TMI Blog2016 (6) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... on is granted, provided appeal is pending before the CIT(A) and objects and activities of the assessee trust are the same as in the year of registration. In the instant case, the assessee trust was granted registration w.e.f 14.9.2009 and the CIT(A) was aware of grant of registration, since the appeal was disposed off only on 11.9.2015. Further, in the instant case the notice u/s 148 of the Act was issued only on 29.3.2010 i.e subsequent to the grant of registration on 14.9.2009, hence, the second proviso put an embargo on the issuance of notice u/s 148 of the Act. Therefore, the CIT(A) ought to have taken note of the 1st proviso as well as 2nd proviso to section 12A, which was inserted by the Finance Act, 2014 w.e.f 1.10.2014. Since both the parties have agreed that the matter needs fresh consideration by the CIT(A), in line of the dictum laid down by the Cochin Bench of the Tribunal in the case of SNDP Yogum (2016 (3) TMI 1110 - ITAT COCHIN ), we restore the issue to the CIT(A). Appeal filed by the assessee is allowed for statistical purpose - ITA No.538/Coch/2015 & STAY PETITION NO.90/Coch/2015 - - - Dated:- 10-6-2016 - S/SHRI B P JAIN, AM GEORGE GEORGE.K, JM Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n U/S 12AA then, the provisions of See 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 u/s 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 u/s 12AA'. 6. The learned Commissioner of Income Tax(Appeals), has gone wrong in confirming the addition of ₹ 6,50,0001- made by the Assessing Officer on the plea that since the trust is not granted registration during the financial year relevant to the A Y 2006- 07,the income received unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Academy (supra), is not applicable to the facts of the instant case; since in that case, contribution was received as donation from various persons, unlike in the instant case, where the contribution was received from the trustees for the specific purpose of construction of the building for housing the mental health centre. The ld counsel further submitted that the judgment of the Hon ble Supreme Court in the case of UP Forest Corporation and Another vs DCIT 2971 SC (2008) relied on by the CIT(A), is also not applicable to the facts of the instant case, since it relates to the period before the classificatory amendment to sec 12A(2) by the Finance (NO.2) Act, 2014. Further, it was contended that as per the amendment to section12A (2) by the Finance (No.2) Act, 2014, once registration is granted u/s 12AA, the provisions of section 11 and 12 will apply in respect of income of the Trust for any assessment year preceding the assessment year in which registration is granted for which assessment proceedings are pending before the AO as on the date of registration, as long as the objects and activities were also the same as in the year of registration. Further, it was contended that no ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 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 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 und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to be read into the section to give the section a reasonable interpretation, requires to be treated as retrospective 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 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 magisvaleat quam pereat, 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 exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT(A) and objects and activities of the assessee trust are the same as in the year of registration. In the instant case, the assessee trust was granted registration w.e.f 14.9.2009 and the CIT(A) was aware of grant of registration, since the appeal was disposed off only on 11.9.2015. Further, in the instant case the notice u/s 148 of the Act was issued only on 29.3.2010 i.e subsequent to the grant of registration on 14.9.2009, hence, the second proviso put an embargo on the issuance of notice u/s 148 of the Act. Therefore, the CIT(A) ought to have taken note of the 1st proviso as well as 2nd proviso to section 12A, which was inserted by the Finance Act, 2014 w.e.f 1.10.2014. Since both the parties have agreed that the matter needs fresh consideration by the CIT(A), in line of the dictum laid down by the Cochin Bench of the Tribunal in the case of SNDP Yogum (supra), we restore the issue to the CIT(A). The CIT(A) shall dispose off the matter as expeditiously as possible after affording reasonable opportunity of being heard to the assessee trust. It is ordered accordingly. 9 In the result, the appeal filed by the assessee is allowed for statistical purpose. STAY PETITION n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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