TaxTMI 
TaxTMI 
2017 (12) TMI 989
X X X X Extracts X X X X
X X X X Extracts X X X X
....0.2014 as applicable to pending assessments orders does not have retrospective effect as such confirmed the addition. 3. On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in rejecting the additional ground of appeal that the society which was Registered u/s 12A/12AA of the Act on 03.04.2012, was not registered during the period under consideration. 2. Briefly stated, the facts of the case are that the assessee which is an educational institution had filed its return of income for A.Y 2011-12 on 29.09.2011, declaring total income at Rs. Nil. The return of income filed by the assessee was processed as such under Sec. 143(1) of the 'Act' on 21.08.2012. The case of the assessee was thereafter taken up for scrutiny assessment and a notice under Sec. 143(2), dated 27.09.2012 was issued to the assessee. 3. That during the course of the assessment proceedings it was observed by the A.O that the assessee society during the year under consideration had shown excess of income over expenditure of Rs. 34,31,521/-, which was transferred to its Reserve and Surplus account. The A.O observing that the gross receipts of the assessee society, which was neither re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that where registration under Sec. 12AA was granted to an assessee under Sec. 12AA, then the assessee would also be entitled for the benefit of Sec. 11 and 12 in the prior years, subject to satisfaction of two fold conditions, viz. (i) that assessment proceedings in such preceding years was pending before the A.O on the date of grant of registration; and (ii) the objects and activities of the assessee during the said year were the same which had been considered by the Commissioner of Income Tax while granting the registration. It was thus submitted by the assessee that as in its case on 03.04.2012 when the registration under Sec. 12AA was granted by the CIT, the assessment proceedings for the year under consideration, viz. A.Y 2011-12 were pending, and the objects and activities of the assessee society had also not witnessed any change, therefore, the first proviso of Sec. 12A(2) was clearly attracted. Thus it was submitted by the ld. A.R that the provisions of Sec. 11 and 12 were clearly applicable to its case, and resultantly the addition of Rs. 34,31,521/- made by the A.O was liable to be set aside. 5. The CIT(A) after deliberating on the contentions of the assessee was however....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... retrospective effect was to be given to the aforesaid statutory provision, therein relied on the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Vatika Township Pvt. Ltd. 367 ITR 466 (SC). The ld. A.R submitted that the issue that the first proviso of Sec. 12A(2) was to be given a retrospective effect had already been looked into and adjudicated by the Income Tax Appellate Tribunal, Cochin Bench, Cochin in the following cases:- (i) SNDP Yogam Vs. ADIT (Exemption) (ITA No.503 to 506 and 569/Coch/2014); dated 01.03.2016 (ii) Santhula Charitable Trust Vs. DDIT (Exemption) (ITA No. 538/Coch/2015; dated 10.06.2016. The ld. A.R further submitted that a similar view had also been taken by the ITAT, "B" Bench, Pune in the case of M/s Shri Vishwa Kalyan Jivraksha Pratisthan Vs. ITO (ITA No. 2013/PN/2014); dated 22/07/2016 and ITAT, Ahmedabad, 'SMC' Bench in the case of Shri Bhanushali Mitra Mandal Trust Vs. ITO (ITA No. 2515/Ahd/2015; dated 22.02.2016. The ld. A.R in order to support his aforesaid claim took us through the order of the ITAT, Cochin Bench in the case of SNDP Yogam (supra). The ld. A.R drew our attention to Page 10 - Para 7.3 of the order, wherein the Tribu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ddled with tax liability in the prior years, due to absence of registration under Sec. 12AA. We find that the issue before us, as to whether the beneficial provisions made available on the statute by the legislature in all its wisdom, vide the Finance (No. 2) 'Act', 2014 with effect from 01.10.2014 were to be given a retrospective effect, or not, had already deliberated upon and adjudicated by this Tribunal in bunch matters of St. Jude St Judes Convent School, Jalandhar & others Vs. ACIT, Circle-III, Jalandhar (ITA No. 749/ASR/2013, dated 26.09.2016). We find that the Tribunal after giving a thoughtful consideration to the issue as regards the retrospective applicability of the aforesaid statutory provision, had therein concluded as under:- "17. The first issue before us as to whether the two provisos to Section 12A(2) are applicable to all the appeals before us, retrospectively, 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Now, undeniably, the assessment of income is a matter of procedure. Even the heading of Chapter (xiv) of the Act, which deals with assessment, itself is 'PROCEDURE FOR ASSESSMENT". Likewise, grant of registration is also a procedural aspect, since registration is but a step in aid for exemption u/s 11. As such, the provisos to Sec. 12A(2) are also procedural. 25. So far as regards the bringing in of the first proviso to Section 12A(2), the Memorandum explaining the provisions of the Finance (No.2) Bill, 365 ITR (statute) 175 itself elaborates the intention of the Legislature behind insertion thereof in the statute book. It states, inter alia, that "nonapplication of registration for the period prior to the year of registration causes genuine hardship to charitable organization. Due to absence of registration, tax liability gets attached even though they may otherwise be eligible for exemption and fulfill 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 Ins....