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TMI Blog2025 (5) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... e wishes to make arguments with respect to ground Nos. 6, 7 & 8, which were identically worded in all these appeals and read as under : "6. BECAUSE, the 'appellant' was granted registration under section 12AA of the Act vide Certificate dated 15.10.2018 by the Ld. CIT(Exemption) Bhopal in view thereof the Ld. 'CIT(A)' ought to have allowed exemption under section 11 as claimed for A.Y 2006-07 in appellate proceedings in view of revised proviso to sub-section (2) of section 12A w.e.f. 01.04.2013 providing that provisions of section 11 and 12 shall apply to preceding years too where proceedings are pending before the Assessing officer. 7. BECAUSE, the 'CIT(A)' had grossly erred in denying deduction, referring to section 119(2)(b) of the 'Act', under section 11 & 12 of the 'Act' which is available to the 'appellant' in view of revised proviso to subsection (2) of section 12A as appellant was duly Registered under section 12AA w.e.f 01.04.2013. 8. BECAUSE, the proceeding before 'CIT(A)' was extension of assessment proceedings and claim raised before 'CIT(A)', which accrued on 15.10.2018 after passing of the Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same for such preceding assessment year." His contention was that the ld. CIT(Appeals) had ignored this provision of law and had not applied the same to the facts of the case wherein the assessee had been granted registration vide order dated 15.10.2018 w.e.f. 01.04.2013 u/s. 12AA of the Act by the ld. CIT(Exemption), Bhopal and on the date of grant of registration, the appeals of the assessee were pending before the ld. CIT(Appeals), who had passed the first appellate order in all the cases on the same date, i.e., 12.04.2024. It was the contention of the ld. Counsel that the proceedings before the ld. CIT(Appeals) was an extension of assessment proceedings and claim raised before the CIT(Appeals) which accrued on 15.10.2018 after passing of the assessment order dated 28.02.2013 ought to have been allowed by the ld. CIT(Appeals). For the proposition that the proceedings before the ld. CIT(Appeals) was an extension of assessment proceedings and if the proceedings before the ld. CIT(Appeals) were pending on the date of grant of registration u/s. 12AA for any preceding year, the provisions of section proviso to section 12A(2) would apply. The assessee referred several case laws i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, not being 30[a Joint Commissioner(Appeals) or] a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law." 5.8. Further, several case laws relied upon by the appellant are also distinguishable on facts and hence not applicable. Accordingly, grounds of appeal are liable to be dismissed." Cases relied upon (a) CIT Vs M/s Shree Shyam Mandir [2018] 400 ITR 466 (Raj) Exemption u/s 11 - trust or institution has been granted registration under section 12AA - Applicability of the registration granted to a trust or institution to earlier years - Non-application of registration for the period prior to the year of registration caused genuine hardship to charitable organisations - ITAT applying the Proviso of Section 12A(2), inserted w.e.f. 01.10.2014, with retrospective effect in spite of the facts that the proviso has no indication of being applied for the earlier years retrospectively - HELD THAT:- At the time of registration, the authority is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insertion of the proviso to section 12A(2) of the Act has to be construed as retrospective in operation - This issue stands answered in favour of the assessee by Shree BhanushaliMitra Mandal Trust [2016 (4) TMI 578 - ITAT Ahmedabad], wherein, it was held that appeal is a continuation of the original proceedings and assessment proceedings pending before an appellate authority should be deemed to be "assessment proceedings pending before the Assessing Officer" within the meaning of Section 12A. - Decided in favour of assessee. (b) Shri Krishnabai Ghat Trust Vs ITO (Exemptions) 2019 (5) TMI 618 - ITAT Pune Exemption u/s.11 - deemed registration u/s 12AA - applicability of Proviso to Section 12A sub-section (2)during appeal proceedings or restricted to assessment proceedings - registration granted to the assessee u/s.12AA during the pendency of proceedings before the ld. CIT(A) - HELD THAT:- What AO can do, can be done by CIT(A) in an appeal before him. Even what the AO could have done but failed to do, can also be done by him. It shows that the powers of a CIT(A) in an appeal against an assessment order are almost similar to those of an AO. If extend this analogy to the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ern has been granted w.e.f. 21.09.2016, it comes into effect during the course of pendency of first appeal proceedings and the proviso to sub-section 2 of section 12A should be construed liberally and the assessee should be granted exemption u/s. 12A - HELD THAT:- As relying on M/S Shree Shyam Mandir [2017 (10) TMI 1450 - Rajasthan High Court] registration was granted to the assessee u/s. 12AA of the IT Act on 29.07.2013. Under these facts, it was held by Hon'ble Rajasthan High Court that appeal is continuation of original assessment proceedings and proceedings before appellate authorities is covered by the proviso to subsection 2 of section 12A of the IT Act. In the present case also, the facts are similar and hence, respectfully following this judgment of Hon'ble Rajasthan High Court, we decline to interfere in the order of ld. CIT(A). Appeal filed by the revenue is dismissed. (d) Lady Kikabai PremchandIyambail Trust Vs ITO 2020 (2) TMI 448 - ITAT Pune Exemption u/s 11 and 12 denied - deemed registration u/s 12AA - registration granted to the assessee u/s.12AA during the pendency of proceedings before the ld. CIT(A) - In the interim, the assessee had applied for fresh regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 12A provided for registration u/s 12AA as a pre-condition for applicability of section 12A. A receipt which is by birth, capital in nature, cannot change its character merely for want of registration of society u/s 12AA of the Act. It is not the case of the revenue that the donations received are meant for general functioning of the charitable objects of the society, in which event, the donations received there on would take the character of revenue receipts requiring to be credited in the income and expenditure account for utilization towards charitable objects thereon. Hence, we hold that in any case, the donations received by the assessee society cannot be brought to tax in the assessment. We hold that since the only reason for denial of exemption u/s 11 was absence of registration u/s 12AA (which was granted to assessee society on 29.10.2010 with effect from 1.4.2010) for the relevant assessment years and on no other ground, the benefit of change in law as above by Finance Act 2014 should be available and for all the years, the benefit of exemption should be available on the date of registration as all the assessments were pending as shown above. In this connection, it re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon the decision of Navsari Malesar Behdin Anjuman, Agiary Street, Malesar, Navsar 2020 (4) TMI 576 -ITAT SURAT wherein the Coordinate Bench of Tribunal while relying upon the decision of Punjab Educational Society 2017 (12) TMI 989 - ITAT AMRITSAR held that benefit of first proviso to Section 12A(2) of the Act would be applicable to the facts of the said case. Benefit of Section 11 is to be given if the registration is obtained even during the pendency of appeal before the ld. CIT(A). Again, coming to the fact of the case,we find that the assessment in the present case was completed on 23/02/2021, before that date, the registration was granted vide order dated 25/10/2018. As in SNDP Yogum case 2016 (3) TMI 1110 - ITAT Cochin held that proviso to section 12A(2) inserted from .01.10.2014 has retrospective effect thus, and there should be no denial of relief under section 11 to a trust if it had obtained registration during the pendency of appeal. Similar view was also taken in Shree Bahnushali Mitra Mandal Trust 2016 (4) TMI 578 - ITAT AHMEDABAD Thus, respectfully following the decisions of coordinate benches, find that the assessee is also eligible for first proviso to Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the payment of education extension services made by the assessee to the Diocese of Jalandhar out of the current year income, as is also available from the income and expenditure account of the relevant financial years, is not allowable as application of income. The restriction/embargo in donation by one charitable Trust to another is only restricted to accumulations made in excess of 15% of income of the Trust, as referred to in Section 11(2) of the Act; and that the said prohibition does not apply, to current year income, or even to accumulations up to 15% U/s. 11(l)(a) of the Act. It may be reiterated that the Diocese of Jalandhar stands notified U/s. 10(23C)(vi) of the Act. This provision, it may be noted, is applicable to universities and educational institutions, which exist solely for educational purposes and not for purposes of profit. Neither the assessment order/s of the assessee's, nor the assessment order/s of the Diocese of Jalandhar, carry any finding of the Diocese of Jalandhar pursuing religious objects. Merely having religious objects does not amount to pursuing religious objects, It is the actual objects perused and the actual activities undertaken, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the present assessee. We therefore set aside the order of the CIT(A) and consequently delete the addition - Decided in favour of assessee. In the light of above it is submitted that appeals may kindly be allowed." 4. Learned DR was unable to controvert the contention of the ld. Counsel for the assessee either on law or on facts nor was he able to point out any distinction on facts or law in the judicial decisions cited by the ld. Counsel for the assessee before us in support of the proposition that the assessee was entitled to the benefit of second proviso to section 12A(2) of the Act on account of which since the appeal proceedings in the present cases were pending on the date of grant of registration u/s. 12A of the Act for subsequent assessment years, the benefit of section 11 & 12 of the Act would apply to the assessment years pending on the date of granting registration also. The ld. DR could also not bring to our notice any contrary decision of High Court and Supreme Court in this regard. In the light of the same, we have no hesitation in holding that in the facts and circumstances of the present cases, which clearly demonstrate that on the date of grant of registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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