TaxTMI 
TaxTMI 
2026 (7) TMI 1644
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....026 for A.Y. 2016-17 as "lead" case. 2. Grounds of appeal raised by the assessee in ITA No.900/Kol/2026 for A.Y. 2016-17 are as under: "1. For that on the facts of the case, the order passed by the Ld. C.I.T.(A)- NFAC on 20.02.2026 which is completely arbitrary, unjustified and illegal. 2. For that on the facts of the case, the Hon'ble Calcutta High Court by its order dated 16.07.2009 has held, 'that the said trust is one under the Charitable and Religious Trust Act, 1920, no leave need be obtained prior to grant of lease and question (b) is answered accordingly. In view of the answers above the Shebaits will have the right to deal with the properties in the best interest of the idol in whom the estate is vested.' 3. For that the facts of the case, the department has been accepted that the assessee is a Charitable Trust and charitable expenses has been allowed till assessment year 2015-16, either assessment made by the A.O. u/s. 143(3) or 143(1) of the I.T. Act, as such the action of the Ld. CIT(A) which is completely arbitrary, unjustified and illegal. 4. For that even u/s. 264 order on 04.03.2011 for the assessment year 2008-09 b....
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....ground or grounds, if necessary, at or before the hearing of the appeal." ITA No.900/Kol/2026 (A.Y. 2016-17): 3. The assessee has also raised additional ground, which is extracted below: "Additional Ground of Appeal: That, on the facts and in the circumstances of the case, the authorities below erred in not holding that in view of grant of registration u/s 12AB of the Act, 1961 (the 'Act') to the appellant with effect from the A.Y. 2025-26 and having regard to section 12A(2) as applicable to the year under appeal read with the first proviso thereto, the income of the appellant for the assessment year under consideration is required to be computed u/s 11 to 13 of the Act." 4. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised the above additional ground of appeal. In our opinion the issue raised in the additional ground is a purely a legal issue qua which all the facts are available in the appeal folder and no further verification of facts are required from any quarter whatsoever. In our considered view the assessee is at liberty to raise any legal issue before any appellate authority for the first....
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....n. He held from the reading the Will as a whole that it was clear that the remuneration to the shebaits and the allowances to the widows were merely applications of the trust income and as such not deductible. According to the AO, under the Will, the shebaits and trustees were to collect the income of the whole debutter property in the first instance and after paying the Government revenues and taxes and rates and other outgoings, perform the puja and the other ceremonies for the worship of the family deity and, spend amounts on charitable and public purposes and, lastly, to pay the remuneration, allowances and private donations. The AO, therefore, determined the income of the trust estate under sections 9 and 12 of the Income Tax Act, 1922 (1922 Act). On reference, the High Court held that the assessee deity was not the owner of the properties and, therefore, the only income which could be subjected to income-tax in the hands of the assessee would be the beneficial interest of the said deity under the Will, which would be expenses incurred for the seva puja of the deity and for the various religious ceremonies connected with the said deity and the value of the residence of the dei....
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....e the assessing officer within the meaning of the term as envisaged under the proviso". Identical views have been taken in the context of the first proviso to section 12A(2) of the Act by the Hon'ble Ahmedabad Bench in Shree Bhanushali Mitra Mandal Trust vs. ITO [68 taxmann.com 50 (Ahmedabad Trib)] so has been the view of the Hon'ble Agra Bench in Somani Charitable Trust vs. ACIT [174 taxmann.com 1246 (Agra - Trib)]. the Hon'ble Bangalore Bench in Magadi Planning Authority vs. IТО [171 taxmann.com 262 (Bangalore - Trib)]. 2. The subject proviso was inserted by the Finance (No. 2) Act, 2014 and in Circular No. 1 of 2015 the CBDT explained the legislative intent behind the amendment as under (also placed at pages ...to.... of the Paper Book) - 8. Applicability of the registration granted to a trust or institution to earlier years. 8.1 The provisions of section 12A of the Income-tax Act, before amendment by the Act, provided that a trust or an institution can claim exemption under sections 11 and 12 only after registration under section 12AA of the said Act has been granted. In case of trusts or institutions which apply for registrati....
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....n undisputed fact that the object and activities of the Trust remained unaltered over centuries and as on the date of granting registration u/s. 12AB (erstwhile section 12AA), the assessment proceedings for the years under consideration, were pending in appeal before the Hon'ble Tribunal. In view thereof the aforesaid first proviso to section 12A(2) of the Act applies on all force to the facts of the case and the registration granted should apply from the AY 2016-17 covering all the years under consideration. The retrospective applicability of the registration u/s, 12AB of the Act is well settled by numerous authorities some of which are referred hereinbelow and relied upon - * Sree Sree Ramkrishna Samity [156 ITD 646 (Kolkata - Trib)] * ITO (Exemption) vs. St. Xavier's School, Burdwan [ITA Nos. 2101 to 2105/Kol/2016 dated 11 May 2028] * Punjab Educational Society vs. ITO [168 ITD 109 (Amritsar - Trib)] * SNDP Yogam vs. ADIT (E) [161 ITD 1 (Cochin - Trib)] * CIT (E) v. Shree Shyam Mandir Committee [TS-6480-HC-2017 (Rajasthan)]- The Hon'ble High Court approved ITAT's view that the first proviso to section 12A(2) is retrosp....
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.... order dated 24.09.2025 from A.Y. 2025-26 to 2029-30. Now, the issue before us, whether the assessee is entitled to the benefit of the said registration and the same approval could not applied to all the assessment years, which are under challenge before us and whether the assessee could be given the benefit of said registration in respect of the years which are before us. 10. So far, the pendency of assessments prior to the A.Y.2025-26 is concerned, we note that undisputedly these are under challenged before us and not before AO. So in terms of section 12A(2) of the Act where an application has been made on or after 1st day of June, 2007, the provisions of section 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made. Further, the proviso to sub-section (2) provides that where registration has been granted to the trust or institution u/s 12AA, then, the provisions of section 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which the assessment proceeding....
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....ear 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 year: Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year: Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA.]" 7.1 Further it would be relevant to reproduce the explanatory note to the provisions of the Finance (No.,2) Act 2014 as given in CBDT No.1/15 dated 21.1.2015 "Para 8.2 Non-application of registration for the period prior to the year of registration caused genuine hardship to charitable organizations. Due to absence of registration, tax liability is fastened even though the....
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....aimed u/s 11of the Act. 7.3 The explanatory Memorandum to Finance (No.2) Bill, 2014 which sought to amend section 12A explains the objects and reasons for making such amendments. The explanation makes it clear that it was in order to provide relief to such trusts in respect of which, due to absence of registration u/s 12AA tax liability got attached though otherwise they were eligible for exemption by fulfilling other substantive conditions that the amendment was brought in. That being so, denying such benefit to a trust like the assessee who had obtained registration u/s 12AA during the pendency of the appeals filed against the orders of the assessing authority, by narrowly interpreting the term, 'pending before the assessing officer' so as to exclude 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 ....
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....operation with effect from the date when the condition of eligibility for exemption under section 11 & 12 as mentioned in section 12A provided for registration u/s. 12AA as a pre-condition for applicability of section 12A." Further, the Kolkata Tribunal observed as under: "6.11. We also hold that though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. It is only elementary that a statutory provision is to be interpreted ut res magisvaleatquampereat, i.e to make it workable rather than redundant. Applying this legal maxim, it would be just and fair to hold that the amendment in section 12A is brought in the statute to confer benefit of exemption u/s 11 of the Act on the genuine trusts which had not changed its objectives and had carried on the same charitable objects in the past as well as in the current year based on which the registration u/s. 12AA is granted by the DIT (Exemptions)." 7.5 In light of the aforesaid reasoning and order of the Tribunal in case of Sree Sre....
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....re raised before us, but the ld. Counsel stated that he wishes to make arguments with respect to ground Nos. 6, 7 & 8, which were identically worded in all these appeals and read as under: "6. BECAUSE, the 'appellant' was granted registration under section 12AA of the Act vide Certificate dated 15.10.2018 by the Ld. CIT(Exemption) Bhopal in view thereof the Ld. 'CIT(A)' ought to have allowed exemption under section 11 as claimed for A.Y 2006-07 in appellate proceedings in view of revised proviso to sub-section (2) of section 12A w.e.f. 01.04.2013 providing that provisions of section 11 and 12 shall apply to preceding years too where proceedings are pending before the Assessing officer. 7. BECAUSE, the 'CIT(A)' had grossly erred in denying deduction, referring to section 119(2)(b) of the 'Act', under section 11 & 12 of the 'Act' which is available to the 'appellant' in view of revised proviso to subsection (2) of section 12A as appellant was duly Registered under section 12AA w.e.f 01.04.2013. 8. BECAUSE, the proceeding before 'CIT(A)' was extension of assessment proceedings and claim raised before &#....
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....sing 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 year." His contention was that the ld. CIT(Appeals) had ignored this provision of law and had not applied the same to the facts of the case wherein the assessee had been granted registration vide order dated 15.10.2018 w.e.f. 01.04.2013 u/s. 12AA of the Act by the ld. CIT(Exemption), Bhopal and on the date of grant of registration, the appeals of the assessee were pending before the ld. CIT(Appeals), who had passed the first appellate order in all the cases on the same date, i.e., 12.04.2024. It was the contention of the ld. Counsel that the proceedings before the ld. CIT(Appeals) was an extension of assessment proceedings and claim raised before the CIT(Appeals) which accrued on 15.10.2018 after passing of the assessment order dated 28.02.2013 ought to have been allowed by the ld. CIT(Appeals). For the proposition that the proceedings before the ld. CIT(Appeals) was an extension of assessment proceedings and if the proceedings before the ld. CIT(Appeals) were pending on the date of grant of registration u/s. 12....
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....emption which says that " the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any income-tax authority, not being 30[a Joint Commissioner(Appeals) or] a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law." 5.8. Further, several case laws relied upon by the appellant are also distinguishable on facts and hence not applicable. Accordingly, grounds of appeal are liable to be dismissed." Cases relied upon (a) CIT v. Shree Shyam Mandir [2018] 400 ITR 466 (Raj) Exemption u/s 11 - trust or institution has been granted registration under section 12AA - Applicability of the registration granted to a trust or institution to earlier years - Non-application of registration for the period prior to the year of registration caused genuine hardship to charitable organisations -ITAT applying the Proviso of Section 12A(2), i....
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....pecifically that all the receipts of the donation were proved on enquiry to have been received from the claimed donors and utilized for the specific purpose (construction of old age home) for which they were received. In conclusion, we hold that the insertion of the proviso to section 12A(2) of the Act has to be construed as retrospective in operation - This issue stands answered in favour of the assessee by Shree Bhanushali Mitra Mandal Trust [2016 (4) TMI 578 - ITAT Ahmedabad], wherein, it was held that appeal is a continuation of the original proceedings and assessment proceedings pending before an appellate authority should be deemed to be "assessment proceedings pending before the Assessing Officer" within the meaning of Section 12A. -Decided in favour of assessee. (b) Shri Krishnabai Ghat Trust v. ITO (Exemptions) 2019 (5) TMI 618 - ITAT Pune Exemption u/s. 11 - deemed registration u/s 12AA - applicability of Proviso to Section 12A sub-section (2) during appeal proceedings or restricted to assessment proceedings - registration granted to the assessee u/s. 12AA during the pendency of proceedings before the ld. CIT(A) - HELD THAT:-What AO can do, can ....
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.... Exemption u/s 11 - Applicability of the registration granted to a trust or institution to earlier years -Non-application of registration for the period prior to the year of registration caused genuine hardship to charitable organizations - claim of the assessee that since the registration of the assessee concern has been granted w.e.f. 21.09.2016, it comes into effect during the course of pendency of first appeal proceedings and the proviso to sub-section 2 of section 12A should be construed liberally and the assessee should be granted exemption u/s. 12A - HELD THAT:- As relying on M/S Shree Shyam Mandir [2017 (10) TMI 1450 - Rajasthan High Court] registration was granted to the assessee u/s. 12AA of the IT Act on 29.07.2013. Under these facts, it was held by Hon'ble Rajasthan High Court that appeal is continuation of original assessment proceedings and proceedings before appellate authorities is covered by the proviso to subsection 2 of section 12A of the IT Act. In the present case also, the facts are similar and hence, respectfully following this judgment of Hon'ble Rajasthan High Court, we decline to interfere in the order of ld. CIT(A). Appeal filed by the reve....
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....ive in operation, so that a reasonable interpretation can be given to the section as a whole and accordingly the said insertion of first proviso to section 12A(2) of the Act with effect from 1.10.2014 should be read as retrospective in operation with effect from the date when the condition of eligibility for exemption under section 11 & 12 as mentioned in section 12A provided for registration u/s 12AA as a precondition for applicability of section 12A. A receipt which is by birth, capital in nature, cannot change its character merely for want of registration of society u/s 12AA of the Act. It is not the case of the revenue that the donations received are meant for general functioning of the charitable objects of the society, in which event, the donations received the reonwould take the character of revenue receipts requiring to be credited in the income and expenditure account for utilization towards charitable objects thereon. Hence, we hold that in any case, the donations received by the assessee society cannot be brought to tax in the assessment. We hold that since the only reason for denial of exemption u/s 11 was absence of registration u/s 12AA(which was gra....
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.... Exemption u/s 11 - Denial of exemption as assessee was not having registration u/s 12AA for the year under consideration - AO held that the assessee was granted registration u/s 12AA on 25/10/2018effective from 24/04/2018 i.e. A.Y. 2019-20, hence, the assessee is not eligible for deduction u/s 11 and 12for the year under consideration - HELD THAT:-Assessee while making submission vehemently relied upon the decision of Navsari Malesar Behdin Anjuman, Agiary Street, Malesar, Navsar 2020 (4) TMI 576 -ITAT SURAT wherein the Coordinate Bench of Tribunal while relying upon the decision of Punjab Educational Society 2017 (12) TMI 989 -ITAT AMRITSAR held that benefit of first proviso to Section12A(2) of the Act would be applicable to the facts of the said case. Benefit of Section 11 is to be given if the registration is obtained even during the pendency of appeal before the ld. CIT(A). Again, coming to the fact of the case, we find that the assessment in the present case was completed on23/02/2021, before that date, the registration was granted vide order dated 25/10/2018. As in SNDP Yogum case 2016 (3) TMI 1110 - ITAT Cochin held that proviso to section 12A(2) insert....
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....is not only registered U/s 12A of the Act, it is also notified u/s. 10(23C)(vi) of the Act. Besides, for A.Ys. 2007-08 to-2013-14, vide orders passed U/s 143(3) of the Act (copies on record), its stands taken note of that the Diocese of Jalandhar is running various schools and that exemption U/ss. 11and 12 of the Act has been allowed with regard to its income. Therefore, it has wrongly been held in the impugned order that the payment of education extension services made by the assessee to the Diocese of Jalandhar out of the current year income, as is also available from the income and expenditure account of the relevant financial years, is not allowable as application of income. The restriction/embargo in donation by one charitable Trust to another is only restricted to accumulations made in excess of 15% of income of the Trust, as referred to in Section 11(2) of the Act; and that the said prohibition does not apply, to current year income, or even to accumulations up to 15% u/s. 11(l)(a) of the Act. It may be reiterated that the Diocese of Jalandhar stands notified u/s. 10(23C)(vi) of the Act. This provision, it may be noted, is applicable to universities and edu....
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....fect - Held that:- The first proviso of Sec. 12A(2) as had been made available on the statute vide the Finance (No. 2) Act. 2014, with effect from 01.10.2014, being a beneficial provision intended to mitigate the hardships in case of genuine charitable institutions, thus, find ourselves to be in agreement with the view taken by the Tribunal in the aforesaid appeals. We thus, are of the considered view that the first proviso of Sec. 12A(2) would be applicable to the case of the present assessee. We therefore set aside the order of the CIT(A) and consequently delete the addition - Decided in favour of assessee. In the light of above it is submitted that appeals may kindly be allowed." 3. Learned DR was unable to controvert the contention of the ld. Counsel for the assessee either on law or on facts nor was he able to point out any distinction on facts or law in the judicial decisions cited by the ld. Counsel for the assessee before us in support of the proposition that the assessee was entitled to the benefit of second proviso to section 12A(2) of the Act on account of which since the appeal proceedings in the present cases were pending on the date of grant of regis....
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.... granted to the trust or institution under section 12AA, then, the provisions of sections 11 and 12 shall apply in 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 year: Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year: Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA.]" 7.2 It is also relevant to reproduce the explanatory notes to the provisions of Finance (No.2) Act, 2014 as given in CBDT Circular No.01/2015 dated 21.01.2015 in reference F. No.142/13/2014-TPL, which read as follows....
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....ew of the above and going by the principle of purposive interpretation of statues, an assessment proceeding which is pending in appeal before the appellate authority should be deemed to be 'assessment proceedings pending before the assessing officer' within the meaning of that term as envisaged under the proviso. It follows there-from that the assessee which obtained registration u/s 12AA of the Act during the pendency of appeal was entitled for exemption claimed u/s 11 of the Act. 7.4 The explanatory Memorandum to Finance (No.2) Bill, 2014, which sought to amend section 12A explains the objects and reasons for making such amendments. The explanation makes it clear that it was in order to provide relief to such trusts in respect of which, due to absence of registration u/s 12AA tax liability got attached though otherwise they were eligible for exemption by fulfilling other substantive conditions that the amendment was brought in. That being so, denying such benefit to a trust like the assessee who had obtained registration u/s 12AA during the pendency of the appeals filed against the orders of the assessing authority, by narrowly interpreting the term, 'pending before t....
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....s so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. It is only elementary that a statutory provision is to be interpreted ut res magis valeat quampereat, i.e to make it workable rather than redundant. Applying this legal maxim, it would be just and fair to hold that the amendment in section 12A is brought in the statute to confer benefit of exemption u/s 11 of the Act on the genuine trusts which had not changed its objectives and had carried on the same charitable objects in the past as well as in the current year based on which the registration u/s. 12AA is granted by the DIT (Exemptions)." 7.7 In view of the aforesaid reasoning and the order of Kolkata Bench of the Tribunal in case of Sree Sree Ramkrishna Samity vs. DCIT (supra), I direct the Director of Income-tax (Exemption) to grant registration to the assessee trust for the assessment year under dispute, subject to the following conditions, namely; "i) The registration u/s. 12AA (1)(b)(i) of the Income Tax Act, 1961 does not automatically exempt the income of the Trust/Institution. The question of taxability of the inc....
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....n 17-102019, as such, on the date of registration i.e. on 14-7-2023, appeal under Section 253 of the IT Act was pending before the ITAT, but the ITAT rejected the contention of the appellant herein holding that first proviso to Section 12A(2) of the IT Act would not be applicable as the assessment proceedings were not pending as on the date of registration and therefore first proviso to Section 12A(2) would not be applicable to the appellant herein. 9. In order to decide the substantial question of law, it would be appropriate to notice first proviso to Section 12A(2) of the IT Act, which states as under: - "Provided further that where registration has been granted to the trust or institution under section 12AA or section 12AB, then the provisions of sections 11 & 12 shall apply in 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 year." First proviso to Section 12A(2) ....
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....which has been affirmed by the Commissioner of Income Tax (Appeals), was pending before the ITAT, which came to be dismissed on 79-2023. 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 IT Act, though it was second appeal, but in that appeal, substantial question of law was not required to be formulated which was required to be formulated in appeal under Section 260A of the IT Act, as such, that appeal pending before the ITAT against the assessment order affirmed by the CIT (Appeals) is the continuation of original assessment proceedings by the Assessing Officer. 13. It is a settled position of law that an appeal is a continuation of the proceedings of the original court. Ordinarily, the appellate jurisdiction involves a rehearing on law as well as on fact and is invoked by an aggrieved person. The first appeal is a valuable right of the appellant and ther....
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....s as cited supra. Further in the case of Sree Sree Ramkrishna Samity, 156 ITR 646 (Kolkata - Trib.) held as under: "6. We have heard the rival submissions and perused the materials available on record. We find that the first two grounds raised by the assessee is on jurisdiction and sanction for issue of notice u/s 148 of the Act and non supply of reasons recorded for reopening the assessment. On specific query from the Bench during the course of hearing, the Learned AR stated that those grounds are not pressed which is taken as a statement from the Bar. Accordingly, the ground nos. 1 & 2 raised by the assessee are dismissed as not pressed. 6.1 We find that the assessee trust was in receipt of donations from various philanthropists including Siliguri Municipal Corporation and these donations were admittedly utilized by the assessee trust towards construction of old age home under the name and style of "Shesh Basanta". On these facts, there is absolutely no dispute. All the donors had filed confirmations before the Learned AO and the genuinity of these donations are proved beyond doubt by the assessee. The Learned AO has accepted the same in the remand proc....
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....2AA." 6.4 Admittedly, the reassessment proceedings were pending before the Learned AO for the Asst Years 2003-04 to 2008-09 as on the date of granting registration u/s 12AA of the Act on 29.10.2010 with effect from 1.4.2010 as reassessment proceedings got commenced pursuant to issuance of notice u/s 148 on 30.3.2010 as stated supra. Admittedly, the objects and activities of the trust had remained the same in preceding assessment years also i.e Asst Years 2003-04 to 2008-09. Though this first proviso to section 12A(2) talks about pendency of assessment proceedings, it is relevant to get into the definition of the term 'assessment' in section 2(8) of the Act, wherein it is defined as "assessment includes reassessment". Hence even reassessment proceedings that were pending would also come under the ambit of the first proviso to section 12A(2) of the Act. 6.5 The second proviso to section 12A(2) also provides that no action u/s 147 of the Act shall be taken merely for non-registration of trust or institution. Reading this proviso with the first proviso to section 12A(2) and applying the Rule of Harmonious Construction, it could safely be concluded that the leg....
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....es to prove that 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 21.1.2015. Apparently the statute provides that registration once granted in subsequent year, the benefit of the same has to be applied in the earlier assessment years for which assessment proceedings are pending before the Learned AO, unless the registration granted earlier is cancelled or refused for specific reasons. The statute also goes on to provide that no action u/s 147 could be taken by the AO merely for non-registration of trust for earlier years. 6.9 With regard to the arguments of the Learned DR that donations received by assessee falls under the definition of in....
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....2014 should be read as retrospective in operation with effect from the date when the condition of eligibility for exemption under section 11 & 12 as mentioned in section 12A provided for registration u/s 12AA as a pre-condition for applicability of section 12A. Reliance in this regard is placed on the following decisions :- Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677/91 Taxman 205 (SC) - Judgement by three judges of the Supreme Court - "The departmental understanding also appears to be that section 43B, the proviso and Explanation 2 have to be read together as expressing the true intention of section 43B. Explanation 2 has been expressly made retrospective. The first proviso, however, cannot be isolated from Explanation 2 and the main body of section 43B. Without the first proviso, Explanation 2 would not obviate the hardship or the unintended consequences of section 43B. The proviso supplies an obvious omission. But for this proviso the ambit of section 43B become unduly wide bringing within its scope those payments, which were not intended to be prohibited from the category of permissible deductions. In the case of Goodyear India Ltd. v. State of Haryana (....
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....ld that a statute was retrospective in nature, was applied in the case of Vijay v. State of Maharashtra reported in (2006) 6 SCC 289. It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature. However, we are confronted with any such situation here. In such cases, retrospectivity is attached to benefit the persons in contradistinction to the provision imposing some burden or liability where the presumption attaches towards prospectivity. In the instant case, the proviso added to section 113 of the Act is not beneficial to the assessee. On the contrary, it is a provision which is onerous to the assessee. Therefore, in a case like this, we have to proceed with the normal rule of presumption against retrospective operation. Thus, the rule against retrospective operation is a fundamental rule of law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act or arises by necessary and distinct implication. Dogmatically framed, the rule is no more than a presumption, and thus could be dis....
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....ere is absolutely no dispute. The Learned AO also had duly accepted the nature of donations, genuinity of the donors and its utilization in the remand proceedings. Hence in any case, a receipt which is by birth, capital in nature, cannot change its character merely for want of registration of society u/s 12AA of the Act. It is not the case of the revenue that the donations received are meant for general functioning of the charitable objects of the society, in which event, the donations received thereon would take the character of revenue receipts requiring to be credited in the income and expenditure account for utilization towards charitable objects thereon. Hence, we hold that in any case, the donations received by the assessee society cannot be brought to tax in the assessment. 6.13 We hold that since the only reason for denial of exemption u/s 11 was absence of registration u/s 12AA (which was granted to assessee society on 29.10.2010 with effect from 1.4.2010) for the relevant assessment years and on no other ground, the benefit of change in law as above by Finance Act 2014 should be available and for all the years, the benefit of exemption should be available on the ....
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....dship to charitable organizations. Due to absence of registration, tax liability is fastened even though they may otherwise be eligible for exemption and fulfil other substantive conditions. However, the power of condonation of delay in seeking registration was not available. 8.3 In order to provide relief to 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 12AA of the Income-tax Act, the benefit of sections 11 and 12 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....
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....e are inclined to set aside the order of ld. CIT(A) and direct the AO to delete the addition. The additional ground is allowed. 23. Since we have decided the appeal of the assessee allowing the additional ground, therefore other grounds raised in the memorandum of appeal are not being adjudicated at this stage and are left open to be decided later on if need arises for the same. 24. In the result, the appeal of the assessee in ITA No.900/Kol/2026 for A.Y. 2016-17 is allowed. ITA Nos. 901 to 905/Kol/2026: 25. The issue raised in the aforesaid appeals, are substantially similar to one as decided by us in ITA No.900/Kol/2026 for A.Y. 2016-17. Therefore, our decision in ITA No.900/Kol/2026 (supra) would apply, mutatis mutandis, to all these appeals as well. 26. In the result, these appeals of the assessee (in ITA Nos.901/Kol/2026 to 905/Kol/2026) are also allowed. The orders are pronounced in the open Court on 21/07/2026. ============= Document 1 2,30,40,013 SRI SRI JAGANNATH JEW PAN . AAAAS47201 et Vear - 2017-2018) Total Receipts Without Interest 4,92,79,333 Less : 15% thereof 73,91,900 xpenditure requires to be made 4,18,87,433 penditure....