Karnataka State Diploma in Nursing Examination Board Vs CIT (Exemptions) (ITAT Bangalore)
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, has remanded a case involving “Karnataka State,” a society engaged in nursing education, back to the Commissioner of Income Tax (Exemptions) [CIT(E)]. The society had appealed the CIT(E)’s order dated December 27, 2024, which cancelled its registration granted under Section 12AB of the Income Tax Act, 1961.
The assessee society, established on April 1, 1995, had obtained registration under Section 12AB vide a unique registration number dated September 24, 2021, applicable for Assessment Years (AY) 2022-23 to 2026-27. However, more than three years after granting this registration, the CIT(E) concluded that it was invalid. The core reason cited was that the assessee society had never held a prior registration under Section 12A of the Act. Consequently, the CIT(E) determined that the society should have applied for provisional registration under Section 12A(1)(ac)(ii) of the Act, which is for new trusts/institutions, instead of Section 12A(1)(ac)(i), meant for those already holding previous registrations under Section 12A/12AA. This technical discrepancy led to the cancellation of the existing registration.
Before the ITAT, the assessee’s authorized representative argued that the cancellation order was illegal due to a lack of proper opportunity of being heard, constituting a gross violation of natural justice. Furthermore, it was vehemently contended that the incorrect section code (12A(1)(ac)(i) instead of 12A(1)(ac)(ii)) was merely a “typographical error” in the application form for provisional registration.
