The Amritsar bench of the Income Tax Appellate Tribunal (ITAT) has held that registration u/s 12A can’t be denied without proper verification of books of account.
The appellant is a society registered u/s Society Registration Act, 1860 which was running a school under the name of “Shaheed Bhagat Singh International School”. The society was established with the object to establish, maintain and/orrunning schools, colleges, universities Technical & Professional Institutes and other development /advancement of society without any distinction between caste, creed and religion. An application was filed for registration u/s 12A in Form No.10A and was rejected based on three reasons.The rejection was based on the absence of a dissolution clause in the Memorandum of Association, objects of trust as in contrary u/s 2(15)and the absence of accounts in a systematic manner.
The appellant contended that the dissolution clause is not obligatory for maintaining societywhich will not be the issue for rejection of registration u/s 12A of the Act. It was further contended that the primary object of the society is not maintaining a coaching centre and stated that even though it was mentioned in MOA, no activity was done to run the coaching centre.
The respondent contended that from FY 2015-16 onwards, the applicant was continuously claiming depreciation as expenses which indicates that the applicant was not maintaining its financials in a systematic manner.
It was observed that for registration u/s 12A the steerage of the Act is the identity of the assessee and the activity relating to the main object of the society and the CIT has failed to do proper verification of the books of account.
The Tribunal consists of Dr M L Meena, AM and Shri Anikesh Banerjee, JMhas held that the CIT (E) has erred in rejecting the application for registration u/s 12AA of the Act filed by the applicant and directed to grant registration u/s 12AA of the Act to the applicant. The appeal filed by the assessee was allowed. Sh. Rohit Kapoor, CA & Sh. V.S. Aggarwal appeared on behalf of the assessee and Sh. Sanjeet Singh appeared on behalf of the revenue.
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