When bye-laws was amended, society was entitled to registration u/s 12AA from the date of establishment

In a recent judgment, ITAT Chennai has held that when the amendment was made in the .

of the society it related back to the date of original establishment and hence the society was entitled for registration u/s 12AA with effect from its date of establishment.

Case Details:

INCOME TAX APPELLATE TRIBUNAL ‘ B’ BENCH : CHENNAI

I.T.A.No.2186/Mds/2014

T. Abdul Wahid Educational Society vs. The Dy. Director of Income tax (Exemptions)

Date of Order: 18/03/2016

Brief Facts of the Case:

The assessee society was established by a Memorandum and bye-laws dated 19.7.2012 and the application for registration u/s 12AA was filed by it on 5.9.2012. The DIT (E) rejected the application on the ground that the assessee may not get the benefit of section 11 since the society was established for the benefit of a particular religion and as such the object of the society was in violation of section 13(1)(b) of the Income Tax Act, 1961. Accordingly the byelaws of the society was amended on 2.7.2013. Considering the amended bye-laws of the society the Tribunal by an order dated 5.12.2013 had directed the DIT(E) to grant registration u/s 12AA of the Act. However, the DIT(E) granted registration with effect from 2.5.2013.

The assessee main ground in this appeal was that once the bye-laws was amendedthe DIT(E) had to grant registration from the date of its establishment and not from the date of amendment of bye-laws.

Excerpts from the Judgment:

We have considered the rival submissions on either side and also perused the material available on record. Admittedly, the assessee filed an application for registration u/s 12AA of the Act on 5.9.2012 i.e within two months period from its establishment. The application of the assessee was rejected by the DIT(E) on the ground that the benefit of the society was for a particular religious community. Subsequently, the assessee-society amended the bye-laws and after considering the amendment made by the assessee, this Tribunal directed the DIT(E) to grant registration u/s 12AA of the Act. The fact remains that the subject matter of appeal before this Tribunal in the earlier round of litigation is on application filed on 5.9.2012. After considering the amendment made in the bye-laws, this Tribunal directed the DIT(E) to grant registration only on the application made by the assessee on 5.9.2012. It is not in dispute that the society was established on 19.7.2012. The object clause in the bye-laws was amended by the assessee-society on 2.7.2013. Therefore, this Tribunal is of the considered opinion that when the amendment was made in the bye-laws of the assessee-society it relates back to the date of original establishment, hence the amended bye-laws would be applicable from 19.7.2012. Since the assessee has filed the application within one year from the date of its establishment, this Tribunal is of the considered opinion that the assessee is eligible for registration with effect from 19.7.2012. Therefore, the DIT(E) is not correct in granting registration with effect from 2.5.2013. Accordingly, the impugned order of the DIT(E) granting registration with effect from 2.5.2013 is modified and the DIT(E) is directed to grant registration with effect from 19.7.2012 i.e the date of establishment of the assessee-society.