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TMI Blog2016 (4) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... e income at Rs. 1,96,210/. 3] Lr. CIT(A), Valsad has erred in holding that the charitable trust is not registered than the income to be assessed at maximum marginal rate of tax. 4] Lr. CIT(A), Valsad has erred in law and on facts to consider appellant's case on the principle of mutuality over looking the fact that the appellant trust has collected donation from bhanushali community and had spent the same for the benefit of bhanushali community. Therefore, surplus, if any, not taxable on the ground of mutuality. 3. Briefly stated facts of the case are that assessee is a trust registered u/s.12AA of the Act w.e.f. 17.12.2013. For A.Y. 2011-12, the return of income was filed on 31.03.2012, declaring total income at Rs. 3,30,860/-. During the course of assessment proceedings, it was noticed by the A.O. that assessee trust had claimed an amount of Rs. 5,93,113/- under the head "income applied" during the year and Rs. 1,64,113/- under the head "amount accumulated or set apart not exceeding 15%". Thus, assessee had claimed exemption u/s.11 of the Act in total amounting to Rs. 7,63,226/-. The A.O. denied the benefit of Section 11 deduction, since according to the A.O., assessee trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the order of ITAT 'C' Bench, Kolkata in the case of Sree Sree Ramkrishna Samity vs. DCIT ( ITA No. 1680/2012, A.Y. 2003-04, order dated 09.10.2015) for the proposition that the provisos introduced to Section 12A by Finance (No.2) Act, 2014 is curative in nature and is retrospective. The ld. D.R. on the other hand supported the order of Income Tax Authorities. 7. I have heard the rival submissions and perused the material on record. The issue that arise for my consideration are of two folds, namely, (i) Whether the assessee trust is entitled to registration u/s.12AA of the Act for the relevant assessment year, (ii) if the assessee trust is not entitled for registration u/s.12AA of the Act whether surplus according to assessee trust which is corpus donation is liable to be taxed. 7.1 To examine the first issue, necessarily I have to analyze the relevant provision, namely, the amendment to Section 12A by Finance Act, 2014 w.e.f. 01.10.2014 by way of insertion of provisos to Section 12A(2) of the Act which is reproduced below for ready reference: "[(2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015 dated 21.1.2015. Apparently the statute provides that registration once granted in subsequent year, the benefit of the same has to be applied in the earlier assessment years for which assessment proceedings are pending before the ld. A.O., unless the registration granted earlier is cancelled or refused for specific reasons. The statute also goes on to provide that no action u/s147 could be taken by the AO merely for non-registration of trust for earlier years. 7.3 In the instant case, it is not in dispute that registration was granted w.e.f. 17.12.2013 by the order of CIT(A) dated 08.05.2014. It is also not in dispute that objects and activities of the assessee trust are charitable in nature during the relevant financial year. When Section 12A of the Act was amended by introducing new provisos to sub-section (2) of Section 12A by Finance Act, 2014 with effect from 01.10.2014, the assessment orders passed by the assessing officer in respect of the present assessee were pending in appeal before the first appellate authority. During such pendency, the assessee was granted registration u/s. 12AA of the Act on 17.12.2013 w.e.f. the assessment year 2013-14. The appeal is the contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. 7.5 I am also supported by the order of Kolkata Bench of ITAT in case of Sree Sree Ramkrishna Samity vs. DCIT (ITA No. 1680/2012, order dated 09.10.2015) where it was held that amendment to Section 12A w.e.f. 01.10.2014 is retrospective. The relevant funding of the Hon'ble Kolkata Bench in case of Sree Sree Ramkrishna Samity vs. DCIT (supra) read as follows: "6.10. We hold that it is an established position in law that a proviso which is inserted to remedy unintended consequences and to make the provision workable, a proviso which supplies an obvious omission in the section and is required to be read into the section to give the section a reasonable interpretation, requires to be treated as retrospective in operation, so that a reasonable interpretation can be given to the section as a whole and accordingly the said insertion of first proviso to section 12A(2) of the Act with effect from 1.10.2014 should be read as retrospective in operation with effect from the date when the condition of eligibility for exemption under section 11 & 12 as mentioned in section 12A provided for registration u/s.12AA as a pre-condition for applicability of section 12A." 7.6 Further, the Kolkat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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