Proviso to section 12A(2) covers pending section 143(1) processing, enabling exemption claims under sections 11 and 12.

The proviso to section 12A(2) was interpreted to apply to an earlier assessment year where processing under section 143(1) was still pending when registration under section 12AA was granted. Processing under section 143(1) was treated as an assessment proceeding, and the Tribunal held that the proviso is not limited to regular assessments under sections 143(3), 147, 153A or 153C. The assessee was therefore entitled in principle to claim exemption under sections 11 and 12 for the relevant year, subject to verification that its objects and activities remained unchanged and that the claim was otherwise admissible, with the matter remitted to the Assessing Officer for fresh examination.

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Issues: Whether the assessee was entitled to exemption under sections 11 and 12 for the relevant assessment year on the basis of the proviso to section 12A(2), and whether processing under section 143(1) could be treated as pending assessment proceedings for that purpose.

Analysis: The assessee had obtained registration under section 12AA with effect from the subsequent assessment year, while the intimation under section 143(1) for the relevant year was passed after the grant of registration. The Tribunal held that the language of the proviso to section 12A(2) governs any preceding assessment year for which assessment proceedings are pending before the Assessing Officer on the date of registration, and that the provision does not confine its operation to regular assessments under sections 143(3), 147, 153A or 153C. It further held that processing under section 143(1) is an assessment proceeding and remains pending until intimation is issued. The Tribunal also noted that the benefit would still require verification that the objects and activities remained the same and that the computation of exemption was otherwise admissible, warranting a remand to the Assessing Officer.

Conclusion: The assessee was held eligible for the benefit of the proviso to section 12A(2), and the denial of exemption under sections 11 and 12 was set aside for fresh verification by the Assessing Officer.

Ratio Decidendi: Where registration under section 12AA is granted while processing under section 143(1) for an earlier year is still pending, the proviso to section 12A(2) applies and the assessee may claim exemption under sections 11 and 12, subject to verification of continued identity of objects and activities and the admissibility of the claim.

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