TaxTMI 
TaxTMI 
2023 (3) TMI 915
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....3. The only surviving issue is that the CIT(A) erred in confirming action of the Assessing Officer in not allowing claim of exemption u/s.11 of the Act holding that the assessee trust is not a registered trust u/s.12AA of the Act and treated the assessee as an AOP and taxed income at maximum marginal rate. For this issue, the assessee has raised various grounds which are argumentative and factual, hence, need not be reproduced. 4. Brief and admitted facts are that the assessee is a registered charitable trust running educational institution viz. Alpha Matriculation Higher Secondary School. The assessee is also conducting various charitable activities like giving scholarship to poor students, helping poor students to study in educational institution and engaging in various charitable activities under the name & style of Alpha Education Trust. The assessee filed its return of income for the relevant assessment year 2011-12 on 09.03.2012 claiming exemption u/s.11 of the Act. The Assessing Officer denied claim of exemption and assessed the assessee as an AOP by observing in para 5 as under:- "The Hon'ble Madras High Court in the case of New Life in Christ Evangelistic Association v ....
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....le Supreme Court has approved deemed registration u/s.12A/12AA of the Act in the event of non-disposal of application by the statutory authority within the statutorily prescribed time limit. The learned counsel for the assessee argued that this aspect was brought to the notice of the CIT/DIT (Exemptions) vide various petitions enclosed in the assessee's paper book. Therefore, he argued that by operation of law declared by the Hon'ble Supreme Court, registration u/s.12AA of the Act is available for the present assessee for the assessment year under consideration and accordingly, prayed for allowance of appeal. The learned counsel for the assessee stated that assessment order passed on 24.03.2014, whereas order granting registration u/s.12AA of the Act w.e.f. 01.04.2011 was passed on 28.10.2015. The learned counsel filed complete dates and events in regard to creation of trust till date which reads as under:- In term of the above, learned counsel stated that there are two facets of argument i.e., first, original application filed by the assessee is alive which was filed in 1991 by submitting Form No.10A u/s.12A of the Act and which is still pending not adjudicated by the revenue....
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....ion granted is to be read as prospective or retrospective in term of 2nd proviso to section 12A of the Act. The insertion of 2nd proviso to section 12A of the Act has been explained by Explanatory Notes to provisions of Finance (No.2) Act, 2014, and it is provided that same is applicable to earlier assessment years which are pending before the Assessing Officer as on date of such registration. The relevant para 8.3 Explanatory Notes as reproduced in the order of CIT(A) reads as under:- "8.3 In order to provide relief to such trusts and remove hardship in genuine cases, section 12A of the Income-tax Act has been amended to provide that in a case where a trust or institution has been granted registration under section 12AA of the Income-tax Act, the benefit of sections 11 and 12 of the said Act shall be available in respect of any income derived from property held under trust in any assessment proceeding for an earlier assessment year which is pending before the Assessing Officer as on the date of such registration, if the objects and activities of such trust or institution in the relevant earlier assessment year are the same as those on the basis of which such registration has bee....
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....t, sections 11 and 12 are substantive provisions which provide for exemptions to a religious or charitable trust. Sections 12A and 12AA detail the procedural requirements for making an application to claim exemptions under sections 11 and 12 by the assessee and the grant or rejection of such application by the commissioner. Thus, in our view, sections 12A and 12AA are only procedural in nature. Hence, it is not the registration u/s 12AA by itself that offers immunity from taxation. A receipt whether it is revenue or capital in nature is to be decided at the assessment stage. Being procedural in nature, in our view, liberal interpretation will give effect to the intention of the amendment, thereby removing the hardship in genuine cases like the present assessee under consideration. 7.4. Taking into account the above facts and circumstances of the issue, we are of the view that the AO was not justified in taking a stand that registration u/s 12A was not applicable to the assessee for the AYs under dispute and the condonation petition for delay in filing the application for registration u/s 12A [for the AYs under dispute] has not yet been decided by the CBDT and, therefore, the tot....