Andhra Pradesh Pollution Control ... vs Assessee

Andhra Pradesh Pollution Control Board, vs. The DIT(Exemptions) Hyderabad - 500 018. Hyderabad - 500 004. PAN AAAJA1601Q (Appellant) (Respondent)

For Assessee : Mr. B. Satyanarayana Murthy For Revenue : Smt. G. Aparna Rao

Date of Hearing : 15.01.2015 Date of Pronouncement : 21.01.2015

ORDER

PER SAKTIJIT DEY, J.M.

This appeal of the assessee is directed against the Order dated 14.07.2014 of the DIT(E), Hyderabad passed under section 154 of the Income Tax Act, 1961.

2. Briefly stated, the assessee a statutory board created by the Government of Andhra Pradesh. It applied for registration under section 12Aof the Act. However, the application filed by the assessee was rejected vide order dated 26.09.2008. The order of rejection was set aside by the ITAT while deciding assessee's appeal in ITA.No.1702/Hyd/2009 dated 30.09.2009. The DIT(E) again rejected the application for grant of registration vide order dated 31.12.2012. Being aggrieved of the order of rejection, assessee came in appeal before the ITAT. The ITAT vide order passed in 2 ITA.No.1481/Hyd/2014 A.P. Pollution Control Board, Hyderabad.

ITA.150/H/2013 dated 30.09.2013 set aside the order of the DIT(E) and directed him to grant registration to the assessee under section 12AA of the Act. Pursuant to the direction of the Tribunal, the DIT(E) passed an order on 20.03.2014 granting registration under section 12AA of the Act w.e.f. 31.03.2008.

3. After receiving the aforesaid order granting registration, assessee filed petition under section 154 of the Act seeking rectification of the order on the ground that in para 4 of the order passed under section 12AA of the Act, the DIT(E) has observed that the registration is granted w.e.f. 31.03.2008 onwards, whereas, as per proviso 1 to section 12A(1) of the Income Tax Act, the registration granted shall be effective from 1st day of Financial Year in which the application is made. It was further submitted by the assessee that since the application was made on 31.03.2008, the registration should be effective from the 1st day of April, 2007. The DIT(E) after considering the submissions made by the assessee in the context of provisions contained under section 12A of the Act held as under :

"3. I have carefully considered the submissions of the assessee institution made in that petition. I have also carefully gone through the provisions of section 12A(1) of the Act. In this case, the assessee institution has filed the application for registration u/s. 12A on 31.03.2008, which is admitted in the said petition. As per sub-section (2) to section 12A of the Act, it says, "Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made". Thus, as per the provisions of the said sub-section, it says, about applicability of provisions of Section 11 and 12 of the Act to the income of such trust or institution from the succeeding financial year, when an application for registration u/s.12A is filed by such trust or 3 ITA.No.1481/Hyd/2014 A.P. Pollution Control Board, Hyderabad.

institution in the preceding financial year. Further, in section 12AA while deals with procedure for granting registration, under sub-clause (i) to clause (b) to sub-section (1), it says that the Commissioner shall pass an order in writing registering the trust or institution. In that sub-

section (1), nowhere there is any mention about the date from which registration has to be granted u/s.12AA of the Act to such trust or institution. Under these circumstances, and when the assessee institution has filed the said application for registration on 31.3.2008, in my view, the assessee institution has rightly been granted registration u/s.12AA of the Act, with effect from the date of filing of that application in Form No.10A i.e., from 31.3.2008 and there is no infirmity in the said order dated 20.3.2014 passed by the DIT(E), Hyderabad.

4. In view of the foregoing discussion, thus, no rectification is called for in the said order dated 20.03.2014 passed by the DIT(E), Hyderabad granting registration u/s.12AA of the Act, to the assessee institution. Hence, the said application filed by the institution u/s.154 of the Act, is rejected."

Being aggrieved of the aforesaid finding of the DIT(E), assessee is in appeal before the Tribunal.

4. We have heard the parties and perused the material available on record. It is the contention of the learned A.R. that as per section 12A(2) assessee is entitled to avail exemption under sections 11 and 12 from the assessment year immediately following the financial year in which application for registration was filed. He submitted that as the assessee has filed the application for registration on 31.03.2008, assessee will be entitled for exemption under section 11 from the immediately following assessment year i.e., A.Y. 2008-09. Therefore, the DIT(E) is not correct in holding that the assessee will be entitled for exemption under section 11 from the succeeding financial year. On perusal of the order dated 02.03.2014 passed by the DIT(E), it is very much evident that 4 ITA.No.1481/Hyd/2014 A.P. Pollution Control Board, Hyderabad.

the registration under section 12AA of the Act was granted to the assessee w.e.f. 31.03.2008 on which date assessee has made the application for registration. On a reading of sub- section 2 to section 12A, it becomes clear that in case of an assessee who has made an application for registration after 1st June, 2007, the provisions contained under sections 11 and 12 of the Act shall be applicable to it for the assessment year immediately following the financial year in which the application for registration was made. Therefore, what follows from the aforesaid statutory provision is, an assessee will be entitled for exemption under section 11 of the Act for the assessment year following the financial year in which he has made the application for registration under section 12A of the Act. In the present case, there is no dispute to the fact that the assessee has applied for registration on 31.03.2008 i.e., in financial year 2007-08. Therefore, as per section 12A(2) the provisions of sections 11 and 12 of the Act will be applicable to the assessee from the A.Y. 2008-09. In the order passed under section 12AA of the Act, DIT(E) has not made any observation with regard to the applicability of provisions under section 11 of the Act from a particular assessment year. This aspect has to be examined by the A.O. keeping in view the relevant statutory provisions. In these circumstances, we fail to understand the need for the assessee to file the application under section 154 of the Act. Be that as it may, considering the relevant statutory provisions as contained under section 12A(2) of the Act, we are inclined to hold that the provisions of sections 11 and 12 of the Act would apply to the assessee from the assessment year 2008-09 and not financial year 2008-09 as observed by the learned DIT(E). Accordingly, grounds of the assessee are allowed.

5 ITA.No.1481/Hyd/2014 A.P. Pollution Control Board, Hyderabad.

5. In the result, appeal of the assessee is allowed.

Order pronounced in the open Court on 21.01.2015

Sd/- Sd/-

(B.RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER

Hyderabad, Dated 21st January, 2015

VBP/-

Copy to

1. Andhra Pradesh Pollution Control Board, Hyderabad.

C/o. Mr. Venugopal & Chenoy, Chartered Accountants, 4-1-889/16/2, Tilak Road, Hyderabad - 500 001.

2. Director of Income Tax (Exemptions), Aayakar Bhavan, Hyderabad.

3. DDIT(E)-II, Hyderabad

4. D.R. ITAT "A" Bench, Hyderabad.