TaxTMI 
TaxTMI 
2020 (4) TMI 576
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....0: On the facts and circumstances of the case and as per law, the learned CIT(A) was not justified in confirming not granting of deduction in respect of amount applied for the objects of the Trust. (III) Disallowance of exemption u/s.11(1)(d) of the Act: ON the facts and circumstances of the case and as per law, the CIT(A) was not justified in not granting exemption u/s.11(1)(d) of the Act in respect of voluntary contributions received as forming part of corpus trust or received for specific purposes. (V) Miscellaneous: The appellant craves leave to add, alter or vary any of the grounds of appeal." 3. Brief facts of the case are that the Return of Income for the A.Y. 2013-14 for the year under consideration was filed on 29.11.2013 declaring total income at Rs.Nil. The case was selected for scrutiny assessment and after issuing statutory notices and seeking replies from the assessee, the ld.Assessing Officer(AO) concluded that the assessee trust was not duly registered u/s.12(a) of the Income Tax Act, but the assessee had only applied for the registration u/s.12AA before the ld.CIT(Exemption), Ahmedabad. Since in the absence of getting....
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.... 29-7-2013 Assessments concluded on *EUREUREUREUREUREUR A.Y.2006-07 (143(3) r.w.s 147) 23-3-2013 *EUREUREUREUREUREUR A.Y.2007-08, A.Y.2008-09 and A.Y.2009-10(143(3) r.w.s 147) 19-3-2013 *EUREUREUREUREUREUR A.Y.2011 -12((143(3) r.w.s 147) 12-3-2014 Returns filed on *EUREUREUREUREUREUREUREUREUREUREUREUREUREUREUREURA.Y.2007-08 to 2009-10 30-1-2013 *EUREUREUREUREUREUREUREUREUREUREUREUREUREUREUREUR A.Y.2006-07 and A.Y.2011-12 19-3-2013 In the above case, application was made during the subsistence of the assessment proceedings, however, registration was granted subsequent to the conclusion of the assessment proceedings, the Hon'ble Tribunal held that relief u/s.11 cannot be denied if the registration was obtained during pendency of appeal before CIT(A). The Tribunal also held that proviso to section 12A(2) had retrospective application. In the case of the appellant too, application for 12A was made prior to the conclusion of assessment proceedings and it received registration u/s. 12A after the assessment was over. Hence, during the pendency of the appeal, the assesses deserves to be granted relief u/....
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....H--I2 Application for 12A made on Although not mentioned in the tribunal order, per section 12AA(2), the application could not have exceeded 6 months prior to the registration 17-12-2013 A.Y.2013-14 8-5-2014 31-3-2012 12AA registration granted Registration u/s.12A granted from CIT(A) order Return filed on The Tribunal held that exemption u/s.11 could not be denied to a trust if it got registration during pendency of appeal, It further held that whether assessment proceedings, which is pending in appeal before appellate authority should be deemed to be 'assessment proceedings pending before A.O. It also held that proviso to section 12A(2) had retrospective application. The AR of the appellant strongly argues that case of the appellant is covered by the decision of IT AT Ahmedabad and other cases cited with retrospective application of Proviso to section 12A(2). As also, it is contended that even if the registration is available before the CIT(A), the benefit u/s 11 cannot be denied in view of decisions of Ahmedabad Tribunal in case of Shree BhanushaliMitraMandal Trust as well as SNDP Yogam. TheA.R. further states that the decision bei....
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....ax Act, 1961 - Charitable or religious trust - Registration of (Sub-section (2)) - Assessment year 2011-12 - Whether first proviso to section 12A(2) inserted by Finance (No. 2) Act, 2014, with effect from 1-10-2014, being a beneficial provision intended to mitigate hardships in case of genuine charitable institutions, has to be applied retrospectively - Held, yes [Para 8][In favour of assessee] FACTS ■ The assessee educational institution had filed its return of income and claimed that it was registered under Section 12AA(1)(b)(i) with the competent authority, with effect from Assessment Year 2012-13, therefore, it being a charitable society which was running an educational institution, could not be denied exemption for the reason that its gross receipts had exceeded Rs. 1 crore in Assessment Year 2011-12. It was further averred that as the assessee society had applied its income purely for the accomplishment of its objects as per section 11(5), therefore, its income could not be subjected to tax. ■ During the course of the assessment proceedings, the Assessing Officer observed that the assessee had shown excess of income over expenditure, whi....
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....ation to the aforesaid observations of the Tribunal and persuaded to be in agreement with the view taken therein. There is no reason to take a different view, thus, the first proviso of section 12A(2) as had been made available on the statute vide the Finance (No. 2) 'Act', 2014, with effect from 1-10-2014, being a beneficial provision intended to mitigate the hardships in case of genuine charitable institutions, thus, find to be in agreement with the view taken by the Tribunal in the aforesaid appeals. Thus, the first proviso of section 12A(2) would be applicable to the case of the present assessee. Therefore, the order of the Commissioner (Appeals) is set aside and, consequently, the addition sustained by here is deleted. [Para 8] ORDER Ravish Sood, Judicial Member - The present appeal is directed against the order passed by the CIT(A)-4, Ludhiana, dated 30.06.2016, which in itself arises from the order passed by the A.O under Sec. 143(3) of the Income Tax Act, 1961, (for short 'Act'), dated 30.08.2013. The assessee assailing the order of the CIT (A) had raised before us the following grounds of appeal:- "1. On the facts and in the circu....
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....1 crore in A.Y 2011-12. It was further averred that as the assessee society had applied its income purely for the accomplishment of its objects as per Sec. 11(5), therefore, its income could not be subjected to tax. However, the A.O not finding favour with the contentions of the assessee, therein being of the view that as the assessee society had neither applied for the grant of registration under Sec. 12AA with the prescribed authority i.e. Commissioner of Income Tax, nor was approved under Sec. 10(23C)(vi) or (via) by the Chief Commissioner of Income tax in A.Y 2011-12, therefore, did not find favour with the explanation of the assessee and made an addition of Rs. 34,31,521/- to its returned income. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The assessee by way of an additional ground of appeal averred before the CIT(A) that as the assessee society was granted registration under Sec. 12AA by the Commissioner of Income tax- III, Ludhiana on 03.04.2012, and objects and activities of the assessee society during the year under consideration, i.e. AY: 2011- 12 were the same as were there before the A.O at the time of grant of registration, ther....
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....essee as a matter of fact was not covered by the exemption contemplated under Sec. 12A or under Sec. 10(23C)(vi). It was further observed by the CIT(A) that as the assessee society was not registered under Sec. 12AA during the year under consideration, therefore, it was not eligible for claim of exemption under Secs. 11 and 12 of the 'Act'. Thus, on the basis of her aforesaid observations the CIT(A) upheld the addition made by the A.O and dismissed the appeal of the assessee. 6. The assessee being aggrieved with the order of the CIT(A) had carried the matter in appeal before us. That at the very outset of the hearing of the appeal the ld. Authorized Representative (for short 'A.R') for the assessee submitted that though the case of the assessee was squarely covered by the first proviso of Sec. 12A(2) of the 'Act', however, the CIT(A) had wrongly concluded that the same was not applicable to the case of the assessee. The ld. A.R. in order to drive home his aforesaid contention, drew our attention to the first proviso of Sec. 12A(2), which was made available on the statute vide the Finance (No. 2) Act, 2014 with effect from 01.10.2014. The ld. A.R sub....
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....ion, viz. A.Y 2011-12, as against those at the time of grant of registration by the Commissioner of Income tax, therefore, the first proviso of Sec. 12A(2) was clearly applicable to the case of the assessee. It was thus submitted by the ld. A.R. that the CIT(A) by misconceiving the scope and gamut of applicability of the first proviso of Sec. 12A(2) had erred in sustaining the addition of Rs. 34.31,521/-, which therein was liable to be struck down. Per contra, the ld. Departmental Representative (for short D.R) placed reliance on the order of the A.O and the CIT(A). It was submitted by the ld. D.R that as the appeal of the assessee did not merit acceptance, therefore, the same was liable to be dismissed. 7. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We find that the issue involved in the present appeal lies in a narrow compass. We are of the considered view that our indulgence in the present appeal is sought for adjudicating as to whether the CIT(A) was right in concluding that the first proviso of Sec.12A(2) would be applicable to the facts of the present assessee bef....
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....ted, is generally retrospective and applies from the date of its enforcement and to this extent, it can be retrospective". 20. In 'Allied Motors (P) Ltd. v. ITO, 224 ITR 677 (SC), it has been held that "a proviso, which is intended 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, is required to be treated as retrospective in operation, so that a reasonable interpretation can be given to the section as a whole". It is, thus, trite that if a provision is curative or merely declaratory of the previous law, retrospective operation thereof is generally intended. 21. In 'CIT v. Vatika Township Pvt. Ltd., 367 ITR 466 (SC), the Constitutional Bench of the Hon'ble Supreme Court held that "if a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators' object, then the presumption would be that such a legislation, giving it a purposiv....
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....2A of the Act entailed unintended consequences of non-application of registration for the period prior to the year of registration and, thereby, non-grant of exemption U/Ss 11 and 12 up to grant of registration. This position was also recognized by the CBDT while issuing the Explanatory Notes to the provisions of the Finance (No.2) Act, 2014 vide CBDT circular No. 1 of 2015, dated 21/1/2015. It was this anomaly which was cured by brining in the first proviso to Sec.12A(2). This proviso, even as avowed by the above quoted Memorandum explaining the provisions of the Finance (No.2) Bill, has sought to remedy the said unintended hardship visiting Trusts and Institutions. It has supplied the aforesaid omission in the section and has thereby made the provision of the section workable, providing a reasonable interpretation to it by providing the benefit mandated by it. It is, thus a curative proviso, which is but merely declaratory of the previous law. It has, by removal of the hardship, rendered the procedure more relief-oriented. It adequately complies with the natural justice principle of fairness to all. Hence, it has to be presumed and constituted as retrospective in nature, in order....