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2023 (8) TMI 327
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....eal i.e. ITA No. 263/RPR/2022. The assessee has assailed the impugned order for A.Y.2015-16 on the following grounds of appeal before me: "1. That under the facts & the law, the Ld. CIT (A) erred in confirming the order of the Ld. AO who assessed the income at Rs. 11,47,592/-as against the returned of income at Nil, without giving the opportunity of being heard and by not allowing the deduction u/s. 11, observing that appellant is not registered u/s 12AA. Prayed that appellant is entitled for deduction u/s 11, the income be assessed at Nil. 2. That under the facts & the laws, the Ld. CIT (A) further erred in rejecting the explanation that the deduction u/s. 11 was allowable as registration was granted u/s. 12AA vide order of Ld. CIT (Exemption), Bhopal dt. 20/04/2017 from AY 2017- 18 and on above date of registration, assessment proceedings for the year so under consideration were pending before the Ld. AO, objects & activities of institution were same on which basis registration was granted, ignoring the explanatory note to the provisions of Finance (No. 2) Bill, 2014 which amended Sec.12A.Prayed that deduction u/s. 11 be allowed and income be assessed at Nil as returned." 3....
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.... of the view that as the assessee society was not registered either u/s. 12A of the Act or u/s. 10(23C)(vi) of the Act, therefore, it was not eligible for claiming exemption of the surplus amount of Rs. 11.47,592/-. During the course of proceedings before the CIT(Appeals), the assessee society had in order to support its claim of exemption u/s. 12AA of the Act relied on the CBDT Circular No. 1/2015 dated 21.01.2015, which, however, did not find favour with him. On a perusal of the order of the CIT(Exemption) it transpires that he was of the view that as the assessee society had failed to place on record any documentary evidence which would prove that as on the date of registration i.e. on 20.04.2017 any assessment proceedings for the earlier assessment year was pending before the A.O, therefore, the issue of availability of exemption u/s. 12AA of the Act for the earlier assessment years could not be decided only on the basis of the aforesaid Circular No. 1/2015 (supra). 6. The assessee being aggrieved with the order of the CIT(Exemption) has carried the matter in appeal before me. 7. It was submitted by the Ld. Authorized Representative (for short 'AR') that as the assessee socie....
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....egistered u/s. 12AA of the Act, then it would not be entitled for exemption u/s. 11 of the Act. Also the Ld. DR had drawn support from the judgment of the Hon'ble Supreme Court in the case of the Commissioner of Income Tax Vs. The Nagpur Hotel Owners, Appeal (Civil) Nos. 1662-1663/1994 dated 113.12. 2000. It was submitted by the Ld. DR that the Hon'ble Apex Court in its aforesaid order had held that in case if a trust is not registered u/s. 12AA of the Act then the excess/surplus income is liable for addition in the hands of the assessee. Referring to the facts involved in the case before me, it was submitted by the Ld. DR that as the assessee society was not registered u/s. 12AA of the Act, therefore, no infirmity could be attributed to the orders of the lower authorities who had rightly declined the assessee's claim of exemption u/s. 11 of the Act. 9. I have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 10. I have given a thoughtful consideration....
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.... 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 been granted. 8.4 Further, it has been provided that no action for reopening of an assessment under section 147 of the Income-tax Act shall be taken by the Assessing Officer in the case of such trust or institution for any assessment year preceding the first assessment year for which the registration applies, merely for the reason that such trust or institution has not obtained the registration under section 12AA for the said assessment year. 8.5 However, the above benefits would not be available in the case of any trust or institution which at any time had applied for registration and the same was refused under section 12AA of the Income-tax Act or a registration once granted was cancelled. 8.6 Applicability: - These amendments take effect from 1st October, 2014. On a caref....
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....hat as it may, I am of the considered view that the A.O could not have taken benefit of the ignorance of the assessee. In fact, I am unable to comprehend that now when the CBDT Circular No. 01/2015 (supra) was brought to the notice of the CIT(Exemption) who is vested with powers which are co-terminus with that of the A.O, the latter, however, instead of acting as per the mandate of law had declined the assessee's claim for exemption u/s. 11 of the Act for the reason that there was no evidence to prove that any assessment for an earlier assessment year was pending before the A.O on the date of grant of registration i.e. on 20.04.2017. In my considered view what was required to be looked into by him was as to whether or not any assessment for the year under consideration i.e. A.Y.2015-16 was pending on the date of which registration was granted, i.e., on 20.04.2017, which material aspect I am afraid had absolutely been lost sight of by him while disposing off the appeal. As observed by me hereinabove, it is matter of fact borne from record that assessment proceedings in the case of the assessee which were initiated vide notice u/s. 143(2) dated 29.07.2016 and had culminated vide orde....