M/s Karnataka State Students Welfare Fund , Bangalore V. The Income TAx Officer(Exemptions) Ward-1 , Bangalore

ITA 1461/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2598 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-11-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 07-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Assessee Lawyers: RAVISHANKAR S V
• Keywords: Reopening of assessment; Charitable institution; Condonation of delay
• Section: 133A; 12A; 12AA; 147; 12; 11

Judgement Text

ITA NOS.1458 TO 1462/BANG/2018 M/S. KARNATAKA STATE STUDENTS WELFARE FUND, BANGALO RE IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NOS.1458 TO 1462/BANG/2018 ASSESSMENT YEARS: 2009-10 TO 2013-14 RESPECTIVELY M/S. KARNATAKA STATE STUDENTS WELFARE FUND SHISHAK SADAN, OPP. CAUVERY BHAVAN KEMPEGOWDA ROAD BANGALORE-560 002 PAN NO : AAAGK0124OL VS. ITO (EXEMPTIONS) WARD-1 BANGALORE APPELLANT RESPONDENT APPELLANT BY : SHRI RAVI SHANKAR S.V., A.R. RESPONDENT BY : SMT. R. PREMI, D.R. DATE OF HEARING : 26.11.2020 DATE OF PRONOUNCEMENT : 26.11.2020 O R D E R PER BENCH: ALL THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A)-10, BENGALURU AND THEY R ELATE TO THE ASSESSMENT YEARS 2009-10 TO 2013-14. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE VALIDIT Y OF REOPENING OF ASSESSMENT IN ALL THE YEARS AND ALSO IN CONFIRMING THE ADDITIONS MADE BY THE AO. 2. THE FACTS RELATING TO THE CASE ARE STATED IN BRIEF. THE ASSESSEE HEREIN WAS ESTABLISHED BY THE EDUCATION DEPARTMENT OF GOVERNMENT ITA NOS.1458 TO 1462/BANG/2018 M/S. KARNATAKA STATE STUDENTS WELFARE FUND, BANGALO RE PAGE 2 OF 10 OF KARNATAKA. THE OBJECTIVES WERE TO CARRY OUT ACT IVITIES FOR THE WELFARE OF STUDENTS. THE FUND WAS ESTABLISHED WAY BACK IN 1962 AND HAS BEEN CARRYING OUT ITS FUNCTIONS UNDER THE DIREC TION AND CONTROL OF THE GOVERNMENT. THE ASSESSEE WAS NOT FILING RET URN OF INCOME UNDER THE INCOME TAX ACT. 3. THE ASSESSEE APPLIED FOR REGISTRATION U/S 12 AA OF THE INCOME- TAX ACT,1961 ['THE ACT' FOR SHORT] AS A CHARITABLE ORGANISATION IN PRESCRIBED FORM 10A ON 28-03-2014. THE ASSESSEE WA S ACCORDED REGISTRATION U/S 12AA OF THE ACT ON 23-09-2014 W.E. F. AY 2014-15. 4. THE REVENUE CARRIED OUT SURVEY OPERATIONS U/S 133A OF THE ACT ON 22-09-2015 UPON GETTING INFORMATION THAT THE ASS ESSEE WAS ACCUMULATING HUGE INCOME YEAR AFTER YEAR AND WAS CL AIMING EXEMPTION U/S 11 OF THE ACT WITHOUT HAVING REGISTRA TION U/S 12AA OF THE ACT. DURING THE COURSE OF SURVEY OPERATIONS, A STATEMENT WAS RECORDED FROM SMT. SYED RUKSANA BULQUEES, PROGRAMME IMPLEMENTATION OFFICER & IN CHARGE JT. DIRECTOR O F PUBLIC INSTRUCTIONS. IN THE STATEMENT, SHE CLEARLY STATED THAT THE FUND DOES NOT HAVE REGISTRATION FOR THE EARLIER YEARS AND FUR THER CONFESSED THAT THE FUND HAS NOT FILED THE RETURNS OF INCOME FOR EA RLIER YEARS. 5. ACCORDINGLY, THE AO REOPENED THE ASSESSMENTS OF THE YEARS UNDER CONSIDERATION BY ISSUING NOTICES US 148 OF TH E ACT ON 30-09- 2015. THE ASSESSEE SOUGHT REASONS FOR REOPENING OF ASSESSMENT FROM THE AO AND THE SAME WAS SUPPLIED. THE ASSESSEE OB JECTED TO REOPENING OF ASSESSMENTS BY PLACING RELIANCE ON THE SECOND PROVISO TO SEC.12A(2) OF THE ACT. THE AO, HOWEVER, EXPRESS ED THE VIEW THAT THE SECOND PROVISO TO SEC.12A(2) WILL NOT APPLY TO THE ASSESSEE. THE OBSERVATIONS MADE BY THE AO IN THIS REGARD ARE EXTR ACTED BELOW:- ITA NOS.1458 TO 1462/BANG/2018 M/S. KARNATAKA STATE STUDENTS WELFARE FUND, BANGALO RE PAGE 3 OF 10 37.1 IT MAY BE NOTED HERE THAT THE SAID AMENDMEN T IS INSERTED IN THE ACT, VIDE FINANCE ACT 2014 (NO.2) A ND THE EFFECTIVE DATE FOR THE SAID SECTION AND THE PROVISI ONS ARE WITH EFFECT FROM 01-10-2014. HENCE, THIS PROVISO DOES N OT APPLY TO THE CASE ON HAND. 6. BEFORE LD CIT(A) ALSO, THE ASSESSEE CHALLENG ED THE VALIDITY OF REOPENING OF ASSESSMENT BY ADVANCING ARGUMENTS MADE BEFORE THE AO. THE ASSESSEE ALSO PLACED ITS RELIANCE ON THE C IRCULAR NO.1 DATED 21-01-2015 ISSUED BY CBDT EXPLAINING THE PROVISOS I NSERTED IN SEC.12A(2) OF THE ACT. THE LD CIT(A), HOWEVER, TOO K THE VIEW THAT THE AO HAS REOPENED THE ASSESSMENT NOT ON ACCOUNT OF TH E REASON THAT THE FUND WAS NOT REGISTERED U/S 12AA OF THE ACT, BU T BECAUSE THE ASSESSEE HAS CLAIMED DEDUCTION U/S 11 AND 12 OF THE ACT. FURTHER THE ASSESSEE WAS HAVING HUGE SURPLUS IN ALL THESE Y EARS. ACCORDINGLY, HE UPHELD THE VALIDITY OF REOPENING OF ASSESSMENT. 7. BEFORE US, THE LD A.R ADVANCED HIS ARGUMENT S ON THE LEGAL ISSUE OF VALIDITY OF REOPENING OF ASSESSMENT. WE A LSO HEARD LD D.R ON THIS PRELIMINARY ISSUE. 8. THE REASONS RECORDED BY THE AO FOR REOPENIN G OF ASSESSMENT OF IMPUGNED ASSESSMENT YEARS ARE IDENTICAL IN ALL THE YEARS. THE REASONS RECORDED BY THE AO READS AS UNDER:- REASONS FOR ISSUE OF NOTICE U/S 148 THE FUND WAS ESTABLISHED BY VIRTUE OF A PROCEEDING S OF THE GOVERNMENT OF KARNATAKA (THE THEN MYSORE GOVT.) . THE SAID FUND, WAS GRANTED REGISTRATION U/S 12A W.E.F. FINAN CIAL YEAR 2013-14. INFORMATION WAS GATHERED REVEALED THAT THE SAID FUN D IS HAVING TAXABLE SURPLUS/INCOME SINCE QUITE A NUMBER OF YEARS. ITA NOS.1458 TO 1462/BANG/2018 M/S. KARNATAKA STATE STUDENTS WELFARE FUND, BANGALO RE PAGE 4 OF 10 IT IS ALSO VERIFIED FROM THE AST THAT THE SAID FUND HAD NOT FILED RETURN OF INCOME EXCEPT FOR THE FINANCIAL YEAR 2008 -09 TO 203-14. AS THE REGISTRATION WAS GRANTED ONLY FROM THE ASSES SMENT YEAR 2014-15 I.E., FOR THE FINANCIAL YEAR 2013-14, THE SURPLUS OF EARLIER YEARS ARE TO BE TAXED AS AOP WITHOUT EXTEND ING THE BENEFITS OF SEC. 11 AND 12. THE PRESENT JURISDICTION OVER THE CASE VESTS WITHIN THE CHARGE OF CIT(E), BENGALURU SINCE FUND HAS BEEN GRA NTED 12-A REGISTRATION. AS THE FUND DO NOT HAVE REGISTRATION U/S 12A, THE T AXABLE SURPLUS FOR THE FINANCIAL YEARS 2008-09 TO 2013-14 THE TAXABLE SURPLUS NEEDS TO BE ASSESSED TO TAX. 9. IT CAN BE NOTICED THAT THE AO HAS SPECIFICAL LY MENTIONED IN THE THIRD PARAGRAPH THAT THE SURPLUS OF EARLIER YEARS A RE TO BE TAXED AS AOP WITHOUT EXTENDING THE BENEFITS OF SEC.11 AND 12 . IN THE FINAL PARAGRAPH, THE AO SPECIFICALLY STATES THAT SURPLUS NEEDS TO BE ASSESSED TO TAX, SINCE THE FUND DOES NOT HAVE REGIS TRATION U/S 12A OF THE ACT. THUS, IN OUR VIEW, THE ONLY REASON FOR RE OPENING OF ASSESSMENT IS TO ASSESS THE SURPLUS EARNED DURING T HE YEARS UNDER CONSIDERATION IN THE ABSENCE OF REGISTRATION U/S 12 A OF THE ACT. WE HAVE NOTICED THAT THE LD CIT(A) HAS EXPRESSED THE V IEW THE AO HAS REOPENED THE ASSESSMENT, NOT ON ACCOUNT OF THE REAS ON THAT THE FUND WAS NOT REGISTERED U/S 12AA OF THE ACT, BUT BECAUSE THE ASSESSEE HAS CLAIMED DEDUCTION U/S 11 AND 12 OF THE ACT. IT IS A FACT THAT THE ASSESSEE HAS NOT FILED RETURNS OF INCOME EARLIER FO R THE YEARS UNDER CONSIDERATION AND HENCE THE ALLEGATION THAT THE ASS ESSEE WAS CLAIMING DEDUCTION U/S 11 & 12 OF THE ACT FOR THESE YEARS IS AGAINST THE FACTS AVAILABLE ON RECORD. IT CAN BE NOTICED T HAT THE AO HIMSELF HAS RECORDED IN THE REASONS FOR REOPENING THAT THE ASSESSEE HAS NOT FILED RETURNS OF INCOME FOR THE FINANCIAL YEARS 200 8-09 TO 2013-14, ITA NOS.1458 TO 1462/BANG/2018 M/S. KARNATAKA STATE STUDENTS WELFARE FUND, BANGALO RE PAGE 5 OF 10 I.E., FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. HENCE THE ORDER PASSED BY LD CIT(A) IS AGAINST THE FACTS AVAILABLE ON RECORD AND HENCE HIS ORDER CANNOT BE SUSTAINED. 10. BEFORE US, THE LD A.R PLACED HIS RELIANCE O N THE SECOND PROVISO TO SEC.12A(2) OF THE ACT. THE PROVISOS BELOW SEC. 12A(2)WERE BROUGHT IN SECTION 12A BY FINANCE ACT 2014 WITH EFFECT FROM 1.10.2014. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW SECTION 1 2A(2) ALONG WITH THE PROVISOS:- SECTION 12 A (2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1 ST DAY OF JUNE 2007, THE PROVISIONS OF SECTION 11 AND 12 S HALL 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 T O THE TRUST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVIS IONS OF SECTIONS 11 AND 12 SHALL APPLY IN RESPECT OF ANY IN COME DERIVED FROM PROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YE AR PRECEDING THE AFORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICE R AS ON DATE OF SUCH REGISTRATION AND THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION REMAIN THE SAME FOR SUCH PRECED ING ASSESSMENT YEAR: PROVIDED FURTHER THAT NO ACTION UNDER SECTION 147 S HALL BE TAKEN BY THE ASSESSING OFFICER IN CASE OF SUCH T RUST OR INSTITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR ONLY FOR NON-REGISTRATION OF SUCH TRUST OR INSTITUTION FOR THE SAID ASSESSMENT Y EAR: 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 SECTI ON 12AA. 11. IN THE INSTANT CASE, THE REGISTRATION U/S 1 2A OF THE ACT WAS GRANTED TO THE ASSESSEE ON 23-09-2014. AS PER THE FIRST PROVISO, WHERE THE REGISTRATION HAS BEEN GRANTED TO THE TRUS T U/S 12AA, THEN THE PROVISIONS OF SEC.11 AND 12 SHALL APPLY IN RESP ECT OF ANY INCOME ITA NOS.1458 TO 1462/BANG/2018 M/S. KARNATAKA STATE STUDENTS WELFARE FUND, BANGALO RE PAGE 6 OF 10 DERIVED FROM PROPERLY HELD UNDER TRUST OF ANY ASSES SMENT YEAR PRECEDING YEAR OF GRANTING REGISTRATION AND WHICH A RE PENDING BEFORE THE AO AS ON THE DATE OF SUCH REGISTRATION AND THE OBJECTS AND ACTIVITIES OF SUCH TRUST REMAIN THE SAME FOR SUCH P RECEDING ASSESSMENT YEAR. AS PER THE SECOND PROVISO, NO ACT ION U/S 147 SHALL BE TAKEN BY THE AO FOR ANY ASSESSMENT YEAR PRECEDIN G THE AFORESAID ASSESSMENT YEAR ONLY FOR NON-REGISTRATION OF SUCH T RUST. THE THIRD PROVISO PROVIDES AN EXCEPTION FOR APPLICATION OF TH E FIRST AND SECOND PROVISO. A COMBINED READING OF ALL THE THREE PROVI SOS WOULD SHOW THAT THESE PROVISOS WILL NOT APPLY IN THE FOLLOWING SITUATIONS, VIZ., (A) THE OBJECTS AND ACTIVITIES OF TRUST OR INSTIT UTION DO NOT REMAIN THE SAME FOR THE PRECEDING ASSESSMENT YEARS AS THAT OF THE YEAR OF REGISTRATION. (B) THE TRUST OR INSTITUTION WAS REFUSED REGISTR ATION EARLIER. (C) THE REGISTRATION GRANTED TO IT EARLIER WAS CA NCELLED AT ANY TIME U/S 12AA. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT NO NE OF THE ABOVE SAID THREE SITUATIONS EXIST IN THE PRESENT CASE. 12. IT CAN BE NOTICED THAT THE SECOND PROVISO T O SEC.12A(2) SPECIFICALLY BARS THE AO FROM TAKING ACTION U/S 147 OF THE ACT ONLY FOR THE REASON OF NON-REGISTRATION OF SUCH TRUST OR INSTITUTION FOR THE SAID ASSESSMENT YEAR. HOWEVER, IN THE INSTANT CASE, THE AO HAS REOPENED THE ASSESSMENT ONLY FOR THE REASON OF NON- REGISTRATION THE ASSESSEE U/S 12A OF THE ACT AND CONSEQUENTLY TO TAX THE SURPLUS EARNED BY THE ASSESSEE DURING THE YEARS UNDER CONSI DERATION. 13. THE AO HAS TAKEN A VIEW THAT THE SECOND PR OVISO TO SEC.12A(2) SHALL NOT APPLY TO THE ASSESSEE, SINCE IT HAS GOT P ROSPECTIVE EFFECT. THOUGH THE VIEW OF THE AO WAS NOT HAPPILY WORDED, I T APPEARS THAT THE AO HAS TAKEN NOTE THAT THE PROVISOS WERE INSERT ED W.E.F. 01-10- ITA NOS.1458 TO 1462/BANG/2018 M/S. KARNATAKA STATE STUDENTS WELFARE FUND, BANGALO RE PAGE 7 OF 10 2014, WHILE THE ASSESSEE WAS GRANTED REGISTRATION U /S 12A OF THE ACT 23-09-2014, I.E., PRIOR TO THE INSERTION OF PROVISO S. HENCE, THE AO HAS TAKEN THE VIEW THAT THE PROVISOS SHALL APPLY TO TRUSTS WHO WERE GRANTED REGISTRATION AFTER 01-10-2014. 14. WE ARE UNABLE TO AGREE WITH THE VIEW SO E NTERTAINED BY THE AO. THE AO HAS REOPENED THE ASSESSMENT BY ISSUING NOTICES U/S 148 OF THE ACT ON 30-09-2015. IT IS WELL SETTLED PROP OSITION OF LAW THAT THE PROVISIONS OF THE ACT, WHICH ARE IN OPERATION O N THE DATE OF ISSUE OF NOTICE U/S 148 OF THE ACT, SHOULD APPLY FOR THE INITIATION OF PROCEEDINGS. IN ANY CASE, WE NOTICE THAT THE RAJAS THAN HIGH COURT HAS HELD IN THE CASE OF CIT VS. SHREE SHYAM MANDIR COMMITTEE (2018)(400 ITR 466)(RAJ) THAT THE PROVISOS INSERTED IN SEC.12A(2) ARE DECLARATORY AND HENCE SHALL HAVE RETROSPECTIVE EFFE CT. WE NOTICE THAT THE HONBLE RAJASTHAN HIGH COURT HAS APPROVED THE V IEW SO EXPRESSED BY THE TRIBUNAL IN THE FOLLOWING CASES:- (1) SREE SREE RAMKRISHNA SAMITY VS. DEPUTY CIT (20 16)(156 ITD 0646)(KOL) (2) SNDP YOGAM VS. ASST. DIT (EXEMPTION) (2016)(1 61 ITD 1)(COCHIN) 15. IN ALL THE ABOVE SAID CASES, THE CIRCULAR NO .1 OF 2015 ISSUED BY CBDT WAS REFERRED IN ORDER TO FIND OUT THE INTENTIO N OF THE GOVERNMENT IN INTRODUCING THE IMPUGNED PROVISOS. T HE SAID CIRCULAR READS AS UNDER:- 8.1 THE PROVISIONS OF SECTION 12A OF THE INCOME TAX ACT, BEFORE AMENDMENT BY THE ACT, PROVIDED THAT A TRUST OR AN I NSTITUTION CAN CLAIM EXEMPTION UNDER SECTIONS 11 AND 12 ONLY A FTER REGISTRATION UNDER SECTION 12AA OF THE SAID ACT HAS BEEN GRANTED. IN CASE OF TRUSTS OR INSTITUTIONS WHICH A PPLY FOR ITA NOS.1458 TO 1462/BANG/2018 M/S. KARNATAKA STATE STUDENTS WELFARE FUND, BANGALO RE PAGE 8 OF 10 REGISTRATION AFTER JUNE 1, 2007, THE REGISTRATION S HALL BE EFFECTIVE ONLY PROSPECTIVELY. 8.2 NON-APPLICATION OF REGISTRATION FOR THE PERIOD PRIOR TO THE YEAR OF REGISTRATION CAUSED GENUINE HARDSHIP TO CHARITAB LE ORGANISATIONS. DUE TO ABSENCE OF REGISTRATION, TAX LIABILITY IS FASTENED EVEN THOUGH THEY MAY OTHERWISE BE ELIGIBLE FOR EXEMPTION AND FULFIL OTHER SUBSTANTIVE CONDITIONS. HOWEVER, THE POWER OF CONDONATION OF DELAY IN SEEKING REGISTRATI ON WAS NOT AVAILABLE. 8.3 IN ORDER TO PROVIDE RELIEF TO SUCH TRUSTS AND REMOVE HARDSHIP IN GENUINE CASES, SECTION 12A OF THE INCOME TAX ACT HAS BEEN AMENDED TO PROVIDE THAT IN A CASE WHERE A TRUST OR INSTITUTION HAS BEEN GRANTED REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, THE BENEFIT OF SECTIONS 11 AND 12 OF THE S AID ACT SHALL BE AVAILABLE IN RESPECT OF ANY INCOME DERIVED FROM PRO PERTY HELD UNDER TRUST IN ANY ASSESSMENT PROCEEDING FOR AN EAR LIER ASSESSMENT YEAR WHICH IS PENDING BEFORE THE ASSESSI NG OFFICER AS ON THE DATE OF SUCH REGISTRATION, IF THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION IN THE RELEVANT EARLIE R ASSESSMENT YEAR ARE THE SAME AS THOSE ON THE BASIS OF WHICH SU CH REGISTRATION HAS BEEN GRANTED. 8.4 FURTHER, IT HAS BEEN PROVIDED THAT NO ACTION FOR REOPENING OF AN ASSESSMENT UNDER SECTION 147 OF THE INCOME TA X ACT SHALL BE TAKEN BY THE ASSESSING OFFICER IN THE CASE OF SU CH TRUST OR INSTITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE F IRST ASSESSMENT YEAR FOR WHICH THE REGISTRATION APPLIES, MERELY FOR THE REASON THAT SUCH TRUST OR INSTITUTION HAS NOT B EEN OBTAINED THE REGISTRATION UNDER SECTION 12AA FOR THE SAID AS SESSMENT YEAR. 8.5 HOWEVER, THE ABOVE BENEFITS WOULD NOT BE AVAIL ABLE IN CASE OF ANY TRUST OR INSTITUTION WHICH AT ANY TIME HAD A PPLIED FOR ITA NOS.1458 TO 1462/BANG/2018 M/S. KARNATAKA STATE STUDENTS WELFARE FUND, BANGALO RE PAGE 9 OF 10 REGISTRATION AND THE SAME WAS REFUSED UNDER SECTION 12AA OF THE INCOME TAX ACT OR A REGISTRATION ONCE GRANTED W AS CANCELLED. WE NOTICE THAT THE AO HAS NOT PROPERLY UNDERSTOOD T HE BINDING CIRCULAR ISSUED BY CBDT, WHICH CLEARLY EXPLAINS THE MEANING OF PROVISOS INSERTED IN SEC.12A(2) OF THE ACT. ACCORD INGLY THESE PROVISOS SHALL HAVE RETROSPECTIVE OPERATION. 16. THE CO-ORDINATE BANGALORE BENCHES OF TRIBUNA L HAS ALSO CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF BANTAN THAMMA MATHU KALAMMA TRUST VS. ITO (ITA NO.1761 1766/BANG/2018 DATED 26- 02-2020) AND HAS EXPRESSED THE VIEW THAT NO ACTION U/S 147 SHALL BE TAKEN BY THE AO IN CASE OF A TRUST FOR ANY ASSESSME NT YEAR PRECEDING THE YEAR OF REGISTRATION ONLY ON ACCOUNT OF NON-RE GISTRATION OF SUCH TRUST FOR THE SAID ASSESSMENT YEAR, IN VIEW OF THE SECOND PROVISO TO SEC.12A(2) OF THE ACT. 17. IN THE INSTANT CASES, WE HAVE NOTICED FROM T HE REASONS RECORDED BY THE AO THAT THE ASSESSING OFFICER HAS REOPENED T HE ASSESSMENTS OF THE YEARS UNDER CONSIDERATION ONLY FOR THE REASON T HAT THE ASSESSEE DOES NOT HAVE REGISTRATION FOR THE YEARS UNDER CONS IDERATION, EVEN THOUGH THE ASSESSEE HAD BEEN GRANTED REGISTRATION F ROM AY 2014-15 AND FURTHER THE REGISTRATION CERTIFICATE WAS IN OPE RATION AT THE TIME THE NOTICES U/S 148 WERE ISSUED. ACCORDINGLY, WE A RE OF THE VIEW THAT THE ACTION OF THE AO IS IN VIOLATION OF THE SECOND PROVISO TO SEC.12A(2) OF THE ACT. ACCORDINGLY, WE ARE UNABLE WITH THE VI EW EXPRESSED BY LD CIT(A). 18. IN VIEW OF THE FOREGOING DISCUSSIONS, WE A RE OF THE VIEW THAT THE REOPENING OF ASSESSMENTS OF THE YEARS UNDER CON SIDERATION IS BAD IN LAW, AS THE SAME IS IN VIOLATION OF THE SECOND P ROVISO TO SEC.12A(2) ITA NOS.1458 TO 1462/BANG/2018 M/S. KARNATAKA STATE STUDENTS WELFARE FUND, BANGALO RE PAGE 10 OF 10 OF THE ACT. ACCORDINGLY, WE QUASH THE ORDERS OF TA X AUTHORITIES FOR ALL THE YEARS UNDER CONSIDERATION. 19. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER S ON THE BASIS OF LEGAL ISSUE CONTESTED BY THE ASSESSEE, THE ISSUES U RGED ON MERITS DO NOT REQUIRE ADJUDICATION. 20. IN THE RESULT, ALL THE APPEALS OF THE ASSESSE E ARE TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH NOV, 2020. SD/- (N.V. VASUDEVAN ) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 26 TH NOV, 2020. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.