TaxTMI 
TaxTMI 
2021 (9) TMI 1227
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.... No.AACTS0376F, on the file of the Assistant Commissioner of Income Tax, Central Circle-1, Madurai. 2.2.In this regard, it is to be noted that, there has been a search under Section 132 of the Act carried out in the premises of the hospital concern run by the petitioner trust sometime in the year 2014, following which, notice under Section 153 C of the Act, dated 16.03.2016 was issued for the assessment years 2009-10 to 2015-16. 2.3.In response to the said notice issued under Section 153 C of the Act, the petitioner filed IT returns electronically under Section 143 (3) read with 153 C of the Act on 03.08.2016 for the assessment years 2013-14, 2014-15 and 2015-16 and also filed manual returns on 12.08.2016 for the assessment years 2009-10, 2010-11, 2011-12 and 2012-13. 2.4.The assessment for assessment years 2009-10 to 2015-16 were completed by the revenue by order dated 31.12.2016 and the respondent computed the total taxable income for the relevant assessment years. Felt aggrieved over the said computation of the assessment made by the revenue, the petitioner filed appeal before the CIT (Appeal), Chennai. The CIT (Appeal), vide its common order dated 02.04.2018 allowed th....
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....g further of his submission, the learned counsel appearing for the petitioner / assessee has pointed out that, as per the Finance Act, 2021, by introduction of Section called 12AB, there has been a new procedure for fresh registration of trust and charitable institution envisaged. 4.In this context, the learned counsel has taken this Court to the erstwhile provisions 12A, 12AA and the newly inserted provision, that is 12AB of the Act. 5.In this context, it is pertinent to be pointed out that, according to the learned counsel, Sub-Section 5 of Section 12AA has been inserted under the Finance Act, 2021, which says that 'Nothing contained in this Section shall apply on or after the 1st day of April 2021'. Heavily relying upon Section 12AB, the learned counsel would contend that, what are all the procedures available under 12AA, either for grant of registration or for cancellation of registration are no more available for the respondent revenue on and from the 1st day of April 2021. Instead, the new procedure as contemplated under Section 12AB since has been introduced, under which, the exhaustive procedure has been provided for the trust and charitable institution like t....
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....t, Sub-Section 3 of Section 12AA has been invoked by issuance of notice dated 10.08.2021, whereas all the provisions including Sub- Section 3 of Section 12AA is no more available for the respondent to act upon, in view of Sub-Section 5 of Section 12AA having been introduced by the Finance Act, 2021, under which, nothing contained in that Section shall apply on or after the 1st day of April, 2021. 9.Therefore, the sum and substance of the arguments advanced by the learned counsel appearing for the petitioner in this regard is that, in view of Sub-Section 5 of Section 12AA, the entire procedure contemplated under Section 12AA of the Act, which was the regime upto 31st March, 2021, is no more available in the statute book. Therefore, if at all any action to be taken against the existing trust or charitable institution, it is open to the respondent revenue to take such action, only after adopting the procedure under Section 12AB of the Act by registering the trust or charitable institution concern under the new regime and for which, since the application was made already on 04.05.2021 by the petitioner trust, the application should be disposed of granting registration as contemplate....
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....it that, since personal hearing as contemplated under Section 12AA(3) of the Act has been given through the impugned notice, pursuant to which the petitioner assessee can appear before the respondent and to show cause as to why the registration enjoyed by the petitioner trust shall not be withdrawn, by producing the relevant documents to the satisfaction of the revenue. Without utilizing the said opportunity of personal hearing, the petitioner assessee ought not to have rushed to challenge the impugned show cause notice. Therefore, on that ground also, the petitioner cannot have a successful challenge against the impugned show cause notice, he contended. 12.He also submitted that, assuming that the arguments advanced by the petitioner side as projected by the learned counsel appearing for the petitioner that in view of the pendency of the application dated 04.05.2021, without disposing the same under Section 12AB(1)(a) of the Act, the present action initiated under the impugned notice ought not to have been issued is concerned, no such application to the best of the knowledge of the respondent, as per their instructions, either been received or pending with the respondent, but i....
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....ing time period and to restrict such kind of registration, as that was the prevailing situation, the legislature thought it fit to introduce new regime and thus Section 12AB has been introduced. 20.While introducing Section 12AB, Sub-Section 5 of Section 12AA has also been introduced. The Sub-Section 5 reads thus: "Nothing contained in this Section shall apply on or after the 1st day of April 2021." which means that, after 1st April, 2021, Section 12AA shall not apply for any cases, in other words, the applicability of the provision under Section 12AA has become redundant with effect from 1st April, 2021. Instead, Section 12AB has been introduced under the heading "Procedure for fresh registration" by the very same Finance Act, 2021, with effect from 01.04.2021. 21.In order to appreciate the new provision, namely, Section 12AB, the said Section in entirety is extracted herein: "Procedure for fresh registration. 12AB.(1)The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall - (a) where the application is made under subclause (i) of the said clause, pass an order in w....
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....uine or are not being carried out in accordance with law the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution after affording a reasonable opportunity of being heard. (5)Without prejudice to the provisions of sub-section (4), where registration of a trust or an institution has been granted under clause (a) or clause (b) of sub-section (1) and subsequently, it is noticed that- (a) the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of subsection (1) of section 13; or (b) the trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (I) of clause (b) of subsection (1), and the order, direction or decree, by whatever name called, holding that such noncompliance has occurred, has either not been disputed or has attained finality, then, the Principal Commissioner or the Commissioner may, by an order in writing, after affording ....
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.... Commissioner for registration of trust or institution. 24.If any such application is made under Section 12A(1)(ac), how such application is to be dealt with has been provided under Section 12AB(1)(a), which has also been quoted hereinabove, where, on receipt of application submitted under Section 12A(1)(ac), the Principal Commissioner/Commissioner shall pass an order in writing registering the trust or institution for a period of five years. 25.On reading of this Section, it has been made abundantly clear that, once the trust enjoyed the registration either under 12A regime or 12AA regime, the same, within three months from 1st April, 2021, shall make an application in the prescribed form and manner provided therein and on receipt of such application, the Principal Commissioner/Commissioner as the case may be shall pass an order in writing registering the trust or institution for a period of five years. Therefore, under this provision, no such procedure has been contemplated that the Principal Commissioner/Commissioner, on receipt of such application from the existing trust enjoyed registration under Section 12A or 12AA, to have any discretion either to grant or to reject th....
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....quently, extended by the notification issued in this regard by Central Board of Direct Taxes, Department of revenue, dated 25.06.2021, under which, the time period has been extended upto 31st August, 2021. 31.The dispute as to whether the application submitted by the petitioner on 04.05.2021 has reached the concerned officer or not probably would have arisen, because, in the hard copy of the application submitted before this Court, in the column against the "authority granting registration", it has been typed as ''Income Tax". However, the Act contemplates either the Principal Commissioner/Commissioner, as the case may be, shall be the authority to consider the application submitted by the trust or institution for grant of registration. Probably because of this confusion, the application submitted by the petitioner on 04.05.2021 might not have reached the concerned officer. Nevertheless, the hard copy of the application dated 04.05.2021 can very well be submitted by the petitioner to the concerned officer, namely the Principal Commissioner/Commissioner as the case may be and such kind of personal submission of the copy of application already sent through online on 04.05.....
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....ars as referred to or contemplated under the new regime, then, it is open to the respondent revenue to proceed against the petitioner and therefore, from that stage, the impugned proceedings dated 10.08.2021 can be proceeded in accordance with law, especially under Sub-Section 4 of Section 12AB of the Act. 36.For all these reasons stated above and the discussions made hereinabove, this Court is inclined to dispose of this writ petition with the following orders: (a)that the impugned notice dated 10.08.2021 shall be kept in abeyance. (b)The application submitted by the petitioner dated 04.05.2021 through online addressed to the Income Tax Department through web portal shall be processed by the Principal Commissioner/Commissioner as the case may be as contemplated under Section 12AB of the Act as introduced by the Finance Act, 2021 and such application since has been filed under Sub-Clause (i) of Clause (ac) of Sub- Section (1) of Section 12A of the Act, the same shall be considered and the order shall be passed in writing to and in favour of the petitioner registering the petitioner trust for a period of five years. (c)once such order is passed granting....