12A(1)(ac)(i) of the Act, the Principal Commissioner or Commissioner is required to pass an order registering the trust for a period of 5 years under section 12AB(1)(a) of the Act. However, Provisional Registration was granted in Form 10AC, which is granted to new charitable institutions who are yet to commence their activities. ITA No.1281/Mum/2022 & 1279/Mum/2022 M/s. D K Ajmera Foundation Trust 5 5.3. Per Contra, the ld. DR vehemently relied upon the impugned order granting Provisional Registration. 6. We have considered the rival submissions and perused the material available on record. In order to decide the issue, it is relevant to analyse the relevant provisions of the Act applicable to the present case. Section 12A deals with conditions for applicability of section 11 and 12. Section 12A(1)(ac) of the Act reads as under: “12A. (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:— (a) .. (aa) ... (ab) ... (ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution,— (i) where the trust or institution is registered under section 12A [as it stood immediately before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] or under section 12AA [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020)], within three months from the first day of April, 2021; (ii) where the trust or institution is registered under section 12AB and the period of the said registration is due to expire, at least six months prior to expiry of the said period; (iii) where the trust or institution has been provisionally registered under section 12AB, at least six months prior to expiry of period of the provisional registration or within six months of commencement of its activities, whichever is earlier; (iv) where registration of the trust or institution has become inoperative due to the first proviso to sub-section (7) of section 11, at least six months prior to the commencement of the assessment year ITA No.1281/Mum/2022 & 1279/Mum/2022 M/s. D K Ajmera Foundation Trust 6 from which the said registration is sought to be made operative; (v) where the trust or institution has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, within a period of thirty days from the date of the said adoption or modification; (vi) in any other case, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought, and such trust or institution is registered under section 12AB;” 6.1. From the aforesaid provision, it is clear that for claiming the benefit under section 11 and section 12 of the Act, the trust or institution has to make an application for registration and such trust or institution should be registered under section 12AB of the Act. Section 12A(1)(ac)(i) of the Act specifically deals with the cases where trust or institution was registered under section 12A or under section 12AA. 6.2. Further, section 12AB of the Act deals with procedure for fresh registration. Section 12AB(1) of the Act reads as under: “12AB. (1) The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall,— (a) where the application is made under sub-clause (i) of the said clause, pass an order in writing registering the trust or institution for a period of five years; (b) where the application is made under sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) of the said clause,— (i) call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about— (A) the genuineness of activities of the trust or institution; and (B) the compliance of such requirements of any other law for ITA No.1281/Mum/2022 & 1279/Mum/2022 M/s. D K Ajmera Foundation Trust 7 the time being in force by the trust or institution as are material for the purpose of achieving its objects; (ii) after satisfying himself about the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), of sub-clause (i),— (A) pass an order in writing registering the trust or institution for a period of five years; or (B) if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its registration after affording a reasonable opportunity of being heard; (c) where the application is made under sub-clause (vi) of the said clause, pass an order in writing provisionally registering the trust or institution for a period of three years from the assessment year from which the registration is sought, and send a copy of such order to the trust or institution.” 6.3. In the present case, it has not been disputed that the assessee trust was duly registered under section 12A of the Act. Thus, the only provision applicable to the assessee trust for the purpose of applying for registration is section 12A(1)(ac)(i) of the Act. Further, section 12AB(1)(a) of the Act provides that where an application is made under section 12A(1)(ac)(i) the Principal Commissioner or Commissioner shall pass an order in writing registering the trust or institution for a period of 5 years. However, in the present case, the assessee trust being registered under section 12A and thus rightly made an application under section 12A(1)(ac)(i) of the Act, was granted Provisional Registration in Form 10AC subject to certain conditions. It is pertinent to note that section 12AB(1)(c) deals with granting of Provisional Registration to the trust or institution for a period of 3 years from the assessment year from which registration is sought. 6.4. However, the said section is applicable in cases where application is made under section 12A(1)(ac)(iv) of the Act. It is also not disputed that the Provisional Registration would be granted for a period ITA No.1281/Mum/2022 & 1279/Mum/2022 M/s. D K Ajmera Foundation Trust 8 of 3 years to the charitable institutions which are yet to start their activities. However, in the present case, the assessee trust was already holding certificate dated 11/08/1989 issued under section 12A of the Act. We find that section 12AB(1)(a) of the Act, which deals with grant of Regular Registration for a period of 5 years does not authorize the Principal Commissioner or Commissioner to impose any conditions for grant of such registration. We further find that though the impugned order granted Provisional Registration subject to certain conditions, however, same was granted for a period of 5 assessment years i.e. from assessment year 2022–23 to assessment year 2026–27. We also find that the impugned order for provisional registration in Form 10AC was issued under section 12A(1)(ac)(i) of the Act, which provision merely deals with making an application for registration. 6.5. Thus, in view of the above, we are of the considered opinion that application filed by the assessee trust under section 12A(1)(ac)(i) was not properly considered for grant of registration under section 12AB of the Act. Accordingly, we direct the designated authority under section 12AB to de novo consider the application of the assessee trust under section 12A(1)(ac)(i) of the Act and grant the registration as per law. As a result, grounds raised by the assessee are allowed for statistical purpose. ITA No.1281/Mum/2022 & 1279/Mum/2022 M/s. D K Ajmera Foundation Trust 9 7. In the result, both the appeals of the assessee are allowed for statistical purpose. Order pronounced on 07/09/2022 by way of proper mentioning in the notice board. Sd/- (M.BALAGANESH) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 07/09/2022 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary / Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy//