The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench remanded the matter back to CIT(A) for determining tax liability arising on the assessee trust on the premise of non-availability of registration under section 12A of the Income Tax Act, 1961.
The assessee, Ahmedabad Sthanik Trivedi Mevada Brahman Gnati Trust is a society registered under Societies Registration Act, 1960. It was constituted as a society in the nature of public trust and registered under the Bombay Charitable Trust Act, 1950. The said society is created with the object and purpose of ameliorating Trivedi Mevada Brahmin residing in the city of Ahmedabad in the area of education and culture which is defined exhaustively in the trust deed.
The return was filed by the trust claiming exemption under section 11 or 12 which was denied in the intimation processed under section 143(1) in the absence of registration obtained under s.12A of the Act. The CIT(A) has also confirmed the action taken under s.143(1) of the Act for want of registration under section 12A of the Act. It was thus held by the Revenue that income of the unregistered trust is susceptible to be taxed at the maximum marginal rate under section 267B of the Act as applicable to Association of Person (AOP). The status of the assessee was thus reckoned as AOP for the purposes of determination of tax liability.
The coram of Madhumita Roy and Pradip Kumar Khedia found merit in the plea of the assessee for admission of additional evidence. It is a matter of fact that the Income Tax Department itself has issued a certificate under section 12AA of the Act registering the assessee for the purposes of Section 11 or 12 of the Act. The delinquency in non-production of registration before CIT(A) is therefore viewed benignly. The additional evidence in the form of order under section 12AA of the Act is therefore admitted by the Tribunal for adjudication of the dispute.
The ITAT ruled that the order under section 12AA of the Act was not presented before the first appellate authority for its consideration, the ITAT refrained from expressing our view on the merits of the eligibility of deduction under section 11or 12 of the Act. The impugned orders of the CIT(A) are thus set aside and the issue is restored back to the file of the CIT(A) for de novo adjudication in accordance with law after taking into account the order passed granting registration under section 12AA of the Act. It shall be open to the assessee to furnish such evidence and explanations as made deemed necessary towards justification of claim of benefit before the first appellate authority and for the purpose of determination of issue.
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