TEEGALA RAM REDDY EDUCATIONAL SOCIETY,HYDERABAD V. INCOME TAX OFFICER, EXEMPTION WARD-1(3) , HYDERABAD

ITA 2090/HYD/2025

AI Insights

The case involves the Teegala Ram Reddy Educational Society, which appealed against the order of the Learned Commissioner of Income Tax Appeals, National Faceless Appeal Centre, Delhi. The primary contention was the denial of exemption under section 11 of the Income Tax Act due to the absence of registration under section 12AB at the time of processing the return for the Assessment Year 2023-24. Initially, the exemption was denied by the Central Processing Centre, and subsequent rectification and appeal were also unsuccessful. However, the society was later granted registration under section 12AB, which covered the relevant assessment year. The Tribunal found that the society was eligible for exemption under section 11, subject to other conditions, and remitted the matter back to the Assessing Officer for a fresh decision.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846958 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Hyderabad
• Assessment Year: 2023-2024
• Appeal Filed On: 29-11-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P.V.RAGHAVENDRA KUMAR
• Keywords: Set aside; Opportunity of being heard
• Section: 154; 11; 12AA; 139

Judgement Text

" ITA No 2090 of 2025 Teegala Ram Reddy Educational Society Page 1 of 7 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ DB-A ‘ Bench, Hyderabad ŵी रिवश सूद,Ɋाियक सद˟ एवं ŵी मधुसूदन साविड़या लेखा सद˟ समƗ | Before Shri Ravish Sood, Judicial Member A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.2090/Hyd/2025 (िनधाŊरण वषŊ/Assessment Year: 2023-24) TEEGALA RAM REDDY EDUCATIONAL SOCIETY, Hyderabad PAN:AABTT1283B Vs. Income Tax Officer (Exemption) Ward 1(3) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri P.V.Raghavendra Kumar, CA राज̾ व Ȫारा/Revenue by:: Shri AVES Madhukar, Sr. AR सुनवाई की तारीख/Date of hearing: 18/03/2026 घोषणा की तारीख/Pronouncement: 25/03/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.: This appeal is filed by Teegala Ram Reddy Educational Society (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax Appeals, National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated 12.03.2026 for the A.Y.2023-24. Printed from counselvise.com ITA No 2090 of 2025 Teegala Ram Reddy Educational Society Page 2 of 7 2. The assessee has raised the following grounds of appeal: 3. The brief facts of the case are that the assessee is an educational society registered under the Societies Registration Act, 1860. The assessee was granted registration under section 12AA of the Income Tax Act, 1961 (“the Act”) on 12.09.2006. For the Assessment Year 2023–24, the assessee filed its return of income under section 139 of the Act declaring a total income of Rs.2,47,160/- after claiming exemption under section 11 of the Act Printed from counselvise.com ITA No 2090 of 2025 Teegala Ram Reddy Educational Society Page 3 of 7 on account of expenditure incurred towards its objects amounting to Rs.5,68,75,682/-. The return of income of the assessee was processed under section 143(1) of the Act by the Central Processing Centre (“CPC”) vide intimation dated 05.12.2024, wherein the exemption claimed under section 11 of the Act amounting to Rs.5,68,75,682/- was denied. Consequently, the total income of the assessee was determined by CPC at Rs.5,71,22,842/-. Aggrieved by the said intimation, the assessee filed an application for rectification under section 154 of the Act, which was rejected by the CPC vide order dated 25.03.2025. 4. Aggrieved by the order under section 154 of the Act, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT (A) dismissed the appeal of the assessee by holding that as per the amended provisions of the Act, with effect from 01.04.2021, all entities already registered under section 12A/12AA were required to obtain fresh registration under section 12AB of the Act. In the absence of such registration, the assessee was not entitled to claim exemption under section 11 of the Act. 5. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before this Tribunal. In this regard, the Learned Authorized Representative (“Ld. AR”) submitted that the exemption under section 11 of the Act was denied by the lower authorities on the ground that the assessee did not possess registration under section 12AB of the Act during the relevant period made applicable w.e.f. 01/04/2021. The Ld. AR further submitted that the assessee Printed from counselvise.com ITA No 2090 of 2025 Teegala Ram Reddy Educational Society Page 4 of 7 has now been granted registration under section 12AB of the Act vide Form No. 10AD dated 12.03.2026, which is valid for the Assessment Years 2022–23 to 2026–27 and thus covers the Assessment Year under consideration i.e., A.Y. 2023–24. It was contended that once the registration under section 12AB of the Act has been granted covering the relevant assessment year, the assessee is entitled to claim exemption under section 11 of the Act. Accordingly, the Ld. AR prayed that the exemption under section 11 of the Act may be allowed to the assessee and the addition made on account of rejection of exemption under section 11 of the Act may be deleted. 6. Per contra, the Learned Departmental Representative (“Ld. DR”) relied on the orders of the lower authorities and submitted that at the time of processing of return under section 143(1) of the Act as well as at the time of passing the order under section 154 of the Act, the assessee did not possess valid registration under section 12AB of the Act, which is mandatory with effect from 01.04.2021. Accordingly, the Ld. DR submitted that the denial of exemption under section 11 of the Act by the CPC as well as the confirmation by the Ld. CIT(A) is in accordance with law. 7. We have heard the rival submissions and perused the material available on record. The primary issue for our consideration is whether the assessee is entitled to claim exemption under section 11 of the Act in the absence of registration under Printed from counselvise.com ITA No 2090 of 2025 Teegala Ram Reddy Educational Society Page 5 of 7 section 12AB of the Act at the time of processing of return, but where such registration has subsequently been granted covering the relevant assessment year. In this regard, we have gone through the registration granted to the assessee under section 12AB of the Act vide Form No. 10AD dated 12.03.2026, 1st page of which is reproduced as under: Printed from counselvise.com ITA No 2090 of 2025 Teegala Ram Reddy Educational Society Page 6 of 7 8. On perusal of the above, we find that the registration under section 12AB of the Act has been granted to the assessee for the Assessment Years 2022–23 to 2026–27, which includes the Assessment Year under consideration i.e., A.Y. 2023–24. Thus, the factual position now on record clearly establishes that the assessee possesses valid registration under section 12AB of the Act for the relevant assessment year. Therefore, in our considered opinion, once the registration has been granted covering the relevant assessment year, the assessee becomes eligible for claiming exemption under section 11 of the Act, subject to fulfilment of other conditions prescribed under the Act. At the same time, we find merit in the contention of the Ld. DR that such registration was not available at the time of processing under section 143(1) of the Act. Therefore, in the interest of justice, the matter requires verification at the end of the Ld. AO. Accordingly, we set aside the order of the Ld. CIT(A) and remit the issue back to the file of the Ld. AO with a direction to consider the claim of the assessee for exemption under section 11 of the Act in the light of registration granted under section 12AB of the Act vide Form No. 10AD dated 12.03.2026 and decide the issue afresh in accordance with law after providing reasonable opportunity of being heard to the assessee. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Printed from counselvise.com ITA No 2090 of 2025 Teegala Ram Reddy Educational Society Page 7 of 7 Order pronounced in the Open Court on 25th March, 2026. Sd/- Sd/- (RAVISH SOOD) JUDICIAL MEMBER (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER Hyderabad, dated 25th March, 2026. Vinodan/sps Copy to: S.No Addresses 1 Teegala Ram Reddy Educational Society, House No.2-2- 18/16/C/301 Shantamma Apartments, D.D. Colony, Hyderabad 500013 2 Income Tax Officer (Exemption) Ward 1(3) Aayakar Bhavan, Opp: LB Stadium, Basheerbagh, Hyderabad 500004 3 PR. CIT (EXEMPTION) HYDERABAD 4 DR, ITAT Hyderabad Benches 5 Guard File By Order Printed from counselvise.com KAMALA KUMAR ORUGANTI Digitally signed by KAMALA KUMAR ORUGANTI Date: 2026.03.26 11:49:10 +05'30' "