Supreme Court of India

U.P. Forest Corporation

v.

Deputy Commissioner of Income-tax, Lucknow

Section 12A of the Income-tax Act, 1961 - Charitable or religious trust - Registration of - Assessment years 1977-78, 1980-81 and 1984-85 - Whether registration of a trust/institution under section 12A is a condition precedent for availing benefit under sections 11 and 12 - Held, yes

Facts

The assessee-corporation constituted under U.P. Forest Corporation Act, 1974 claimed exemption under section 11(1)(a) on ground that it was a charitable institution. For purposes of claiming said exemption, it moved an application before the competent authority for being registered under section 12A. The competent authority, however, rejected the said application. The corporation filed appeal against rejection of such application before the Tribunal which was pending decision. The assessing authority while considering claim of the assessee for exemption under section 11(1)(a) held that the assessee was not a charitable institution and assessed the income in respect of relevant assessment years to tax. The Tribunal upheld the order of the assessing authority. On further appeal filed by the assessee, the High Court remanded the matter back to the Tribunal for considering the matter afresh.

On appeal to the Supreme Court :

Held

A conjoint reading of sections 11, 12 and 12A makes it clear that registration under section 12A is a condition precedent for availing benefit under sections 11 and 12. Unless and until an institution is registered under section 12A, it cannot claim the benefit of section 11(1)(a). Keeping in view the fact that the assessee had not been granted registration under section 12A, it was not entitled to claim exemption from payment of tax under sections 11(1)(a) and 12. [Para 12]

The appeals filed by the assessee was to be dismissed accordingly. [Para 13]

The order of the High Court remanding the matter in respect of main assessment shall remain in abeyance till the matter regarding registration was decided finally by the Tribunal. [Para 16]