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TMI Blog2018 (1) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... e delay of 14 days in filing the appeal before the Tribunal is condoned and we proceed to hear the appeal on merits. 3. The appellant Revenue has raised the following grounds:- 1. That the ld. CIT(A) has erred in allowing the appeal whereas the assessment proceedings for the assessment year under consideration was not pending on the date on which the first Proviso to Section 12A(2) become effective. 2. That the Ld. CIT(A) has erred in allowing relief whereas it is apparent that the application of total fund during the year under consideration was less than 85%, hence, the assessee was liable to pay tax." 4. The AO for non submission of order of registration u/s. 12AA of the Act denied the claim of exemption u/s. 10 (23C) of the Act and disallowed a sum of Rs. 64,49,997/- vide his order dt:240202914 u/section 144 of the Act. 5. The assessee challenged the same before the CIT-A. The CIT-A after considering the effect of first proviso to section 12A(2) inserted by Finance Act (No.2) 2014 w.e.f 01-10-2014 directed the AO to give benefit of registration u/s. 12AA of the Act for the A.Y under consideration. Relevant portion of which is reproduced herein below:- "3. During course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year, for which assessment proceedings are pending before the Assessing Officer as on the date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment year." It has also been held in the judgement of Hon'ble ITAT cited above that the assessment is not complete as long as it is pending before the appellate authorities. The AO is directed to give the benefit of registration u/s. 12AA to the assessee for this AY. Appeal is allowed. " 6. The Ld.DR submits that inspite of having availing many opportunities, the assessee did not provide the information as required by the AO to examine the claim. The Ld.DR referred to page no-1 and 2 of AO's order and argued that the AO rightly denied the exemption of claim made u/section 10(23C) of the Act. The Ld.DR further submits there was no assessment pending as on the date of 1st proviso came into force. The CIT-A without considering the facts of the case properly, directed the AO to give benefit of registration u/section 12AA of the Act is incorrect. The ld. DR relied on the other of the AO. 7. On the other hand, the ld. AR submits that the AO completed the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking registration u/s. 12A of the Act the assessment for the A.Y under consideration is pending before the CIT-A as the CIT-A has co-terminus power. In support of his contention, the ld.AR supported the order of the CIT-A. 8. Heard rival submissions and perused the material on record. We find that the assessee made an application to CIT on 12-02-2012 seeking registration u/s. 12A of the Act. The assessment was completed by fixing various dates from 22-10-2013 to 17-02-2014 finally on 24-02-2014 u/s.144 of the Act. The CIT-A considered the insertion of 1st proviso to section 12A by taking support from the order dt:09-10-15 of the Kolkata Bench, wherein, the Kolkata Bench by placing reliance on the decision of the Hon'ble High Court of Gujarat which held that a legal claim can always be entertained in first appellate proceedings which is part and parcel of assessment proceedings in determining the correct income. The Cochin Tribunal in the case of supra has placed reliance on the order of Kolkata Bench in the case of Sree Sree Ramkrishna Samity supra, and held that insertion of 1st proviso to section 12A is retrospective in nature and those appeals were the continuation of the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which, due to absence of registration u/s 12AA tax liability got attached though otherwise they were eligible for exemption by fulfilling other substantive conditions that the amendment was brought in. That being so, denying such benefit to a trust like the assessee who had obtained registration u/s 12AA during the pendency of the appeals filed against the orders of the assessing authority, by narrowly interpreting the term, 'pending before the assessing officer' so as to exclude its pendency before the appellate authority, will be doing violence to the provisions of the Statute and, as such, liable to be interfered with. Moreover, under the Scheme of the Act, sections 11 and 12 are substantive provisions which provide for exemptions to a religious or charitable trust. Sections 12A and 12AA detail the procedural requirements for making an application to claim exemptions under sections 11 and 12 by the assessee and the grant or rejection of such application by the commissioner. Thus, in our view, sections 12A and 12AA are only procedural in nature. Hence, it is not the registration u/s 12AA by itself that offers immunity from taxation. A receipt whether it is revenue or capital in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. It is only elementary that a statutory provision is to be interpreted ut res magisvaleat quam pereat, i.e to make it workable rather than redundant. Applying this legal maxim, it would be just and fair to hold that the amendment in section 12A is brought in the statute to confer benefit of exemption u/s 11 of the Act on the genuine trusts which had not changed its objectives and had carried on the same charitable objects in the past as well as in the current year based on which the registration u/s.12AA is granted by the DIT (Exemptions)." 7.5 In light of the aforesaid reasoning and order of the Tribunal in case of Sree Sree Ramkrishna Samity(supra), we direct the Director of Income-tax(Exemption) to grant registration to the assessee trust for all the assessment years under dispute, subject to the following conditions, namely: "i) The registration U/S.12AA (1)(b)(i) of the Income Tax Act, 1961 does not automatically exempt the income of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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