Case Law Details
Santiniketan Sishutirtha Vs CIT (Exemptions) (ITAT Kolkata)
Introduction: The Kolkata Income Tax Appellate Tribunal (ITAT) recently adjudicated on the registration applications under section 12A(1)(ac)(i) filed by various assesses, notably Santiniketan Sishutirtha, challenging the orders of the Commissioner of Income Tax (Exemptions). The crux of the matter lay in the correct interpretation of Form No. 10AB and its implications.
Detailed Analysis: The core contention revolved around the application’s misrepresentation of the relevant clause. The applicants erroneously cited clause (iii) of sub-section (1) of section 12A instead of sub-clause (i) of section 12A(1)(ac). This discrepancy led to the rejection of their registration requests, despite having been provisionally registered.
Upon scrutinizing the matter, the Kolkata ITAT recognized the procedural error and empathized with the assesses’ predicament. It acknowledged that the applications should have been filed under section 12A(1)(ac)(i) for regular registration, rather than under a provision meant for provisional registration renewal.
Consequently, the ITAT directed the Commissioner of Income Tax (Exemptions) to reconsider the applications in light of the correct provision, emphasizing the applicants’ entitlement to a fair evaluation for fixed-term registration.
Conclusion: The Kolkata ITAT’s ruling in the case of Santiniketan Sishutirtha vs CIT (Exemptions) underscores the importance of procedural adherence and the interpretation of statutory provisions. By rectifying the misapplication of the relevant clause, the tribunal ensures equitable treatment for the assesses and upholds the principles of natural justice in tax matters. This decision serves as a reminder of the significance of precision in legal documentation and the judiciary’s role in rectifying procedural errors to safeguard taxpayer rights.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
All these captioned appeals filed by different assessee are against the separate orders of Ld. CIT(E), Kolkata dated 04.07.2023, 11.07.2023 & 11.07.2023 respectively arising out of order passed u/s. 12AB(1)(b)(iii) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”). Since grounds are common and facts are identical, we dispose of all these appeals by this consolidated order for the sake of convenience by taking the ITA No. 961/Kol/2023 as the lead case and result of which will apply mutatis mutandis in all the other appeals.
2. The solitary grievance of the assessee is that Ld. CIT(E) has erred in rejecting the application filed by the assessee for grant of registration u/s. 12AB(1)(ac) of the Act.
2. Brief facts of all the above appeals are that they are existing Trust and earlier enjoying registration under section 12AA of the Income Tax Act. After introduction of the new Scheme, the assessees have applied for registration, which applications were allowed by the Department and copy of the order is available in Form No. 10AC. The Registrations were granted provisionally from 23rd September, 2021. Meanwhile the assessees have filed one more application in Form No. 10AB. In the application at Serial No. 2, there is a narration – “02-Sub-clause (iii) of clause (ac) of sub-section (1) of section 12A”. It is pertinent to take note of this clause, which reads as under:-
“(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”.
3. On perusal of the application, ld. Commissioner formed an opinion that this clause is meant for grant of provisional registration. In these cases, already provisional registration has been granted. The assessees are required to file an application within six months prior to expiry of period of the provisional registration or within six months from the commencement of activity, whichever event occurs first.
4. With the help of ld. Representatives, we have gone through the record carefully. It emerges out that basically application of the assessee ought to have been under section 12A, sub-clause (1)(ac)(i), where a regular registration for a period of five years ought to be granted. Automatically dismissal of the applications of assessees resulted on account of wrong mention of the clause in the application form. Had an opportunity would have been provided in the system, the assessees could have rectified this application and mentioned correct provision that these applications be treated under section 12A(1)(ac)(i). Considering the hardship faced by the assessees, we deem it appropriate to relegate this issue to the file of ld. CIT(Exemption) with a direction that application in Form No. 10AB should be construed as if filed under clause 12A(1)(ac), sub-clause (i). The applications are to be considered on merit for grant of registration for a fixed period, not be treated to grant a provisional registration.
5. In the result, all these appeals are allowed in above terms.
Order is pronounced in the open court on 30th January, 2024
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