In CIT (Exm) v. M/ S Maharishi Institute Of Creative Intelligence U.P., the Allahabad High Court held that Income Tax exemption under s. 11 cannot be granted to a Trust mere on the basis of the fact that an application u/s 12AA is submitted before the authority.
The division bench comprising of Justice Sudhir Agarwal and Justice Ravindranath Misra clarified that granting of registration by the Commissioner is a mandatory requirement for granting exemption under the Income Tax Act.
The assessee-Trust, in the instant case, had applied for registration of society under Section 12A(1) of the Income Tax Act, 1961 long back and registration has not been granted by Commissioner till date. The assessing officer allowed exemption to the assessee, which was revised by the Commissioner by invoking his revisional power under s. 263 of the Income Tax Act.
The ITAT quashed the revisional order and therefore, the Revenue approached the High Court for relief.
Before the Court, the Revenue contended that granting of registration is a mandatory requirement for availing exemption as per the amendment to Finance Act, 2007 w.e.f. 01.06.2007.
Reversing the ITAT order, the bench said “until and unless registration is granted no exemption can be claimed only on the basis that application has been submitted for registration. In the present case, despite the fact that admittedly no registration certificate has been issued to respondent till date, still exemption has been granted by authorities below. This is not consistent with requirement of Section 12A(1), as is applicable for relevant assessment year with which we are concerned.”
Read the full text of the Judgment below.
