Lokmanya Shikshan Prasara K Mandal Vs ITO (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT) Pune ruled in Lokmanya Shikshan Prasarak Mandal vs. ITO that the Income Tax Department cannot deny exemption under Section 11 of the Income Tax Act solely due to the taxpayer’s failure to submit the original 12A registration certificate. The tribunal emphasized that since the tax department is the custodian of such records, it cannot hold the taxpayer responsible for not providing the document.
The assessee, a trust running primary and secondary schools, had been registered under the Bombay Public Trust Act, 1950, and had obtained a 12A certificate from the Commissioner of Income Tax, Kolhapur, in 1991. In its income tax return for Assessment Year 2016-17, the assessee claimed exemption under Section 11, explicitly mentioning its 12A registration number. However, the Assessing Officer denied the exemption, citing non-submission of the original certificate, despite the fact that the registration details were available in the department’s records.
During appellate proceedings, the assessee produced a copy of the registration certificate, but the Commissioner of Income Tax (Appeals) [CIT(A)] rejected it, stating there was no valid reason for not submitting it during assessment. ITAT Pune observed that the department, being the official custodian of such documents, had the means to verify the details but failed to do so. The tribunal held that the department’s refusal to acknowledge the registration certificate was unjustified, especially since the trust had consistently received tax exemptions in subsequent years.
