Parivallal Educational Trust, CHENNAI V. ITO, CHENNAI

ITA 1217/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8645 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 04-05-2016
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: S SRIDHAR
• Section: 12A; 12AA; 147; 148; 12; 11

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL S M C-A BENCH : CHENNAI . . . , [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ] ./ I.T.A.NO. 1217/MDS/2016 / ASSESSMENT YEAR : 2012-13 M/S PARIVALLAL EDUCATIONAL TRUST NEW NO.35, OLD NO.17 SIXTH MAIN ROAD RAJAH ANNAMALAI PURAM CHENNAI 600 028 VS. THE INCOME TAX OFFICER(EXEMPTIONS) WARD 1 CHENNAI [PAN AAATP 0578 Q] ( ! / APPELLANT) ( '# ! /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI P. R ADHAKRISHNAN, JCIT / DATE OF HEARING : 16 - 0 6 - 2016 / DATE OF PRONOUNCEMENT : 18 - 08 - 2016 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-17, CHENNA I DATED 30.3.2016 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2. SHRI S. SRIDHAR, LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ASSESSEE CLAIMED EXEMPTION U/S 11 OF THE ACT FOR THE ASSESSMENT YEAR 2012-13. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE PROVISO TO SEC. 12A (2) OF THE ACT WOULD NOT BE AVAILABLE TO THE ASSESSEE SINCE NO ASS ESSMENT WAS ITA NO. 1217/16 :- 2 -: PENDING ON THE DATE OF GRANTING OF REGISTRATION U/ S 12AA OF THE ACT. ACCORDING TO THE LD. COUNSEL, THE TRUST WAS ESTABLI SHED BY A TRUST DEED DATED 19.11.1993. THE DIT(E) GRANTED REGISTRATION U/S 12AA OF THE ACT BY AN ORDER DATED 28.2.2014 WITH EFFECT FROM 4. 6.2013. IN FACT, THE ASSESSING OFFICER ISSUED NOTICE U/S 148 OF THE ACT FOR REOPENING THE ASSESSMENT U/S 147 ON 24.3.2014. ON THE DATE OF GRANT OF REGISTRATION I.E ON 28.2.2014 NO ASSESSMENT IS PEND ING. REFERRING TO PROVISO TO SUB-SECTION(2) OF SEC. 12A OF THE ACT, T HE LD. COUNSEL SUBMITTED THAT THE INTENTION OF THE LEGISLATURE WAS TO ALLOW EXEMPTION U/S 11 OF THE ACT IN CASE THE TRUST WAS REGISTERED U/S 12AA OF THE ACT. IN THIS CASE, THE TRUST WAS REGISTERED U/S 12AA OF THE ACT BY AN ORDER DATED 28.2.2014, THEREFORE, THE TRUST IS ELIGIBLE F OR EXEMPTION U/S 11 OF THE ACT FOR EARLIER ASSESSMENT YEAR ALSO SINCE T HE OBJECT AND THE ACTIVITY OF THE TRUST REMAIN THE SAME. 3. ON THE CONTRARY, SHRI P. RADHAKRISHNAN, LD. DEPART MENTAL REPRESENTATIVE SUBMITTED THAT PROVISO TO SUB-SECTIO N (2) OF SEC. 12A WAS INTRODUCED BY FINANCE ACT, 2014 WITH EFFECT FRO M 1.10.2014. REFERRING TO THE PROVISO TO SUB-SECTION(2) OF SEC. 12A OF THE ACT, THE LD. DR SUBMITTED THAT SECTIONS 11 AND 12 SHALL APPL Y IN RESPECT OF THE INCOME DERIVED FROM PROPERTY HELD UNDER A TRUST IN ANY ASSESSMENT YEAR PRECEDING THE ASSESSMENT YEAR IN WHICH REGISTR ATION U/S 12AA WAS GRANTED FOR WHICH THE ASSESSMENT PROCEEDINGS AR E PENDING BEFORE ITA NO. 1217/16 :- 3 -: THE ASSESSING OFFICER ON THE DATE OF SUCH REGISTRAT ION AND THE OBJECT AND ACTIVITY OF SUCH TRUST REMAIN THE SAME. IN THI S CASE, THE ORDER OF THE DIT(E) GRANTING REGISTRATION U/S 12AA WAS PASS ED ON 28.2.2014. THE ASSESSMENT WAS ADMITTEDLY REOPENED BY ISSUING N OTICE ON 24.3.2014. THEREFORE, ON THE DATE OF GRANT OF REGI STRATION ON 28.2.2014, NO ASSESSMENT PROCEEDING IS PENDING. H ENCE, PROVISO TO SUB-SECTION(2) OF SEC. 12A IS NOT APPLICABLE TO THE FACTS OF THIS CASE. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER S IDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FRO M THE ORDER OF THE ASSESSING OFFICER, IT APPEARS THAT THE ASSESSEE WA S CLAIMING EXEMPTION U/S 11 OF THE ACT ON THE STRENGTH OF REG ISTRATION U/S 12A/12AA OF THE ACT GRANTED VIDE REGN. C.NO.2(240)/ 91-92. SUBSEQUENTLY, AN ORDER DATED 28.2.2014 WAS RECEIVED BY THE ASSESSING OFFICER U/S 12AA PASSED BY THE DIT(E). THIS ORDER GRANTING REGISTRATION U/S 12AA OF THE ACT WAS WITH EFFECT F ROM 4.6.2013. IT IS NOT KNOWN WHEN THE REGISTRATION WAS GRANTED FROM AS SESSMENT YEAR 1991-92 BY REGISTRATION C.NO.2(240)/91-92, WHY ANOT HER REGISTRATION WAS GRANTED BY AN ORDER DATED ON 28.2.2014. IT IS NOT KNOWN WHETHER THE EARLIER REGISTRATION GRANTED WAS CANCELLED OR I T LAPSED DUE TO EXPIRY OF TIME. IF THE REGISTRATION GRANTED EARLIER CONTIN UED WITHOUT CANCELLATION OR OTHERWISE THEN THE ASSESSEE IS ELI GIBLE FOR EXEMPTION SUBJECT TO CONDITIONS LAID DOWN U/S 11 & 12 OF THE ACT. THEREFORE, IT ITA NO. 1217/16 :- 4 -: HAS TO BE FIRST ASCERTAINED WHAT IS THE CAUSE TO G RANT ANOTHER REGISTRATION ON 28.2.2014 BY THE DIT(E) WHEN ADMIT TEDLY, THE ASSESSEE WAS REGISTERED IN THE EARLIER ASSESSMENT Y EARS. THESE FACTS ARE NOT BROUGHT ON RECORD EITHER BY THE ASSESSING O FFICER OR BY THE CIT(A). 5. I HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF PR OVISO TO SUB-SECTION(2) OF SEC. 12A OF THE ACT. THIS PROVIS O WAS INTRODUCED BY FINANCE ACT, 2014 WITH EFFECT FROM 1.10.2014. A BA RE READING OF THIS PROVISO CLEARLY INDICATES THAT THE ASSESSMENT PROCE EDINGS WHICH ARE PENDING BEFORE THE ASSESSING OFFICER ON THE DATE OF GRANT OF REGISTRATION BY THE DIT(E) IS ELIGIBLE FOR EXEMPTIO N U/S 11 & 12 OF THE ACT. IN THE CASE BEFORE THIS TRIBUNAL, ADMITTEDLY, ON 28.2.2014, NO ASSESSMENT PROCEEDING IS PENDING BEFORE THE ASSESSI NG OFFICER. IN FACT, THE ASSESSMENT WAS REOPENED BY ISSUING A NOT ICE ON 24.3.2014 AND THEREFORE, AT THE BEST, IT CAN BE SAID THAT ASS ESSMENT PROCEEDING WAS PENDING AFTER REOPENING ON 24.3.2014. THEREFOR E, AS ON 28.2.2014 WHEN THE REGISTRATION WAS SAID TO BE GRAN TED BY THE DIT(E), NO ASSESSMENT PROCEEDING WAS PENDING. HOWEVER, AS OBSERVED EARLIER, WHAT HAPPENED TO THE EARLIER REGISTRATION GRANTED U/S 12A/12AA IS NOT KNOWN. HENCE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE REGISTRATION GRANTED IN THE EARLIE R ASSESSMENT YEARS IS RELEVANT FOR THE PURPOSE OF DISPOSAL OF THIS APPEAL . THE ASSESSING ITA NO. 1217/16 :- 5 -: OFFICER NEEDS TO CONSIDER THE STATUS OF THE REGISTR ATION GRANTED WHICH WAS REFERRED BY HIM IN THE ASSESSMENT ORDER AND BRI NG ON RECORD WHETHER SUCH REGISTRATION CONTINUES OR IT WAS CANCE LLED OR OTHERWISE TERMINATED. ACCORDINGLY, THE ORDERS OF THE LOWER A UTHORITIES ARE SET ASIDE AND THE ISSUE OF CLAIM OF EXEMPTION U/S 11 O F THE ACT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL REEXAMINE THE ISSUE AND BRING ON RECO RD THE STATUS OF THE REGISTRATION GRANTED EARLIER IN C.NO.2(240)/91-92 A ND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASON ABLE OPPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST, 2016, AT CHENNAI. SD/- ( . . . ! ) (N.R.S. GANESAN) / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 18 TH AUGUST, 2016 RD %&'' ()'*) / COPY TO: ' 1 . / APPELLANT 4. ' + / CIT 2. / RESPONDENT 5. ),-' . / DR 3. ' +'/! / CIT(A) 6. -0'1 / GF