TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 680
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....and facts, the subjected receipt claimed as non-taxable kindly be held so. 2.2. The learned Commissioner of Income-tax (Appeals) further erred in law as well as on the facts of the case in not appreciating that the subjected receipt was a capital receipt and/or not being in the nature of income, was not taxable hence, the addition so made being contrary to the provisions of law and facts, kindly be deleted in full. 2.3. The learned Commissioner of Income-tax (Appeals) erred in law as well as on the facts of the case in confirming the taxing income while invoking section 115BBC of the Act which being contrary to the provisions of law and facts on the subjected receipt, the provision kindly be held non-applicable. 2. Before we decide the issue relating to ground Nos. 1, 2.1, 2.2 and 2.3, it would be relevant to mention the brief facts as under. 2.1. On March 4, 1986, the deed of appellant-trust was registered and the trust has started doing its activities. The primary activity of the trust is to look after, manage and administer the affairs of the famous temple of Lord Shyamji at Khatushyamji. The Khatushyamji temple is a historical temple and relate back to the age of Pandavas....
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....ons. This fact by itself does not take away the basic identity and character of the assessee which is that of a trust. In the instant case and for purpose of resolving the quarrel at hand, it would be worthwhile to refer to the provisions of section 2(24)(iia) which provides as under : '(24) "income" includes- (iia) voluntary contribution received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes or by an association and institution referred to in clause (21) or clause (23) or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v)'." 3. Feeling aggrieved by the order passed by the Assessing Officer, the assessee preferred an appeal before the learned Commissioner of Income- tax (Appeals). The learned Commissioner of Income-tax (Appeals) has held as under : "In these grounds of the appeal the Assessing Officer held that the assessee has made contradictory claims in respect of the receipts of Rs. 2,08,00,000 because in reply dated December 14, 2011, it is claimed that the said receipts are capital receipts and cannot be treated as income, whereas in re....
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....ll deal with the additional ground hereinabove before we deal with the other grounds. 5.1. For the purpose of adjudicating the additional ground, it is necessary to reproduce section 12A of the Income-tax Act, which provides as under : "12A. Conditions for applicability of sections 11 and 12.-(1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely :- (a) The person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA : Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution,- (i) from the date of the creation of the trust or the esta....
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....objects and activities of such trust or institution remain the same for such preceding assessment year : Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year : Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA." A bare reading of the proviso clearly provides that if at the time of grant of registration under section 12A the assessment proceedings are pending before the Assessing Officer and the object and activities of the trust remain the same for such preceding assessment years, then the benefit of registration for sections 11 and 12 are required to be given to the trust on the income derived from the property held under the trust. In the present case as mentioned hereinabove, the appellant has filed the application for grant of registration on March 16, 2009, and the registr....
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....cer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non- registration of such trust or institution for the said assessment year : Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA.' " We have gone through the provisions of the Act and have also gone through the record. In our view, the proviso to sub-section (2) of section12A has retrospective application and has been inserted in the Act to remove the hardship of the charitable trusts/institutions. Admittedly, in the present case when the registration was granted on March 5, 2010, with effect from April 1, 2008, the assessment proceedings for 2007-08 were pending before the Assessing Officer. Therefore, the assessee cannot be treated as an association of persons and is required to be treated as registered trust under section 12A of the Income-tax Act. We find no reason to disagree with the judgment passed by the co-ordinate Bench (supra) where the co-ordinate Bench has given the bene....
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....lls (P.) Ltd. [1979] 116 ITR 60 (SC) ; 2. CIT v. Madurai Mills Co. Ltd. [1973] 89 ITR 45 (SC) ; 3. Mahila Sidh Nirman Yojna v. IAC [1994] 50 TTJ (Delhi) 494; 4. ITO (Exemptions) v. Smt. Basanti Devi and Shri Chakhan Lal Garg Education Trust (I. T. A. No. 5082/Del/2010, dated January 19, 2011) ; 5. ITO v. Gaudiya Granth Anuved Trust [2013] 28 ITR (Trib) 161 (Agra) ; and 6. Shankar Bhagwan Estate v. ITO [1997] 61 ITD 196 (Cal.). 5.3. The learned Departmental representative for the Revenue has submitted that the provisions of section 147/148 are attracted as the original return of income was only processed and there was no application of mind in scrutiny assessment. It was submitted by the learned Depart mental representative that the assessee has filed the return of income as an association of persons and not as registered trust. Therefore, the amount of Rs. 2.08 crores though has mentioned in the return of income but there was no application of mind and, therefore, has submitted that the income of the assessee has escaped assessment. Therefore, the authorities below were right in reopening the case of the assessee. 5.4. We have heard the rival parties and perused the material....