2022 (2) TMI 227

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..... n or by issuance by the AO of notice to file a return and it culminates with the issuance of notice of demand u/s 156 - manifest that the assessment proceedings commence with the filing of return and not when notice is issued for the first time u/s 143(2). Issuance of such a notice and passing of assessment order are parts of entire assessment proceedings which commences with the filing of return. Assessee filed its return for the year under consideration on 17.01.2017. The approval was granted by the ld. CIT(E) u/s 12AA on 16.05.2017. It is, ergo, glaringly patent that the assessment proceedings for the year under consideration, which commenced with the filing of return on 17.01.2017, were pending on the date of grant of registration by .....

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..... benefit of exemption u/s 11 of the Act. The AO observed that the registration was granted by the ld. CIT(E) u/s 12AA to the assessee on 16.05.2017. The assessee‟s contention that section 12A(2) entitled it to the exemption for the year under consideration also, did not find favour with the AO, who held that for availing such a benefit, the assessment proceedings must be pending when the registration is granted. Since notice u/s 143(2) of the Act for the instant year was issued for the first time on 20.09.2017, i.e. after the grant of registration, no such exemption could be allowed. The ld CIT(A) echoed the assessment order on this count. 4. I have heard both the sides in Virtual Court and gone through the relevant material on reco .....

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..... to grant exemption u/s 11 in respect of such assessment year. The authorities below have taken note of the mandate of the second proviso but interpreted the term assessment proceedings‟ as commencing with the issuance of notice u/s 143(2) of the Act. That is the raison d`etre for denying the benefit of exemption in the extant case on the premise that notice u/s 143(2) was issued on 20.09.2017 and by that time the registration had already been granted by the ld. CIT(E) on 16.5.2017. In my opinion, the connotation of commencement, continuation and termination of `assessment proceedings‟ is fairly settled by authoritative pronouncement from the highest Court of the land in Auto Metal Engineers And Ors. Vs. Union of India Ors. .....

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