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TMI Blog2020 (12) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ome tax Act. 3. The assessee applied for registration u/s 12AA of the Incometax Act,1961 ['the Act' for short] as a charitable organisation in prescribed Form 10A on 28-03-2014. The assessee was accorded registration u/s 12AA of the Act on 23-09-2014 w.e.f. AY 2014-15. 4. The revenue carried out Survey operations u/s 133A of the Act on 22-09-2015 upon getting information that the assessee was accumulating huge income year after year and was claiming exemption u/s 11 of the Act without having registration u/s 12AA of the Act. During the course of Survey operations, a statement was recorded from Smt. Syed Ruksana Bulquees, Programme Implementation Officer & In charge - Jt. Director of Public Instructions. In the statement, she clearly stated that the fund does not have registration for the earlier years and further confessed that the fund has not filed the returns of income for earlier years. 5. Accordingly, the AO reopened the assessments of the years under consideration by issuing notices us 148 of the Act on 30-09- 2015. The assessee sought reasons for reopening of assessment from the AO and the same was supplied. The assessee objected to reopening of assessments by pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013-14 the taxable surplus needs to be assessed to tax." 9. It can be noticed that the AO has specifically mentioned in the third paragraph that the surplus of earlier years are to be taxed as AOP without extending the benefits of sec.11 and 12. In the final paragraph, the AO specifically states that surplus needs to be assessed to tax, since the fund does not have registration u/s 12A of the Act. Thus, in our view, the only reason for reopening of assessment is to assess the surplus earned during the years under consideration in the absence of registration u/s 12A of the Act. We have noticed that the Ld CIT(A) has expressed the view 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. It is a fact that the assessee has not filed returns of income earlier for the years under consideration and hence the allegation that the assessee was claiming deduction u/s 11 & 12 of the Act for these years is against the facts available on record. It can be noticed that the AO himself has recorded in the reasons for reopening that the assessee has not filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no action u/s 147 shall be taken by the AO for any assessment year preceding the aforesaid assessment year only for non-registration of such trust. The third proviso provides an exception for application of the first and second proviso. A combined reading of all the three provisos would show that these provisos will not apply in the following situations, viz., (a) the objects and activities of trust or institution do not remain the same for the preceding assessment years as that of the year of registration. (b) the trust or institution was refused registration earlier. (c) the registration granted to it earlier was cancelled at any time u/s 12AA. There is no dispute with regard to the fact that none of the above said three situations exist in the present case. 12. It can be noticed that the second proviso to sec.12A(2) specifically bars the AO from taking action u/s 147 of the Act only for the reason of non-registration of such trust or institution for the said assessment year. However, in the instant case, the AO has reopened 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 du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order to provide relief to such trusts and remove hardship in genuine cases, section 12A of the Income tax Act has been amended to provide that in a case where a trust or institution has been granted registration under section 12AA of the Income tax Act, the benefit of sections 11 and 12 of the said Act shall be available in respect of any income derived from property held under trust in any assessment proceeding for an earlier assessment year which is pending before the Assessing Officer as on the date of such registration, if the objects and activities of such trust or institution in the relevant earlier assessment year are the same as those on the basis of which such registration has been granted. 8.4 Further, it has been provided that no action for reopening of an assessment under section 147 of the Income tax Act shall be taken by the Assessing Officer in the case of such trust or institution for any assessment year preceding the first assessment year for which the registration applies, merely for the reason that such trust or institution has not been obtained the registration under section 12AA for the said assessment year. 8.5 However, the above benefits would not be a ..... 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