TaxTMI 
TaxTMI 
2020 (8) TMI 87
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....he learned CIT (A) has erred in holding that the claim of the assessee for exemption under the provisions of section 11 of the Act is not tenable and allowable under the provisions of the Act. 3. That the learned CIT (A) should have passed a speaking order in relation to the appellant's submission that the appeal filed on 23 April 2015 against the order dated 31 March 2015 passed under the provisions of section 144 of the Act should be merged with the Appeal No. ITA No.122/CIT(A)-25/Kol./2015-16. 4. That the CIT (A) has failed to realise that the appellant has been granted registration under section 12AA of the Income Tax Act, 1961 on 03.05.2013 whereas the notice for reopening the assessment was issued on 27.03.2014 and as such the reopening is barred by limitation as per the amended provision of section 12A of the said Act. 5. That, Without prejudice to Ground Nos. 1, 2 and 3, the CIT (A) has erred in law and on facts of the case in not allowing Rs. 2,35,00,000/- being the compensation paid to the encroachers to the Land of WBTPO during the year ended 31st March, 2009. 6. That the CIT (A) has erred in law and on facts of the case in confirm....
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....evenue is before us. 4. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the Ld. CIT(A) has held that the 1st proviso to sec. 12A(2) is retrospective in operation by relying on the coordinate bench decision of this Tribunal in SreeSreeRamkrishna Samity Vs. DCIT (2015) 44 ITR (Trib) 678 (ITAT, Kol). Since the Ld. CIT(A) has relied on this Tribunal's decision we would reproduce the operative portion of the order which is as under: "13. 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 :- "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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....roviso to section 12A(2) of the 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. 17. 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 ACIT vs Surat City Gymkhana reported in (2008) 300 ITR 214 (SC). 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....
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....ommonly understood does not include any donation specifically meant for utilization 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." 22. 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 th....
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.... well settled that if a statute is curative or merely declaratory of the previous law, retrospective 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 vs 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 vs Vatika Township P Ltd reported in (2014) 367 ITR 466 (SC) - Five Judges decision of the Supreme Court (page 487): "33.We would also like to point out, for the sake of completeness, that where a benefit is co....
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....nd out the intention from the language used by the legislature and if strict 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." 24. 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 quampereat, 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 D....
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....tion of the proviso to section 12A(2) of the Act has to be construed as retrospective in operation." 5. We note that the assessee before us has got registration from Ld. CIT(E) u/s. 12AA of the Act vide order dated 03.05.2013 w.e.f. 01.04.2012. The question of retrospective operation of 1st proviso to sub-section (2) of section 12A of the Act has been answered as "retrospective in operation" by the Ld. CIT(A) after taking note of the order of coordinate bench's decision of this Tribunal in SreeSreeRamkrishna Samity (supra) wherein the Tribunal had held at para 27 that the "insertion of the proviso to sec. 12A(2) of the Act has to be construed retrospective in operation". We also note that the assessee has also been accorded approval u/s. 10(23)(c)(iv) by order of Ld. CCIT-3, Kolkata dated 09.01.2014. It is well settled that the Ld. CIT(A) has co-terminus power as enjoyed by the AO while deciding the appeal against an assessment order. Therefore, even though the assessment order has been passed on 28.03.2014, for the ends of justice and fair play and taking into consideration the fact that the assessee is basically a consortium of State Govt., Central Govt and Muni....