In a recent decision the Supreme Court quashed the disallowance of rebate to a trust in spite of having valid registration in the previous years.
The assessee, M/s Maharishi Institute of Creative Intelligence, applied for registration under Section 12A of the Income Tax Act, 1961 as per the provisions of law prevailing in the year 1987.That, thereafter, the assessee continued to be granted the exemption under Section 12A of the Income Tax Act.
It is the case on behalf of the appellant that till 1987 there was no requirement of issuance of any certificate of registration of Section 12A and only filing an application for registration under Section 12A of the Income Tax Act and processing the same by the Department was sufficient. However, in the year 1997 there was an amendment, which required the issuance of the certificate of registration under Section 12A of the Income Tax Act.
The assessee even after 1997 continued to avail the exemption under Section 12A of the Act even post 1987 till the assessment year 2007-2008. The dispute is with respect to the assessment year 2010- 2011. The Assessing Officer considering the facts as in earlier years upto 2007-2008 and on the basis of the registration under Section 12A of the Income Tax Act in the year 1987 granted the benefit of exemption under Section 12A of the Income Tax Act and accordingly passed an assessment order.
The Two-Judge Bench consisting of Justices MR Shah and CT Ravikumar observed that “The Assessing Officer was justified in granting the benefit of exemption under Section 12A of the Income Tax Act for the assessment year 2010-2011. What was required to be considered was the relevant provision prevailing in the year 1987, namely, the day on which the assessee applied for the registration. At the relevant time there was no requirement of issuance of any certificate of registration.”
The Court further noted that “The fact remains that for all these years after 1997 till the year 2007-2008 when the assessee continued to avail the benefit of exemption solely on the basis of the registration in the year 1987 and it was never the case on behalf of the revenue and even the Commissioner that in the earlier years there was any certificate of registration or the registration was not granted.”
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