TaxTMI 
TaxTMI 
2020 (12) TMI 737
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....exemption u/s 12A of Income Tax Act, 1961, with effect from 01.04.2015, is the Income Tax Appellate Tribunal right in law in holding that the Appellant cannot be treated as charitable for the A.Y.2013-14, in spite of complying and satisfying with all other provisions and preconditions for availing the benefit under Sections 11 & 12 of Income Tax Act, 1961? 3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in not considering and following a catena of decisions relied by the Appellant in support of its claim that 1st Proviso to Section 12A(2) of Income Tax Act, 1961, squarely applies for the A.Y.2013-14?" 2. We have heard Mr.G.Baskar, learned counsel for the appellant/assessee and Mr.J.Narayanasamy, learned Senior Standing counsel for the respondent/Revenue. 3. The assessee is a Trust, which filed the return of income for the Assessment Year under consideration, which was processed by the Centralized Processing Center and intimation under Section 143(1) of the Act was sent on 14.03.2015. The assessee filed a petition under Section 154 of the Act before the Assessing Officer, which was rejected by order dated 17.11.2015 on the gro....
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....venue and the benefit now sought for by the assessee would go beyond the registration granted to the assessee under Section 12AA of the Act. To support his submission, the learned counsel placed reliance on the decision in the case of Commissioner of Income Tax (Exemption), Lucknow Vs. Shiv Kumar Sumitra Devi Smarak Shikshan Sansthan, reported in [2020] 113 taxmann.com 334 (Allahabad). 6. We have elaborately heard the learned counsel for the parties and carefully perused the materials placed on record including the decisions cited supra. 7. At the outset, we need to point out certain factual aspects before we examine as to the applicability of the decisions cited. Admittedly, the application for registration was filed by the assessee only on 23.02.2016. It appears that the application was not processed as the Commissioner of Income Tax (Exemptions) ['CIT(E)' for brevity] was not satisfied that the activities of the petitioner Trust as mentioned in the deed of trust would qualify for an exemption. This necessitated the assessee to amend the various clauses and covenants in the trust deed and the amended deed of trust was considered by the CIT (E) and an order was passed on....
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....Questions of Law which fell for consideration in the said case was: (i) Whether the Income Tax Appellate Tribunal was justified in allowing retrospective coverage to the assessee under Sections 11 and 12 of the Act, by holding that the appellate proceedings can be regarded as assessment proceeding?; (ii) Whether the Income Tax Appellate Tribunal has rightly applied the proviso of Section 12A (2) for the Assessment Year 2011-12 in the case of assessee therein when admittedly the assessee got registration under Section12AA from Assessment Year 15-16 ?; and (iii) Whether the Income Tax Appellate Tribunal was justified in holding that the assessee is eligible for exemption under Section 11 of the Act even when the assessee was not registered under Section 12AA of the Act? 10. The above questions were answered in the following manner. "13. We need to consider Section 12 A (2) of Act, 1961 along with proviso to determine the issue raised before us. Section 12 A (2) of the Act, 1961 provide that whenever application has been made for registration of trust or institution is made under Section 12AA of the Act on or after first date of 2007, the provision of Section 11 and 12 of the Act....
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....ce of substantive provision. 16. The Tribunal has even ignored the basic principle of law in giving interpretation in charging provisions, the benefit is to be given to the assessee but same principle is not applicable for an exemption notification or exemption clause, where the benefit of ambiguity must be given to the Revenue/State. It is also that burden to prove applicability of exemption would be on the assessee that it comes squarely within the parameters of the exemption notification or exemption clause. The Tribunal was required to make distinction between charging provision where benefit of ambiguity is given to the assessee and the exemption notification or clause where interpretation is to be given in the form of Revenue. The issue aforesaid has been recently considered and decided by the Apex Court in the Case of Commissioner of Customs (Import) v. Dilip Kumar & Company [2018] 9 SCC 1. 17. Section 12A extends benefit of exemption under Section 11 & 12 of the Act at the first instance to the cases referred under sub- section 1 of Section 12 A. Sub-section 2 of section 12 A extends benefit even when application for registration of Trust or Institution has been made on....
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....lsewhere. In a common parlance, whenever matter is pending before the Tribunal in appeal, considered to be pendency of the assessment proceedings. The aforesaid principle would be applicable in the instant case is another question because proviso qualifies not only pendency of the assessment proceedings, but should before the Assessing Officer not else where, if in the proviso words "pendency of the assessment proceedings", would have been used then pendency of the appeal against the assessment could have been considered to be pendency of the assessment proceedings, but in the instant case the words used are "pendency of the assessment proceedings before the Assessing Officer". The assessment proceedings of the year 2011-12 was not pending before the Assessing Officer, but before the Tribunal. The observation aforesaid is relevant on the facts of this case. This Court has otherwise given proper interpretation to the substantive provision as well as the proviso. 20. We have further gone through the instruction of the CBDT and find it to be contrary to the proviso to Section 12 A of the Act, 1961. The instruction of the CBDT cannot be forfeited, if it is against the statutory provi....