TaxTMI 
TaxTMI 
2024 (7) TMI 955
X X X X Extracts X X X X
X X X X Extracts X X X X
....TR Form 5. The CPC rejected the same. Aggrieved, the assessee preferred an appeal before NFAC, Delhi. 3. After considering the grounds of appeal and submissions of the assessee, the Ld. CIT(A) observed that assessee trust had no valid registration u/s 12AA of the Act and also filed the return of income with incorrect Form ITR 7 has been used instead of the correct ITR Form 5 as applicable. However, Ld. CIT(A) rejected the submissions of the assessee and sustained the order of the CPC. 4. Aggrieved with the above order, the assessee is in appeal before us raising the following grounds of appeal:- "1. On the facts and circumstances of the case, the ld. CIT(A) has erred in law in not allowing benefit of registration of the trust u/s 12AA of the IT Act which was granted subsequently and such benefit is available to the trust as per third proviso to sec 12A(2) of IT Act. The exemption u/s 11 is required to be allowed subject to provision of sec 11(1) by virtue of above proviso. 2. On facts and circumstances of the case and without prejudice to the Ground No.1, the Ld. CIT(A) was not justified in not allowing deduction u/s 57(ii) of the expense incurred by the app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d on the date of granting of registration u/s 12AA, the assessment proceedings did not conclude as the intimation passed u/s 143(1) was subjected to rectification and subsequent appeal. The objects of the assessee trust remain the same as in the year of registration of the trust u/s 12AA. Further, the other conditions laid down under third proviso is also satisfied as the registration to the trust has neither been refused nor cancelled any time u/s 12AA, the benefit of section 11 for exemption regarding the application of income for charitable purpose therefore need be provided by virtue of applicability of first and third proviso to sec 12A(2) of the Act. iv. In view of the factual situation that there remains no dispute that the rectification/appeal in relation to the AY under the present appeal was pending on the date of grant of registration u/s 12A of the Act to the appellant trust, the benefit of first/ third proviso to section 12A(2) were available to the appellant as there was no denial of registration u/s 12AA. The reliance is placed on the decision of the Raipur Bench of the ITAT in the case of Prem Prakash Mandal Sewa Trust Vs ITO (Exemption) in ITA No 2628263/R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of the appellant society is for the social/ charitable purposes. The Form 108 report of the auditors (PB10) is on records to show that the collection offered for tax have been spent out for the purposes for which collection were made i.e. social and charitable purposes objectives. Your kind attention is invited to the decision of the Hon'ble Delhi Bench of ITAT in case of Sanatam Dharam Sabha vs ITO ITA No.5791/Del/2019 dated 13.04.2022 where on identical facts, the assessee was denied benefit of exemption of section 11/12 of IT Act but at the same time, the assessee was found eligible for allowance of relevant expenditure on the section 57(ii) of IT Act. The Hon'ble ITAT in the above judgement relied on the decision of jurisdictional Delhi High Court in the case of DDIT Vs Petroleum Sports Promotion board Delhi High Court 362 ITR 235. The decision of Hon'ble Jurisdictional Delhi High Court is based on the decision of Hon'ble Supreme Court in CIT vs. Rajendra Prasad Moody, 115 ITR 519 that Section 57 (ii) must be construed broadly and the somewhat wider language of Section 37(i) should not affect the interpretation of Section 57 (iii). e) With regard t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pplicable to individual assessee provided exemption under section 11 or 12 of 10(23C) is not available. From the facts available in the present case, there is no infringement of sec 13(1)(a) to 13(1)(d) and sec 115 of IT Act for which the sec 1678 authorizing levy of tax at maximum marginal rate could be applied. The fact that the appellant trust has been granted registration u/s 12AA of the Act (PB 17) shows that the character of the appellant trust is a charitable trust. Further, there is no material on record of the CPC or the Department that there was any infringement by the appellant of the above noted excluding provisions of section 13(1)(a) to section 13(1)(d) or section 115 of the Act and therefore, the present appellant is required to be taxed at the rates applicable to the individuals. iv. Without prejudice to above, it is relevant to note that the appellant is a AOP (Trust) and since, there was no registration u/s 12A of IT Act, the correct form for filling the return should have been ITR-5 which was applicable for persons other than- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7. In the ITR form-5, the status of the entities....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cle 265 of the Constitution of India which lays down that no tax shall be levy except when authorized by law. The Ld. AR relied on the decision of ITAT, Raipur Bench and facts in the above case are slightly different and they have considered that the assessment pending before the Ld. CIT(A). In this case, at the time of grant of registration, there was no appeal pending before the Ld. CIT(A). 6. On the other hand, the Ld. DR objected to the submissions of the Ld. AR and submitted that in order to claim the benefit u/s 12A of the Act in a situation wherein the registration was granted subsequently, there should be proceedings pending before any authority. In this case, at the time of granting of registration vide order dated 22/02/2016, there was no proceedings pending. The submissions of the assessee may not be entertained. 7. In the rejoinder, Ld. AR submitted that there is a sufficient time for filing the rectification u/s 154 of the Act and also the assessee has raised the same issue before the CPC and subsequently filed the appeal before the Ld. CIT(A), therefore, the issue under consideration was pending in this regard. He relied on the decision of Prem Prakash Mandal....