TMI Blog2022 (7) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench in the case of Shree Bhanushali Mitra Mandal Trust [ 2016 (4) TMI 578 - ITAT AHMEDABAD ] and ITAT Kochin Bench in SNDP Yogam [ 2016 (3) TMI 1110 - ITAT COCHIN ] as per the said proviso to sub-section (2) to section 12A of the Act, the provisions of sections 11 and 12 of the Act shall apply in respect of any income derived by the trust of any assessment year preceding to the year in which registration u/s 12A of the Act was granted for the assessment year for which proceedings are pending before the AO as on the date of such registration and the retrospective benefit of the said first proviso to sub-section (2) to section 12A of the Act is also available in the cases where appeal is pending before the appellate authorities including CIT(A) and Tribunal (ITAT). Therefore, respectfully following the order of the ITAT Pune Bench in the case of Marathwada Auto Cluster (supra), the sole grievance of the assessee in the present appeal is allowed and the AO is directed to allow benefit of section 11 and 12 of the Act to the assessee in terms of first proviso to sub-section (2) of section 12A of the Act. Appeal of assessee allowed. - ITA No.1845/Del/2020 - - - Dated:- 8-7-2022 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Circular No.01/2015 dated 21.1.2015. 5. Elaborating the facts of the present case, the ld. Counsel submitted that the AO passed his order on 10.12.2018 and the appeal of the assessee was dismissed by the ld. CIT(A)-2, Gurgaon on 18.11.2019 and registration u/s 12AA of the Act was allowed to the assessee on 15.09.2020. Therefore, in view of the first proviso to sub-section (2) to section 12A of the Act and in view of various orders and judgments of coordinate Benches of ITAT including the judgment of the Hon ble High Court of Rajasthan in the case of CIT (E) vs. Shree Shyam Mandir Committee dated 23.10.2017 reported as 400 ITR 466 (Raj), if the proviso brought into the statute as a procedural or beneficial one intending to remove the hardships, it is applicable retrospectively. The ld. Counsel for the assessee also placed reliance on the order of the ITAT, Pune Bench dated 27.02.2016 in the case of M/s Shri Vishwakalyan Jivraksha Pratishthan vs. ITO to submit that the amendment thereby removing hardships in genuine cases has to be given retrospective effect. The ld. Counsel also placed reliance on the judgment of ITAT Kochin Bench in the case of SNDP Yogam vs. ACIT (2017) 186 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Moreover, under the Scheme of the Act, sections 11 and 12 are substantive provisions which provide for exemptions to a religious or charitable trust. Sections 12A and 12AA detail the procedural requirements for making an application to claim exemptions under sections 11 and 12 by the assessee and the grant or rejection of such application by the commissioner. Thus, in our view, sections 12A and 12AA are only procedural in nature. Hence, it is not the registration u/s 12AA by itself that offers immunity from taxation. A receipt whether it is revenue or capital in nature is to be decided at the assessment stage. Being procedural in nature, in our view, liberal interpretation will give effect to the intention of the amendment, thereby removing the hardship in genuine cases like the present assessee under consideration. 7.4 Taking into account the above facts and circumstances of the issue, we are of the view that the AO was not justified in taking a stand that registration u/s 12A was not applicable to the assessee for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amendment in section 12A is brought in the statute to confer benefit of exemption u/s 11 of the Act on the genuine trusts which had not changed its objectives and had carried on the same charitable objects in the past as well as in the current year based on which the registration U/S.12AA is granted by the DIT (Exemptions). 6. On the issue of applicability and benefit of registration u/s 12A of the Act on pending appeals before the appellate authorities, the ITAT, Ahmedabad Bench in the case of Shree Bhanushali Mitra Mandal Trust vs. ITO reported as (2016) 47 CCH 197 (Ahmedabad Tribunal), as vehemently relied by the ld. Counsel of the assessee in paras 7.1 to 7.4 held thus:- 7.1 To examine the first issue, necessarily I have to analyze the relevant provision, namely, the amendment to Section 12A by Finance Act, 2014 w.e.f. 01.10.2014 by way of insertion of provisos to Section 12A(2) of the Act which is reproduced below for ready reference: [(2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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 ld. A.O., unless the registration granted earlier is cancelled or refused for specific reasons. The statute also goes on to provide that no action u/s147 could be taken by the AO merely for non-registration of trust for earlier years. 7.3 In the instant case, it is not in dispute that registration was granted w.e.f. 17.12.2013 by the order of CIT(A) dated 08.05.2014. It is also not in dispute that objects and activities of the assessee trust are charitable in nature during the relevant financial year. When Section 12A of the Act was amended by introducing new provisos to sub-section (2) of Section 12A by Finance Act, 2014 with effect from 01.10.2014, the assessment orders Asst. Year 2011-12 passed by the assessing officer in respect of the present assessee were pending in appeal before the first appellate authority. During such pendency, the assessee was granted registration u/s. 12AA of the Act on 17.12.2013 w.e.f. the assessment year 2013-14. The appeal is the continuation of the original proceedings and that the power of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal is pending before the Tribunal, then, after grant of registration u/s 12AA of the Act w.e.f. 15.09.2020 as per retrospective operation of first proviso to sub-section (2) of section 12A of the Act. Further, as per order of ITAT Ahmedabad Bench in the case of Shree Bhanushali Mitra Mandal Trust (supra) and ITAT Kochin Bench in SNDP Yogam (supra), as per the said proviso to sub-section (2) to section 12A of the Act, the provisions of sections 11 and 12 of the Act shall apply in respect of any income derived by the trust of any assessment year preceding to the year in which registration u/s 12A of the Act was granted for the assessment year for which proceedings are pending before the AO as on the date of such registration and as per orders of the ITAT Pune (supra) and ITAT Kochin Bench (supra) the retrospective benefit of the said first proviso to sub-section (2) to section 12A of the Act is also available in the cases where appeal is pending before the appellate authorities including CIT(A) and Tribunal (ITAT). Therefore, respectfully following the order of the ITAT Pune Bench in the case of Marathwada Auto Cluster (supra), the sole grievance of the assessee in the present appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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