TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal grants assessee benefits retrospectively, deletes addition of Rs. 34,31,521 under Sec. 11 & 12</h1> <h3>M/s Punjab Educational Society Versus Income Tax Officer-II, Moga</h3> M/s Punjab Educational Society Versus Income Tax Officer-II, Moga - [2018] 61 ITR (Trib) 622 Issues Involved:1. Addition of Rs. 34,31,521 as surplus of the Society due to non-approval under Sec. 10(23C)(vi) or (via) of the Income Tax Act.2. Applicability of amended provisions of Sec. 12A/12AA of the Income Tax Act retrospectively.3. Rejection of the additional ground of appeal regarding the society's registration status under Sec. 12A/12AA during the period under consideration.Issue-wise Detailed Analysis:1. Addition of Rs. 34,31,521 as Surplus of the Society:The assessee, an educational institution, filed its return for AY 2011-12 declaring nil income. The Assessing Officer (A.O) observed that the assessee had an excess income of Rs. 34,31,521, transferred to its Reserve and Surplus account. Since the society was neither registered under Sec. 12A nor approved under Sec. 10(23C)(vi) during the period, the A.O added Rs. 34,31,521 to the assessee's income. The assessee argued that it was registered under Sec. 12AA from AY 2012-13 and had applied its income for charitable purposes, thus should not be taxed. However, the A.O did not accept this contention and made the addition.2. Applicability of Amended Provisions of Sec. 12A/12AA Retrospectively:The assessee contended before the CIT(A) that the first proviso to Sec. 12A(2), effective from 01.10.2014, should apply retrospectively, allowing benefits of Sec. 11 and 12 for prior years if the registration was granted later and assessment proceedings were pending. The CIT(A) rejected this, stating the amendment was not retrospective and did not apply to AY 2011-12. The assessee argued that the provision was intended to mitigate hardships for charitable institutions and should be given retrospective effect, citing various tribunal judgments supporting this view.3. Rejection of Additional Ground of Appeal Regarding Registration Status:The assessee raised an additional ground of appeal before the CIT(A), stating that the society was granted registration under Sec. 12AA on 03.04.2012, and the objects and activities during AY 2011-12 were the same as at the time of registration. The CIT(A) rejected this, maintaining that the society was not registered under Sec. 12AA during the year under consideration and was not eligible for exemption under Sec. 11 and 12.Tribunal's Decision:The tribunal examined whether the first proviso to Sec. 12A(2) should apply retrospectively. It noted that the provision was intended to mitigate hardships for charitable institutions and should be considered retrospective, aligning with previous tribunal decisions and the Supreme Court's judgment in CIT Vs. Vatika Township Pvt. Ltd. The tribunal concluded that the first proviso to Sec. 12A(2) applied to the assessee's case, thus allowing the benefit of Sec. 11 and 12 for AY 2011-12. Consequently, the tribunal set aside the CIT(A)'s order and deleted the addition of Rs. 34,31,521.Conclusion:The tribunal allowed the appeal, determining that the first proviso to Sec. 12A(2) should be applied retrospectively, thus granting the assessee the benefits of Sec. 11 and 12 for AY 2011-12 and deleting the addition of Rs. 34,31,521.
TaxTMI 