Ujjawal Sawera Samiti Vs ITO (ITAT Delhi)
ITAT Delhi: Exemption u/s 11 Cannot Be Denied When 12AA Registration Exists; Revenue Must Follow Rule of Consistency
Delhi Tribunal has held that once the charitable society continues to hold valid registration u/s 12AA, exemption u/s 11 cannot be denied merely on the basis of assumptions. Tribunal emphasized that the Revenue must follow the rule of consistency when exemption has been allowed in earlier & subsequent years in the absence of any change in facts.
Assessee, a charitable society registered u/s 12A since 2011, filed return declaring Nil income. AO denied exemption u/s 11 & assessed income of ₹3.79 Cr on the ground that the registration had been withdrawn, raising tax demand of ₹1.72 Cr. NFAC upheld the AO’s order.
Before the Tribunal, Assessee produced its registration certificate dated 28.02.2011, pointing out that it had never been cancelled. It was argued that exemption was granted in AYs 2016-17, 2018-19, 2021-22, 2022-23 & 2023-24 & the principle of consistency must be followed. Reliance was placed on Lal Chand Bhagat Ambika Ram v. CIT (37 ITR 288, SC), Radhasoami Satsang v. CIT (193 ITR 321, SC), DIT(E) v. Escorts Cardiac Diseases (300 ITR 75, Del) & CIT v. ARJ Securities Printers (264 ITR 276, Del).
