TMI Blog2022 (6) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of any income derived from held under trust in any assessment proceeding for an earlier assessment year which is pending before the Ld.AO. Here the ld. AR of the assessee already proved that the circumstantial evidence suggest that the assessee is having the registration but unable to provide the certificate and they have made sufficient effort to find out the truth and have also availed the fresh registration which is granted without any adverse observations on the activities of the trust. Thus the denial of benefit under section 11 of the Act by the ld. AO merely on account non production of registration certificate is incorrect and we direct the AO to grant the benefit of section 11 12 benefit to the assessee and also direct to delete the addition made on this count consequent there upon. Appeal of assessee allowed. - ITA Nos. 275, 276 And 277/JP/2021 - - - Dated:- 22-6-2022 - Dr. S. Seethalakshmi, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Sh. Neeraj Jain, CA For the Revenue : Smt. Monisha Choudhary, JCIT ORDER PER BENCH These are the appeals filed by the assessee and are arising out of the following orders of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) has erred in not considering the first proviso to Section 12A(2) of the Act which was introduced vide Finance (No.2) Act, 2014. 4. The appellant craves liberty to raise additional ground and to modify/amend the ground of appeal at the time of hearing. 2.2 In ITA No. 276/JP/2021 for A.Y 2017-18, the assessee has taken following grounds of appeal, which is reproduced here in below: 1. That under the facts and circumstances of the case the learned Assessing Officer has erred in denying the exemption available under section 11 and 12 of the Income Tax Act and the Hon'ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre has further erred in upholding the order of the AO. 2. That under the facts and circumstances of the case the learned Assessing Officer has erred in disallowing an amount which was accumulated or set apart of Rs.2,52,430 u/s 11(1)(a) of the Income tax Act. The Hon'ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre has further erred in upholding the order of the AO and confirming the additions made in the assessment order made by the learned Assessing Officer. 3. That under the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income was filed on 31.03.2018 declaring total income at Rs. Nil. The case was selected for limited scrutiny by CASS. Notice u/s 143(3)/142(1) of the Act were issued from time to time. 3.1 The assessee society is running a hostel for girls and is registered under the Rajasthan Societies Registration Act, 1958 with the registrar of society, Sawai Madhopur. During the assessment proceedings, the ld. Assessing Officer has observed that the assessee has not provided the copy of registration certificate u/s 12AA of the I.T. Act in the assessment proceedings. Therefore, assessee was issued a show cause notice to the trust on 16.11.2018 wherein assessee trust was asked to show cause as to why the claim of exemption u/s 11 should not be disallowed as the assessee failed to furnish the copy of registration certificate u/s 12AA of the I.T. Act which is pre-requisite the claim of the exemption u/s 11 of the Act. In response, to the show cause notice, the assessee has submitted as under:- In compliance of this notice the society submitted its reply on 27.11.2018 which read as under: In above reference we hereby submit that we have misplaced the registration u/s 12AA of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant claims that in their case objects of the Society are same since inception and there is no change, registration granted in AY 2019-20 shall be valid for all the years. 7.1 During the appellate proceedings appellant has submitted 12AA Certificate issued by the CIT Exemption, Jaipur, vide vide order dated 03.12.2019, which shows that provisions of sections 11 and 12 shall apply in the case from the AY 2020-21 onwards. Therefore, it is very clear that the appellant is entitled to claim exemptions u/s 11 of the IT Act from AY 2020-21 onwards only. In view of the above and observations in the assessment order, there is no reason to interfere with the order of the AO and the same is upheld. Appellant fails on these grounds of appeal. 5. Before us, the ld. AR of the assessee filed written submission on various grounds which reads as under:- In the above referred case the appeal was filed against the order passed u/s 250 of the A.Y.2016-17. We would like to submit before your honour below mentioned submission: Ground No. 1: That under the facts and circumstances of the case the learned Assessing Officer has erred in denying the exemption available under section 11 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the objects of the Sansthan was of charitable in nature and therefore the exemption claimed by the appellant u/s 11 and 12 was correct. The appellant has explained that registration u/s 12AA is now available to the Sansthan and being the objects of the A.Y.2016-17 was the same as of A.Y.2020-21, the deduction claimed u/s 11 and 12 should not be denied. However, the learned AO has not accepted the request and disallowed the capital expenditure of Rs. 3,10,754 and denied the exemption of surplus income u/s 11(1)(a) of Rs. 5,80,036 accumulated or set apart and added the same to the total income of the appellant. 6. We would like to bring to your kind consideration that appellant is regular in filing its return of income. For claiming the exemption under section 11 of the Act, issuance of registration is one of the conditions and not the only condition for claiming the exemption. Where the Commissioner has granted the registration later than the creation of the trust, it should be effective for all the years for which the constitution had remained the same. Since, in our case objects of the society are same since inception and there is no change, registration granted in AY 2019-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA. 3. Admittedly, the assessment proceedings were pending before the Learned AO for the Asst Years 2016-17 to 2018-19 as on the date of granting registration u/s 12AA of the Act on 03.12.2019 with effect from 1.4.2019 as assessment proceedings got commenced pursuant to issuance of notice u/s 143(2) on 08.08.2018 as stated supra. Admittedly, the objects and activities of the trust had remained the same in preceding assessment years also i.e. Asst Years 2016-17 to 2018-19. 4. The first proviso to Section 12A(2) of the Act had come into force vide Finance (No.2) Act, 2014, with effect from 1-10-2014. The proviso was introduces in order to mitigate the hardships caused to charitable institutions, which despite having satisfied the substantive conditions rendering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd societies carrying on genuine charitable objects in the earlier years and substantive conditions stipulated in section 11 to13 have been duly fulfilled by the said trust. The benefit of retrospective application alone could be the intention of the legislature and this point is further strengthened by the Explanatory Notes to Finance (No. 2) Act, 2014 issued by the Central Board of Direct Taxes vide its Circular No. 01 / 2015 dated 21.1.2015. Apparently the statute provides that registration once granted in subsequent year, the benefit of the same has to be applied in the earlier assessment years for which assessment proceedings are pending before the Learned AO, unless the registration granted earlier is cancelled or refused for specific reasons. Therefore, Hon ble CIT (Appeals) has erred in not considering the first proviso to Section 12A(2) of the Act which was introduced vide Finance (No.2) Act, 2014. Ground No. 3: That under the facts and circumstances of the case the learned Assessing Officer has erred in disallowing the capital expenditure of Rs.3,10,754 and exemption of surplus income under section 11(1)(a) of Rs.5,80,036 against the application of income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sree Sree Ramkrishna Samity vs. DCIT, Circle-2,Siliguri, ITA No.1680- 1685/2012 (ITAT Kolkata) (ii) M/S Baba Amarnath Educational Society vs The Income Tax Officer-I, Moga pronounced on 31 January,2019 (ITA No.1318(Chd)/2012,366(Asr)/2014,638(Asr)/2014) (ITAT Amritsar) (iii) SNDP Yogam vs. ADIT (Exemption), Range-4, Kochi, IITA No.503-506 569/Coch/2014(ITAT Coch) which states that All the Co-ordinate Benches in the aforesaid cases categorically held that amendment made by Finance Act, 2014 by inserting a proviso in Sec.12A of the Act shall be construed retrospectively in operation because the legislators in their wisdom have brought this proviso to prevent genuine hardship which could be caused on the assessee(s) due to non-registration u/s 12A of the Act. (iv) In case of Shri Jain Shwetamber Murtipujak Fund Kapda Committee Vs. CIT (Exemption) (ITAT Indore) pronounced on 29.09.2020 held that In our considered view all the documents are sufficient enough to prove that the claim of the assessee being registered u/s 12A of the Act is a charitable trust since 13.8.1973 has sufficient merit. Therefore there remains no dispute to the fact that the assesse trust was enjoying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of section 80(G) of the Act and for that 12A registration was mandatory, whether any efforts were made to call for the duplicate registration certificate from the records of the CIT(E)? In response the ld. AR submitted as under: As directed by the Hon'ble Bench during the course of last hearing, we have written a request letter to the Commissioner of Income Tax (Exemption), Kailash Heights, 3rd Floor, Lal Kothi, Tonk Road, Jaipur on 02.04.2022 (Copy enclosed), whereby we have requested to provide copy of registration certification u/s 12A. We have also explained that department has granted the exemption certificate u/s 80G(5) of the Income Tax Act and being registration u/s 12A is a pre requisite requirement, we have requested that 12A certificate must have been granted to the Sansthan and in support we have also provided the copy of 80G certificate dated 25.04.2007. We have also conveyed to the Hon'ble Commissioner of Income Tax (Exemption) that the copy is required by the ITAT, Jaipur Bench and therefore the same may please be provided at the earliest. However, till date we have not received any communication form the office of the Commissioner of Income Tax (Exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t time to find out the fact. But the ld. DR did not bring anything on record to counter the arguments of the ld. AR. 9. We have heard the rival contentions and also persuaded the written submission and case laws relied upon. Having persuaded the material and arguments serviced before us it is undisputed facts, that the assessee expressed that the 12A registration was not traceable but placed on record that after receipt of the 12A, 80(G) registration was granted and was effective and not cancelled till the completion of the assessment. They have made necessary efforts to bring the facts on record by applying to the CIT(E) by writing a letter and upon no response they have subsequently availed the registration u/s. 12AA of the Act. All these facts were not disputed by the ld. DR. 10. We have also persuaded the extract of the Notes to the Provisions of Finance (No. 2), 2014 as given in CBDT circular no. 01/2015 dated 21.01.2015 where in the board has clarified so as to applicability of the registration certificate the same is extracted here in below for the sake of brevity: 8. Applicability of the registration granted to a trust or institution to earlier years 8.1 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rejection of the trust registration the benefit of section 11 and 12 of the Act shall be available in respect of any income derived from held under trust in any assessment proceeding for an earlier assessment year which is pending before the Ld.AO. Here the ld. AR of the assessee already proved that the circumstantial evidence suggest that the assessee is having the registration but unable to provide the certificate and they have made sufficient effort to find out the truth and have also availed the fresh registration which is granted without any adverse observations on the activities of the trust. 12. In terms of the above observations made here in above, the denial of benefit under section 11 of the Act by the ld. AO merely on account non production of registration certificate is incorrect and we direct the AO to grant the benefit of section 11 12 benefit to the assessee and also direct to delete the addition made on this count consequent there upon. 13. In terms of this observations the appeal of the assessee in ITA No. 275/JP/2021 for assessment year 2016-17 is allowed. 14. The fact of the case in ITA No. 276 277/JPR/2021 are similar to the case in ITA No. 275/J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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