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2018 (9) TMI 866 - AT - Income TaxExemption u/s 11/12 denied - General Principles concerning retrospectivity - amendment to proviso in Sec.12A - scope of amendment - Held that - As amendment made by Finance Act 2014 by inserting a proviso in Sec.12A of the Act shall be construed retrospectively in operation because the legislator in its wisdom has brought this proviso to prevent genuine hardship which could be caused on the assessee due to non-registration u/s 12A of the Act. Even otherwise the Apex Court in the case of CIT vs. Vatika Township Pvt. Ltd. 2014 (9) TMI 576 - SUPREME COURT clearly held if a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally and where to confer such benefit appears to have been the legislator s object then the presumption would be that such a legislation giving it a purposive construction would warrant it to be given a retrospective effect . Thus we do not have any hesitation to hold that proviso to Sec.12A(2) which was added by Finance Act 2014 shall be retrospective in operation. Hence the assessee shall be entitled to get the benefit of registration therefore we are inclined to set aside the impugned order passed by the ld. CIT(A) as well as assessment order and remand the case to the file of the Assessing Officer to decide afresh. - Appeal by the assessee is allowed for statistical purposes.
Issues:
1. Denial of exemption under section 10(23C)(iiiad) and sections 11/12 of the Act. 2. Applicability of the proviso of Sec. 12A(2) inserted by the Finance Act, 2014. 3. Interpretation of registration requirements under Sec. 12A of the Act. 4. Retrospective operation of the proviso to Sec. 12A(2). 5. Validity of the orders passed by the authorities below and imposition of penalty. Analysis: Issue 1: Denial of exemption under section 10(23C)(iiiad) and sections 11/12 of the Act: The appellant, a registered society running educational institutions, filed an appeal against the order of the ld. CIT(A) affirming the addition made by the Assessing Officer. The Assessing Officer denied exemption under section 10(23C)(iiiad) and sections 11/12 of the Act due to the society not being approved under section 10(23C)(vi) and not being registered under section 12A/12AA of the Act at the relevant time. The appellant contested this denial, leading to the present appeal. Issue 2: Applicability of the proviso of Sec. 12A(2) inserted by the Finance Act, 2014: The appellant argued that the amendment to Sec. 12A by the Finance Act, 2014, inserting a proviso, should be applied retrospectively. The proviso relates to the registration requirements for trusts or institutions to avail benefits under sections 11 and 12 of the Act. The appellant contended that since the registration was granted after the assessment order, the benefit of sections 11 and 12 should not be denied. Issue 3: Interpretation of registration requirements under Sec. 12A of the Act: The crux of the issue revolved around the timing of registration under section 12A and its impact on the entitlement to exemptions under the Act. The appellant argued that registration granted post-assessment should not preclude the society from claiming benefits under sections 11 and 12. Issue 4: Retrospective operation of the proviso to Sec. 12A(2): The Tribunal, considering previous decisions and the Apex Court's stance on legislative intent, held that the proviso to Sec. 12A(2) inserted by the Finance Act, 2014, should be applied retrospectively. This decision was based on preventing genuine hardship to the assessee due to non-registration under section 12A. Issue 5: Validity of the orders passed by the authorities below and imposition of penalty: The Tribunal set aside the orders passed by the authorities below, allowing the appellant's appeal for statistical purposes. Consequently, the penalty order was deemed unsustainable, leading to the dismissal of the Revenue's appeal. The case was remanded to the Assessing Officer for fresh consideration in light of the Tribunal's observations. This comprehensive analysis highlights the key legal issues, arguments presented, and the Tribunal's decision, ensuring a detailed understanding of the judgment.
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