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TMI Blog2022 (7) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... d that since limitation period was extended by the Hon'ble Supreme Court, therefore, it is safely inferred that there was no delay in filing the appeal before this Tribunal by the assessee. Thus, I proceed to adjudicate the appeal as filed within time. 3. Although the assessee has raised as many as five grounds of appeal in its appeal, the main effective ground of the assessee is that the income/surplus of the assessee is entitled to the benefit of sections 11 and 12 in terms of first proviso to section12A(2) of the Act as the assessee has been granted registration u/s 12AA of the Act on 15.09.2020. 4. The ld. Counsel for the assessee, placing reliance on the order of the ITAT, Ahmedabad Bench in the case of Shree Bhanushali Mitra Mandal Trust vs. ITO, dated 22.02.2016, in ITA No.2515/Ahd/2015, submitted that the first proviso to sub-section (2) of section 12A was brought to the statute with retrospective effect with a view not to affect the genuine charitable trusts and societies carrying on genuine charitable objects in the earlier years and substantive conditions stipulated in 2011-12 has been duly fulfilled by the said trust. The ld. Counsel pointed out that the benefit of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower 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 being so, denying such benefit to a trust like the assessee who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ramkrishna Samity (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 precondition for applicability of section 12 A." 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 construction should be preferred to the literal construction. It is only elementary t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion granted to it was cancelled at any time under section 12AA.]" 7.2 It is also relevant to reproduce the explanatory notes to the provisions of Finance (No.2) Act, 2014 as given in CBDT Circular No.01/2015 dated 21.01.2015 in reference F. No.142/13/2014-TPL, which read as follows: "Para 8.2 Non-application of registration for the period prior to the year of registration caused genuine hardship to charitable organizations. Due to absence of registration, tax liability is fastened even though they may otherwise be eligible for exemption and fulfill other substantive conditions. However, the power of condonation of delay in seeking registration was not available." This clearly goes to prove that the first proviso to section 12A(2) was brought in the statute only as a retrospective effect with a view not to affect genuine charitable trusts and societies carrying on genuine charitable objects in the earlier years and substantive conditions stipulated in section 11 to 13 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 (N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions that the amendment was brought in. That being so, denying such benefit to a trust like the assessee who had obtained registration u/s 12AA during the pendency of the appeals filed against the orders of the assessing authority, by narrowly interpreting the term, 'pending before the assessing officer' so as to exclude its pendency before the appellate authority, will be doing violence to the provisions of the Statute and, as such, liable to be interfered with. 7. In view of the above, we find that the AO as well as the ld. CIT(A) denied benefit of sections 11 and 12 of the Act to the assessee on the sole ground that the assessee was not having registration u/s 12A of the act for AY 2016-17. It has not been disputed by the ld. Sr. DR that the assessee was granted registration u/s 12AA of the Act vide order dated 15.09.2020 by CIT (Exemptions), Chandigarh. 8. In the present case, the assessee was not having registration u/s 12A of the Act till pronouncement of first appellate order on 18.11.2019 and, thereafter, the aggrieved assessee chose to file appeal before the Tribunal challenging the orders of the authorities below. In view of order of ITAT Pune Bench in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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