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TMI Blog2020 (6) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... im benefit of exemption u/s.11 of the Act before the AO and the AO did not have the benefit of examining such a claim. Mere existence of registration u/s.12A will not confer benefit of exemption u/s.11 and the other conditions for availing benefit of exemption u/s.11 of the Act has to be examined by the AO. It would be just and proper to set aside the order of the CIT(A) and remand to the AO the question of allowing exemption u/s.11 of the Act as by reason of the proviso to Section 12A(2), the Assessee should be deemed to have had registration u/s.12A of the Act. The registration u/s. 12AA(1)(b)(i) of the Income Tax Act, 1961 does not automatically exempt the income of the Trust/Institution. The question of taxability of the income of the Trust/Institution shall be examined and decided upon by the Assessing Officer based on the activities, compliance with various statutory and other requirements, etc., as referred to in Sections 2(15), 11, 12 13 - Appeal of the Assessee is treated as allowed for statistical purposes. - ITA No.157/Bang/2019 - - - Dated:- 19-6-2020 - Shri N.V. Vasudevan, Vice President And Shri B R Baskaran, Accountant Member For the Appellant : Shri Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s. 11 is applicable to assessee society for all the preceding assessment years of the previous year in which registration u/s. 12AA is granted. 5. The CIT(A), however, rejected the plea of the Assessee observing that the registration was granted to the Assessee only on 9.3.2018 but the order of AO was passed on 29.8.2017. Therefore the assessment proceedings were not pending as on 9.3.2018 and therefore the benefit of proviso to Sec.12A(2) of the Act cannot be extended to the Assessee. The following were his observations in this regard:- 5. In the written submissions AR of the appellant stated that the assessee proviso to section 12A(2) states that, where registration has been granted to the trust or institution under section 12AA, then the provisions of section 11 and 12 shall apply in respect of any income derived from property held under trust of any Asst. year preceding the aforesaid Asst. year for which Asst. proceedings are pending before the A.0 as on the date of such registration and the object and activities of such trust or institution remain the same for such preceding Asst. year. 6. I have carefully considered the facts of the case, the submissions made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. It was contended by him that assessment proceeding which is pending in appeal before appellate authority should be deemed to be 'assessment proceedings pending before Assessing Officer' within the meaning of that term as envisaged under proviso to section 12A(2) and therefore an Assessee which obtained registration under section 12AA during pendency of appeal was entitled to exemption claimed under section 11 of the Act. 10. The learned counsel for the Assessee in this regard placed reliance on a decision of the ITAT Cochin Bench in SNDP Yogam v. Assistant Director of Income-tax (Exemption) [2016] 68 taxmann.com 152 (Cochin - Trib.) . The facts of the case were that the Assessee which was a charitable institution had not obtained the benefit of registration u/s.12A of the Act for AY. 2006-07 to 2009-10 2011-12. On 29.7.2013, the Assessee was granted registration u/s.12A of the Act. Prior to 29.7.2013, the assessment for AY 2006-07 to 2009-10 2011-12 were concluded by the AO and the benefit of Sec.11 12 was denied to the Assessee because the Assessee did not have registration u/s.12A of the Act. Against the orders of assessment for the aforesaid AYs, the Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 nature is to be decided at the assessment stage. Being procedural in nature, in our view, liberal interpretation will give effect to the intention of the amendment, thereby removing the hardship in genuine cases like the present assessee under consideration. 7.4 Taking into account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. It has to be held that an assessment proceeding which is pending in appeal before appellate authority should be deemed to be 'assessment proceedings pending before Assessing Officer' within meaning of that term as envisaged under proviso to section 12A(2). Consequently, an Assessee which obtained registration under section 12AA during pendency of appeal was entitled to exemption claimed under section 11. 14. In the present case, however, we find that the Assessee did not claim benefit of exemption u/s.11 of the Act before the AO and the AO did not have the benefit of examining such a claim. Mere existence of registration u/s.12A will not confer benefit of exemption u/s.11 of the Act and the other conditions for availing benefit of exemption u/s.11 of the Act has to be examined by the AO. In the given facts and circumstances of the case, we are of the view that it would be just and proper to set aside the order of the CIT(A) and remand to the AO the question of allowing exemption u/s.11 of the Act as by reason of the proviso to Section 12A(2), the Assessee should be deemed to have had registration u/s.12A of the Act. The registration u/s. 12AA(1)(b)(i) of the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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