TaxTMI 
TaxTMI 
2019 (9) TMI 55
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has rightly applied the proviso of Sec. 12A (2) for A.Y. 2011-12 in the case of assessee when admittedly the assessee got registration U/s 12AA from A.Y. 15-16 ? 3. Whether the Income Tax Appellate Tribunal was justified in holding that the assessee is eligible for exemption U/s 11 of the Act even when the assessee was not registered U/s 12AA of the Act at the time of passing of the assessment order? 4. Learned counsel appearing for the revenue submits that benefit of Section 11 and 12 of the Income Tax Act, 1961 (hereinafter referred to as "the Act, 1961") has been given to the assessee for the assessment year prior to the application for registration of the Trust under Section 12 AA, though not provided and permissible. 5. The Tribunal, has extended the benefit of Section 11 and 12 of the Act, 1961 to the assessee by taking an erroneous interpretation of the proviso to Section 12A(2) of the Act, 1961. 6. Coming to the facts of the case, it is stated that for the assessment year 2011-12, the benefit of section 11 and 12 has been given to the assessee through application for registration under Section 12 AA of the Act, 1961, was submitted in the assessment year 2015-16. It is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons of the parties and perused the record. 12. The substantial question of law before us is in reference of Section 12 A of the Act, 1961 thus it is quoted herein below for ready reference:- "12A. [[1] The provisions of section 11 and section 12 shall 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 [Principal Commissioner or 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 trust or institution is registered under section 12AA: Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of section 11 and section 12 shall apply in relation to the income of such trust or institution,- (i) from the date of the creation of the trust or the establishment of the institution if the [Principal Commissioner or Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by the Finance Act, 2002, with effect from 1st April, 2002.] [(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 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Tribunal. 15. According to us, the interpretation of the proviso has been given in ignorance of the main provision of Section 12A(2) of the Act, 1961. Whenever interpretation of the statutes has to be given it should be after making harmonious construction of the statute. For the purpose of proper interpretation of Section 12A of the Act, 1961, the Tribunal was required to make interpretation after taking into consideration the main provision along with the proviso and not by giving meaning to the proviso in ignorance of substantive provision. 16. The Tribunal has even ignored the basic principle of law in giving interpretation in charging provisions, the benefit is to be given to the assessee but same principle is not applicable for an exemption notification or exemption clause, where the benefit of ambiguity must be given to the Revenue/State. It is also that burden to prove applicability of exemption would be on the assessee that it comes squarely within the parameters of the exemption notification or exemption clause. The Tribunal was required to make distinction between charging provision where benefit of ambiguity is given to the assessee and the exemption notification or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t would be in contravention of sub-section 2 of Section 12. By virtue of the interpretation taken by the Tribunal the main provision has been made redundant on the facts of the case, though not permissible. The proviso has to be read along with main proviso and not in isolation and contradiction. 19. The Tribunal even ignored the fact that proviso not only require registration of the Trust or the Institution while the assessment proceedings are pending, but it refers to assessment proceedings before the assessing authority and not elsewhere. In a common parlance, whenever matter is pending before the Tribunal in appeal, considered to be pendency of the assessment proceedings. The aforesaid principle would be applicable in the instant case is another question because proviso qualifies not only pendency of the assessment proceedings, but should before the Assessing Officer not else where, if in the proviso words "pendency of the assessment proceedings", would have been used then pendency of the appeal against the assessment could have been considered to be pendency of the assessment proceedings, but in the instant case the words used are "pendency of the assessment proceedings befor....