Retrospective relief for charitable trusts under Section 12A(2) extends Sections 11 and 12 to pending earlier years.

The first proviso to Section 12A(2) of the Income-tax Act was treated as procedural and curative, enacted to remove hardship to genuine charitable trusts that had not obtained registration in time. The Court held that beneficial and remedial amendments may operate retrospectively where they confer relief without imposing a new burden. Pending appellate proceedings were treated as pending assessment proceedings for this purpose, so the benefit of Sections 11 and 12 extended to the earlier years concerned. The assessee was therefore entitled to exemption for those years.

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Issues: Whether the first proviso to Section 12A(2) of the Income-tax Act, 1961, inserted by the Finance Act, 2014, applies retrospectively so as to extend the benefit of Sections 11 and 12 to earlier assessment years whose proceedings were pending when registration was granted under Section 12AA.

Analysis: The proviso was introduced to remove the hardship caused to genuine charitable trusts that were otherwise eligible for exemption but had not yet secured registration. The provision was held to be procedural and curative in nature, intended to remedy an unintended omission and to make the exemption scheme workable. The pending appellate proceedings were treated as assessment proceedings pending before the Assessing Officer for the purpose of the proviso. The Court also relied on the CBDT explanatory circular and the principle that beneficial and remedial amendments may operate retrospectively where the legislative intent is to confer relief without imposing a new burden.

Conclusion: The first proviso to Section 12A(2) was held to operate retrospectively, and the assessee was entitled to the benefit of Sections 11 and 12 for the relevant earlier years.

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