TMI Blog2022 (11) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer to grant the benefit of Section 11 12 to the appellant trust. Judgement in the case of CIT vs. Shiv Kumar Sumitra Shikshan Sansthan, [ 2019 (9) TMI 55 - ALLAHABAD HIGH COURT] relied by the DR is distinguishable on facts as in that case the proceeding were pending before the Tribunal and not before the AO, whereas in the present case the proceedings were pending before the AO. Thus we hold that the assessee is eligible for deduction u/s 11 and 12 for A.Y. 2010-11 under the first Proviso to section 12A. Accordingly, we delete the disputed addition by granting the benefit of Section 11 12 to the appellant trust. Appeal of the assessee is allowed. - I.T.A. No. 364/Asr/2014 - - - Dated:- 16-11-2022 - Dr. M. L. Meena, Accountant Member And Sh. Anikesh Banerjee, Judicial Member For the Appellant : Sh. Tarun Bansal, Adv. For the Respondent : Sh. S. M. Surendranath, Sr. DR ORDER PER DR. M. L. MEENA, A.M.: This appeal has been filed by the assessee against the impugned order dated 26.03.2014 passed by the Ld. Commissioner of Income Tax (Appeals), Jammu in respect of the Assessment Year 2010-11. 2. The assessee has raised the following a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Department. 7. That order of Ld AO Ld CIT (A) is bad in law, as well as, on facts. 8. That appellant craves to add or amend any ground of appeal before the appeal is finally heard or disposed-off. 9. That the order may kindly be modified or another consequential relief be allowed. 3. Legal grounds for A.Y. 2010-11 That on the facts and circumstances of the case, the ld. A.O., as well as, CIT(A) has erred in law while passing the order dated 31.-1-13 26-3-14 respectively, ignoring that the appellant having been granted registration u/s 12A dated 21.-7- 11, therefore, the benefit of such exemption should be granted for the year under consideration also, in view of the amendment in section 12A(2) vide Finance Act, 2014. 4. The appellant trust has raised legal ground which goes to the root of the matter that the appellant having been granted registration u/s 12A dated 21.-7-11, therefore, the benefit of such exemption should be granted for the year under consideration and it is therefore legal issued admitted to be heard. 5. The Ld. CIT(A) has although admitted the facts that there was no denying of the fact that the appellant was engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... memorandum explaining the provision of finance no. 2 (Bill), 2014 is enclosed at page 506 to 507 and main provision is enclosed at page 507 and refers Para-3 of the same. Case Law 1:- The issue has also been explained in the following case law: - Sansthan Shree Eknath Maharaj Vishwastha Mandal vs. ITO (Exemption) ITA No. 288/Pun/2020 (AY-2016-17) Refer Para 3,4 5 at page 509 to 512 Copy enclosed at page 508 to 512. Facts of this case i) Return filed dtd. = 17-01-17. (our case is = 24-3-11) ii) Registration u/s 12AA granted = 16-05-17 (our case = 20-7-11) iii) Notice u/s 143(2) issued = 20-09-17 (our case = 22-9-11) iv) At Para-5, the author says since the return was filed on 17-01-17, the assessment proceeding for year under consideration commenced with the filing of return dtd. 17-1-17 and the author also quoted the Supreme Court case law of M/s Auto And Metal Engineers Ors. Vs. Union of India Ors (SC) (1998) 229 ITR 399 indicating the process of assessment commences with the filing of return or by issuance by AO of notice to file a return. Case Law 2 If there is a change in law during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2011-12 due to the pendency of the appeal before the tribunal. Refer Para-18,19, 20 at PB 550 onwards. ii) The proviso not only required for registration of the trust but it refers to assessment proceeding before assessment authority not elsewhere. iii) The assessment proceedings for year 2011-12 was not pending before the A.O but for the tribunal. iv) As per Para-20 at PB 550 . in this case, tribunal will not be covered. v) This case law first of all, is on the sec 12A(2) and not the proviso 1 or proviso 2 of sec. 12A(2) . section 12A(2) is relevant where the application is made for registration and Proviso 1 is relevant where registration has already been done. vi) The above said case law has not discussed : (i) CIT vs. Calcutta Exports Company (2018) 404 ITR 654 (SC) dtd. 24-04-18 In the above referred Allahabad HC order is dtd. 06-08-19 (ii) Howrah Municipal Corpration Ors. Vs Gangis Rope Co. Ltd. Ors. (2004) 1 SCC 663 (iii) In the above case of Allahabad HC order, the case of Supreme Court, as mentioned above was not discussed, indicating beneficial change in law during the pendency of the appeal, the change in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w helps the appellant as far as the issue of assessment proceedings before AO is concerned. On the other issue, the case law is not applicable to the appellant 2. However, 15% should be allowed to the trust out of the total receipts and this figure will come at a lesser amount, as compared to the addition confirmed by CIT(A). 3. Ground No. 2, 3, 4 and 5 are on merits and merits are narrated at PB-454 to PB-457 and all the required page numbers are also mentioned therein by saying that trust was just a postman and receiving specific donations and was utilizing the same. If any amount remained unspent was either given back to the donor or were carry forwarded to the next year. All the donors were having agreement with the appellant to refund the balance unspent amount and the members of the society were also filing bond on this ground. Even the interest earned on the balance unspent amount was returned, if unspent. All the documents relating to this argument are mentioned in the above pages. I further relied on the order of ITAT, Amritsar Bench ,on same issue , in the case of Dera Bhai Gurdas Ji Udasin Trust (Regd.) Mansa vs. ITO, Ward- 1(4), ITA No. 228 229/Asr/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and activities of such trust or institution remain the same for such preceding assessment year._ A bare perusal of the proviso amply transpires that where the subsequent registration has been granted u/s 12AA, then the benefit of such registration will also be conferred to earlier years for which assessment proceedings are pending before the AO as on the date of such registration. The crucial words used in the second proviso are the pendency of assessment proceedings. To put it simply, if the assessment proceedings are pending before the AO when the registration is granted by CIT(E), the registration so granted will also have effect and the AO will be obliged to grant exemption u/s 11 in respect of such assessment year. The authorities below have taken note of the mandate of the second proviso but interpreted the term assessment proceedings_ as commencing with the issuance of notice u/s 143(2) of the Act. That is the raison d`etre for denying the benefit of exemption in the extant case on the premise that notice u/s 143(2) was issued on 20.09.2017 and by that time the registration had already been granted by the ld. CIT(E) on 16.5.2017. In my opinion, the connotation of commence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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