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2020 (6) TMI 506 - AT - Income TaxExemption u/s 11 - whether existence of registration u/s.12A will not confer benefit of exemption u/s.11? - HELD THAT:- Where registration has been 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. It has to be held that an assessment proceeding which is pending in appeal before appellate authority should be deemed to be 'assessment proceedings pending before Assessing Officer' within meaning of that term as envisaged under proviso to section 12A(2). Consequently, an Assessee which obtained registration under section 12AA during pendency of appeal was entitled to exemption claimed under section 11. In the present case Assessee did not claim benefit of exemption u/s.11 of the Act before the AO and the AO did not have the benefit of examining such a claim. Mere existence of registration u/s.12A will not confer benefit of exemption u/s.11 and the other conditions for availing benefit of exemption u/s.11 of the Act has to be examined by the AO. It would be just and proper to set aside the order of the CIT(A) and remand to the AO the question of allowing exemption u/s.11 of the Act as by reason of the proviso to Section 12A(2), the Assessee should be deemed to have had registration u/s.12A of the Act. 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 income of the Trust/Institution shall be examined and decided upon by the Assessing Officer based on the activities, compliance with various statutory and other requirements, etc., as referred to in Sections 2(15), 11, 12 & 13 - Appeal of the Assessee is treated as allowed for statistical purposes.
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