Whether when assessee which works for cause of trade & industry was granted registration u/s 12A, it loses eligibility for Sec 80G benefits merely because a copy of registration is not available - NO: ITAT

THE issue before the Bench is - Whether when the assessee-association involved in taking up the cause of trade and industry has been granted registration u/s 12A, it loses eligibility for Sec 80G benefits merely because a copy of registration is not available with it and even Revenue is not able to trace its file. And the answer favours the Association.

Facts of the case

The assessee is an association undertaking various activities, seminars, medical relief, awareness programmes and also activities of general public utility without any profit motive. It had applied for registration u/s 12A and the same was claimed by the assessee to had been granted to the

assessee in the year 1988-89. Thereafter, it had also applied for recognition u/s 80G and it was granted accordingly. However, the assessee’s application for renewal of recognition u/s 80G was rejected holding that the assessee had resorted to agitational activities. On appeal, the Tribunal held that proviso to section 2(15) shall not apply to the donations received by the assessee upto 31/03/2009 and in the absence of any acts of violation of the provision of section 80G(5) by the assessee, it was entitled for approval u/s 80G in respect of the donations received up to 31/03/2009 only. Consequent thereto, assessee was granted recognition u/s 80G for a limited period. Subsequently, the assessee, again, filed an application on 10/12/2012 seeking renewal of approval u/s 80G(5)(vi) along with the necessary enclosures. The DIT(E) required the assessee to furnish a copy of the registration granted u/s 12AA in the case of the assessee society. The assessee submitted that the copy of the registration u/s 12AA was not traceable. The DIT(E) held that the application for approval u/s 80G(5)(vi) cannot be considered as filing of copies of registration granted u/s 12A was mandatory. DIT(E), thus, rejected the application of the assessee. Before Tribunal, the assessee's representative had filed a reply of the revenue department to the application filed by the assessee under Right To Information Act seeking furnishing of the certified copy of the Registration u/s 12A granted by the IT Department wherein it was stated by the Department that the file pertaining to the assessee’s case was not readily available in its office as the case pertains to the year 1988-89 and hence it was not possible to furnish a copy of registration u/s 12A. AR had also filed a copy of the communication of the CIT, AP-II dated 29/11/1999 to the assessee wherein there was a reference to the registration u/s 12A and 80G for 1988-89. The counsel for the assessee had also filed a paper book containing copies of IT returns, income and expenditure account, balance sheet and audit report for the AY 2003-04 to 2012-13 to demonstrate that the assessee had always been furnishing returns of income with DDIT(E) and the computation of income had been done u/s 11 all along. It was submitted that all along the returns filed by assessee, had been accepted by the Department and the communication accepting the return had been given to the assessee only for one AY. Further, it was submitted that in the earlier years when the assessee had applied for recognition u/s 80G, the revenue department had never taken a stand that the copy of the registration u/s 12A was not available. Thus, according to him, the substantial evidence such as, department granting the renewal of recognition u/s 80G to the assessee in earlier assessment years on the basis of the registration u/s 12A, should be considered while considering the assessee’s application for grant of recognition u/s 80G. On the other hand, DR had supported the orders of the DIT(E) and submitted that it was mandatory requirement of law that the application for recognition u/s 80G should be accompanied by a copy of the registration u/s 12A and since such copy was not enclosed along with application, application for recognition u/s 80G was incomplete and the DIT(E) had rightly rejected such incomplete application.

Held that,

++ the assessee is a charitable organization and is carrying on charitable activities and it has been allegedly granted registration u/s 12A, as far back as 1988-89. The subsequent events such as the assessee filing returns as charitable organization before the DIT(E) and the revenue department accepting such returns, goes to prove that the registration u/s 12A is in force. Even the order of the DIT(E) dated 12/09/2008, which has been assailed before the Tribunal in ITA No. 1682/Hyd/2008 did not raise any objection as to the furnishing or non-furnishing copy of the registration u/s 12A. Pursuant to the direction of the Tribunal that the activities of the assessee of agitating for cause of the trade and commerce are not in violation of the provisions of section 80G(5)(vi) of the Act, we find that the DIT(E) has granted recognition u/s 80G of the Act to the assessee;

++ we find that all these circumstances go to prove the contention of the assessee that registration u/s 12A in favour of the assessee is in force. Merely because the copy of the registration u/s 12A is not available with the assessee and the revenue department is not able to trace the file and the copy of the registration, it cannot be said that the assessee is not eligible for recognition u/s 80G. In view of the same, we remit the issue back to the file of the DIT(E) to consider the assessee’s application for recognition u/s 80G on the basis of the evidence available with the assessee. Needless to mention that the assessee shall be given a fair opportunity of hearing in the matter. In the result, appeal of the assessee is allowed for statistical purposes.