TMI Blog2019 (8) TMI 1717X X X X Extracts X X X X X X X X Extracts X X X X ..... following this judgment of Hon ble Rajasthan High Court, we decline to interfere in the order of ld. CIT(A). Appeal filed by the revenue is dismissed. - ITA No. 271/Bang/2018 - - - Dated:- 28-8-2019 - SHRI ARUN KUMAR GARODIA AND SHRI PAVAN KUMAR GADALE, JJ. Assessee by : Shri V. Srinivasan, Advocate Revenue by : Shri Ujjwal Kumar, JCIT (DR) ORDER Shri A.K. Garodia, J. This appeal is filed by the revenue and the same is directed against the order of ld. CIT(A)-2, Bangalore dated 14.09.2017 for Assessment Year 2013-14. 2. The ld. DR of revenue supported the assessment order whereas the ld. AR of assessee supported the order of ld. CIT(A). He also placed reliance on the judgement of Hon'ble Rajasthan High Court rendered in the case of CIT(E) Vs. Shree Shyam Mandir Committee as reported in [2018] 400 ITR 466 (Raj), copy available on pages 1 to 16 of the paper book. 3. We have considered the rival submissions. We find that in the present case, the issue in dispute is this whether the assessee is eligible for exemption u/s. 11 and 12 of the IT Act or not. It is noted by ld. CIT(A) on page no. 8 of his order that during the course of appellate proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinuation of the original proceedings and that the power of the Commissioner of Income-tax was co-terminus with that of the assessing officer [ADIT (Exemption) in the present case] were two well established principles of law. In view of the above and going by the principle of purposive interpretation of statues, an assessment 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. 11 of 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 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt finding of the Hon'ble Kolkata Bench in case of Sree Sree Ramkrishna Samity v. DCIT (supra) read as follows: 6.10. We hold that it is an established position in law that a proviso which is inserted to remedy unintended consequences and to make the provision workable, a proviso which supplies an obvious omission in the section and is required 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 constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down in the Income Tax Act, 1961, (v) The SOCIETY/TRUST shall regularly file its Income Tax Return. 3. Allied Motors (P) Ltd. ETC. vs. Commissioner of Income Tax, (1997) 224 ITR 0677, wherein it has been observed as under:- In the case of Goodyear India Ltd. v. State of Haryana and Anr. [1991] 188 ITR 402 (SC) this Court said that the rule of reasonable construction must be applied while construing a statute. Literal construction should be avoided if it defeats the manifest object and purpose of the Act. Therefore, in the well known words of Judge Learned Hand, one cannot make a fortress out of the dictionary; and should remember that statutes have some purpose and object to accomplish whose sympathetic and imaginative discovery is the surest guide to their meaning. In the case of R.B Jodha Mai Kuthiala v. Commissioner of Income-Tax, [1971] 82 ITR 570 (SC) , TC 40R.279, this Court said that one should apply the rule of reasonable interpretation. A proviso which is inserted to remedy unintended consequences and to make the provision workable, a proviso which supplies an obvious omission in the section and is required to be read into the section to give the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trib.), wherein it has been observed as under:- 12. In response to this, the Id. Counsel for the assessee has contended that the assessment proceedings pending in appeal are deemed to be assessment proceedings pending before the Assessing Officer. For this proposition, the Id. Counsel has placed reliance on the decisions in the cases of SNDP Yogam v. Asstt. DIT (Exemption) [2016] 161 ITD 1/68 taxmarm.com 152 (Coch. - Trib.) and Shree Bhanushali Mitra Mandal Trust v. ITO [2016] 68 taxmann.com 250 (Ahd. Trib.). 13. The ld. DR has further submitted that in any case, the said first proviso has been inserted by Finance (No. 2) Act, 2014 w.e.f. 01-4-2014 and as such, it is not applicable retrospectively. 14. For this, the Id. Counsel for the assessee has, again, cited the decision in the case of SNDP Yogam (supra). 15. We have heard the rival contentions of both the parties with reference to the merits of the additional ground. The relevant portion of Section 12A of the Act is as follows:- Section 12A - (1) Conditions as to registration of trusts, etc.- The provisions of section 11 and section 12 shall not apply in relation to the income of any trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rust or Institution is not registered, no action u/s. 147 shall be taken for any assessment year preceding the said assessment year. 17. The first issue before us is as to whether the two provisos to Section 12A(2) are applicable to all the appeals before us, respectively, as contended by the Id. Counsel for the assessee, or whether, since the provisos have been brought in w.e.f. 01-10-2014 and they have not been made applicable, retrospectively, the same are not applicable for earlier periods, as submitted by the department. 18. Now, a bare reading of the first proviso to Section 12A(2) shows that it has not been made applicable retrospectively. It has been inserted in the Act w.e.f. 0110-2014, by virtue of the Finance (No. 2) Act, 2014. Thus, ordinarily, it ought to be taken as applicable only prospectively, and not retrospectively. However, the law is well settled to the effect that if the proviso brought in as a procedural or beneficial one, intending to remove hardship, it is applicable retrospectively. 19. In C.B. Richards Ellis Mauritius Ltd. v. Asstt. DIT [2012] 208 Taxman 322/21 taxmann.com 535 (Delhi) (copy on record), it has been held that procedural l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Finance (No. 2) Bill, 365 ITR (Statute) 175 itself elaborates the intention of the Legislature behind insertion thereof in the statute book. It states, inter alia, that non-application of registration for the period prior to the year of registration causes genuine hardship to charitable organizations. Due to absence of registration, tax liability gets attached even though they may otherwise be eligible for exemption and fulfil the other substantive conditions. The power of condonation of delay is not available under the section. In order to provide relief to such Trusts and remove hardship in genuine cases, it is proposed to amend Section 12A of the Act to provide that in a case where a Trust or Institution has been granted registration u/s. 12AA of the Act, the benefit of Sections 11 and 12 shall be available in respect of any income derived from property held under Trust in any assessment proceedings for any 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding in appeal , or, in other words, whether proceedings pending in appeal can be taken to be proceedings pending before the Assessing Officer. This issue also stands answered in favour of the assessee by Shree Bhanushali Mitra Mandal Trust (supra), wherein, it was held that appeal is a continuation of the original proceedings and assessment proceedings pending before an appellate authority should be deemed to be assessment proceedings pending before the Assessing Officer within the meaning of Section 12A. SNDP Yogam {supra), is to the same effect. Again, no contrary decision has been brought to our notice. Accordingly, it is held that the appellate proceedings before the appellate authorities are deemed to be assessment proceedings pending before the Assessing Officer. 31. In all these cases, the impugned orders were passed after the respective dates of grant of registration. Thus, we hold that subsequent grant of registration in all these cases operates retrospectively for all the relevant years under consideration. 5. CBDT Circular No. 1/2015, dated 21.1.2015, reads as under:- 8.1 The provisions of section 12A of the Income-tax Act, before amendment by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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