DODDABALLAPUR PLANNING AUTHORITY,BANGALORE V. ITO, EXEMPTION, WARD-3, BANGALORE

ITA 2115/BANG/2024

AI Insights

The case involves the Doddaballapur Planning Authority appealing against the orders of the CIT(A) which denied them exemptions under Sections 11 and 12 of the Income Tax Act for the assessment years 2019-20 and 2021-22. The primary contention was whether the authority's collections, such as betterment fees and lake rejuvenation fees, could be treated as capital receipts under Section 11(1)(d). The tribunal examined the registration status of the authority under Section 12A/12AA/12AB and found it lacking for the years in question, thus upholding the CIT(A)'s decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669526 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Other Referred Cases: Assistant Commissioner of Income Tax (Exemptions) v. Ahmedabad urban development authority, Magadi Planning Authority in ITA No. 1056, 1352 & 1353 /Bang/2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEHA SAHAY
• Assessee Lawyers: DINESH KUMAR JOSHI
• Keywords: Capital receipt; Charitable institution; Benefit of exemption; Procedural lapse
• Section: 147; 144; 143(3); 142(1); 12AA; 12A; 139; 10B

Judgement Text

"ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur IN THE INCOME TAX APPELLATE TRIBUNAL “C’’BENCH: BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA Nos. 2115 & 2116/Bang/2024 Assessment Years : 2019-20 & 2021-22 Doddaballapur Planning Authority Khata No.2971/2526, S N Complex 1st Floor, Opp. Police Station D Cross Doddaballapur Bangalore Rural 561 203 Karnataka PAN NO : AAALD2630B Vs. ITO (Exemption) Ward-3 Bangalore APPELLANT RESPONDENT Appellant by : Sri Dinesh Kumar Joshi, A.R. Respondent by : Ms. Neha Sahay, D.R. Date of Hearing : 07.04.2025 Date of Pronouncement : 25.06.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: These appeals at the instance of assessee are directed against the orders of ld. Addl/JCIT(A), Panchkula both dated 25.10.2024 vide DIN & Order No. ITBA/APL/S/250/2024-25/1069938421(1) for the assessment year 2019-20 & vide DIN & Order No. ITBA/APL/S/250/2024-25/1069936312(1) for the assessment year 2021-22 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”). Since the issue in both these appeals is common, these are clubbed together, heard together and disposed of by this common order for the sake of convenience and brevity. ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 2 of 35 2. First, we take-up the assessee’s appeal in ITA No. 2115/Bang/2024 for the AY 2019-20 for adjudication. The grounds raised by the assessee in this appeal are as follows: 1. “That on the facts and circumstances of the case the order of the ld. CIT(A) is bad in law. 2. CIT(A) erred in not considering the receipts covered under section 11(1)(d) as income liable for accumulation even it is brought to the notice that there is wrong filing of return of income by the assessee. 3. CIT(A) erred in not considering the specific collections like betterment fees, lake rejuvenation fees are specific collections covered u/s 11(1)(d) of the income tax and treated it as income in general.” 3. Brief facts of the case as stated by the AR of the assessee are that the assessee is a Town Planning authority constituted under the special act called The Bangalore Metropolitan Region Development Authority Act, 1985. Thus, the assessee is an Authority constituted under the act of State Legislature and assessed to ITO (Exemption), Ward-3, Bangalore having PAN- AAALD2630B. The assessee filed its return of income for the AY 2019-20 belatedly on 29.11.2020 declaring the total income of Rs. Nil whereas the due date of filing the return of Income for the Asst. year 2019-20 was 30/09/2019. Thereafter, the said Return of Income was processed by the ld. Asst. Director of Income Tax, CPC and an Intimation u/s 143(1) of the Act dated 12.2.2021 was passed wherein the amount of Rs. 5,80,44,590/- deemed to have been applied during the previous year as per clause (2) of explanation to section 11(1) of the Act as claimed by the assessee in the return was denied by the CPC and added to Income of the assessee by citing the following reason- ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 3 of 35 (Quote ) As per the details furnished in schedule Personal information under “Details of registration or approval under the Income Tax Act”, the trust or institution is registered u/s 12A/12AA and is claiming exemption u/s 11, but the trust or institution has not e-filed Form 9A within the due date, hence exemption claimed in Sr. no. 4iv of Part- B TI “ Amount deemed to have been applied during the previous year as per clause (2) of Explanation to section 11(1)” is not allowed in accordance with the said provisions r/w Rule 17 of Income Tax Rules. (Unquote) The CPC accordingly raised a demand of Rs. 2,86,21,342/- for the assessment year 2019-20 while passing intimation U/s 143(1) of the Act. 4. Aggrieved by the intimation dated 12/02/2021 passed by the CPC u/s 143(1) of the Act, the assessee preferred an appeal before the ld. CIT(A) / ADDL./JCIT(A). 5. The ld. ADDL/JCIT(A) Panchkula dismiss the appeal of the assessee on the following grounds/Observations- (i) It is noted that the appellant is a Charitable Trust and has claimed exemption at Rs.5,80,44,590/- under section 11(1) of the Act and this amount has been disallowed as the appellant assessee failed to file Form 9A within the due date. (ii) Section 11(1) explicitly mandates the filing of Form 9A for the accumulation of income for the charitable purpose to ensure transparency and accountability in the utilization of fund for charitable activities. ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 4 of 35 (iii) The failure to file Form 9A as required constitutes a breach of the provisions set out in the I. Tax Act. (iv) The assessee has not provided sufficient justification for the oversight in filing the form. (v) The absence of Form 9A has been interpreted as a significant procedural lapse. (vi) Lastly, the appellant has submitted Form 10AC which shows that registration was valid with effect from assessment year 2022-23 & not for assessment year 2019-20 for which the appellant has filed appeal. 6. Again, aggrieved by the order of the ld. ADDL/JCIT(A) Panchkula dated 25/10/2024, the assessee has filed the present appeal before this Tribunal. 7. Before us, the ld. AR of the assessee CA Sri Dinesh Kumar Joshi vehemently submitted that the ld. ADDL/JCIT(A) erred in not considering the amount collected by the planning authority by virtue of section 18 of the Town planning act being betterment fees amounting to Rs. 5,20,97,935/- & Rejuvenation fees amounting to Rs. 55,10,500/- is covered under section 11(1)(d) of I. Tax Act as capital Receipt. Further the ld. AR of the assessee relied upon the Apex Court verdict in the case of Assistant Commissioner of Income Tax (Exemptions) v. Ahmedabad urban development authority reported in (2022) 449 ITR 1 & (2022) 449 ITR 389 as well as Order of the ITAT, ‘C’ Bench, Bangalore in the case of Magadi Planning Authority in ITA No. 1056, 1352 & 1353 /Bang/2024 dated 22/01/2025. 7.1 Further, the Member secretary of the Assessee has also filed the detailed written submission which is reproduced below for ease of reference & convenience: - ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 5 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 6 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 7 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 8 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 9 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 10 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 11 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 12 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 13 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 14 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 15 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 16 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 17 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 18 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 19 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 20 of 35 8. The ld. DR Ms. Neha Sahay, on the other hand supported the order of the ld. ADDL/JCIT(A), Panchkula and fervently submitted that the provision of section 11 of the Act is not at all applicable to the assessee as the assessee is not registered u/s 12A/12AB of the Act for the Asst. year 2019-20 & Asst. yea 2021-22 under appeal. Further the ld. DR submitted that in fact the entire gross receipts of the assessee are liable to tax instead of Net Income as computed by the CPC. 9. We have heard the rival submissions & perused the material available on Record. We have also gone through the case laws relied upon by the AR of the assessee. On going through the intimation passed u/s 143(1) of the Act dated 12.2.2021, we take a note of the fact that the ld. Asst. Director of Income Tax, CPC had denied the claim of Rs. 5,80,44,590/- deemed to have been applied during the previous year as per clause (2) of explanation to section 11(1) of the Act on the ground that the assessee had failed to file Form 9A before the due date as per the provisions of the Act read with rule 17 of the Income Tax Rules. We also take a note of the fact that such denial was on the strong credence that the assessee is registered u/s 12A/12AA of the Act since in the Return of Income as per the details furnished in schedule personal information under “Details of registration or approval under the Income Tax Act, the assessee had declared to be registered u/s 12A/12AA of the Act and is claiming exemption u/s 11 of the Act. Before us, the ld. AR of the assessee submitted that the claim of registration in the return was due to the inadvertent mistake on the part of the assessee. Further on going through the order for registration in Form 10AC dated 15/11/2021 submitted before us, we observe that the ld. PCIT/CIT granted the registration under sub clause (i) of clause (ac) of sub- section (1) of section 12A of the Act vide Unique Registration No. ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 21 of 35 (URN)- AAALD2630BE20215 effective from AY 2022-23 to AY 2026-27, the copy of which is reproduced below for ease of reference & convenience:- ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 22 of 35 ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 23 of 35 9.1 On going through the above order, we take a note of the fact that the assessee had been granted registration under sub clause (i) of clause (ac) of sub-section (1) of section 12A of the Act i.e. where the trust or institution is already registered u/s 12A [as it stood immediately before its amendment by the Finance (No.2) Act, 1996] or u/s 12AA [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of certain Provisions) Act,2020 which in our view is not a case of the assessee Trust. In fact, as submitted by the AR of the assessee, the application for registration was originally filed on 21/03/2020 which was rejected by the ld. CIT(E) as incomplete vide order dated ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 24 of 35 31/03/2021. Thereafter the assessee had again filed the fresh application on 08/11/2021 & accordingly the ld CIT(E) had granted registration vide order dated 15/11/2021. Further, we also take a note of the fact that ld. ADDL/JCIT(A), Panchkula has also observed that the registration was valid with effect from assessment year 2022-23 & not for the assessment year 2019-20 for which the appellant has filed the appeal nevertheless also held that the failure to file Form 9A as required constitutes a breach of the provisions set out in the I. Tax Act. We are of the considered opinion that for the purposes of claiming exemption u/s 11 & 12 of the Act, the assessee must first be registered u/s 12A/12AA/12AB of the Act. Registration under the Income tax Act is a precondition and mandatory requirement for the trust/institution to claim benefit of exemption under section 11 and 12 of the Act. The Hon’ble Supreme Court in the case of U.P. Forest Corporation & Anr. v. Dy. CIT reported in (2008) 297 ITR 1 held that “A conjoint reading of sections 11,12 and 12A makes it clear that registration u/s 12A is a condition precedent for availing benefit under sections 11 and 12 of the Act. Unless and until an institution is registered under section 12A of the Act, it cannot claim the benefit of section 11(1)(a) of the Act.” The relevant Paragraphs are reproduced below for ease of reference & convenience: - “11. We are of the considered view that for claiming benefit under section 11(1)(a), registration under section 12A is a condition precedent. Section 11 provides for exemption of income which is applied for charitable purposes. Section 12 is in the nature of an Explanation of section 11. Section 12A provides that provisions of sections 11 and 12 shall not apply in relation to income of any trust or institution unless certain conditions are satisfied, one of which is clause (a), the same is reproduced as under: \"12A. Conditions as to registration of trusts, etc.—The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely :— (a)the person in respect of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Chief Commissioner or Commissioner before 1st day of July, 1973, or before the expiry of a period of one year from the date ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 25 of 35 of the creation of the trust or the establishment of the institution, whichever is later : Provided that the Chief Commissioner or Commissioner may, in his discretion, admit an application for the registration of any trust or institution after the expiry of the period aforesaid;\" 12. Application for registration under section 12A has to be made in Form 10A prescribed by Rule 17-A of the Income-tax Rules, 1962 before the expiry of one year from the date of the creation of the trust or the establishment of the institution, whichever is later. The same has to be made by the person in receipt of the income of the trust. Chief Commissioner or Commissioner under proviso to clause (a) of section 12A has been vested with the discretion to admit an application for registration after the expiry of the prescribed period. A conjoint reading of sections 11, 12 and 12A makes it clear that registration under section 12A is a condition precedent for availing benefit under sections 11 and 12 of the Act. Unless and until an institution is registered under section 12A of the Act, it cannot claim the benefit of section 11(1)(a) of the Act. Keeping in view the fact that the appellant-Corporation has not been granted registration under section 12A of the Act, we hold that the appellant is not entitled to claim exemption from payment of tax under sections 11(1)(a) and 12 of the Act. 13. We, accordingly, dismiss the appeals filed by the Corporation without deciding the merits of the dispute.” 9.2 In the present case, the assessee is neither registered u/s 12A/12AA/12AB of the Act for the impugned Asst. year 2019-20 nor for the Asst. year 2021-22 under appeal as can be seen from the order of the registration. We are of the opinion that when the assessee is not registered u/s 12A/12AA/12AB of the Act, then the question of filing Form 9A/ Form 10/ Form 10B/Form 10BB does not arise at all in the case of the assessee. Therefore, to that extent we agree with the contention of the ld. DR that the provision of section 11 & section 12 of the Act is not at all applicable to the assessee as the assessee is not registered u/s 12AA/12AB of the Act for the Asst. year 2019-20 as well as for the Asst. year 2021-22 under appeal. Once the provisions of section 11 of the Act is not applicable to the assessee, then even the claim of the assessee that the amount collected by the planning authority by virtue of section ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 26 of 35 18 of the Town planning act being betterment fees amounting to Rs. 5,20,97,935/- & Rejuvenation fees amounting to Rs. 55,10,500/- is covered under section 11(1)(d) of I. Tax Act as capital Receipt is also not tenable. 9.3 Before proceeding further it is apposite here to mention that Section 12A of the Act deals with the conditions for applicability of sections 11 and 12 of the Act which are reproduced below for ease of reference & convenience:- Section 12A in The Income Tax Act, 1961 12A. [Conditions for applicability of sections 11 and 12] [(1)] The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:- (a)the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the [* * *] [Principal Commissioner or] Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, [whichever is later and such trust or institution is registered under section 12-AA] : [Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution,- (i)from the date of the creation of the trust or the establishment of the institution if the [* * *][Principal Commissioner or] Commissioner is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons; ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 27 of 35 (ii)from the 1st day of the financial year in which the application is made, if the] [* * *] [ Principal Commissioner or ] [Commissioner is not so satisfied:] [Provided further that the provisions of this clause shall not apply in relation to any application made on or after the 1st day of June, 2007;] (aa)[ the person in receipt of the income has made an application for registration of the trust or institution on or after the 1st day of June, 2007 in the prescribed form and manner to the [Principal Commissioner or] Commissioner and such trust or institution is registered under section 12AA;] (ab)the person in receipt of the income has made an application for registration of the trust or institution, in a case where a trust or an institution has been granted registration under section 12AA or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)], and, subsequently, it has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, in the prescribed form 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; (ac)notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution,— (i)where the trust or institution is registered under section 12A [as it stood immediately before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] or under section 12AA [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020)], within three months from the first day of April, 2021; ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 28 of 35 (ii)where the trust or institution is registered under section 12AB and the period of the said registration is due to expire, at least six months prior to expiry of the said period; (iii)where the trust or institution has been provisionally registered under section 12AB, at least six months prior to expiry of period of the provisional registration or within six months of commencement of its activities, whichever is earlier; (iv)where registration of the trust or institution has become inoperative due to the first proviso to sub-section (7) of section 11, at least six months prior to the commencement of the assessment year from which the said registration is sought to be made operative; (v)where the trust or institution has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, within a period of thirty days from the date of the said adoption or modification; (vi)in any other case, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought, and such trust or institution is registered under section 12AB;] (b)where the total income of the trust or institution as computed under this Act without giving effect to [the provisions of sections 11 and 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 defined in the Explanation below sub-section (2) of section 288 [before the specified date referred to in section 44AB and the person in receipt of the income furnishes by that date] 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. ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 29 of 35 (c)[* * *] [(2) Where an application has been made on or after the 1st 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 assessement year immediately following the financial year in which such application is made:] [Provided that the provisions of sections 11 and 12 shall apply to a trust or institution, where the application is made under— (a)sub-clause (i) of clause (ac) of sub-section (1), from the assessment year from which such trust or institution was earlier granted registration; (b)sub-clause (iii) of clause (ac) of sub-section (1), from the first of the assessment year for which it was provisionally registered: Provided further that where registration has been granted to the trust or institution under section 12AA or section 12AB ], 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 objects and activities of such trust or institution remain the same for such preceding assessment year: [Provided also] that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year: Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under [section 12AA or section 12AB ].].” 9.4 On plain reading of section 12A of the Act we take a note of the fact that Section 12A provides for the conditions for applicability of Sections 11 and 12 of the Act. It prescribes three ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 30 of 35 essential conditions which must be satisfied by a charitable/religious trust in order to claim exemption under the aforesaid sections: firstly, that the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Principal Commissioner or Commissioner and such trust is registered under Section 12AA/12AB. Secondly, where the total income of the trust without giving effect to the provisions of section 11 and 12 exceeds the maximum amount which is not chargeable to income tax in any previous year,- (i) the books of account and other documents have been kept and maintained in such form and manner and at such place as may be prescribed, and (ii) the accounts of the trust have been be audited by a chartered accountant and the person in receipt of the income should furnish such audit report in the prescribed form duly signed and verified by the accountant. Thirdly, the person in receipt of income has furnished the return of income in accordance with the provisions of sub-section (4A) of section 139 within the time allowed under sub- section (1) or sub-section (4) of that section. 9.5 Now the question arises when the registration granted subsequently whether the exemption applies to the earlier years? Section 12A(2) second proviso which is omitted by the Finance Act, 2023 w.e.f 01-04-2023 but applicable for both the Asst. year 2019- 20 as well as Asst. year 2021-22 provides that where the registration has been granted to the trust or institution under section 12A or section 12AB of the Act, then the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under any trust or 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 or ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 31 of 35 institution remain the same for such preceding assessment year. This proviso provides under the following circumstances when the registration is granted, the benefit of exemption under section 11 and 12 applies to earlier assessment year- 1. Income derived from property held under trust where section 11 and 12 applies 2. Assessment proceedings are pending before the AO on the date of such registration 3. The object and activities of such trust or institution remain the same for such preceding assessment years 9.6 Before us, the ld. AR of the assessee categorically stated that object and activities of the assessee trust being the planning Authority does not change from the date of inception to the date of application or even after. Further we are of the opinion that the word ‘assessment’ is used in the Income Tax Act in a number of provisions in a comprehensive sense and includes all proceedings, starting with the filing of the return or issue of notice and ending with determination of the tax payable by the assessee. The expression assessment proceedings as held in case of Auto & Metal Engineers v. Union of India (1998) 229 ITR 399 (SC), comprehend the entire process of assessment starting from the date of filing of returns u/s 139 or issuance of notice under section 142(1) till making of the order of assessment under section 143(3) or section 144 of the Act. The order granting the registration was passed by the ld. PCIT/CIT in Form 10AC on 15/11/2021. The Return of income for the Asst. year 2019-20 was filed on 29/11/2020 & the intimation u/s 143(1) of the Act for the Asst. year 2019-20 was passed on 12/02/2021 i.e. way before the date of granting the registration on 15/11/2021. Further, as on 15/11/2021, the time ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 32 of 35 limit to issue notice u/s 143(2) of the Act for the Asst. year 2019-20 had already expired. Therefore, it cannot be said that any assessment proceedings for the Asst. year 2019-20 is pending as on the date of registration. Similarly, the extended due date for filing the return of Income for the Asst. year 2021-22 itself was 15/03/2022 i.e. way after the date of granting the registration & therefore the question of assessment pending for the Asst. year 2021-22 as on the date of registration does not arise at all. In view of the above discussion as the registration under the I. Tax Act is a precondition and mandatory requirement for the trust/institution to claim benefit of exemption under section 11 and 12 of the Act, the contention of the assessee that the amount collected by the planning authority by virtue of section 18 of the Town planning act being betterment fees amounting to Rs. 5,20,97,935/- & Rejuvenation fees amounting to Rs. 55,10,500/- is covered under section 11(1)(d) of I. Tax Act as capital Receipt cannot be accepted. 9.7 It is an undisputed fact that the activities of the Assessee is “the Advancement of any other object of general public utility” which comes under the purview of last limb of “Charitable Purpose” as defined u/s 2(15) of the Act but without valid registration u/s 12AA/12AB of the Act, the benefit of section 11 & 12 cannot be granted. 9.8 Further, the AR of the assessee relied upon the decision of the coordinate Bench of ITAT in the case of Magadi Planning Authority in ITA No. 1056, 1352 & 1353/Bang/2024 dated 22/01/2025 which in our view is quite distinguishable on the present facts & circumstances of the case. In the case of Magadi Planning Authority the issue was whether the assessee can claim exemption u/s 11 & 12 of the Act, especially when the assessee was involved in activities aimed at advancing general public utility & also engaged in significant commercial activities & consequently the ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 33 of 35 AO invoked section 13(8) of the Act. Further, the verdict of the Hon’ble Apex court in the case of Ahmedabad Urban Development Authority relied upon by the assessee is with regard to the legal position established that the Ahmedabad Urban Development Authority, constituted under the Gujarat Town Planning Act, is engaged in activities of general public utility which are charitable in nature. The mere collection of fees or cess under statutory powers does not negate the charitable status. Therefore, AUDA is entitled to exemption under Sections 11 and 12 of the Income Tax Act, 1961, and the proviso to Section 2(15) does not apply to disqualify it from such exemption which is not in dispute in the present case. 9.9 In conclusion, we dismiss the appeal of the assessee. The assessee is not entitled to claim benefit of exemptions under Sections 11 and 12 of the Act, 1961 in the absence of valid registration under the Income Tax Act. Hence the grounds of appeal raised by the assessee are hereby dismissed. 10. In the result, the appeal of the assessee is hereby dismissed. Coming to ITA No. 2116/Bang/2024 for the A.Y. 2021-22. 11. At the outset, we note that the issues raised by the assessee in its grounds of appeal for the AY 2021-22 are identical to the issue raised by the assessee in ITA No. 2115/Bang/2024 for the assessment year 2019-20 i.e. the ld. ADDL/JCIT(A) erred in not considering the specific collections like betterment fees, lake rejuvenation fees are covered u/s 11(1)(d) of the Act as income liable for accumulation even it is brought to the notice that there is wrong filing of return of income by the assessee. ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 34 of 35 12. Further, on going through the intimation passed u/s 143(1) of the Act for the Asst. year 2021-22, we also observe that the CPC apart from contending that the Trust or institution has not e-filed Form 9A within the due date had also contended that the trust had also not filed the Audit Report in Form 10B at least one month prior to the due date for furnishing the return u/s 139(1) & hence exemption claimed u/s 11(1)(d) of the Act is not allowable. 13. We have noted the fact that such denial by the CPC was on the strong credence that the assessee is registered u/s 12A/12AA of the Act since in the Return of Income as per the details furnished in schedule personal information under “Details of registration or approval under the Income Tax Act, the assessee had declared to be registered u/s 12A/12AA of the Act and is claiming exemption u/s 11 of the Act. However in ITA No. 2115/Bang/2024 we have already held that as the registration under the I. Tax Act is a precondition and mandatory requirement for the trust/institution to claim benefit of exemption under section 11 and 12 of the Act, the contention of the assessee that the amount collected by the planning authority by virtue of section 18 of the Town planning act being betterment fees & Rejuvenation lake fees is covered under section 11(1)(d) of I. Tax Act as capital Receipt cannot be accepted in the absence of registration for the impugned Asst. year. 14. Therefore, the findings given in ITA No. 2115/Bang/2024 shall also be applicable for the assessment year 2021-22. The appeal of the assessee for the A.Y. 2019-20 has been decided by us vide paragraph No. 9-9.7 of this order against the assessee. Hence, the grounds of appeal filed by the assessee for the Asst. year 2021- 22 is hereby dismiss. ITA Nos.2115 & 2116/Bang/2024 Doddaballapur Planning Authority, Doddaballapur Page 35 of 35 15. In the result appeal of the assessee is hereby dismissed. 16. In the combined result, both the appeals of the assessee for A.Y. 2019-20 & A.Y. 2021-22 are dismissed. Order pronounced in the open court on 25th June, 2025 Sd/- (Laxmi Prasad Sahu) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 25th June, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "