TMI Blog2020 (12) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... pened the assessment only for the reason of non-registration the assessee u/s 12A of the Act and consequently to tax the surplus earned by the assessee during the years under consideration. AO has not properly understood the binding circular issued by CBDT, which clearly explains the meaning of provisos inserted in sec.12A(2) of the Act. Accordingly these provisos shall have retrospective operation. Thus reasons recorded by the AO that the assessing officer has reopened the assessments of the years under consideration only for the reason that the assessee does not have registration for the years under consideration, even though the assessee had been granted registration from AY 2014-15 and further the registration certificate was in operation at the time the notices u/s 148 were issued. Accordingly, we are of the view that the action of the AO is in violation of the second proviso to sec.12A(2) of the Act. - Decided in favour of assessee. - ITA Nos.1458 to 1462/Bang/2018 - - - Dated:- 26-11-2020 - Shri N.V. Vasudevan, Vice President And Shri B.R. Baskaran, Accountant Member For the Appellant : Shri Ravi Shankar S.V., A.R. For the Respondent : Smt. R. Premi, D.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions are with effect from 01-10-2014. Hence, this proviso does not apply to the case on hand. 6. Before Ld CIT(A) also, the assessee challenged the validity of reopening of assessment by advancing arguments made before the AO. The assessee also placed its reliance on the Circular No.1 dated 21-01-2015 issued by CBDT explaining the provisos inserted in sec.12A(2) of the Act. The Ld CIT(A), however, took the view that the AO has reopened the assessment not on account of the reason that the fund was not registered u/s 12AA of the Act, but because the assessee has claimed deduction u/s 11 and 12 of the Act. Further the assessee was having huge surplus in all these years. Accordingly, he upheld the validity of reopening of assessment. 7. Before us, the Ld A.R advanced his arguments on the legal issue of validity of reopening of assessment. We also heard Ld D.R on this preliminary issue. 8. The reasons recorded by the AO for reopening of assessment of impugned assessment years are identical in all the years. The reasons recorded by the AO reads as under:- REASONS FOR ISSUE OF NOTICE U/S 148 The Fund was established by virtue of a proceedings of the Government of Karn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 12A by Finance Act 2014 with effect from 1.10.2014. For the sake of convenience, we extract below Section 12A(2) along with the provisos:- Section 12 A (2) Where an application has been made on or after the 1st day of June 2007, the provisions of section 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 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was granted registration u/s 12A of the Act 23-09-2014, i.e., prior to the insertion of provisos. Hence, the AO has taken the view that the provisos shall apply to trusts who were granted registration after 01-10-2014. 14. We are unable to agree with the view so entertained by the AO. The AO has reopened the assessment by issuing notices u/s 148 of the Act on 30-09-2015. It is well settled proposition of law that the provisions of the Act, which are in operation on the date of issue of notice u/s 148 of the Act, should apply for the initiation of proceedings. In any case, we notice that the Rajasthan High Court has held in the case of CIT vs. Shree Shyam Mandir Committee (2018)(400 ITR 466)(Raj) that the provisos inserted in Sec.12A(2) are declaratory and hence shall have retrospective effect. We notice that the Hon ble Rajasthan High Court has approved the view so expressed by the Tribunal in the following cases:- (1) Sree Sree Ramkrishna Samity vs. Deputy CIT (2016)(156 ITD 0646)(Kol) (2) SNDP Yogam vs. Asst. DIT (Exemption) (2016)(161 ITD 1)(Cochin) 15. In all the above said cases, the Circular No.1 of 2015 issued by CBDT was referred in order to find out the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly explains the meaning of provisos inserted in sec.12A(2) of the Act. Accordingly these provisos shall have retrospective operation. 16. The co-ordinate Bangalore benches of Tribunal has also considered an identical issue in the case of Bantanthamma Mathu Kalamma Trust vs. ITO (ITA No.1761 1766/Bang/2018 dated 26- 02-2020) and has expressed the view that no action u/s 147 shall be taken by the AO in case of a trust for any assessment year preceding the year of registration only on account of non-registration of such trust for the said assessment year, in view of the second proviso to sec.12A(2) of the Act. 17. In the instant cases, we have noticed from the reasons recorded by the AO that the assessing officer has reopened the assessments of the years under consideration only for the reason that the assessee does not have registration for the years under consideration, even though the assessee had been granted registration from AY 2014-15 and further the registration certificate was in operation at the time the notices u/s 148 were issued. Accordingly, we are of the view that the action of the AO is in violation of the second proviso to sec.12A(2) of the Act. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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