When Dept. is Custodian, It Cannot Blame Taxpayer for Not Filing Original S.12A Registration Certificate: ITAT [Read Order]

The Pune Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the Department cannot blame the assessee for not filing the original certificate when the Department is the custodian of the documents.

Lokmanya Shikshan Prasara K Mandal, a trust registered under the Bombay Public Trust Act, 1950, and Section 12A of the Income Tax Act, 1961, as of 19.02.1991, filed its return for A.Y. 2016-17 on 31.08.2018, claiming exemption under Section 11 of the Income Tax Act, 1961.

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The Assessing Officer ( AO ) denied the exemption claim under Section 11 because the assessee did not submit the original registration certificate under Section 12A during the assessment proceedings.

The assessee appealed before the Commissioner of Income Tax (Appeals) [CIT(A)], submitting all necessary documents, including a copy of the registration certificate under Section 12A. The CIT(A) dismissed the appeal.

The assessee argued that they are duly registered under Section 12A and claimed exemption under Section 11. They submitted all necessary documents during the assessment and appellate proceedings. Despite this, the assessee was granted an exemption under Section 11 for subsequent years, including A.Y. 2017-18, and received a fresh certificate under Section 12A(1)(ac) on 07.04.2022.

The two-member bench, comprising Dr.Dipak P. Ripote ( Accountant Member ) and Vinay Bhamore ( Judicial Member ), observed that the assessee mentioned the registration number under Section 12A in the return of income, and the AO was aware of this during the assessment proceedings.

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The Tribunal referred to its earlier decision in Rotary Club Poona Downtown Charitable Trust Vs. ITO (Exemption), where it was held that the Department cannot blame the assessee for not filing the original certificate when the Department is the custodian of the documents.

The tribunal explained that the Department, being the custodian of the registration certificate, should have verified the details instead of insisting on the original certificate. The assessee was granted the exemption under Section 11 for the assessment year 2016-17. The appeal was allowed.

To Read the full text of the Order CLICK HERE

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