Proviso to section 12A(2) extends exemption benefits for pending earlier-year assessments, subject to verification of unchanged objects and activities.

Delay of 43 days in filing the appeal was condoned on a liberal, justice-oriented view after the explanation that the school staff was engaged in examinations and the appeal was filed at the start of the new session. On the substantive issue, registration under section 12A granted during pendency of the earlier year's assessment attracted the proviso to section 12A(2), making sections 11 and 12 available for that year, subject to verification that the objects and activities remained unchanged. The exemption claim was therefore remitted to the Assessing Officer for factual verification and consequential relief as admissible.

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Issues: (i) Whether the delay of 43 days in filing the appeal should be condoned. (ii) Whether the assessee was entitled to exemption under sections 11 and 12 of the Income-tax Act, 1961 in view of the proviso to section 12A(2), and whether the matter required verification by the Assessing Officer.

Issue (i): Whether the delay of 43 days in filing the appeal should be condoned.

Analysis: The explanation for the delay was that the school staff was occupied with examinations and the appeal was filed when the new session commenced. The assessee also had a meritorious claim on the substantive tax issue. Applying a liberal, justice-oriented approach, the delay was treated as sufficiently explained.

Conclusion: The delay was condoned.

Issue (ii): Whether the assessee was entitled to exemption under sections 11 and 12 of the Income-tax Act, 1961 in view of the proviso to section 12A(2), and whether the matter required verification by the Assessing Officer.

Analysis: The assessee had obtained registration under section 12A during pendency of the assessment for the earlier year. The proviso to section 12A(2) applies where registration is granted and assessment proceedings for the preceding year are pending on that date, provided the objects and activities remain the same. At the same time, the factual verification of continuity of objects and activities, and the working of exemption under sections 11 and 12, required examination by the Assessing Officer.

Conclusion: The assessee was entitled to consideration of exemption under sections 11 and 12, and the matter was remitted to the Assessing Officer for verification and consequential allowance as admissible.

Final Conclusion: The appeal succeeded in part, the delay was condoned, and the exemption claim was sent back for fresh verification, resulting in a remand with directions and costs.

Ratio Decidendi: Where registration under section 12A is granted while assessment proceedings for an earlier year remain pending, the proviso to section 12A(2) extends the benefit of sections 11 and 12 to that year, subject to verification that the objects and activities remain unchanged.

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