TaxTMI 
TaxTMI 
2015 (11) TMI 119
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....sst Year 2008-09 2. As the issues involved are identical in nature, they are disposed off together by way of a common order for the sake of convenience. 3. The brief facts of these appeals are that Shree Shree Ramakrishna Samity is a society, registered under the West Bengal Society Registration Act, 1961 on 10.8.1986. The predominant object of the society includes promotion, development, preservation and rendering of social and cultural services in the matters of advancement of tenets and precepts of Lord Shree Shree Ram Krishna Paramhansa Dev irrespective of caste and creed of the humanity at large. The objects further include promotion of physical and mental development of youths, to make them worthy citizen for the service of the mother land, co-ordination of social, cultural and religious activities of allied organizations, organization of sevadal for rendering services to the suffering humanity, acquiring, establishment, starting, aiding, maintaining and management of schools, colleges, libraries, hospitals for the benefit of the public, helping needy students for prosecution of studies, helping the aged, sick and helpless and indigent persons, construction, maintenance....
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....ace (No.2) Act, 2014 with effect from 1.10.2014 clearly provides for deemed registration u/s 12AA of the Act for the earlier years and hence the same has to be construed as retrospective in operation. He further argued that on the date of granting registration u/s 12AA of the Act on 29.10.2010 with effect from 1.4.2010, admittedly, the reassessment proceedings were pending before the Learned AO and admittedly, the assessee had carried on the same charitable objects in the earlier assessment years. 4.1. He further argued that the assessee society in the worst case could have been brought to tax only in the status of Association of Persons (AOP) as admittedly the assessee society was formed with a voluntary act of coming together of persons as per paragraph 5 of Memorandum of Association dated 9.8.1986 to pursue a common object as per paragraph 43 of Memorandum of Association to earn income from property held under trust. Reliance in this regard is placed on the decision of the Hon'ble Apex Court in the case of CIT vs Indira Balkrishna reported in 39 ITR 546 (SC). He further argued that, even assuming without conceding, that assessee society has to be taxed as an AOP by assess....
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....he Act on which fact there is absolutely no dispute. It is pertinent to note that the registration u/s 12AA of the Act was granted to the assessee on 29.10.2010 with effect from 1.4.2010. Admittedly, the notice u/s 148 of the Act was issued by the DCIT, Circle 2 Siliguri for the Asst Years 2003-04 to 2008-09 on 30.3.2010. Even for the earlier years, the assessee society was carrying on the same charitable objects as per the trust deed on which fact also there is absolutely no dispute. The receipts were brought to tax only on the pretext that the assessee society is not having registration u/s 12AA of the Act in the Asst Years 2003-04 to 2008-09. 6.3. It is relevant at this juncture to get into the amendment brought in section 12A by Finance Act 2014 with effect from 1.10.2014 by way of insertion of first proviso to section 12A(2) of the Act which is reproduced below for the sake of convenience :- Section 12 A (2) Where an application has been made on or after the 1st day of June 2007, the provisions of section 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which s....
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.... the Act and accordingly in our opinion, the provisos to section 12A(2) of the Act is to be construed as retrospective in operation. 6.6. The third proviso to section 12A(2) of the Act also provides that the first and second proviso shall not be applicable if the trust or institution had been refused registration earlier or the registration granted earlier is cancelled by the Commissioner u/s 12AA of the Act. This also goes to prove that the first and second proviso shall be made applicable for the trusts for earlier assessment years also who had not applied for registration u/s 12AA of the Act at all. 6.7. We hold that the registration of trust under section 12A of the Act once done is a fait accompli and the AO cannot thereafter make further probe into the objects of the trust. Reliance in this regard is placed on the decision of the Hon'ble Apex Court rendered in the case of ACIT vs Surat City Gymkhana reported in (2008) 300 ITR 214 (SC). Drawing analogy from this judgement, the logical inference could be that as long as the objects were charitable in nature in the earlier years and in the year in which registration u/s 12AA was granted, the existence of trust for char....
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....eral meaning as commonly understood by the said expression which is defined in a statute. The word income as is commonly understood does not include any donation specifically meant for utilization for acquiring, constructing a capital asset, as is the case here. Further section 2(24) had undergone amendment by way of insertion of clause (iia) by Finance Act, 1972 with effect from 1.4.1973. In this connection, it will be relevant to get into the Memorandum explaining the provisions in Finance Act 1972 reported in 83 ITR (St.) 173, wherein Paragraphs 24 and 25 clearly define the scope of the amendment wherein in paragraph 25(i), the concluding sentence is as under:- "contributions received with a specific direction that they will form part of the corpus of the trust or distribution will, however, not be regarded as income." Thus the relevant clause defining income in section 2(24)(iia) as introduced with effect from 1.4.1973 was clearly not intended to cover contributions / donations received with a specific direction that they will form part of the corpus of the trust for utilization in acquisition / construction of a capital asset. Thus what is not income as per the def....
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....e of the Act. As observed by G.P.Singh in his Principles of Statutory Interpretation, 4th Edn., Page 291, "It is well settled that if a statute is curative or merely declaratory of the previous law, retrospective operation is generally intended". In fact the amendment would not serve its object in such a situation, unless it is construed as retrospective. The view, therefore, taken by the Delhi High Court cannot be sustained. CIT vs Virgin Creations in ITAT No. 302 of 2011 in GA 3200/2011 dated 23.11.2011, the Hon'ble Calcutta High Court in the context of retrospective applicability of amendment to section 40(a)(ia) of the Act held as below:- "The supreme court in the case of Allied Motors P ltd and also in the case of Alom Extrusions Ltd has already decided that the aforesaid provision has retrospective application. Again, in the case reported in 82 ITR 570, the Supreme Court held that the provision, which has inserted the remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to the section as well". CIT vs Vatika Township P Ltd reported in (2014) 367 ITR 466 (SC)....
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....teract the effect of transfer of assets so far as computation of income of the assessee is concerned, then bearing that purpose in mind, we should find out the intention from the language used by the legislature and if strict literal construction leads to an absurd result, i.e., result not intended to be subserved by the object of the legislation found in the manner indicated before, then another construction is possible apart from strict literal construction then that construction should be preferred to the strict literal construction. 6.11. We also hold that though equity and taxation are often strangers , attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. It is only elementary that a statutory provision is to be interpreted ut res magis valeat quam pereat, i.e to make it workable rather than redundant. Applying this legal maxim, it would be just and fair to hold that the amendment in section 12A is brought in the statute to confer benefit of exemption u/s 11 of the Act on the genuine trusts which had not changed its objectives and h....