TaxTMI 
TaxTMI 
2023 (8) TMI 1574
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....e facts & position of Law. 2. That the learned CIT-'A' has erred in holding that Assessing Officer was justified in making addition of surplus of Rs. 22,97,578/- to the income of assessee in status of A. O. P. and charging tax at Maximum Marginal Rate. The said finding is illegal & unjustified. The assessee was not liable for payment of any tax on surplus as he was entitled to benefit of Section 11 read with Section 12AA of the Income Tax Act. 3. That the learned CIT-'A' was not justified in ignoring the binding judgement of the Jurisdictional Rajasthan High Court in Case of CIT(Exemption) v. Shree Shyam Mandir Committee 400 ITR 466(Raj.) where it was held that appeal is a continuation of original proceedings & assessment proceedings pending before appellate authority should be deemed to be assessment proceedings pending before Assessing Officer within meaning of Section 12A. The said action is illegal & unjustified. 3. That action of lower authorities in treating surplus of Rs. 22,97,578/- as income & charging tax at Maximum Marginal Rate is illegal & unjustified. 4. That charging of interest Under Section 234B is illegal." 2.1. A....
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....ng the benefit of Section 11 and 12 as the appellant failed to produce copy of Registration 12AA of the Act, taxing the surplus and assessing it as AOP respectively. Ground no. 6 challenges the levy of interest u/s 234 of the Act. This being consequential in nature, Ground no. 6 is worth dismissal, and is dismissed. 5.1. to 5.1.9............. 5.1.10 However, it is found that in the present case the important facts are that the assessment year for the year under consideration i.e. A.Y. 2010-11 was complete on 2-03-2016 when the registration u/s 12AA was not granted to the appellant trust. The application seeking registration was moved on 19-01-2016 and the registration was granted on 08-07-2016 by the CIT(Exemptions). Thus in the light of above referred CBDT Circular No. 1/2015 dated 21-01-2015 and on which reliance was placed upon by the appellant, particularly the following para 8.3 reproduced for ready reference, as below ''8.3 In order to provide relief of 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....
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....CIT(E), on 27.10.2018, with effect from AY 19- 20. 6. Before NFAC, it was submitted that since the assessee trust, before the order being passed by NFAC, in the first appellate proceeding, for caption assessment year, had been granted fresh registration under Section 12AA, benefit of such exemption should be given even for the captioned assessment year. 7. However, such appeal of assessee trust was dismissed by NFAC, vide order dated 18.11.2022, denying the benefit of Section 11 to the assessee trust. 8. Chronological of event are tabulated below:- Particular Date CIT(A) order Page Date of order of ld. AO, in reassessment proceedings. 30.09.2017 Page 1 Date of filing of appeal by assessee trust before NFAC 16.11.2017 Page 1 Date of grant of registration by ld. CIT(E) to the assessee trust under section 12AA 27.10.2018 Page 1 Date of order passed by NFAC in case of assessee trust in appellate proceeding 18.11.2022 Page 1 9. At time of passing of the order by ld. AO on 30.09.2017, assessee trust had not been granted fresh registration under Section 12AA. However, the same was granted on 27.10.2018, i.e. ....
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....f the order by Id. AO, but the same was granted before passing the order by NFAC, in the first appellate proceedings. Resultingly, NFAC should have given the benefit of Section 11 to the assessee trust by considering it to be registered under Section 12AA. 15. The aforementioned legal position was submitted before the NFAC during the first appellate proceedings; however, those were simply rejected by NFAC by stating as under at Page 17 of its order: " 5.1.10 However, it is found that in the present case the important facts are that the Assessment for the year under consideration I.e., A.Y. 2010-11 was complete on 22.03.2016 when the registration u/s 12AA was not granted to the appellant trust. The application seeking registration was moved on 19.01.2016 and the registration was granted on 08.07.2016 by the CIT(Exemptions). Thus, in light of the above-referred CBDT Circular no, 1/2015 dated 21.01.2015 and on which reliance was placed upon by the appellant, particularly the following para 8.3, reproduced for ready reference, as below:- "8.3 In order to provide relief to such trusts and remove hardship in genuine cases, section 12A of the Income-tax Act has ....
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....TA No. 345/JP/2018 dated 07.01.2019. * SNDP Yogam vs. Asst. Director of Income Tax in ITA No. 503 to 506 and 569/Coch/2014 dated 01.03.2016. * Shree Khathu Shyam Jangid Brahman Dharamshala vs. ITO ITA No. 1845/Del/2020 dated 08.07.2022. 2.5. Per contra, the ld. DR supported the orders of the lower authorities and relied upon following the case laws:- * Bharatpur Royal Family Religious & Ceremonial Trust Moti Mahal vs. CIT (2021) 130 taxmann.com 406 (Jaipur Trib.) * Shiv Kumar Sumitra Devi Smarak Shikshan Sansthan vs. CIT(E) (2022) 138 taxmann.com 197 (SC) * CIT(E) vs. Shiv Kumar Sumitra Devi Smarak Shikshan Sansthan (2020) 113 taxmann.com 334 (Allhabad H.C.) * U.P. Forest Corporation vs. DCIT (2007) 165 Taxman 533 (SC) * Bhagawan Sree Mahayogi Lakshmamma Educational Society, Adoni vs. ITO (2022) 135 taxmann.com 310 (Hyderabad-Trib.). 2.6 In the case of the assessee, the ld. AR distinguished the case laws relied upon the ld. DR which are mentioned as under:- ''1. Effect of dismissal of SLP against the order of Hon'ble Allahabad High Court 1.1. Ld. DR has placed heavy reliance on the judgment o....
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.... the Constitution is simply dismissed by saying 'dismissed' and an appeal provided under article 133 is dismissed also with the words 'the appeal is dismissed". In the former case it has been laid by this court that when special leave petition is dismissed this court does not comment on the correctness or otherwise of the order from which leave to appeal is sought. But what the court means is that it does not consider it to be a fit case for exercise of its jurisdiction under article 136 of the Constitution. That certainly could not be so when appeal is dismissed though by a non-speaking order. Here the doctrine of merger applies. In that case, the Supreme Court upholds the decision of the High Court or of the Tribunal from which the appeal is provided under clause (3) of article 133, This doctrine of merger does not apply in the case of dismissal of special leave petition under article 136. When appeal is dismissed order of the High Court is merged with that of the Supreme Court. We quote the following paragraph from the judgment of this court in the case of Supreme Court Employees' Welfare Association v. Union of India & Anr. MANU/SC/0582/1989." 1.5. ii. ....
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.... territory of India. It, therefore, follows that when no reason is given, but a Special Leave Petition is dismissed simliciter, it cannot be said that there has been a declaration of law by this Court under Article 141 of the Constitution." 2. The judicial position emerges as under: 2.1. Decision of the jurisdictional High Court in favour of the Assessee- CIT v. Shree Shyam Mandir Committee [2018] 400 ITR 466 (Raj) 2.2. Decision of the Hon'ble Allahabad High Court against the Asssessee- CIT (E) v. Shiv Kumar Sumitra Devi Smarak Shikshan Sansthan [2020] 422 ITR 468 (Allahabad) 2.3. In such a scenario the order of the jurisdictional High Court would prevail and would be binding on the Hon'ble ITAT, Jaipur Bench. 2.4. It is also submitted that as per our research the Department has not filed any SLP against the order of the Hon'ble Rajasthan High Court in Shree Shyam Mandir Committee (Supra). Therefore, it amounts to Department having accepted the decision of the Hon'ble Rajasthan High Court. 3. Bharatpur Royal Family Religious & Ceremonial Trust Moti Mahal v. CIT [2021] 92 ITR(T) 690 (Jaipur-Trib.) 3.1. Ld....
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....ee Vijay Pal Rao (JM) and Shree Lakshmi Prasad Sahu (AM). 5.2. Shree Vijay Pal Rao (JM) while sitting at Jaipur Benches, under jurisdiction of Hon'ble Rajasthan High Court, while delivering judgment in the case of Akhil Bhartiya Shree Khandal Vipra Mahasaba v. ITO (Supra) have followed the jurisdictional High Court decision delivered in the case of Shreee Shyam Mandir Committee (Supra).'' 2.7. We have heard the rival contention and perused material available on record. Brief facts of the case are that the AO during the course of assessment proceedings noticed that the assessee has not filed any return of income for the year under consideration and as per information available with the Department, the society had received interest and rent of Rs.19,27,637/-. It is also noted that return of income was filed by the assessee trust on 17-04-2017 in response to notice issued u/s 148 of the Act. Thereafter notices u/s 143(2) and 142(1) of the Act alongwith query letters were issued. In response thereto, the ld. AR of the assessee attended the proceedings from time to time and furnished the requisite details / submissions. Books of accounts produced during the course of ass....
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.... After having meticulously gone through the submissions of both the parties and case laws relied on (supra), it is noted that at the time of passing of the order by AO on 30-0-2017, the assessee trust was not granted fresh registration u/s 12AA of the Act, however, the same was granted on 27-10-2018 i.e. before the order passed by NFAC, Delhi. In the present case, the registration u/s 12AA was granted on 27- 10-2018 to the assessee trust. At such time, the appeal of assessee trust for the relevant previous year was pending before the NFAC. It is also noteworthy to mention that even though the registration was not granted till the time of passing of the order by the AO yet the same was granted before passing the order by NFAC, in the first appellate proceedings. Resultantly, the NFAC should have given the benefit of Section 11 to the assessee trust by considering it to be registered u/s 12AA of the Act but the ld. CIT(A), NFAC dismissed the appeal of the assessee trust by confirming the order of the AO whose relevant para is reproduced as under:- ''5.1.11 In light of the above discussion, it is found that the action of ld. AO in not granting the benefit u/s 11 to the appe....