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TMI Blog2024 (11) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... nd raised by the Appellant. 3. The CIT(A) ought to have held that the AO erred in law and facts of the case by passing the assessment order without jurisdiction and, is hence, illegal and bad in law. That the AO erred in assuming jurisdiction under section 147 of the Act without fulfilling the jurisdictional preconditions in sections 147 to 151. 4. The CIT(A) ought to have held that the AO erred in law and facts of the case by assessing the Appellant for the year under consideration to total income of Rs. 4,62,47,290/- overlooking that its income was not chargeable to tax under the Act. 5. The CIT(A) ought to have held that the AO erred in law and facts of the case by failing to appreciate that as per section 12A(2) read with the provisos thereto he ought to have granted the Appellants claim for exemption of its income under section 11 of the Act, as, on the date of grant of registration under section 12A i.e., on 29.09.2018, the present assessment proceeding which was initiated on 28.09.2018 was pending. 6. The CIT(A) ought to have held that the AO erred in law and facts of the case by erring in denying the Appellants claim for grant of exemption in respect of amounts accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atus as AOP for A.Ys. 2016-17 and 2017-18 dated 31.03.2018 and had applied for section 12A registration in Form No.10A in March, 2018. The ld.CIT(E) issued order u/s. 12AA(1)(b)(i) grating 12A registration from A.Y. 2018-19 onwards vide order dated 29.09.2018. 5. The ld. learned Assessing Officer ('ld. A.O.' for short) reopened the assessee's case vide notice u/s. 148 of the Act dated 28.09.2018 for A.Ys. 2012-13 to 2017-18 and in response to the same, the assessee filed its return of income for the impugned assessment years. The assessee contended that as 12A registration was granted to the assessee, reopening of the earlier years was objected by the assessee. The ld. A.O. rejected the assessee's contention that notices were issued on 28.09.2018, whereas the Registration u/s. 12A of the Act was granted on 29.09.2018. The assessee's contention that the assessee Trust was unable to spend the money accumulated for purchase of its own premises due to the restraint order passed by the Hon'ble High Court and that if the ld. A.O. fails to grant benefit of section 11 of the Act, then the alternate plea was to treat the assessee as a mutual organization and income received fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR relied on the decision of the Hon'ble High Court of Karnataka in the case of CIT(E) vs. Karnataka State Welfare Fund [2022] 141 taxmann.com 419 (Kar) and Circular No. 1 of 2015 which supported the contention of the ld. AR. The ld. AR also relied on the decision of the Hon'ble Rajasthan High Court in the case of CIT(E) vs. Shri Shyam Mandir Committee [2018] 400 ITR 466 (Raj.) which held that the proviso to section 12A(2) of the Act inserted w.e.f 01.10.2014 was held to be applicable retrospectively and that no action u/s. 147 of the Act shall be taken merely for non registration of the Trust. The ld. AR also contended that the only reason why the surplus was not applied as per section 11(2) of the Act, was due to the restriction placed by the Hon'ble Jurisdictional High Court, which was later on relaxed by the subsequent order. 9. The learned Departmental Representative ('ld. DR' for short), on the other hand, controverted the said fact and contended that the assessee Trust was registered u/s. 12A/12AA of the Act only on 29.09.2018 and notice for reassessment was issued prior to the registration and the ld. DR further stated that the assessee has not satisfied t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA. 11. The above provision clearly mandates that there can be no reassessment merely for the reason of non registration of a Trust or Institution. In the present case in hand, there is no iota of doubt that the reassessment was initiated for non registration and the other reasons specified are consequential to such non registration or rather to say for non fulfillment of the conditions due to the non registration. The ld. AR has extensively placed reliance on the decision of Hon'ble High Court of Karnataka in the case of CIT(E) vs. Karnataka State Welfare Fund (supra), which has upheld the order of the Tribunal, quashing the reassessment order for the reason that it is violative of the second and third proviso to section 12A(2) of the Act. The ld. AR has also placed reliance on Circular No.1/2015, which has reiterated that no reassessment can be initiated merely for the reason of non registration. The above mentioned decision has also relied on the said Circular and upheld this issue in favour of the assessee. The relevant extract of the said decision is cite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer as on the date 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 been obtained the registration under section 12AA for the said assessment year. 8.5 However, the above benefits would not be available in case of any trust or instituti0n which at any time had applied for registration and the same was refused under section 12AA of the Income-tax Act or a registration once granted was cancelled." 9. On combined reading of the aforesaid provisions with the Circular vis-d-vis the material facts of the case, it cannot be gainsaid that the case on hand would not fall under any of the exceptions carved out in the provisos as contemplated under section 12A(2) of the Act. Moreover, the interpretation given by the authorities to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for non registration is not warranted as per the Act. The ld. AR has also relied on the first proviso to section 12A of the Act where the registration has been granted u/s. 12AA of the Act then the provision of section 11 and 12 of the Act shall apply to the assessment year preceding the assessment year for which the assessment proceedings are pending before the ld. A.O. as on the date of registration along with the cumulative condition that the objects and activities of the Trust remains the same for such preceding assessment year. Here in this case, the assessment proceeding commenced on issuance of the notice u/s. 148 of the Act dated 28.09.2018 and the date of registration was the next day, i.e., 29.09.2018, which implies that the assessment proceeding for earlier years were pending before the ld. A.O. as on the date of such registration, thereby concluding that the provisions of section 11 and 12 of the Act shall apply to income held by the assessee Trust of any assessment year, preceding the assessment year in which the registration was granted. The ld. AR has also placed reliance on the decision of the Hon'ble Rajasthan High Court, Jaipur Bench in the case of CIT vs. Shree S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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