Rectification Rejected as U/s 143(1) Intimation Had Attained Finality

Omm Muruga Educational Trust Vs ITO (ITAT Chennai)

Section 154 Has Limits: Later Registration Can’t Rewrite 143(1)- No 12A on Filing Date, No 11 Exemption: ITAT Rejects Rectification

In Omm Muruga Educational Trust Vs. ITO (Exemptions), Ward-2, Chennai, ITA No.1505/Chny/2025, AY 2014-15, order dated 31.12.2025, Chennai ITAT dismissed Assessee’s appeal & upheld denial of exemption u/s 11 through rectification proceedings u/s 154.

Assessee-trust had filed return claiming exemption u/s 11, which was denied by CPC u/s 143(1) as trust was not registered u/s 12A at the relevant time. Subsequently, Assessee obtained 12AA registration on 28.03.2017 & filed rectification application u/s 154 seeking allowance of exemption by invoking second proviso to s.12A(2). AO rejected rectification holding that no assessment proceedings were pending on date of registration & exemption could not be granted retrospectively through 154. CIT(A) confirmed rejection.

Tribunal held that intimation u/s 143(1) had already been issued on 14.03.2016 & no regular assessment was pending when registration was granted. Since Assessee did not hold 12A registration on date of filing return or CPC processing, denial of exemption was not a mistake apparent on record capable of rectification u/s 154. Tribunal ruled that subsequent registration cannot revive concluded 143(1) processing. Accordingly, rectification was rightly rejected & appeal dismissed.

FULL TEXT OF THE ORDER OF ITAT CHENNAI

This appeal filed by the assessee is directed against the order dated 21.03.2025 passed by the Addl/JCIT(A)-12, Mumbai for the assessment year 2014-15.

2. The assessee raised 4 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the rectification order passed under section 154 of the Income Tax Act, 1961 [“Act” in short] denying exemption under section 11 of the Act.

3. The assessee filed return of income for the AY 2014-15 on 14.01.2016 admitting a total income of ₹. NIL after claiming exemption under section 11 of the Act towards application of income for charitable purposes. While processing the return of income, the CPC rejected the claim of the assessee made under section 11 of the Act. The assessee filed an application under section 154 of the Act requesting to allow the exemption claimed under section 11 of the Act as per the provisions of sub-section (2) of section 12A of the Act. The Assessing Officer noted that the assessee filed the application in Form 10A for registration under section 12AA of the Act only on 28.03.2017, whereas, the processing of the return of income under section 143(1)(a) of the Act was completed on 14.03.2016 by the CPC and no assessment proceedings were pending on the date of filing of application seeking registration. Thus, the Assessing Officer rejected the rectification application filed under section 154 of the Act claiming the exemption under section 11 of the Act. The ld. CIT(A) confirmed the order passed under section 154 of the Act by the Assessing Officer.

4. The ld. AR Shri D. Raju, Advocate submits that the intimation passed under section 143(1) of the Act is merely a preliminary processing of return and cannot be equated with a regular assessment under section 143(3) or 144 of the Act. The ld. AR vehemently argued that once the assessment order is not concluded under section 143(3) or 144 of the Act in assessee’s case, the second proviso to section 12A(2) of the Act is very much applicable for allowance of exemption under section 11 of the Act. By relying upon various case law, the ld. AR prayed to allow the exemption claimed under section 11 of the Act.

5. The ld. DR Ms. Latchana, JCIT relied on the order of the ld. CIT(A).

6. Heard both the parties and perused the material available on record. It is noted that the assessee challenged the order passed under section 154 of the Act seeking to rectify the mistake in denying the exemption under section 11 of the Act by the CPC. It is noted that the CPC denied the exemption under section 11 of the Act for having no registration under section 12A of the Act vide intimation dated 14.03.2016. Admittedly, the assessee got approval under section 12A of the Act on 28.03.2017 and there is no dispute with regard to filing of application under section 154 of the Act on 06.02.2018 for allowance of exemption under section 11 of the Act. The ITO (Exemptions) dismissed the said application under section 154 of the Act vide order dated 28.02.2018 by holding that the assessee is not entitled to claim exemption under section 11 of the Act. Facts even admitted, by the time of filing return of income and denial of exemption by the CPC, there was no approval under section 12A of the Act. Therefore, the order passed by the ld. CIT(A) is justified not only for the reasons stated by us above, but also the reasons recorded by the ld. CIT(A) vide para 4.1 of the impugned order. Thus, the ground raised by the assessee is dismissed.

7. In the result, the appeal filed by the assessee is dismissed.

Order pronounced on 31^st December, 2025 at Chennai.