TaxTMI 
TaxTMI 
2025 (7) TMI 49
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.... assessee/appellant has preferred this appeal questioning the judgment and order dated 7-9-2023 passed by the Income Tax Appellate Tribunal, Raipur Bench, Raipur in ITA No. 02/RPR/ 2020, which was admitted for hearing on 16-4-2025 by formulating the following substantial question of law:- "Whether the Income Tax Appellate Tribunal is justified in dismissing the appeal by ignoring the order granting approval under Section 12 AA of the IT Act which was passed on 14.07.2023 during the pendency of appeal by holding that first proviso to sub-section (2) of Section 12 A is not attracted and further ignoring the fact that appeal was already pending before it (ITAT), by recording a finding which is perverse to the record?" 2. The afores....
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....er of the Assessing Officer as affirmed by the Commissioner of Income Tax (Appeals) and an additional ground was taken that approval under Section 12AA of the IT Act has been granted by the Commissioner of Income Tax (Exemption) on 14-7-2023 and therefore by virtue of first proviso to Section 12A(2) of the IT Act, exemption would apply retrospectively. 4. The learned ITAT by the impugned order rejected the appeal holding that first proviso to Section 12A(2) of the IT Act has wrongly been construed, as the assessment proceeding was not pending before the Assessing Officer on the date of registration i.e. 14-7-2023 and accordingly proceeded to dismiss the appeal which is sought to be challenged by filing this appeal under 260A of the IT Ac....
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....on and in the instant case, the assessment proceeding had already completed on 12-12-2018 and appeal has also been dismissed by the CIT (Appeals) on 17-10-2019, and only appeal was pending before the ITAT when the registration was granted under Section 12AA of the IT Act on 14-7-2023. As such, the learned ITAT has rightly held that the benefit of first proviso would not flow to the appellant/assessee and as such, the appeal deserves to be dismissed. 7. We have heard learned counsel for the parties and considered their rival submissions made hereinabove and also went through the record with utmost circumspection. 8. It is not in dispute that assessment proceeding under Section 143(2) of the IT Act was adjudicated by the Assessing Offic....
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....r institution remain the same for such preceding assessment year." First proviso to Section 12A(2) of the IT Act has been inserted with effect from 1-10-2014. Section 12A(2) of the IT Act was brought into the statute book by the Legislature to prevent genuine hardship that could be caused on the assessee due to non-registration under Section 12AA of the IT Act and accordingly, the provisos to Section 12A(2) is to be construed as retrospective in nature. 10. At this stage, it would also be appropriate to notice the CBDT Circular No. 01/2015 dated 21-5-2015 which has been made applicable with effect from 1-10-2014 in order to remove hardships to charitable organisations due to non-application for registration for the period prior to the....
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....ature, in order to give the section a purposive interpretation. {See Shree Shyam Mandir Committee's case (supra), paragraph 26.} 12. In the instant case, admittedly, on the date of registration i.e. 14-7-2023, the assessment proceeding which has been affirmed by the Commissioner of Income Tax (Appeals), was pending before the ITAT, which came to be dismissed on 7-9-2023. The question for consideration would be, whether the assessment proceeding as stated in first proviso to Section 12A(2) of the IT Act can be taken as pending appeal, in other words, whether the assessment proceeding pending in appeal can be taken to be the proceeding pending before the Assessing Officer? Since appeal was pending before the ITAT under Section 253 of the I....
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....iar (1980) 4 SCC 259]. 14. It is held that appeal pending before the ITAT against the order of the CIT (Appeals) affirming the order of the Assessing Officer is the continuation of the original proceedings of the Assessing Officer and thus, the assessment proceeding in appeal pending before the appellate Court i.e. ITAT is deemed to be the assessment proceeding before the Assessing Officer within the meaning of first proviso to Section 12A(2) of the IT Act and we accordingly hold that appeal proceedings pending before the ITAT are deemed to be the assessment proceeding before the Assessing Officer within the meaning of Section 12A of the IT Act. The impugned order so passed after the effective date of grant of registration and subsequent....