TaxTMI 
TaxTMI 
TaxTMI 
2017 (11) TMI 365
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.....2007. The assessee's gross receipts were exceeded Rs. 1 crore, therefore, the assessee sought exemption u/s 10(23C)(vi) of the I.T.Act and the Chief Commissioner of Income Tax, Visakhapatnam has rejected the assessee's request to grant exemption u/s 10(23C)(vi) of I.T.Act. Subsequently, the assessee applied for registration u/s 12A of the I.T.Act on 30.09.2011 but the Registration u/s 12A was granted to the assessee on 30.03.2012 w.e.f. 01.04.2011. During the period of pending for registration, the assessing officer reopened the assessments for the assessment year 2010-11 and 2011-12 and made the assessments u/s 143(3) r.w.s. 147 of the I.T.Act and brought to tax the sum of Rs. 61,93,820/- for the assessment year 2010-11 by order dated 19.02.2013 and a sum of Rs. 1,49,20,271/- for the assessment year 2011-12 by order dated 25.02.2013. Aggrieved by the order of the assessing officer, the assessee went on appeal before the CIT(Appeals) and the Ld.CIT(Appeals) confirmed the order of the assessing officer holding that the registration u/s 12A was granted to the assessee w.e.f.01.04.2011 and would be applicable for assessment year 2012-13 onwards and not applicable for the assessment y....
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....01.10.2014, and is not clarificatory in nature. Therefore, it cannot be applied retrospectively. When the provisions of IT Act are clear and unambiguous, it should be read in between the lines and should not be interpreted liberally to defeat the intention of the legisltaure. The legislature is aware of the consequences of non application of the benefit of section 11 and 12 for the intervening period and intentionally not extended the benefit from retrospectively. Therefore, the Ld.DR vehemently opposed the assessee's contention for application of the provisions retrospectively. The Ld DR also argued that there is an alternative remedy available to the assessee where the assessee can approach the CIT for granting of registration for the earlier years. Accordingly, the Ld. DR contended that the CIT (Appeals) has rightly confirmed the order of the assessing officer and there is no necessity to interfere with it. 5. We have heard the rival submissions and perused the material placed on record. In this case, the assessee has applied for registration u/s 10(23C) since the receipts of the assessee exceeded one crore and the Chief CIT has refused to grant exemption u/s 10(23C). After ref....
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....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 such application is made: Provided that where registration has been granted to the trust or institution under section 12AA, then, the provisions of sections 11....
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....e 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 Asstt. CIT v.Surat City Gymkhana [2008] 300 ITR 214/170 Taxman 612. 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 charitable purposes in the earlier years cannot be doubted with. Even otherwise, no adverse findings were given by the revenue with regard to the existence of the assessee society for ....
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....tion 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 definition of the word income in the Act cannot be brought to tax under any other provision of the Act. We find that the order of the Learned CITA failed to distinguish between a case where a receipt is n....
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....pective 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 v. 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 v. Vatika Township (P.) Ltd. [2014] 367 ITR 466/227 Taxman 121/49 taxmann.com 249 (SC) - Five Judges decision of the Supreme Court :- "We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against a retrospective const....
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....ct 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 had carried on the same charitable objects in the past as well as in the current year based on which the registration u/s 12AA is granted by the DIT(Exemptions). 6.12 We hold that the arguments of the Learned AR that, eve....