Income Tax Act, 1961 - Section 12A – Denial of exemption under Section 12A on the ground that the assessee has failed to produce the certificate of registration – HELD - since 1987 from the date on which the assessee applied for registration under Section 12A, the assessee continued to avail the benefit of exemption under Section 12A at least up to the assessment year 2007-2008 - 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 Assessing Officer was justified in granting the benefit of exemption under Section 12A for the assessment year 2010-2011 - 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 - the impugned judgment and order passed by the High Court is erroneous and is unsustainable and the same is quashed and set aside – assessee appeal is allowed

2023-VIL-16-SC-DT

IN THE SUPREME COURT OF INDIA

CIVIL APPEAL Nos. 2907 - 2908 /2023

(Arising out of SLP(C) Nos.13966-13967/2017)

DATE: 18.04.2023

M/s MAHARISHI INSTITUTE OF CREATIVE INTELLIGENCE U.P. LUCKNOW

Vs

COMMISSIONER OF INCOME TAX (EXEMPTION) LUCKNOW

CORAM

M.R. SHAH

SANJAY KAROL

ORDER

Leave granted.

Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Judicature at Allahabad, Lucknow Bench, Lucknow passed in Income Tax Appeal Defective (ITAD) No.55 of 2016 as well as the subsequent order passed in Review Petition No.17685 of 2017, by which the High Court has allowed the appeal(s) preferred by the Revenue quashing the order passed by the Income Tax Appellate Tribunal (ITAT) and thereafter rejecting the review application preferred by the assessee, the assessee has preferred the present appeals.

The facts leading to the present appeals, in a nutshell, are as under:

The assessee applied for registration under Section 12A of the Income Tax Act, 1961 (for short “the Act”) 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 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 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 also.

In spite of the above, 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 in the year 1987 granted the benefit of exemption under Section 12A and accordingly passed an assessment order.

The assessment order came to be taken under Suo Motu revision by the Commissioner in exercise of powers under Section 263 of the Act. The Commissioner set aside the assessment order on the ground that the Assessing Officer mechanically granted the benefit of exemption under Section 12A without in fact verifying whether any registration in favour of the assessee was issued under Section 12A of the Act or not. Therefore, the Commissioner was of the opinion that the assessment order was against the interest of the revenue. Therefore, the Commissioner set aside the assessment order.

In appeal(s), at the instance of the assessee, the ITAT set aside the order passed by the Commissioner. The order passed by the ITAT was the subject matter of appeal(s) before the High Court at the instance of the revenue. Taking into consideration the amendment in the year 1997, the High Court allowed the appeal(s) preferred by the revenue and set aside the order passed by the ITAT by observing that as the assessee has failed to produce the certificate of registration the assessee shall not be entitled to the exemption under Section 12A. The assessee filed the review application which has been dismissed. The judgment and order passed by the High Court allowing the appeal(s) preferred by the revenue and setting aside the order passed by the ITAT and restoring the order passed by the Commissioner and rejecting the review application preferred by the assessee are the subject matter of the present appeals.

Having heard the learned counsel appearing for respective parties and taking into consideration that since 1987 from the date on which the assessee applied for registration under Section 12A, the assessee continued to avail the benefit of exemption under Section 12A at least up to the assessment year 2007-2008.

The aforesaid is not disputed by the learned counsel appearing on behalf of the revenue. It is required to be noted that even post 1997 also the assessee continued to avail the exemption under Section 12A on the basis of its registration in the year 1987.

In that view of the matter, the Assessing Officer was justified in granting the benefit of exemption under Section 12A 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.

Be that as it may, 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. Even from the material on record, namely, a communication dated 03.6.2015 which was considered by the ITAT, it is apparent that the assessee was granted registration on 22.9.1987. Therefore it cannot be said that there was no registration at all.

In view of the above, the impugned judgment and order passed by the High Court is erroneous and is unsustainable and the same deserves to be quashed and set aside and is accordingly quashed and set aside. The order passed by the ITAT is hereby restored.

The present appeals are accordingly allowed to the aforesaid extent.

No costs.

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