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It would be just and proper to set aside the order of the CIT(A) and remand to the AO the question of allowing exemption u/s.11 of the Act as by reason of the proviso to Section 12A(2), the Assessee should be deemed to have had registration u/s.12A of the Act.

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Sec. 11 of Income Tax Act, 1961—Exemption—The question of taxability of the income of the Trust/Institution shall be examined and decided upon by the Assessing Officer based on the activities, compliance with various statutory and other requirements, etc., as referred to in Sections 2(15), 11, 12 & 13.

Facts: “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”.

Held, that it was found that the assessee did not claim benefit of exemption u/s.11 before the AO and the AO did not have the benefit of examining such a claim. Mere existence of registration u/s.12A will not confer benefit of exemption u/s.11 and the other conditions for availing benefit of exemption u/s.11 has to be examined by the AO. It would be just and proper to set aside the order of CIT(A) and remand to the AO the question of allowing exemption u/s.11 as by reason of the proviso to Section 12A(2), the Assessee should be deemed to have had registration u/s.12A. The registration u/s 12AA(1)(b)(i) does not automatically exempt the income of the Trust/Institution. The question of taxability of the income of the Trust/Institution shall be examined and decided upon by the Assessing Officer based on the activities, compliance with various statutory and other requirements, etc., as referred to in Sections 2(15), 11, 12 & 13. The AO will afford opportunity of being heard to the Assessee in the set aside proceedings. - INSTITUTE MANAGEMENT COMMITTEE (IMC) V/s ITO - [2020] 26 ITCD Online 077 (ITAT-BANGALORE)

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