TaxTMI 
TaxTMI 
2025 (9) TMI 1051
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.... filed return of income on 26.09.2011. For AY 2012-13, the return was filed on 28.11.2013. During the AY 2011-12, assessee received donation amounting to Rs. 34,92,076/- which the Ld. Assessing Officer ("AO") in the initial/ original assessment, treated as taxable income of the assessee and raised a demand of Rs. 17,58,884/- vide his order dated 29.06.2016 passed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (the "Act"). Similarly, for AY 2012-13, the Ld. AO completed the assessment vide order dated 30.06.2016 treating the trust as AOP taking surplus of Rs. 2,93,770/- as taxable income and raised demand of Rs. 1,37,083/-. The assessee challenged such assessment order(s) before the Ld. CIT(A) which was confirmed and thereafter on further appeal to the ITAT, Pune, the matter was remanded back the to the file of the Ld. AO with specific direction to consider the fact of grant of registration to the assessee trust u/s 12AA of the Act, vide its consolidated order dated 18.03.2019 for AYs 2011-12, 2012-13 and 2013-14 in ITA Nos. 189 to 191/PUN/2019. The Ld. AO/NeAC, however, again completed the assessment vide separate order(s) both dated 16.04.2021 for AYs 2011-12 and 2012-13 passed....
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.... to section 12A(2) inserted by Finance Act, 2014 w.e.f 01.10.2014 reads as under:- "Provided that where registration has been granted to the trust or institution under section 12AA, then, the provisions of sections 11 and 12 shall apply to respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the assessing officer as on the date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment order. Provided further that no action under section 147 shall be taken by the assessing officer in case of such trust or institution for nay assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year. It is evident from the plain reading of first proviso to section 12A(2) that it is applicable only in case of assessment year, for which assessment proceedings are pending before the assessing officer as on the date of such registration. In the present case, on the date of grant of registration u/s 12AA i.e.....
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....d 2012-13 were passed on 29.06.2016 and 30.06.2016 respectively. The assessee filed appeal against the said assessment order(s) on 06.08.2016. The registration under section 12AA was granted on 02.12.2016. The Ld. AO/ CIT(A) denied the assessee's claim of exemption under section 11 of the Act disregarding the directions of the Coordinate Bench of the Tribunal in the first round of appeal vide its order dated 18.03.2019. Consequent thereto, the Ld. AO passed the impugned assessment order(s) under section147 read with section 254 of the Act on 21.04.2021 which has been confirmed by the Ld. CIT(A) vide his impugned order dated 05.09.2024. The above sequence of proceedings/ events confirms that the assessment proceedings were pending during appeal when registration was granted to the assessee. He submitted that there are several judicial precedents in favour of the assessee wherein it has been held that the trust is eligible for claiming exemption under Section 11 of the Act on subsequent registration granted under Section 12AA while the proceedings were pending before the CIT(A). Relying on the decision of the ITAT, Pune in the case of ITO Vs. M/s. Shri Vishwakalyan Jivraksha Pratisht....
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....;s Compliance: o The appellant, a trust registered under the Society Registration Act, 1860, and BPT Act, 1950 (No. F-27645, Pune, 14/02/2011), received Rs. 34,92,076 in donations for charitable purposes (Building Fund). It obtained Section 12AA registration on 02/12/2016 during appeal pendency (06/08/2016), meeting the proviso's conditions. o The Assessing Officer's disregard of ITAT's remand directive to consider the 12A grant and CIT(A)'s narrow interpretation of the proviso (order dated 05/09/2024) denied the trust its substantive right to exemption. 4. Pendency of Proceedings: o The table below summarizes key dates, confirming that assessment proceedings were pending during appeal when registration was granted: Event Date Return Filed 26/09/2011 AO's Initial Order 29/06/2016 Appeal Filed to CIT(A) 06/08/2016 Section 12AA Registration 02/12/2016 AO's Order u/s 147 r.w.s. 254 16/04/2021 CIT(A) Order 05/09/2024 ITAT Appeal Filed 21/12/2024 6. The Ld. DR, on the other hand, supported the order of the Ld. AO/CIT(A). 7. We have heard the Ld. Representatives of the parties,....
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.... We have perused the order of the Co-ordinate Bench of the Tribunal in the case of M/s. Shri Vishwakalyan Jivraksha Pratishthan (supra). The relevant extract of the said order of the Tribunal is reproduced below : "8. The Cochin Bench of the Tribunal in the case of SNDP Yogam Vs. Assistant Director of Income Tax (Exemption) (supra) while dealing with the issue relating to retrospective applicability of newly inserted proviso to section 12A(2) has held that the amendment is retrospective in nature. The relevant extract of the findings of Tribunal are as under : "7.1 .............The first proviso to section 12A(2) was brought in the statute only as a retrospective effect, with a view not to affect genuine charitable trusts and societies carrying on genuine charitable objects in the earlier years and substantive conditions stipulated in section 11 to 13 have been duly fulfilled by the said trust. The benefit of retrospective application alone could be the intention of the legislature and this point is further strengthened by the Explanatory Notes to Finance (No.2) Act, 2014 issued by the Central Board of Direct Taxes vide its Circular No. 01/2015 dated 2....
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.... its pendency before the appellate authority, will be doing violence to the provisions of the Statute and, as such, liable to be interfered with. Moreover, under the Scheme of the Act, 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." 9. The Kolkata Bench of the Tribunal in the case of Sree Sree Ramkrishna Samity Vs. Deputy Commissioner of Income Tax (supra) while dealing with the issue where the benefits of exemption u/s. 11 and 12 were denied to....
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....uestion of taxability of donation u/s. 57 and deduction u/s. 57(iii) of Income-tax Act does not arise. Accordingly, the Assessing Officer is directed to delete the addition of Rs. 40,92,237/-." 11. The ld. DR has not been able to controvert the well reasoned findings of the Commissioner of Income Tax (Appeals). Thus, in view of the facts of the case and the decisions of Tribunal holding the amendment to provisions of sub-section (2) to section 12A to be retrospective in nature, coupled with the fact that the assessee was subsequently granted registration u/s. 12AA of the Act, we are of the considered view that the Commissioner of Income Tax (Appeals) has rightly deleted the addition made by the Assessing Officer. Accordingly, the appeal of the Revenue is dismissed being devoid of any merit." 7.3 Similar view has been taken by the Kolkata Bench of the Tribunal in the case of M/s. St. Xavier's School (supra). No contrary decision / material has been brought on record by the Revenue to rebut the above contention of the assessee. 7.4 We also note that the Ld. AO passed the impugned order for AYs 2011-12 and 2012-13 vide order dated 16.04.2021 and the Ld. CIT(A) ....