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TMI Blog2024 (2) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) according to which the object and activities of the assessee should remain same for preceding assessment year i.e. AY 2016-17 and 2017-18 in these cases. AR submitted that the assessee is a Govt. owned society and its object and activities remained same year after year. We prima facie find merit in the submission of Ld. AR but still the AO should get an opportunity to verify this condition (iii). Moreover, the claim of exemption u/s 11/12 involves a different type of working based on application and accumulation of income which the AO has not verified till now because he did not grant exemption for want of registration u/s 12A. For these reasons, we feel it most appropriate to remand these matters back to the file of AO for carrying out verification of fulfillment of condition (iii) discussed above and if that is held to be satisfied, to verify and allow exemption u/s 11/12. Appeals of assessee are allowed for statistical purpose. - SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER For the Appellant : Ms. Nisha Lahoti, AR For the Respondent : Shri Ashish Porwal, Sr. DR ORDER Per B.M. Biyani, A.M.: Feeling aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormed the assessee on 15.06.2022 about non-filing of appeal. On coming to know this, the assessee immediately arranged to file appeals without further delay. Ld. AR submitted that there occurred a small delay of 25 days due to this reason beyond control of assessee. Ld. AR very humbly submits that there is no deliberate lethargy, negligence or mala fide intention of assessee in making delay and the assessee does not stand to derive any benefit because of delay. Ld. DR left the matter to the wisdom of Bench. We have considered the explanation of assessee and in absence of any contrary fact or material on record, the assessee is found to have a reasonable cause for delay in filing the present appeal. Placing reliance on the decision of Hon ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387, we take a judicious view; condone delay and proceed with appeal. 4. Brief facts culled out from orders of lower-authorities are such that the assessee is a society formed by the state Govt. of Madya Pradesh under M.P. Societies Registration Act, 1973 on 26.07.2010 for promotion of vocational education, training, management, etc. and run vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15.07.2022 granting registration u/s 12A to assessee w.e.f. 01.04.2017. Copies of orders of ITAT and CIT(Exemption) are placed on record. Thus, the assessee-society stands registered u/s 12A w.e.f. 01.04.2017. Now, the limited controversy for Madhya Pradesh Council for Vocational Education Training, Bhopal adjudication by us is whether or not the assessee shall be eligible to get benefit of exemption u/s 11/12 for preceding AY 2016-17 and 2017-18 under consideration in present appeals? 9. The assessee claims that it is entitled to benefit of exemption on the basis of 1 st Proviso to section 12A(2). For ready reference, the provision of section 12A(2) as existing at the relevant time, is re-produced below: 12A(2) Where an application has been made on or after the 1 st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment-year immediately following the financial year in which such application is made: Provided that where registration has been granted to the trust or institution under section 12AA, then, the provisions of sections 11 and 12 shall apply in respect of any income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e copy of registration-order. Ld. AR then referred to the section 12A(2) which reads as under: 12A(2) Where an application has been made on or after the 1 st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment-year immediately following the financial year in which such application is made. Provided that where registration has been granted to the trust or institution under section 12AA, then, the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the Assessing Officer as on the date of such registration and the object and activities of the trust or institution remain the same for such preceding assessment year: Analyzing the above Proviso, the Ld. AR submitted that once the registration has been granted u/s 12AA, the exemption u/s 11 and 12 shall apply in respect of any preceding assessment-year for which the assessment- proceeding is pending before the AO on the date of registration. Ld. AR submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year of registration caused genuine hardship to charitable organizations. Due to absence of registration, tax liability is fastened even though they may otherwise be eligible for exemption and fulfill other substantive conditions. However, the power of condonation of delay in seeking registration was not available. This clearly goes to prove that the first proviso to section 12A(2) was brought in the statute only as a retrospective effect with a view not to affect genuine charitable trusts and societies carrying on genuine charitable objects in the earlier years and substantive conditions stipulated in section 11 to 13 have been duly fulfilled by the said trust. The benefit of retrospective application alone could be the intention of the legislature and this point is further strengthened by the Explanatory Notes to Finance (No.2) Act, 2014 issued by the Central Board of Direct Taxes vide its Circular No. 01/2015 dated 21.1.2015. Apparently, the statute provides that registration once granted in subsequent year, the benefit of the same has to be applied in the earlier assessment years for which assessment proceedings are pending before the ld. A.O., unless the registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 my 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 my 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. 7.5 I am also supported by the order of Kolkata Bench of ITAT in case of Sree Sree Ramkrishna Samity vs. DCIT (ITA No. 1680/2012, order dated 09.10.2015) where it was held that amendment to Section 12A w.e.f. 01.10.2014 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the records, considered the provisions of law and judicial precedents. We would first deal with the claim of exemption u/s 10(23C)(iiiab). XXX (not reproduced being ir-relevant in present appeal). 11. Now we proceed to examine the alternative claim of exemption u/s 11 / 12 demanded by the assessee. On perusal of the Proviso to section 12A(2) and the decision of Hon ble Co-ordinate Bench of ITAT, Ahmedabad in Shri Bhanushali Mitra Mandal Trust (supra), we agree to the proposition that the assessee is entitled to the benefit of exemption u/s 11/12 for the assessment- year 2014-15 under consideration as the requirements prescribed in the Proviso stand satisfied, viz. (i) the revenue had already granted registration u/s 12AA from assessment-year 2019-20, (ii) the assessment-year under consideration is 2014-15 which falls within any preceding assessment year , and (iii) the objects and activities of the assessee remain same. We also find that the Ld. DR did not make any objection to this claim argued by Ld. AR. But, however, we have to ascertain one important aspect i.e. can we entertain this new claim made by assessee for the first time before us? In this respect we find that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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