TMI Blog2021 (3) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... suitably explained by the assessee by way of its affidavit dated 22nd September, 2020 and basis such clarification, ld. CIT(E) was satisfied about the charitable nature of the objects of the assessee foundation and therefore, once, the objects have been found to be charitable in nature, there is no discretion left with the ld CIT(E) to restrict the applicability of provisions of section 11 and 12 from date of furnishing of such affidavit and rather, as per the provisions of sub-section 2 to section 12A, the provisions of section 11 and 12 shall apply from 01.04.2020 i.e. from A.Y 2020-21 onwards and the assessee shall be entitled to claim exemption under section 11 and 12 from A.Y 2020-21. In any case, the requirements of proviso to Section 2(15) remain mandatory in nature and the compliance thereof has to be examined by the AO on a yearly basis including that for A.Y 2020-21 while framing the assessment as per law. In the result, the ld. CIT(E) is directed to grant registration u/s 12AA effective from A.Y 2020-21 instead of A.Y 2021-22. Following the aforesaid discussions, the ld. CIT(E) is also directed to grant registration u/s 80G(5)(vi) effective from A.Y 2020-21 instead o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted from A.Y. 2020-21. It was submitted that Ld. CIT(E), while granting the approval, cannot defer the Assessment Year for which the approval should be effective as provided in section 12A(2). Section 12AA(1)(b) provides that after the necessary enquiry, the CIT(E) can either register or refuse to register the trust. If registration is granted, the applicability would be governed by the provisions of section 12A(2) and CIT(E) has no discretion in this regard. 6. It was further submitted that without prejudice to above, it may be noted that while application was filed on 04-02-2020, the first notice by ld. CIT(E) was issued on as late as 14-07-2020. The notice required as many as 26 documents/ clarifications/ information. All the 26 queries were responded vide letter dated 17-08-2020. Thereafter the notice dated 11-09-2020 was issued by ld. CIT(E) and in response to query related to certain Object Clauses of the Trust as desired in the said notice, the trust filed an affidavit dated 22-09-2020 and thereafter, the Ld. CIT(E) has granted the approval w.e.f. A.Y. 2021-22 only because of the fact that affidavit was filed on 22-09-2020. It was submitted that the proviso to section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In insisting upon the society in changing or amending its bye-laws and in refusing to consider the application on the ground that those bye-laws have not been changed so as to exclude the religious aspect from those bye-laws, the Commissioner has clearly over-stepped his limits. It was further held at para 8 that the view of the Commissioner that unless the religious aspect of the society is removed from the bye-laws, the application could not be taken for consideration, is clearly erroneous. And finally the Hon ble High Court at para 9 held as under: 9 .In that view of the matter, it will not be necessary for the petitioner to comply with the objections and/or suggestions made by the first respondent as a precondition for consideration of the application. The first respondent is, therefore, directed to pass an order in the light of the objections made above. The application shall be disposed of within one month from today. 10. It was submitted that similar contentions may be considered in respect of matter relating to grant of approval u/s 80G wherein also the ld. CIT(E) has granted registration w.e.f from A.Y 2021-22 instead of A.Y 2020-21. 11. It was submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the trust, the genuineness of its activities as well as compliance of other law time being in force as applicable to such trust for the purposes of achieving its objects and once he is so satisfied, he is required to pass an order either registering the trust or refusing to register the trust and it nowhere talks about the date from which the registration will be granted or can be made effective. 14. At the same time, where we look at the provisions of section 12A(1) of the Act, in respect of any application made before the 1st day of June, 2007, it provides that the provisions of sections 11 and 12 shall not apply in relation to the income of any trust unless the person in receipt of the income has made an application for registration of the trust in the prescribed form and in the prescribed manner before the expiry of a period of one year from the date of creation of the trust. It has been further provided where an application for registration of the trust is made after expiry of the aforesaid period, the provisions of sections 11 and 12 shall apply in relation to income of such trust from the date of creation of the trust where the ld. CIT(E) for reasons to be recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections 11 and 12 shall apply in all cases from the assessment year immediately following the financial year in which such application is made and enabling provisions in respect of assessment proceedings pending for the previous assessment years before the Assessing Officer has also been provided. 16. On a harmonious construction of provisions of section 12AA read with section 12A of the Act, we therefore find that under the amended law as are applicable in the instant case, once the ld. CIT(E) is satisfied about the objects and the genuineness of the activities of the trust and the sufficient compliance of other law for time being in force as are material for the purpose of achieving its objects, the provisions of sections 11 and 12 shall apply from the assessment year following the financial year in which such application is made. In the instant case, the assessee has made an application on 04.02.2020 and in light of the aforesaid provisions, we find that where the registration has been granted by the ld CIT(E) after satisfying himself about the objects and genuineness of its activities, the provisions of sections 11 and 12 shall apply in the case of the assessee from 01.04.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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