TaxTMI 
TaxTMI 
2016 (3) TMI 1110
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....ed in confirming the AO's action in not allowing exemption u/s 10(23C)(iiiad) of the Act. 3. As the issues raised in these appeals pertain to the same assessee, they were heard together and disposed of by this consolidated order. 4. Briefly, the facts of the issues are as under: The assessee - a Poothotta Branch No.1103 of the Sree Narayana Dharma Paripalana Yogam [SNDP] - is running educational institutions and also engaged in temple activities by renting out auditorium etc. According to the AO, since the institution was engaged in temple activities by renting of auditorium etc., as well as running the educational institutions and that the assessee had neither obtained PAN nor obtained registration u/s 12A of the Act, he had reason to believe that the income chargeable to taxes escaped assessments and, accordingly, issued notices u/s 148 of the Act, calling for returns of income for the AYs under consideration. In compliance, the assessee had furnished its returns of income, admitting 'Nil' income. After due consideration of the assessee's contentions and for the reasons recorded in the respective assessment orders, the AO came to the conclusion that since the asses....
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....the assessee are same since those earlier years. However in the submissions and the additional grounds, the assessee has accepted that CIT's power to grant registration is not with retrospective effect and, therefore, the assessee has filed petition before the CBDT for the condonation of delay in filing application for registration under section 12A, and it is mentioned therein that there is a chance that registration would be granted to the assessee with retrospective effect by the CBDT. Since the assessee does not have registration under section 12A in all these assessment years, exemption under section 11 cannot be given to the assessee. 4.3.1. The assessee has also contended in the additional grounds that since it is running individual education institution the assessee is also eligible for exemption u/s 10(23C) (iiiad). However, it is seen that the total receipts of the assessee are to the tune of Rs. 2,98,58,719/- and, hence, the provisions of section which are applicable only for institution having total receipt less than one crores are also not applicable in the case of the assessee. Moreover, AO has given a finding in the very beginning that since this institution....
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.... section 12AA, then, the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year for which assessment proceedings are pending before the assessing officer as on the date of such registration and the 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" (iii) That the assessee filed 12A application before the CIT vide letter dt.30.1.2013 and the registration was granted vide order dt.29.7.2013; (iv) That the assessments u/s 143 (3) r.w.s. 147 of the Act were concluded for the AY 2006....
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.... whole income of the assessee from all the institutions was to be taxed at the maximum marginal rate. As there were no infirmities in the stand of the authorities below, it was pleaded by the learned DR, that the appeals of the assessee for all the AYs under consideration require to be dismissed. 7. We have carefully considered the rival submissions, perused the relevant materials on record and the case law on which the learned AR had placed strong reliance. The primary issue for our consideration is whether the CIT (A) is justified in confirming the AO's action, for all the assessment years under consideration, in assessing the entire incomes of the assessee from all the institutions at the maximum marginal rate. In this context, it is appropriate to refer the amendment to section 12A(2) of the Act and its proviso. For ready reference the same is reproduced below: (Section 12A(2) & its proviso) "[(2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 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 such application ....
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....sment proceedings are pending before the ld. A.O., unless the registration granted earlier is cancelled or refused for specific reasons. The statute also goes on to provide that no action u/s147 could be taken by the AO merely for nonregistration of trust for earlier years. 7.2 When section 12A of the Act was amended by introducing new provisos to sub-section (2) of s. 12A by Finance Act, 2014 with effect from 01.10.2014, the assessment orders passed by the assessing officer in respect of the present assessee were pending in appeal before the first appellate authority. During such pendency, the assessee was granted registration u/s 12AA of the Act on 29.07.2013 w.e.f. the assessment year 2013-14. Those appeals were the continuation of the original proceedings and that the power of the Commissioner of Income-tax was co-terminus with that of the assessing officer [ADIT (Exemption) in the present case] were two well established principles of law. In view of the above and going by the principle of purposive interpretation of statues, an assessment proceeding which is pending in appeal before the appellate authority should be deemed to be 'assessment proceedings pending before the as....
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....ee were to be assessed as per commercial principles. The CIT (A) was also not justified in taking a similar stand that of the AO, without taking cognizance and intention of the amendment to s. 12A of the Act. If no judicious or a liberal view is not taken either by the assessing authority or the appellate authority as in the case under consideration, the very purpose for which such an amendment to s. 12A of the Act enacted,in our view, would be defeated. We are also supported by the order of Kolkata Bench of ITAT in case of Sree Sree Ramkrishna Samity vs. DCIT (ITA No. 1680/2012, order dated 09.10.2015) where it was held that amendment to Section 12A w.e.f. 01.10.2014 is retrospective. The relevant finding of the Hon'ble Kolkata Bench in case of Sree Sree Ramkrishna Samity vs. DCIT (supra) read as follows: "6.10. We hold that it is an established position in law that a proviso which is inserted to remedy unintended consequences and to make the provision workable, a proviso which supplies an obvious omission in the section and is required to be read into the section to give the section a reasonable interpretation, requires to be treated as retrospective in operation, so tha....