TaxTMI 
TaxTMI 
2016 (9) TMI 1382
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....hool Assessment years No. of appeals 1. St. Jude's Convent School, Nakodar A.Y. 2006-07 to 2010-11 and 2012-13 6 2. St. Francis Convent School, Jandiala Guru A.Y. 2006-07 to 2012-13 7 3. St. Francis Convent School, Fatehgarh Churian A.Y. 2006-07 to 2010-11 and 2012-13 6 4. Christ the King Convent School, Pathankot A.Y. 2006-07 to 2010-11 and 2012-13 6 5. St. Francis Convent School, Tarn Taran A.Y. 2006-07 to 2010-11 and 2012-13 6 6. St. Joseph Convent School, Phagwara A.Y. 2007-08, 2008-09, 2011-12 and 2012-13 4 7. St. Antony's Convent School, Adampur A.Y. 2011-12 1 8. Christ The King Convent School, Bholath A.Y. 2011-12 1 9. Sacred Heart Convent School, Patti A.Y. 2011-12 1 Total 38 3. The first batch of appeals seeks relief under the first proviso to Section 12A(2) of the Act. The appeals in this batch are as follows:- Name of the appellant school Appeal Numbers Assessment years No. of appeals St. Jude's Convent School, Nakodar ITA No. 749/Asr/2013 & 8/Asr/2016 A.Y. 2010-11 and 2012-13 2 St.....
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....d qua ITA No. 749/Asr/2013 and so, the facts are being taken from this appeal. 6. The facts, as pleaded, are that the assessee is a society registered under the Societies Registration Act, 1860. The assessee-society has been formed solely for educational purposes, as is evident from the aims and objects contained in its Memorandum of Association (page-1 of the paper book). In furtherance of its objects, the assessee-society had, during the relevant year, been managing and running various convent schools for imparting education to children of all castes and creeds, without any discrimination. It was granted approval/registration under section 10(23C)(vi) of the Act by the CCIT, vide order dated 29.01.2008, applicable from assessment year 2007-08 and onwards (paper book, page- 54), which is applicable to "any university or educational institution existing solely for educational purposes and not for purposes of profit. . . . ". On the basis of the Notification under section 10(23C)(vi) in force at the relevant time, the assessee filed returns of income for assessment years 2006-07 to 2012-13 at 'nil', considering:- (i) the payment of 'Education Extension Ser....
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....ieved, the assessee filed appeal before the CIT (Appeals), who dismissed the appeal. 7. In ITA 749/Asr/2013, the assessee's appeal for A.Y. 2010-11, the following Grounds have been raised:- "1. That on facts and circumstances of the case, the Ld. CIT (A) has erred in holding that Ground No, 4 (That exemption u/s. 10(23)(vi) cannot be withdrawn retrospectively) does not arise from the assessment order. 2. That on facts and circumstances of the case, the income of the assessee is exempt u/s. 10(23C)(vi). 3. That on facts and circumstances of the case, payment of Education Extension Services to another society, M/s. Diocese of Jalandhar of Rs. 85,00,000/- is not disallowable, especially when the nature and veracity of such expense had been verified by the Ld CCIT, as well as the Ld. AO. 4. That without prejudice to Ground 3 above, payment made to the Diocese of Jalandhar should be considered for use of land for the school being run by the assessee society. 5. That the dominant object of the society is to run school and is therefore outside the ambit of taxation. 6. That the observations of the Ld. CIT(A) are patently wrong a....
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....essment proceedings pending in appeal are deemed to be assessment proceedings pending before the Assessing Officer. For this proposition, the ld. Counsel has placed reliance on the decisions in the cases of SNDP Yogam v. Asstt. DIT (Exemption) [2016] 161 ITD 1 (Coch. - Trib.) and Shree Bhanushali Mitra Mandal Trust v. ITO [2016] 68 taxmann.com 250 (Ahd. Trib.). 13. The ld. DR has further submitted that in any case, the said first proviso has been inserted by Finance (No. 2) Act, 2014 w.e.f. 01/4/2014 and as such, it is not applicable retrospectively. 14. For this, the ld. Counsel for the assessee has, again, cited the decision in the case of SNDP Yogam (supra). 15. We have heard the rival contentions of both the parties with reference to the merits of the additional ground. The relevant portion of Section 12A of the Act is as follows:- "Section 12A- CONDITIONS as to registration of trusts, etc. (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 :- ** ** ** (aa) the person in receipt of the income has made an appl....
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....ng the said assessment year. 17. The first issue before us is as to whether the two provisos to Section 12A(2) are applicable to all the appeals before us, respectively, as contended by the ld. Counsel for the assessee, or whether, since the provisos have been brought in w.e.f. 01/10/2014 and they have not been made applicable, retrospectively, the same are not applicable for earlier periods, as submitted by the department. 18. Now, a bare reading of the first proviso to Section 12A(2) shows that it has not been made applicable retrospectively. It has been inserted in the Act w.e.f. 01/10/2014, by virtue of the Finance (No. 2) Act, 2014. Thus, ordinarily, it ought to be taken as applicable only prospectively, and not retrospectively. However, the law is well settled to the effect that if the proviso brought in as a procedural or beneficial one, intending to remove hardship, it is applicable retrospectively. 19. In C.B. Richards Ellis Mauritius Ltd. v. Asstt. DIT [2012] 208 Taxman 322 (Delhi) (copy on record), it has been held that "procedural law, when amended" or substituted, is generally retrospective and applies from the date of its enforcement and to this extent, it ca....
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....ion for the period prior to the year of registration causes genuine hardship to charitable organizations. Due to absence of registration, tax liability gets attached even though they may otherwise be eligible for exemption and fulfil the other substantive conditions. The power of condonation of delay is not available under the section. In order to provide relief to such Trusts and remove hardship in genuine cases, it is proposed to amend Section 12A of the Act to provide that in a case where a Trust or Institution has been granted registration U/s 12AA of the Act, the benefit of Section 11 and 12 shall be available in respect of any income derived from property held under Trust in any assessment proceedings for any earlier assessment year, which is pending before the Assessing Officer as on the date of such registration, if the objects and activities of such Trust or Institution in the relevant earlier assessment year are the same as those on the basis of which such registration has been granted. 26. Thus, clearly, the provisions of Section 12A of the Act entailed -unintended consequences of non-application of registration for the period prior to the year of registration and, th....
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....), wherein, it was held that appeal is a continuation of the original proceedings and assessment proceedings pending before an appellate authority should be deemed to be "assessment proceedings pending before the Assessing Officer" within the meaning of Section 12A. SNDP Yogam (supra), is to the same effect. Again, no contrary decision has been brought to our notice. Accordingly, it is held that the appellate proceedings before the appellate authorities are deemed to be assessment proceedings pending before the Assessing Officer. 31. In all these cases, the impugned orders were passed after the respective dates of grant of registration. Thus, we hold that subsequent grant of registration in all these cases operates retrospectively for all the relevant years under consideration. 32. Now, apropos the merits, the question is whether payment of Education Extension Services to the Diocese of Jalandhar, notified U/s 10(23C)(vi), as well as registered U/s. 12A of the Act and persuing the object of prompting education through running various schools, can be regarded as application of income. 33. Here, it is not in dispute that the Diocese of Jalandhar is not only registered U/s 12....