TMI Blog2023 (9) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... e trust or institution u/s.12AA of the Act, then the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the A.O as on the date of such registration, though subject to the condition that the objects and activities of such trust or institution remain the same for such preceding assessment year. CBDT Circular No.01/2015 dated 21.05.2015 (applicable w.e.f. 01.10.2014) in order to remove hardships to charitable organizations due to non-application for registration for the period prior to the year of registration had come to the rescue of such assessee s for the years preceding the year of registration. As per the aforesaid CBDT Circular No.01/2015 (supra), the benefit of Sections 11/12 of the Act would be available to an assessee for a period prior to the year of registration despite the fact that no application for registration for the said period had been filed. The only rider/pre-condition that is required to be satisfied for bringing a case within the realm of the CBDT Circular No.01/2015 (supra) is that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er a statutory obligation to have guided the assessee society, which admittedly not being wholly and substantially financed by the government, was disentitled from raising a claim for exemption u/s. 10(23C)(iiiab) of the Act, to have applied for registration and raised a claim of exemption u/s. 10(23C)(vi) we are of the considered view that as the said issue does not emanate from the orders of the lower authorities, therefore, we refrain from dealing with the same. Thus, the additional ground of appeal raised by the assessee society being devoid and bereft of any merit is dismissed in terms of our observations above. - Shri Ravish Sood, Judicial Member And Shri Arun Khodpia, Accountant Member For the Assessee : Shri S.R Rao, Advocate For the Revenue : Shri Debashis Lahiri, CIT-DR ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals), Raipur, dated 17.10.2019, which in turn arises from the order passed by the A.O. u/s. 143(3) of the Income-tax Act, 1961 (for short Act ), dated 12.12.2018 for A.Y. 2016-17. The assessee has assailed the impugned order on the following grounds of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 10(23C)(iiiab) of the Act, the same was declined by the latter for the reason that the following two conditions were not satisfied: (i) The education institution/university must be existing solely for the purpose of education and without any profit motive and; (ii) The educational institution/university must be wholly or substantially financed by the government. Carrying his observations further, the A.O was of the view that as the assessee society had not received any government grants during the year under consideration, thus, it had not fulfilled the basic condition laid down u/s. 10(23C)(iiiab) of the Act. Accordingly, the A.O., based on his aforesaid deliberation, declined the assessee s claim for exemption of the excess of income over expenditure of Rs. 5.24 crore (approx.) u/s. 10(23C)(iiiab) of the Act. For the sake of clarity, the observations of the A.O are culled out as under: 4. During the year under consideration, the assessee society has claimed exemption u/s. 10(23c)(iiiab) of I. T. Act, 1961. In the course of assessment proceedings, the balance sheet and income expenditure along-with the allowability of exemption u/s. 10(23C)(iiiab) has been exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration. Accordingly, the exemption claimed by the assessee society on excess of income over expenditure of Rs. 5,24,17,851/- u/s 10(23c)(iiiab) of I. T. Act, 1961 is not allowable. Since, the assessee has furnished inaccurate particulars of its income, therefore, penalty proceedings u/s 271(1)(c) is initiated separately. Similar issue was involved in the case of M. P. Rajya Open School vs. Dy. Commissioner of Income Tax-1(2), Bhopal in ITA Nos. 193 to 198/Ind/2012 vide order dated 08/11/201 for A.Ys. 2003-04 to 2008-09 in which the issue was decided by the ITAT, Bench-Indore in favour of revenue. 4. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. 5. The assessee, being aggrieved with the order of the CIT(Appeals), has carried the matter in appeal before us. 6. We have heard the ld. Authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record and considered the judicial pronouncement that has been pressed into service by Ld. AR to drive home his contentions. 7. Shri S.R. Rao, Ld. Authorized Representative (for short AR ) for the assessee society too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2023. 8. Per contra, the Ld. Departmental Representative (for short, DR ) relied on the orders of the lower authorities. The Ld. CIT-D.R submitted that the 2nd proviso to Section 12A(2) of the Act could not be pressed into service by the assessee society in the course of hearing of the present appeal wherein the issue involved was confined to declining of its claim of exemption u/s. 10(23C)(iiiab) of the Act. 9. We have deliberated at length on the issue at hand and are unable to persuade ourselves to concur with the claim of the Ld. AR. Admittedly, the 2nd proviso to sub-section (2) of Section 12A of the Act contemplates that where registration had been granted to the trust or institution u/s. 12AA of the Act, then the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the A.O as on the date of such registration, though subject to the condition that the objects and activities of such trust or institution remain the same for such preceding assessment year. For the sake of clarity, the 1st proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay in seeking registration was not available. 8.3 In order to provide relief to such trusts and remove hardship in genuine cases, section 12A of the Income-tax Act has been amended to provide that in a case where a trust or institution has been granted registration under section 12AA of the Income-tax Act, the benefit of sections 11 and 12 of the said Act shall be available in respect of any income derived from property held under trust in any assessment proceeding for an 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 been granted. 8.4 Further, it has been provided that no action for reopening of an assessment under section 147 of the Income-tax Act shall be taken by the Assessing Officer in the case of such trust or institution for any assessment year preceding the first assessment year for which the registration applies, merely for the reason that such trust or institution has not obtained the registration under section 12AA for the said assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Section 12A of the Act, i.e. .assessment proceedings are pending before the Assessing Officer as on the date of such registration .. is not found to be satisfied. Accordingly, in absence of satisfaction of the pre-condition contemplated in the 2nd proviso to Section 12A(2) of the Act and CBDT Circular No.01/2015, the assessee society is not found to be entitled to avail the concession/relief therein provided. 12. Apropos the order of the ITAT, Raipur in the case of Shivom Vidyapeeth Shikshan Samity Vs. ITO, Exemption-2, Raipur, ITA Nos.262 263/RPR/2022 dated 17.03.2023 that had been pressed into service by the ld. AR, the same being distinguishable on facts, would, thus, not assist its case. In the case above, the issue before the Tribunal was the challenge thrown by the assessee society in light of the CBDT Circular No. 01/2015, dated 21/01/2015 to declining of the benefits under Sections 11/12 of the Act for the year under consideration, i.e. A.Y 2015-16 for which year assessment was pending at the time when registration u/s 12A was subsequently granted to it by the CIT(Exemption), Bhopal on 20.04.2017. As the assessee in the aforesaid case, had assailed the decli ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
