TMI Blog2016 (8) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... e on account of non-registration of the trust. In view thereof, we hold that the reopening made by the Assessing Officer under section 147/148 of the Act was ill founded and was not in accordance with law. In view thereof this ground is decided in favour of the assessee and against the Revenue. - I. T. A. No. 651/JP/2013 - - - Dated:- 2-6-2016 - T. R. Meena (Accountant Member) And Laliet Kumar (Judicial Member) For the Appellant : Mahendra Gargieya, Advocate For the Respondent : S. K. Jain, Deputy Commissioner of Income-Tax ORDER Laliet Kumar (Judicial Member) 1. The appeal is filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals)-III, Jaipur, dated April 9, 2013. The assessee has filed the present appeal on the following grounds : 1. The impugned additions and disallowances made in the order under section 143(3) read with section 147 of the Act dated April 9, 2013, are bad in law and on facts of the case, for want of jurisdiction and various other reasons and, hence, the same may kindly be deleted. 2.1 ₹ 2,08,00,000 : The learned Commissioner of Income-tax (Appeals) erred in law as well as on the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on March 12, 2010, and assessment was completed under section 143(3) read with section 147 of the Act on December 26, 2011, wherein the Assessing Officer has held as under : 5. The replies of the assessee have been duly considered. It is clear from the two submissions dated December 14, 2011, and dated December 22, 2011, that the assessee has made contradictory claims in respect of the receipts of ₹ 2,08,00,000. While in the reply dated December 14, 2011, it has claimed that the said receipts are capital receipts and, hence, cannot be treated as income, in the reply dated December 22, 2011, it has claimed that the same had been received for the specific purpose of renovation and, hence, cannot be treated as income. As regards the assessee's claim that the receipts of ₹ 2,08,00,000 are capital in nature, it is seen that such claim is exclusively based on the contention that the assessee-trust not being registered under section 12A during the year under consideration, was having the status of association of persons and, accordingly, the said receipts bore the character of capital receipt. This contention of the assessee is wholly unacceptable in view of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued if any were also not produced. Hence, section 115BBC is clearly attracted. The case law cited by the authorised representative for the appellant are found distinguishable on facts. Hence, receipts of ₹ 2,08,00,000 was held to be the income of the assessee-trust as provided under section 2(24) and section115BBC. 4. Now, the assessee is before us. The assessee has filed written submissions and has not pressed ground No. 1. On May 4, 2016, the assessee has moved an application for admitting the additional ground of appeal. The additional ground of appeal is as under : The very action taken under section 147 read with 148 is bad in law without jurisdiction and being void ab initio, the same kindly be quashed. Consequently, the impugned assessment framed under section 143(3)/148 dated April 9, 2013, also kindly be quashed. The appellant be held entitled to the benefits of sections 11 and 12 and its total income is exempted in view of section 12A(2) of the Act which is having a retrospective benefit. 4.1 The learned Departmental representative for the Revenue has submitted that this ground cannot be taken into consideration at this stage. However, consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Income-tax in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such account ant and setting forth such particulars as may be prescribed. (2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 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. The Finance (No. 2) Act of 2014 has inserted the proviso to sub- section (2) of section 12A with effect from October 1, 2014. We are reproducing hereinbelow sub-section (2) of section 12A first proviso, second proviso and third proviso for the sake of clarity. 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 in respect of any income deri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative had placed strong reliance. The primary issue for our consideration is whether the Commissioner of Income- tax (Appeals) is justified in confirming the Assessing Officer's action, for all the assessment years under consideration, in assessing the entire incomes of the assessee from all the institutions at the maximum marginal rate. In this context, it is appropriate to refer the amendment to section 12A(2) of the Act and its proviso. For ready reference the same is reproduced below : (Section 12A(2) and its proviso) '(2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 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 : 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party's case that the assessment proceedings have reached to the finality and, therefore, in view of the change in law, the beneficial legislation should be applied to the benefit of the assessee. Even otherwise, in the matter of Howrah Municipal Corpo ration v. Ganges Rope Co. Ltd. [2004] 1 SCC 663 it has been held by the honourable Supreme Court that if there is a change in law during the pendency of the appeal, the change in law should be made applicable and should be applied to the pending appeals. In the present case the appeal is pending before the Tribunal for the year 2007-08 and there is a change in law with effect from October 1, 2014. Therefore, the benefit which are available to the assessee on account of insertion are required to be extended or passed on to the assessee. We, therefore, hold that the asses see is entitled to benefit under sections 11 and 12 for the assessment year 2007-08 on account of the fact that the assessment proceedings are pending. In view thereof, now we will deal with the reopening under section 147/ 148 of the Income-tax Act. 5.2. It is the contention of the learned authorised representative that the sole basis of reopening under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clear that the reopening under section 147/148 is not permitted. For ready reference, we are reproducing hereinbelow the second proviso to sub-section (2) of section 12A : 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 : A bare reading of the abovesaid provision though inserted with effect from October 1, 2014, in our view, clearly mandates that no reopening can be made on account of non-registration of the trust. In view thereof, we hold that the reopening made by the Assessing Officer under section 147/148 of the Act was ill founded and was not in accordance with law. In view thereof this ground is decided in favour of the assessee and against the Revenue. 5.5. Since we have held that the reopening under section 147/148 was bad in law, therefore, we do not find it appropriate to examine the other grounds mentioned by the assessee as the other grounds originates from reopening of the assessment proceedings. Since we have held that the reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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