Taxmann Daily – Editorial Team
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The assessee was a multi-state co-operative society. It had filed its return of income which was processed and an assessment order was passed.
Later, a reopening notice was issued on the ground that the identity, creditworthiness, and genuineness of deposits received from its members and shareholder's fund were not verified with relevant documents.
Assessee filed writ petition contended that notice was issued on 22-3-2021 by DCIT whereas letter written by member CIT communicating approval under section 151 for issuance of notice was received by Assessing Officer (AO) on 24-3-2021. Thus, on the date of issuance of notice i.e., on 22-3-2021, AO was not having any approval/sanction.
The Allahabad High Court held that there was no need for the paper containing approval to be received physically before issuing the notice. AO can proceed to issue a notice under section 148 if the approving authority has granted his approval and such approval has been communicated to AO in any manner including by uploading it on the portal of the department.
The notice issued under section 148 is not vitiated on the ground that the paper containing approval under section 151 was received by AO after issuing the notice.
Thus, the notice issued under section 148 as well as all the procedures undertaken in consequence of the notice did not suffer from any such illegality to warrant any interference by High Court.
Assessee-society, engaged in carrying out charitable and religious activity, filed an application seeking registration under section 12A. The Commissioner (Exemption) rejected the same on grounds that the assessee had without any approval wrongly claimed deduction under sections 10(23BBA) and 10(23C)(v).
Aggrieved-assessee filed the instant appeal before the Tribunal.
The Delhi Tribunal held that a wrong claim of exemption under sections 10(23BBA) and 10(23C)(v) would not debar the assessee from getting registration under section 12AA as registration was not dependent either upon section 10(23BBA) or 10(23C)(v).
What is required to be examined at the time of grant of registration, as per the provisions existing at the relevant point of time, is the genuineness of the activities of the trust or institution and the objects of the trust.
The so-called infraction pointed out by the Commissioner (Exemption) such as the claim of exemption under section 10(23BBA) and section 10(23C)(v), neither impinges on the genuineness of the trust nor it is charitable/religious nature.
In case, the assessee claims the wrong exemption, it can be dealt with appropriately under the relevant provisions of the Act. However, a wrong claim of exemption, by itself, cannot debar the assessee from getting an exemption under section 12A.
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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