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TMI Blog2024 (10) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... s already approved by CIT(Exemption), Pune u/s 12A of the IT Act for five assessment years i.e. from assessment year 2022-23 to 2026-27. Also decided in Shri Krishnabai Ghat Trust [ 2019 (5) TMI 618 - ITAT PUNE] has already held that if the proceedings pending before the ld. CIT(A) and registration u/s 12AA is granted to the assessee then for such previous assessment year also he is entitled for exemption u/s 11 12 of the IT Act. We find that the assessee trust was granted registration u/s 12A of the IT Act during the pendency of assessment proceedings and Form 10B audit report was also available with the CPC while processing the return. Therefore we allow the additional ground of appeal raised by the assessee in the present appeal. We therefore direct CPC to amend the intimation issued u/s 143(1) of the IT Act in the light of Form 10B Audit Report and provisional registration certificate u/s 12A of the IT Act furnished before us. Decided in favour of assessee. - SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER For the Assessee: Shri Kishor B. Phadke For the Revenue: Shri Ajay Kumar Keshari ORDER PER VINAY BHAMORE, JM: This appeal filed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of the IT Act was passed by disallowing incorrect claim u/s 143(1)(a)(ii) of Rs.46,79,75,225/-. As per the said intimation, two reasons were mentioned regarding disallowance of claim made by the assessee u/s 11 of the Act i.e. (i) the detail of registration or approval u/s 12AB was not mentioned and (ii) the trust has not e-filed the audit report in Form 10B one month prior to the due date for furnishing of return u/s 139 of the Act. Hence, the exemption of Rs.46,79,75,225/- claimed u/s 11 of the IT Act was not allowed. 5. Being aggrieved with this intimation order, the assessee society/trust filed first appeal before the ld. Addl./JCIT(A)-1, Chennai, who vide impugned order dated 31.01.2024 dismissed the appeal of the assessee. It is against this order, the assessee trust is in appeal before this Tribunal. 6. The ld. AR submitted before us that the order passed by ld. Addl./JCIT(A)-1, Chennai is not correct to the extent of not allowing benefit of section 12A of the IT Act. It was further submitted before us that the assessee society/trust was provisionally registered u/s 12A of the IT Act and in this regard the provisional registration certificate dated 07.04.2022 was produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year 1946 and registered under the provisions of Bombay Public Trust Act, 1950 which is engaged in education activities by running various schools/ colleges in and around Shirur of Pune district and also holding 12A registration along with 80G entitlement for past many years. From the copy of 143(1)(a) intimation order, it is apparent that two defects were pointed out (i) that 12A registration number was not mentioned and (ii) Form 10B audit report was not furnished one month prior to the due date of filing of return of income u/s 139(1) of the Act. In this regard, we find that the intimation u/s 143(1)(a) was passed on 27.10.2022 and on this date Form 10B was already filed and was available along with return of income and also the assessee society/trust was having provisional registration u/s 12A of the IT Act and, therefore, in the light of the decisions relied on by ld. AR, we are of the considered opinion that the ld. Addl./JCIT(A)-1, Chennai erred in not allowing the appeal of the assessee society/trust. In this regard, we find that Form 10B and audit report could not be filed prior to one month of due date of filing of return of income u/s 139 of the IT Act. In the lig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the due date of filing of the return which is duly extended by CBDT. Identical issue arose before the coordinate bench in case of Kedar Nath Saraf Charity Trust [2024] 161 taxmann.com 671 (Kolkata - Trib.) albeit for assessment year 2021 22 wherein coordinate bench held as under:- 4.1. It is an admitted fact that from March, 2020 to March, 2022, country was passing through Covid Pandemic and there were various restriction on the movements of the citizens and carrying out of the normal official works was hindered. It is also an accepted fact that many changes have been brought into the Act regarding procedure of filing of income-tax return as well as audit reports and certain technical glitches have been faced time and again. Also on account of change of the utility of furnishing the reports, the forms and change in the due dates have given rise to delay in furnishing of details and documents with the revenue authorities. Considering these aspects, CBDT firstly came up with a Notification dt. 03/01/2020 authorising the Commissioners to admit applications of condonation of delay in filing Form No. 10B for Assessment Year 2018-19 and subsequent Assessment Years, where there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of filing of income tax return for assessment year 2018-19 was 26-09- 2018. Notice under section 143 (1)(a) was issued on 19-12-2019. The audit report of the assessee trust was filed on the income tax portal by the auditors of the assessee trust on 20-01-2020. Intimation under section 143 (1) denying the claim of the application of income was issued by CPC, Bengaluru on 08-02-2020. Therefore, what can be seen is that as on the date on which the intimation/order under section 143(1) of the Act was passed by CPC, Bengaluru, the auditor of the assessee trust had already filed the audit report in form 10B, before such order/intimation under section 143 (1) of the Act was issued. From the facts placed on record before us, we see no deliberate/mala fide intention on the part of the assessee or it s auditor to file the audit report in form 10 B belatedly. 7.1 In the case of Shree Jain Swetamber Murtipujak Tapagachha Sangh v CIT 161 taxmann.com 114 (Bombay), the High Court held that where assessee-trust filed Form No. 10 beyond due date and assessee s auditor admitted to oversight that he did not consider provisions of Rule 17 and was under bona fide impression that since factum of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port in Form no. 10B. 7.5 In the case of CIT v. Gujarat Oil Allied Industries 201 ITR 325 (Gujarat), the High Court held that where an assessee could not file audit report along with return but filed it later before completion of assessment by ITO, he was entitled to deduction under section 80J of the Act. 7.6 Accordingly, in light of the above judicial precedents cited above and the assessee s set of facts, we are of the considered view that the claim of application of income cannot be denied to the assessee only on the ground that the assessee/the auditor of the assessee omitted to file form 10 B (auditor s report) along with return of income, when the same was submitted to the tax authorities before the order/intimation under section 143 (1) of the Act was issued. 10. We further find that if the assessee trust was granted registration u/s 12A of the IT Act during the pendency of assessment proceedings for any previous assessment year and the objects and activities remains same for such assessment year, the benefit of exemption u/s 11 and 12 shall be available to the assessee for that year for which assessment proceedings are pending. In the instant case in hand, we find that pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and the objects and activities of such trust or institution remain the same for such preceding assessment year: (italicized for emphasis) 6. A close scrutiny of the provision indicates that where an assessee has made an application for registration after the date specified in the sub-section (2), the provisions of sections 11 and 12 of the Act shall apply from the assessment year immediately following the financial year in which such application is made. First proviso to this section is relevant for our purpose. This proviso states that where the registration has been granted to the assessee u/s.12AA, then the provisions of sections 11 and 12 shall apply to 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 objects and activities of such trust remained the same for such preceding assessment year . Crux of the provision is that if registration has been granted subsequently and the proceedings for some earlier year are pending before the AO as on the date of granting the registration, then the benefit of sections 11 and 12 should be granted to such earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issues arising from the assessment at his own volition as well as at the instance of the assessee. Further, he is empowered to confirm, reduce, enhance or annul the assessment. It is thus clearly borne out from the above provisions that the CIT(A) has got plenary powers in an appeal before him against an assessment order. What AO can do, can be done by CIT(A) in an appeal before him. Even what the AO could have done but failed to do, can also be done by him. It shows that the powers of a CIT(A) in an appeal against an assessment order are almost similar to those of an AO. If extend this analogy to the provisions of section 12A(2), an irresistible conclusion which follows is that the benefit of the proviso is available not only when the assessment proceedings are pending before the AO but also when an appeal against the assessment order is pending before the ld. CIT(A). It is so for the reason that the appeal proceedings are nothing but continuation of the assessment proceedings. 8. At this juncture, it would be pertinent to note that the main object of proviso to section 12A(2) is to liberally grant the benefit of registration when the trust is otherwise engaged in genuine charitab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record. The issue in the present appeal is with respect to denial of claim of exemption u/s 11 and 12 of the Act. It is an undisputed fact that assessment u/s 143(3) of the Act was framed by Assessing Officer on 20.03.2015 whereby the claim of exemption u/s 11 and 12 was denied by the Assessing Officer. Against the aforesaid order of Assessing Officer, assessee carried the matter before the CIT(A). In the interim, the assessee had applied for fresh registration before the CIT(E) and CIT(E) vide order dated 19.03.2015 has granted registration w.e.f. A.Y. 2015-16. I find that an identical issue arose in the case of Shri Krishnabai Ghat Trust Vs. ITO (Exemptions) (supra), wherein Pune Tribunal has held as under:- 6. A close scrutiny of the provision indicates that where an assessee has made an application for registration after the date specified in the sub-section (2), the provisions of sections 11 and 12 of the Act shall apply from the assessment year immediately following the financial year in which such application is made. First proviso to this section is relevant for our purpose. This proviso states that where the registration has been granted to the assessee u/s.12AA, then the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n held that an assessment proceedings which is pending in appeal before the appellate authority should be deemed to be assessment proceedings pending before the AO. within the meaning of the term as envisaged under the proviso. It follows there from that the assessee which obtained registration u/s.12AA of the Act during the pending of appeal was entitled for exemption claimed u/s.11 of the Act . The additional ground thus raised is allowed by holding that the assessee would be entitled to exemption u/ss. 11 and 12 of the Act for the year under consideration on the raison d etre that the registration was, in fact, granted to the assessee u/s.12AA during the pendency of proceedings before the ld. CIT(A). 9. In the light of my above conclusion on the additional ground, the impugned order is set-aside and the matter is restored to the file of AO for framing a de novo assessment as per law after allowing a reasonable opportunity of hearing to the assessee. Needless to say, the assessee in such assessment proceedings would be considered to have been granted registration and the provisions of sections 11 and 12 shall apply pro tanto. 9. Before me, the Revenue has not pointed out as to ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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