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2016 (8) TMI 680 - ITAT JAIPUR

2016 (8) TMI 680 - ITAT JAIPUR - [2016] 49 ITR (Trib) 462 - Reopening of assessment - non-registration of the trust - Held that:- It is admitted case that the assessee was incorporated in the year 1986 and thereafter has been continued to discharge its function as registered trust and was looking after the affairs of Khatu Shyamji. By virtue of order of the Tribunal dated January 28, 2010, the registration was granted with effect from April 1, 2008, however have held that the assessee, though wa .....

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section 12A, then it is clear that the reopening under section 147/148 is not permitted. - 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. - I. T. A. No. 651/JP/2013 - Dated:- 2-6-2016 - T. R. Meena (Accountant Member) And L .....

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f 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 the case in confirming the taxing of the income by invoking section 2(24) of the Act which being contrary to the provisions of law and facts, the subjected receipt claimed as non-taxable kindly be held so. 2.2. The lea .....

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the Act which being contrary to the provisions of law and facts on the subjected receipt, the provision kindly be held non-applicable. 2. Before we decide the issue relating to ground Nos. 1, 2.1, 2.2 and 2.3, it would be relevant to mention the brief facts as under. 2.1. On March 4, 1986, the deed of appellant-trust was registered and the trust has started doing its activities. The primary activity of the trust is to look after, manage and administer the affairs of the famous temple of Lord Shy .....

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trust after getting itself formally constituted applied for grant of exemption under section 12AA, vide their application dated March 16, 2009. However, vide order dated January 28, 2010, passed by the Tribunal in I. T. A. No. 789/JP/2009 has directed to grant registration to the appel lant-trust with effect from April 1, 2008. The present dispute pertains to the assessment year 2007-08, i.e., prior to the grant of registration pursuant to the order passed by this Tribunal. At this stage it is r .....

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, 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 i .....

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ssociation of persons. This fact by itself does not take away the basic identity and character of the assessee which is that of a trust. In the instant case and for purpose of resolving the quarrel at hand, it would be worthwhile to refer to the provisions of section 2(24)(iia) which provides as under : '(24) "income" includes- (iia) voluntary contribution received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or pa .....

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assessee has made contradictory claims in respect of the receipts of ₹ 2,08,00,000 because in reply dated December 14, 2011, it is claimed that the said receipts are capital receipts and cannot be treated as income, whereas in reply dated December 22, 2011, it is claimed that the same had been received for the specific purpose of renovation and, hence, cannot be treated as income. That the asses see's claim that such receipts of ₹ 2,08,00,000 are of capital nature, is exclusively .....

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2(24)(iia) is squarely applicable. That the donations were received by way of donation box and, hence, were anonymous. Although the assessee-trust claimed that a register was also kept for recording the collections but was not produced for verification. Donation receipts 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 .....

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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, considering the nature of the ground .....

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all not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely :- (a) The person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such tru .....

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ted from making the application before the expiry of the period aforesaid for sufficient reasons ; (ii) from the 1st day of the financial year in which the application is made, if the Commissioner is not so satisfied : Provided further that the provisions of this clause shall not apply in relation to any application made on or after the 1st day of June, 2007. (aa) the person in receipt of the income has made an application for registration of the trust or institution on or after the 1st day of J .....

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tion (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 imme .....

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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 .....

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ngs are pending before the Assessing Officer and the object and activities of the trust remain the same for such preceding assessment years, then the benefit of registration for sections 11 and 12 are required to be given to the trust on the income derived from the property held under the trust. In the present case as mentioned hereinabove, the appellant has filed the application for grant of registration on March 16, 2009, and the registration was directed to be granted by the order of the Trib .....

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counsel for the assessee relied upon the judgment of the Income-tax Appellate Tribunal in I. T. A. Nos. 503 to 506 and 569/Coch/2014, dated May 13, 2015 in the matter of SNDP Yogam v. ADIT (Exemption) wherein in paragraphs 7, 7.1 and 7.2 it has been held as under : "7. We have carefully considered the rival submissions, perused the relevant materials on record and the case law on which the learned authorised representative had placed strong reliance. The primary issue for our consideration .....

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e 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 .....

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r 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.' " We have gone through the provisions of the Act and have also gone through the record. In our view, the proviso to sub-section (2) of section12A has retrospective application and has been inserted in the Act to remove the har .....

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he co-ordinate Bench has given the benefit of registration of the trust for the assessment year 2006-07 though the application for registration was granted on July 29, 2013. Respectfully following the judgment of the co-ordinate Bench, we are of the view that the assessee before us is also required to be treated as registered trust for the assessment year 2007-08 dehors the direction issued by the Tribunal to grant the registration with effect from April 1, 2008, in the light of new amendment re .....

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#39;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 app .....

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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 section 147 was the levy was not rejected and, therefore, the amount of ₹ 2.08 crores is required to be treated as the income instead of being the capital receipt. The learned counsel relied upon various judgments as under : 1. CIT v. Bijli Cotton Mills (P.) Ltd. [1979] 116 ITR 60 (SC) ; 2. CIT v. Madurai Mi .....

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as the original return of income was only processed and there was no application of mind in scrutiny assessment. It was submitted by the learned Depart mental representative that the assessee has filed the return of income as an association of persons and not as registered trust. Therefore, the amount of ₹ 2.08 crores though has mentioned in the return of income but there was no application of mind and, therefore, has submitted that the income of the assessee has escaped assessment. Theref .....

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