No Sec. 12AA Registration to a Bar Association If It Isn’t Registered as a Trust/Institution With Statutory Authorities

Case Details: Income Tax Appellate Tribunal Bar Association vs. Commissioner of Income Tax (Exemption) - [2023] 156 taxmann.com 91 (Surat-Trib.)

Judiciary and Counsel Details

• • Pawan Singh, Judicial Member & Dr Arjun Lal Saini, Accountant Member
  • Rasesh Shah, CA for the Appellant.
  • S.M. Keshkamat, CIT-DR for the Respondent.

Facts of the Case

The assessee was a Bar Association of Income Tax consultant of Surat Bench. The assessee filed an application under section 12AA in Form No. 10A as per Rule 17A of Income Tax Rules, 1962, along with various details for its registration.

However, the CIT(E) rejected the application of the assessee by holding that the assessee failed to submit a copy of the registration certificate, evidencing the creation of a trust/institution.

The matter reached the Surat Tribunal.

ITAT Held

The Tribunal held that the sole basis for rejection of the application under section 12AA is the want of registration with the registrar of company, registrar of firm and society, or registrar of trust, as the case may be. It is an admitted fact that the assessee had not obtained any registration either under the Gujarat Public Trust Act or under any other statutory provision.

Rule 17A, which deals with the registration under section 12AB, has been substituted with effect from 01.04.2021. As per the substituted provision, the assessee is required to furnish a certified copy of the registration with the Registrar of Companies, Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be.

This was a condition precedent for making an application under Form 10A or 10AB. However, the assessee vehemently submitted that a self-certified copy of registration was required if it was so registered, and it was also argued that there was no provision that the institute should be constituted under any law. Such submission of the assessee is not acceptable, as clause-(c) of sub-rule (2) of Rule 17A is clear and unambiguous.

Income Tax Rules, 1962, amended from time to time, is framed to supplement the statutory provision under the Act and have the approval of Parliament. Thus, the assessee failed to fulfil the primary condition of registration with the Registrar of Company, Registrar of Firm and Society, or Registrar of Public Trust. In the absence of such a registered instrument, the application filed by the assessee is premature and cannot be proceeded to examine its object and activities.

Accordingly, it was held that CIT(E) rightly denied registration to the assessee.