A mere non-intimation of the amendments in the Trust Deed to the Department cannot ipso-facto lead to cancellation of registration because the statutory requirement of cancellation of registration contained in section 12AA(3) of the Act prescribe that the cancellation of registration cannot be effectuated unless a case is made out that the new objects do not fit-in with the existing objects (i.e. new objects are ‘non-charitable’ in nature) or that the activities are in-genuine.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the Revenue. The relevant assessment year is 2011-12. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-1, Mumbai [ in short ‘CIT(A)] and arises out of the assessment completed u/s 143(3) of the Income Tax Act 1961, (the ‘Act’). As neither the assessee nor its authorized representative appeared before the Tribunal on the date fixed for hearing, we are proceeding to dispose off the matter on merit.
2. The grounds raised by the Revenue in this appeal read as under:
1. Whether on the facts and in the circumstances of the case and in law Ld. CIT(A) erred in allowing the claim of exemption u/s 11 of the Act even though assessee failed to intimate the changes made in object clause to CIT (Exemption) as per the undertaking given in form no. 10A and continued to enjoy benefits of valid 12A registration year after year, as the trust deed on the basis of which registration was granted was amended and therefore, the registration granted earlier ceased to exist?
2. The appellate prays that the order of the Ld. CIT(A), Mumbai be set aside and that of the Assessing Officer be restored.
3. Briefly stated, the facts of the case are that the assessee is a trust registered with the Director of Income Tax (Exemption), Mumbai u/s 12A and also with Charity Commissioner, Mumbai. It filed its return of income for the assessment year (AY) 2011-12 on 24.11.2011 along with the income and expenditure account, balance sheet and audit report in Form No. 10B declaring total income at Rs. Nil. During the course of assessment proceedings, the Assessing Officer (AO) noticed that the object of the assessee-trust has been amended. New objects have been added to the existing objects of the trust and major alterations in the objects have been made. Therefore, the AO was of the view that it was mandatory on the part of the trust to seek a fresh registration with regard to the amended objects without which the new trust-deed is not covered in the ambit of section 11 of the Act. Having amended the trust-deed, it was incumbent upon the assessee to seek fresh registration on the basis of the amended trust-deed. The assessee has not done so. Therefore, the AO held that the registration granted by the Commissioner of Income Tax, Mumbai ceased to survive after the trust deed was altered by the assessee. Further, the application for registration u/s 12A filed in Form No. 10A contains an undertaking which requires the assessee to communicate the alteration. Therefore, the AO concluded that the registration earlier granted does not subsist in the year under consideration and thus brought to tax Rs.2,88,68,260/- under the normal provisions in the status of the AOP.
4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) observed that the facts in the impugned assessment year are identical to AY 2010-11. The Tribunal in case of the assessee for AY 2010-11 followed the order of the Coordinate Bench for AY 2009-10 (ITA No. 5948/Mum/2012) and allowed the appeal filed by the assessee. The Ld. CIT(A) followed the order of the Tribunal in the case of the assessee for the AY 2010-11 and held as under:
As there is no change in facts, observations of the AO in the assessment order, the facts relating to enhancement of income and submissions of the appellant in the year under consideration as compared to AY 2010-11, the AO is directed to follow the above observations of the Hon’ble ITAT for this year as well.
5. Before us, the Ld. DR relies on the order of the AO.
6. We have heard the Ld. DR and perused the relevant materials on record. It is found that the ITAT in the case of the assessee-trust for AY 2010-11, by following the order of the Co-ordinate Bench for AY 2009-10, has decided the same issue in favour of the assessee. The Ld. CIT(A) has extracted the order of the Tribunal for AY 2010-11 at page 17-23 of his appellate order dated 09.03.2016.
Facts being identical, we follow the above order of the Co-ordinate Bench in the case of the assessee for the AY 2010-11 and uphold the order of the Ld. CIT(A).
7. In the result, the appeal is dismissed.
Order pronounced in the open Court on 11/04/2018