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TMI Blog2017 (11) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... nment of Andhra Pradesh, vide G.O.M.S No. 411/MA dated 27-9-1975 issued a notification allowing the jurisdiction to each of the development authority. The assessee was recognized as a local authority. The income of the assessee was exempt from taxation u/s 10(20A) of the IT Act, till 31-03-2003 as Sec. 10(20A) of the IT Act was omitted w.e.f 01-04-2003. The assessee was in existence till formation of Hyderabad Metropolitan Development Authority (HMDA) w.e.f 19-04- 2008 by virtue of the HMDA Act of 2008 and the Govt., issued consequential G.Os for appointment of the Members and functioning of the HMDA. Thereafter, the assessee filed an application for registration u/s 12A of the IT Act by filing Form No. 10A, dated 02-03-2007. The said application was rejected by the CIT(E) and the matter travelled up to Hon'ble Supreme Court on refusal of condonation of delay by the Tribunal. The Hon'ble Supreme Court condoned the delay and remanded the matter to the file of the Tribunal, which remanded the issue to the file of the CIT(E) for reconsideration of the issue on merits. The assessee, vide letter dated 12-04- 2016, stated that the assessee was enjoying the exemption u/s 10(20A) of the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous years 2008-09, 2009-10, 2011-12, 2012-13 and also for subsequent years. He therefore did not grant the registration from the A.Y 2009-10 onwards. In effect he granted registration u/s 12AA of the Act only for the A.Ys 2007-08 and 2008-09. 3. Aggrieved, the assessee is in appeal before us by raising the following grounds of appeal: "1. The order of the learned Commissioner of Income-Tax (Exemptions) is erroneous to the extent it is prejudicial to the appellant. 2. The learned Commissioner of Income-Tax (Exemptions) erred in not allowing registration with eff ect from 1.4.2002. 3. The learned Commissioner of Income-Tax (Exemptions) ought to have seen that in the application f iled the appellant mentioned the date of Incorporation of the assessee and in the letter f iled before the learned Commissioner of Income-Tax (Exemptions) a request was made that the registration be granted with eff ect from 1.4.2002. 4. The learned Commissioner of Income-Tax (Exemptions) erred in holding that the registration granted would have effect only for the assessment years 2007-08 and 2008-09 and would not have effect f or the later years. 5. The learned Commissioner of Income-Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2016, wherein the CBDT has clarified that the registrations granted u/s 12A of the IT Act shall not be cancelled by virtue of the proviso to Sec. 2(15) of the IT Act. He submitted that the registration u/s 12A is granted after being satisfied that the objectives of the assessee company are charitable in nature and it shall be in force until it is cancelled or withdrawn under sub-Sec. (2) of Sec. 12AA of the IT Act. He submitted that the CIT(E) having granted registration for the A.Y 2007-08 and 2008-09 has, in the same order, cancelled the registration from the A.Y 2009- 10 onwards which is not permissible in law or as per the directions of the CBDT circular No. 21 of 2016. Therefore, he prayed that the CIT(E) be directed to grant registration u/s 12AA of the IT Act from the F.Y 2002-03 onwards and not limit it to A.Y. 2007-08 and 2008-09 alone. 7. He also argued that the assessee is not carrying on any activity in the nature of trade, commerce or business and therefore the proviso of Sec. 2(15) of the Act is not applicable to it but none of the authorities below ever considered the applicability or otherwise of the proviso to the assessee either in the proceedings u/s 12A of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular No. 21 of 2016, he submitted that the said circular relates to cancellation of the registration already granted u/s 12A of the Act and not to fresh application for registration u/s 12A of the Act. As regards assessee's prayer for registration for the assessment years prior to the date of application and the assessee's reliance upon the proviso sub sec. 2 of Sec. 12A of the Act, he submitted that the said proviso would be applicable only when the application for registration filed after 01-06-2007 is pending adjudication before the department. He submitted that in the case of the assessee, the application was filed on 02-03-2007 and was rejected and it has now come for reconsideration by the CIT(E), by virtue of the remand of the issue to his file by the Hon'ble ITAT. Therefore, according to him, the proviso to sub-sec. (2) of sec. 12 A of the Act, cannot be applied to the assessee's case and the assessee cannot be granted registration from the A.Ys 2003-04 onwards. The Ld. standing counsel also drew our attention to sub sec. (8) of sec. 13 of the Act introduced by the Finance Act 2012 with retrospective effect from 01-04- 2009 to state that even if the registration u/s 12A is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E) Vs. M/s Water and Land Management Training and Research Institute, Himayath Nagar, Hyderabad in ITTA No. 56 of 2017, vide judgment dated 15.03.2017 has held that the clause (ii) of the proviso to Sec. 2(15) of the Act clearly provides that the proviso would apply only if the turnover of the assessee trust crosses Rs. 25 lakhs and therefore on this ground the registration u/s 12A cannot be denied. Therefore we have no hesitation in holding that even if the proviso to Sec. 2(15) of the Act is applicable to assessee for the A.Ys 2009-10 onwards, it cannot be denied registration u/s 12A of the Act. The standing counsel's objection that by virtue of Sec. 13(8) of the Act, the assessee would not be entitled to exemption Sec. 11 and 12 of the Act, even if the registration u/s 12A of the Act is granted and therefore, there is no useful purpose in granting registration u/s 12A of the IT Act at this stage, is not acceptable to us, because in our opinion the applicability of Sec. 13(8) of the Act can be considered only while completing the assessment u/s 143(3) of the Act and examining the allowability of exemption u/s 11 and 12 of the Act. 12. Further, as rightly pointed out by the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee for all the assessment years from 2003-04 on wards were pending before the A.O and hence the proviso was applicable and assessee should be granted registration w.e.f 01-04-2002. 15. The Ld. Sr. Standing Counsel for the Department, on the other hand, submitted that assessee's application was already rejected by the CIT(E) and in the earlier application the assessee had never claimed the exemption w.e.f 01-04- 2002 nor has it filed any application for condonation of delay giving reasons as to why the application could not be filed earlier. 16. Having regard to the rival contentions and the material on record, we find that by virtue of remand to the CIT(E) for re-consideration of the assessee's application for registration u/s 12A of the IT Act, the assessee's application has been revived. As on the date when the CIT(E) was considering the application for registration pursuant to the remand by the ITAT, the proviso to Sec. 12A(2) of the IT Act has come into the statute book and therefore it is very much applicable to all the pending assessments before the A.O. The SMC Bench of this Tribunal at Ahmadabad, in the case of Shri Bhanushali Mitramandali Trust Vs ITO (cited ..... 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