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TMI Blog2019 (9) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... y, if the assessment proceedings were pending and pendency of such proceedings may be not only before the Assessing Office, but even before the Tribunal. According to us, the interpretation of the proviso has been given in ignorance of the main provision of Section 12A(2) of the Act, 1961. For the purpose of proper interpretation of Section 12A of the Act, 1961, the Tribunal was required to make interpretation after taking into consideration the main provision along with the proviso and not by giving meaning to the proviso in ignorance of substantive provision. Tribunal has even ignored the basic principle of law in giving interpretation in charging provisions, the benefit is to be given to the assessee but same principle is not applicable for an exemption notification or exemption clause, where the benefit of ambiguity must be given to the Revenue/State. It is also that burden to prove applicability of exemption would be on the assessee that it comes squarely within the parameters of the exemption notification or exemption clause. The Tribunal was required to make distinction between charging provision where benefit of ambiguity is given to the assessee and the exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rakash Sinha, learned counsel representing the respondent. 2. This appeal has been preferred under Section 260-A of the Income Tax Act- 1961. Challenge has been made to the order dated 26.11.2018 passed by the Learned Income Tax Appellate Tribunal ( hereinafter referred to as the Tribunal ) . 3. The appeal was admitted by this Court on following substantial questions of law, which are quoted for ready reference:- 1. Whether the Income Tax Appellate Tribunal was justified in allowing retrospective coverage to the assessee U/s 11 and 12 of the Act, 1961 by holding that the appellate proceeding can be regarded as assessment proceeding ? 2. Whether the Income Tax Appellate Tribunal has rightly applied the proviso of Sec. 12A (2) for A.Y. 2011-12 in the case of assessee when admittedly the assessee got registration U/s 12AA from A.Y. 15-16 ? 3. Whether the Income Tax Appellate Tribunal was justified in holding that the assessee is eligible for exemption U/s 11 of the Act even when the assessee was not registered U/s 12AA of the Act at the time of passing of the assessment order? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that an appeal was pending for the assessment year 2011-12 while the application for registration was accepted in favour of the assessee, thus the benefit of exemption under Section 11 and 12 of the Act, 1961 has rightly been allowed by the Tribunal. 10. Reference of the judgment of the Gujarat High Court in the case of Commissioner of Income-Tax Vs. Mayur Foundation , reported in (2005) 194 CTR Gujarat 197 has been given. It is to demonstrate the meaning of word pendency of the assessment . It has been held that assessment proceedings remain pending till appeal is heard and disposed of by the Tribunal and accordingly interpretation of the proviso appended to Section 12A(2) of the Act, 1961 has been given by the Tribunal. The prayer is accordingly to maintain the order passed by the Tribunal and accordingly the appeal be dismissed. 11. We have heard the rival submissions of the parties and perused the record. 12. The substantial question of law before us is in reference of Section 12 A of the Act, 1961 thus it is quoted herein below for ready reference:- 12A. [[1] The provisions of section 11 and sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m and manner, within a period of thirty days from the date of said adoption or modification, to the Principal Commissioner or Commissioner and such trust or institution is registered under section 12AA;] (b) where the total income of the trust or institution as computed under this Act without giving effect to [the provisions of section 11 and section 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year], the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below subsection (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. (ba) the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of sub-section (4A) of section 139, within the time allowed under that section.] (c)[Omitted by the Finance Act, 2002, with effect from 1st April, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for registration on 15.12.2014 i.e. in the assessment year 2015-16. The assessment in question is of the year 2011-12. In view of the above, whether the subsequent registration pursuant to the application dated 15.12.2014 would make the assessee entitled for the benefit of Section 11 12. It is in respect of the assessment year prior to the date of application. It is in the circumstances that registration was finally given on 08.06.2015. We are required to consider proviso below sub-Section 2 of Section 12 A of the Act, 1961. The proviso provides that if registration has been given to the Trust or the Institution under Section 12 AA of the Act, 1961, then provisions of Section 11 12 of the Act, 1961 shall apply in respect of any income derived from the property held under the Trust or the institution for any assessment year proceeding, for which assessment is pending before the Assessing Authority as on the date of registration. The Tribunal has given interpretation to the proviso to hold that irrespective of the date of application, the benefit of Section 11 12 of the Act, 1961 would be available to the assessee retrospectively, if the assessment proceedings were pending and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial year in which the application was given. In the instant case the application for registration was given on 15.12.2014 i.e. in the financial year 2014- 15. On registration of the Trust, benefit under Section 11 and 12 would be available to the assessee from the assessment year following the financial year in which application was given and not any previous year. The benefit of registration could not have been extended for the assessment year 2011-12, even if the matter was pending before the Tribunal when application for registration was submitted on 15.12.2014. 18. The proviso to sub-section 2 applies in a given circumstances, but cannot by making main provision of section 12 A as redundant. In the instant case, the application for registration was then submitted on 15.12.2014. The registration was given on 08.06.2015. Since registration has been given on 08.06.2015, the benefit of Section 11 12 would be available for the following financial year in which application was made if the assessment proceedings for the relevant assessment year was pending till the date of registration. It cannot be for the assessment year 2011-12 due to pend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is pending before the Assessing Officer. In few cases, the assessment proceedings is considered to be pending before the Tribunal due to pendency of the appeal but it is applicable in those cases where words used are pendency of the assessment proceedings and not with words pending before the Assessing Officer . The interpretation therein is in reference to the words pendency of the assessment and not in reference to the pendency of the assessment before the Assessment Officer. The instruction of CBDT can not be applied if seems counter the statue. 21. Accordingly the judgment of Gujarat High Court in Commissioner of Income-Tax Vs. Mayur Foundation (supra) , would not apply. The view expressed therein cannot be applied to the facts of this case, otherwise an anomalous situation may emerge in a given case where for one or the other reason assessment proceedings before the Tribunal remain pending for years together or on a remand or for any other reason it comes before the Assessing Officer and such cases also subsequent application for registration and acceptance would result to extend benefit of Section 11 and 12 creating anomalous position if not meant for. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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