M/s Mujtaba Foundation , Bangalore V. Income Tax Officer Ward-7(2)(2), Bangalore

ITA 1757/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7689 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 24-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VENKATESH
• Assessee Lawyers: NARAYANA MURTHY
• Keywords: Charitable institution; Maximum Marginal Rate; Retrospective amendment; Benefit of exemption
• Section: 12A; 12AA; 147; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1 757 / BANG/201 8 ASSESSMENT YEAR : 20 14 - 1 5 M/S. MUJTABA FOUNDATION, 101/10, 9 TH CROSS, WILSON GARDEN, BANGALORE 560 027. PAN: AADTM8350N VS. THE INCOME TAX OFFICER, WARD 7 (2) (2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI NARAYANA MURTHY, CA RESPONDENT BY : SHRI S. VENKATESH, JCIT (DR) DATE OF HEARING : 02 .0 7 .2018 DATE OF PRONOUNCEMENT : 13 .0 7 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT (A)-10, BANGALORE DATED 12.03.2018 FOR ASSE SSMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE ASSESSEEARE AS UNDER. 1. THE LEARNED CIT(A) HAS ERRED IN LAW IN CONFIRMIN G THE ADDITION OF RS 17,05,000/-MADE BY THE ASSESSING OFFICER TO THE RETURNED INCOME. 2. THE LEARNED CIT(A) OUGHT TO HAVE NOTICED THAT TH E TRUST HAD APPLIED THE VOLUNTARY CONTRIBUTIONS RECEIVED FROM T HE TRUSTEES FOR CHARITABLE PURPOSES AS DIRECTED BY THE DONORS IN AC CORDANCE WITH THE OBJECTS OF THE TRUST. 3. THE LEARNED CIT (A) ERRED IN LAW IN IGNORING THE SUBMISSIONS MADE BY THE APPELLANT IN ITS LETTER DATED 01-03-2018 DRA WING ATTENTION TO THE APPLICATION FOR REGISTRATION PENDING BEFORE THE CIT (EXEMPTIONS) AND THE DECISION OF THE ITAT, 'C' BENCH, KOLKATA IN ITA NOS.1680 TO 1685/2012 DATED 09-10-2015 IN THE CASE OF SREE SREE RAMKRISHNA SAMITY VS. DCIT, CIR-2, SILIGURI. 4. THE LEARNED CIT(A) ERRED IN LAW IN CONFIRMING TH E DECISION OF THE ASSESSING OFFICER DENYING THE EXEMPTION CLAIMED U/S 11. ITA NO.1757/BANG/2018 PAGE 2 OF 9 5. THE LEARNED CIT(A) ERRED IN LAW IN TAXING THE EN TIRE RECEIPTS AS INCOME WITHOUT ALLOWING DEDUCTION FOR EXPENSES. 6. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND, ALT ER OR MODIFY ANY OF THE ABOVE GROUNDS. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS P ER THE ASSESSMENT ORDER, THE ASSESSEES CLAIM FOR EXEMPTION U/S. 11 WAS REJECTED ONLY FOR THIS REASON THAT THE ASSESSEE TRUST WAS NOT REGISTERED U/S. 12A OF I T ACT AS NOTED BY THE AO IN PARA NO. 3 OF THE ASSESSMENT ORDER. THEREAFTER HE SUBMITTED THAT SUBSEQUENTLY, THE ASSESSEE HAS GOT THE REGISTRATION U/S. 12AA AS PER THE ORDER DATED 16.05.2018 OF CIT (EXEMPTIONS), COPY AVAILABL E ON PAGES 59 AND 60 OF PAPER BOOK. HE POINTED OUT THAT THIS ORDER IS SAID TO BE APPLICABLE FROM ASSESSMENT YEAR 2018-19. THEREAFTER, HE SUBMITTED THAT AS PER THE TRIBUNAL ORDER RENDERED IN THE CASE OF SNDP YOGAM VS. ASSIST ANT DIRECTOR OF INCOME- TAX AS REPORTED IN (2016) 161 ITD 1 (COCHIN), COPY AVAILABLE ON PAGES 125 TO 133 OF PAPER BOOK, IT WAS HELD THAT IF THE ASSESSEE OBTAIN REGISTRATION U/S. 12AA OF IT ACT DURING THE PENDENCY OF APPEAL, THE ASSESS EE IS ENTITLED FOR EXEMPTION U/S. 11 OF IT ACT. HE POINTED OUT THAT THIS WAS HE LD ON THIS BASIS OF THE AMENDMENT IN SECTION 12A OF IT ACT BY FINANCE ACT, 2014 W.E.F. 01.10.2014 AND IT WAS ALSO HELD THAT THE SAID AMENDMENT IS RET ROSPECTIVE IN NATURE. HE FURTHER SUBMITTED THAT LD. AR OF ASSESSEE HAS MADE WRITTEN SUBMISSIONS WHICH ARE AVAILABLE ON PAGES 1 TO 6 OF PAPER BOOK AND IN PARTICULAR MY ATTENTION WAS DRAWN TO PARA 15 OF WRITTEN SUBMISSIONS AND IT WAS POINTED OUT THAT IN THIS PARA, IT IS POINTED OUT THAT IT WAS REQUESTED BEFORE CIT( A) THAT IN VIEW OF THE PENDENCY OF THE ASSESSEES APPLICATION FOR REGISTRATION U/S. 12AA OF IT ACT, THE CIT(A) WAS REQUESTED TO KEEP THE APPEAL PROCEEDINGS IN PEN DING TILL THE APPLICATION FOR REGISTRATION IS DISPOSED OF BY THE CIT(EXEMPTIONS) AND COPY OF SUCH REQUEST BEFORE CIT(A) IS AVAILABLE ON PAGE NO. 61 OF PAPER BOOK BEING LETTER DATED 01.03.2018. THE LD. DR OF REVENUE SUPPORTED THE OR DER OF CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, I REPRODUCE PARA NO. 15 OF THE WRITTEN SUBMISSIONS OF THE ASSESSEE WHICH IS AV AILABLE ON PAGE NO. 6 OF THE PAPER BOOK. THE SAME IS AS UNDER. 15. THE APPELLANT TRUST FILED AN APPEAL BEFORE THE LEARNED CIT(A), ITA NO.1757/BANG/2018 PAGE 3 OF 9 BENGALURU - AND SUBMITTED THE FACT THAT THE APPELLA NT'S APPLICATION FOR REGISTRATION U/S 12AA WAS PENDING BEFORE THE CIT (E XEMPTIONS). THE APPELLANT THEREFORE REQUESTED THE CIT(A) TO KEEP TH E APPEAL PROCEEDINGS PENDING TILL THE APPLICATION FOR REGIST RATION IS DISPOSED OF BY THE CIT (EXEMPTIONS). A COPY OF THE APPLICATION BEFORE THE CIT(A) DATED 01-03-2018 IS SHOWN AT PAGE 61 OF THE PAPER B OOK. THE APPELLANT HAS RECEIVED THE ORDER OF THE CIT (EX EMPTIONS) DATED 16-05-2018 ON 17-05-2018. A COPY OF THE ORDER GRANTING REGISTRATION U/S 12AA IS ENCLOSED (PAGE 59-60 OF PAPER BOOK). THE APPELLANT ALSO REFERRED TO THE DECISION OF THE INCOME-TAX APPELLATE TRIBUNAL, 'C' BENCH, KOLKATTA. IN ITA NOS . 1680 TO 1685/2012 DATED 09-10-2015 IN THE CASE OF SREE SREE RAMKRISHNA SAMITY VS. DCIT, CIR-2. SILIGURI WHEREIN IN IDENTIC AL CIRCUMSTANCES THE APPELLANT TRUST IN THAT CASE WAS HELD ELIGIBLE FOR EXEMPTION U/S 11 WHEN THE APPLICATION WAS PENDING BEFORE THE DIT (EX EMPTIONS). A COPY OF THE ORDER OF THE ITAT WAS ALSO ENCLOSED IN THE LETTER DATED 01- 03-2018 ADDRESSED TO THE CIT(A)-10 - (PAGES 62-75 O F PAPER BOOK). 5. IN SUPPORT OF ITS CONTENTION RAISED IN THIS ABOV E PARA OF WRITTEN SUBMISSIONS, I FIND THAT THE SAID LETTER DATED 01.03.2018 FILED BE FORE CIT (A) ON THE SAME DATE IS AVAILABLE ON PAGE NO. 61 OF PAPER BOOK AND IN TH E SAID LETTER, THE REQUEST WAS MADE BY ASSESSEE BEFORE CIT (A) TO KEEP THE APPEAL PROCEEDINGS PENDING TILL THE APPLICATION FOR REGISTRATION IS DISPOSED OF BY THE DIRECTOR (EXEMPTIONS). IN SPITE OF THIS REQUEST DATED 01.03.2018, THE IMPUGNE D ORDER IS PASSED BY CIT(A) ON 12.03.2018 AND THEREAFTER, REGISTRATION WAS GRAN TED BY CIT(E) ON 16.05.2018 W.E.F. ASSESSMENT YEAR 2018-19 AS PER TH E CERTIFICATE AVAILABLE ON PAGES 59 AND 60 OF PAPER BOOK. 6. NOW I REPRODUCE THE RELEVANT PARA FROM THE TRIBU NAL ORDER RENDERED IN THE CASE OF SNDP YOGAM VS. ASSISTANT DIRECTOR OF INCOME-TAX (SUPRA). THE RELEVANT PARAS ARE 7 & 7.1 TO 7.5 WHICH ARE AVAILABLE ON PA GES 130 TO 133 OF PAPER BOOK. THE SAME ARE AS UNDER. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS, PERUSED THE RELEVANT MATERIALS ON RECORD AND THE CASE LAW ON WH ICH THE LEARNED AR HAD PLACED STRONG RELIANCE. THE PRIMARY ISSUE FO R OUR CONSIDERATION IS WHETHER THE CIT (A) IS JUSTIFIED I N CONFIRMING THE AOS ACTION, FOR ALL THE ASSESSMENT YEARS UNDER CON SIDERATION, IN ASSESSING THE ENTIRE INCOMES OF THE ASSESSEE FROM A LL THE INSTITUTIONS AT THE MAXIMUM MARGINAL RATE. IN THIS CONTEXT, IT IS A PPROPRIATE TO REFER THE AMENDMENT TO SECTION 12A (2) OF THE ACT AND ITS PROVISO. FOR READY REFERENCE THE SAME IS REPRODUCED BELOW: ITA NO.1757/BANG/2018 PAGE 4 OF 9 (SECTION 12A (2) & ITS PROVISO) [(2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTE R THE 1ST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SH ALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WH ICH SUCH APPLICATION IS MADE:] [PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED TO THE TRU ST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVISION S OF SECTIONS 11 AND 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FRO M PROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YEAR PRECEDING THE AF ORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICER AS ON THE DATE OF SUCH REGISTRATI ON AND THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION REMAIN THE SAME FOR SUCH PRECEDING ASSESSMENT YEAR: PROVIDED FURTHER THAT NO ACTION UNDER SECTION 147 SHALL BE TAKEN BY THE ASSESSING OFFICER IN CASE OF SUCH TRUST OR INST ITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR ONLY FOR NON-REGISTRATION OF SUCH TRUST OR INSTITUTION FOR T HE SAID ASSESSMENT YEAR: PROVIDED ALSO THAT PROVISIONS CONTAINED IN THE FIRST AND SECOND PROVISO SHALL NOT APPLY IN CASE OF ANY TRUST OR INS TITUTION WHICH WAS REFUSED REGISTRATION OR THE REGISTRATION GRANTED TO IT WAS CANCELLED AT ANY TIME UNDER SECTION 12AA.] 7.1 FURTHER IT WOULD BE RELEVANT TO REPRODUCE THE E XPLANATORY NOTE TO THE PROVISIONS OF THE FINANCE (NO.,2) ACT 2014 AS G IVEN IN CBDT NO.1/15 DATED 21.1.2015 PARA 8.2 NON-APPLICATION OF REGISTRATION FOR THE PERIOD PRIO R TO THE YEAR OF REGISTRATION CAUSED GENUINE HARDSHIP TO CHARITABLE ORGANIZATIONS. DUE TO ABSENCE OF REGISTRATION, TAX LIABILITY IS FASTEN ED EVEN THOUGH THEY MAY OTHERWISE BE ELIGIBLE FOR EXEMPTION AND FULFILL OTHER SUBSTANTIVE CONDITIONS. HOWEVER, THE POWER OF CONDONATION OF DE LAY IN SEEKING REGISTRATION WAS NOT AVAILABLE. THE FIRST PROVISO TO SECTION 12A(2) WAS BROUGHT IN THE STATUTE ONLY AS A RETROSPECTIVE EFFECT, WITH A VIEW NOT TO AFFECT GEN UINE CHARITABLE TRUSTS AND SOCIETIES CARRYING ON GENUINE CHARITABLE OBJECT S 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 INTENT ION OF THE LEGISLATURE AND THIS POINT IS FURTHER STRENGTHENED BY THE EXPLANATORY NOTES TO FINANCE (NO.2) ACT, 2014 ISSUED BY THE CEN TRAL BOARD OF DIRECT TAXES VIDE ITS CIRCULAR NO. 01/2015 DATED 21 .1.2015. APPARENTLY THE STATUTE PROVIDES THAT REGISTRATION O NCE GRANTED IN ITA NO.1757/BANG/2018 PAGE 5 OF 9 SUBSEQUENT YEAR, THE BENEFIT OF THE SAME HAS TO BE APPLIED IN THE EARLIER ASSESSMENT YEARS FOR WHICH ASSESSMENT PROCE EDINGS ARE PENDING BEFORE THE LD. A.O., UNLESS THE REGISTRATIO N GRANTED EARLIER IS CANCELLED OR REFUSED FOR SPECIFIC REASONS. THE STAT UTE ALSO GOES ON TO PROVIDE THAT NO ACTION U/S147 COULD BE TAKEN BY THE AO MERELY FOR NON-REGISTRATION OF TRUST FOR EARLIER YEARS. 7.2 WHEN SECTION 12A OF THE ACT WAS AMENDED BY INTR ODUCING NEW PROVISOS TO SUB-SECTION (2) OF S. 12A BY FINANCE AC T, 2014 WITH EFFECT FROM 01.10.2014, THE ASSESSMENT ORDERS PASSED BY TH E ASSESSING OFFICER IN RESPECT OF THE PRESENT ASSESSEE WERE PEN DING IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. DURING SUCH P ENDENCY, THE ASSESSEE WAS GRANTED REGISTRATION U/S 12AA OF THE A CT ON 29.07.2013 W.E.F. THE ASSESSMENT YEAR 2013-14. THOSE APPEALS W ERE THE CONTINUATION OF THE ORIGINAL PROCEEDINGS AND THAT T HE POWER OF THE COMMISSIONER OF INCOME-TAX WAS CO-TERMINUS WITH THA T OF THE ASSESSING OFFICER [ADIT (EXEMPTION) IN THE PRESENT CASE] WERE TWO WELL ESTABLISHED PRINCIPLES OF LAW. IN VIEW OF THE ABOVE AND GOING BY THE PRINCIPLE OF PURPOSIVE INTERPRETATION OF STATUE S, AN ASSESSMENT PROCEEDING WHICH IS PENDING IN APPEAL BEFORE THE AP PELLATE AUTHORITY SHOULD BE DEEMED TO BE ASSESSMENT PROCEEDINGS PEND ING BEFORE THE ASSESSING OFFICER WITHIN THE MEANING OF THAT TERM AS ENVISAGED UNDER THE PROVISO. IT FOLLOWS THERE-FROM THAT THE ASSESSE E WHICH OBTAINED REGISTRATION U/S 12AA OF THE ACT DURING THE PENDENC Y OF APPEAL WAS ENTITLED FOR EXEMPTION CLAIMED U/S 11OF THE ACT. 7.3 THE EXPLANATORY MEMORANDUM TO FINANCE (NO.2) BI LL, 2014 WHICH SOUGHT TO AMEND SECTION 12A EXPLAINS THE OBJECTS AN D REASONS FOR MAKING SUCH AMENDMENTS. THE EXPLANATION MAKES IT CL EAR THAT IT WAS IN ORDER TO PROVIDE RELIEF TO SUCH TRUSTS IN RESPEC T OF WHICH, DUE TO ABSENCE OF REGISTRATION U/S 12AA TAX LIABILITY GOT ATTACHED THOUGH OTHERWISE THEY WERE ELIGIBLE FOR EXEMPTION BY FULFI LLING OTHER SUBSTANTIVE CONDITIONS THAT THE AMENDMENT WAS BROUG HT IN. THAT BEING SO, DENYING SUCH BENEFIT TO A TRUST LIKE THE ASSESS EE WHO HAD OBTAINED REGISTRATION U/S 12AA DURING THE PENDENCY OF THE AP PEALS FILED AGAINST THE ORDERS OF THE ASSESSING AUTHORITY, BY NARROWLY INTERPRETING THE TERM, PENDING BEFORE THE ASSESSING OFFICER SO AS TO EXCLUDE ITS PENDENCY BEFORE THE APPELLATE AUTHORITY, WILL BE DO ING VIOLENCE TO THE PROVISIONS OF THE STATUTE AND, AS SUCH, LIABLE TO B E 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 EXE MPTIONS UNDER SECTIONS 11 AND 12 BY THE ASSESSEE AND THE GRANT OR REJECTION OF SUCH APPLICATION BY THE COMMISSIONER. THUS, IN OUR VIEW, SECTIONS 12A AND 12AA ARE ONLY PROCEDURAL IN NATURE. HENCE, IT IS NO T THE REGISTRATION U/S 12AA BY ITSELF THAT OFFERS IMMUNITY FROM TAXATI ON. A RECEIPT WHETHER IT IS REVENUE OR CAPITAL IN NATURE IS TO BE DECIDED AT THE ASSESSMENT STAGE. BEING PROCEDURAL IN NATURE, IN OU R VIEW, LIBERAL INTERPRETATION WILL GIVE EFFECT TO THE INTENTION OF THE AMENDMENT, ITA NO.1757/BANG/2018 PAGE 6 OF 9 THEREBY REMOVING THE HARDSHIP IN GENUINE CASES LIKE THE PRESENT ASSESSEE UNDER CONSIDERATION. 7.4 TAKING INTO ACCOUNT THE ABOVE FACTS AND CIRCUMS TANCES OF THE ISSUE, WE ARE OF THE VIEW THAT THE AO WAS NOT JUSTI FIED IN TAKING A STAND THAT REGISTRATION U/S 12A WAS NOT APPLICABLE TO THE ASSESSEE FOR THE AYS UNDER DISPUTE AND THE CONDONATION PETITION FOR DELA Y IN FILING THE APPLICATION FOR REGISTRATION U/S 12A [FOR THE AYS U NDER DISPUTE] HAS NOT YET BEEN DECIDED BY THE CBDT AND, THEREFORE, THE TO TAL INCOMES OF THE ASSESSEE WERE TO BE ASSESSED AS PER COMMERCIAL PRIN CIPLES. THE CIT (A) WAS ALSO NOT JUSTIFIED IN TAKING A SIMILAR STAND TH AT OF THE AO, WITHOUT TAKING COGNIZANCE AND INTENTION OF THE AMENDMENT TO S. 12A OF THE ACT. IF NO JUDICIOUS OR A LIBERAL VIEW IS NOT TAKEN EITH ER BY THE ASSESSING AUTHORITY OR THE APPELLATE AUTHORITY AS IN THE CASE UNDER CONSIDERATION, THE VERY PURPOSE FOR WHICH SUCH AN AMENDMENT TO S. 12A OF THE ACT ENACTED,IN OUR VIEW, WOULD BE DEFEATED. WE ARE 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 IS RETROSPECTIVE. THE RELEVANT FINDING OF THE HONBLE KOLKATA BENCH IN CASE OF SREE SREE RAMKRISHNA SAMITY VS. DCIT (SUPRA ) READ AS FOLLOWS: 6.10. WE HOLD THAT IT IS AN ESTABLISHED POSITION I N LAW THAT A PROVISO WHICH IS INSERTED TO REMEDY UNINTENDED CONSEQUENCES AND TO MAKE THE PROVISION WORKABLE, A PROVISO WHICH SUPPLIES AN OBVIOUS OMISSION IN THE SECTION AND IS REQUIRED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONABLE INTERPRETATION, REQUI RES TO BE TREATED AS RETROSPECTIVE IN OPERATION, SO THAT A REASONABLE IN TERPRETATION CAN BE GIVEN TO THE SECTION AS A WHOLE AND ACCORDINGLY THE SAID INSERTION OF FIRST PROVISO TO SECTION 12A(2) OF THE ACT WITH EFF ECT FROM 1.10.2014 SHOULD BE READ AS RETROSPECTIVE IN OPERATION WITH E FFECT FROM THE DATE WHEN THE CONDITION OF ELIGIBILITY FOR EXEMPTION UND ER SECTION 11 & 12 AS MENTIONED IN SECTION 12A PROVIDED FOR REGISTRATI ON U/S.12AA AS A PRE-CONDITION FOR APPLICABILITY OF SECTION 12A. FURTHER, THE KOLKATA TRIBUNAL OBSERVED AS UNDER: 6.11. WE ALSO HOLD THAT THOUGH EQUITY AND TAXATION ARE OFTEN STRANGERS, ATTEMPTS SHOULD BE MADE THAT THESE DO NO T REMAIN ALWAYS SO AND IF A CONSTRUCTION RESULTS IN EQUITY RATHER T HAN IN INJUSTICE, THEN SUCH CONSTRUCTION SHOULD BE PREFERRED TO THE LITERA L CONSTRUCTION. IT IS ONLY ELEMENTARY THAT A STATUTORY PROVISION IS TO BE INTERPRETED UT RES MAGISVALEATQUAMPEREAT, I.E. TO MAKE IT WORKABLE RAT HER THAN REDUNDANT. APPLYING THIS LEGAL MAXIM, IT WOULD BE J UST AND FAIR TO HOLD THAT THE AMENDMENT IN SECTION 12A IS BROUGHT I N THE STATUTE TO CONFER BENEFIT OF EXEMPTION U/S 11 OF THE ACT ON TH E GENUINE TRUSTS WHICH HAD NOT CHANGED ITS OBJECTIVES AND HAD CARRIE D ON THE SAME CHARITABLE OBJECTS IN THE PAST AS WELL AS IN THE CU RRENT YEAR BASED ON WHICH THE REGISTRATION U/S.12AA IS GRANTED BY THE D IT (EXEMPTIONS). ITA NO.1757/BANG/2018 PAGE 7 OF 9 7.5 IN LIGHT OF THE AFORESAID REASONING AND ORDER O F THE TRIBUNAL IN CASE OF SREE SREE RAMKRISHNA SAMITY (SUPRA), WE DIR ECT THE DIRECTOR OF INCOME-TAX (EXEMPTION) TO GRANT REGISTRATION TO THE ASSESSEE TRUST FOR ALL THE ASSESSMENT YEARS UNDER DISPUTE, SUBJECT TO THE FOLLOWING CONDITIONS, NAMELY: I) THE REGISTRATION U/S.12AA (1) (B) (I) OF THE I NCOME TAX ACT, 1961 DOES NOT AUTOMATICALLY EXEMPT THE INCOME OF TH E TRUST/INSTITUTION. THE QUESTION OF TAXABILITY OF TH E INCOME OF THE TRUST/INSTITUTION SHALL BE EXAMINED AND DECIDED UPO N BY THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT BASED ON THE COND UCT OF THE ACTIVITIES, COMPLIANCE WITH VARIOUS STATUTORY AND O THER REQUIREMENTS, ETC., AS REFERRED TO IN SECTIONS 2(15), 11, 12 & 13 OF THE INCOME TAX ACT, 1961, WITHOUT PREJUDICE TO THE FACT OF GRANTIN G MERELY IN PRINCIPLE REGISTRATION BY DIT(E). (II) WITH EFFECT FROM THE ASSESSMENT YEAR 2009-10, THE ADVANCEMENT OF ANY OBJECT OF GENERAL PUBLIC UTILITY OTHER THAN REL IEF OF THE POOR, EDUCATION AND MEDICAL RELIEF AS DEFINED IN SECTION 2(15) OF THE INCOME TAX ACT SHALL NOT BE A CHARITABLE PURPOSE, IF IT IN VOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO AN Y TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERAT ION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY. (III) AMENDMENTS TO THE DEED/MEMORANDUM, RULES AND REGULATIONS, IF ANY, OF THE TRUST / INSTITUTION SHALL BE MADE ONLY WITH THE PRIOR APPROVAL OF THE COMMISSIONER OF INCOME TAX(EXEMPTIO NS) OR ANY OTHER PRESCRIBED AUTHORITY UNDER THE INCOME TAX ACT ,1961. (IV) THE REGISTRATION MAY BE WITHDRAWN ON VIOLATION OF ANY OF THE STIPULATIONS LAID DOWN IN THE INCOME TAX ACT, 1961, (V) THE SOCIETY/TRUST SHALL REGULARLY FILE ITS INCO ME TAX RETURN. 7. IN MY OPINION, THESE FACTS ARE VERY CRUCIAL THAT THE APPEAL WAS PENDING BEFORE CIT(A) ON 01.03.2018 AND ON THAT DATE, A REQUEST WA S MADE BY THE ASSESSEE BEFORE CIT(A) TO KEEP THE APPEAL IN ABEYANCE TILL T HE ASSESSEES APPLICATION FOR REGISTRATION IS DISPOSED OF BY LD. CIT(E) AND ULTIM ATELY ON 16.05.2018, THE CIT(E) GRANTED THE REGISTRATION TO THE ASSESSEE BUT CIT(A) HAS DISPOSED OF THE APPEAL OF THE ASSESSEE ON 12.03.2018 WITHOUT WAITIN G FOR THE DISPOSAL OF THE ASSESSEES APPLICATION FOR REGISTRATION U/S. 12AA O F IT ACT. HENCE I FEEL IT PROPER THAT IN THE FACTS OF THE PRESENT CASE, AS DI SCUSSED ABOVE, THE ASSESSEE SHOULD GET THE BENEFIT OF REGISTRATION GRANTED BY C IT (E) ON 16.05.2018 AND SUCH BENEFIT SHOULD NOT BE DENIED TO THE ASSESSEE O NLY BECAUSE OF THIS REASON THAT IN SPITE OF THE ASSESSEES REQUEST FOR KEEPING THE APPEAL IN ABEYANCE, THE APPEAL OF THE ASSESSEE WAS DISPOSED OF BY THE CIT ( A). RESPECTFULLY FOLLOWING ITA NO.1757/BANG/2018 PAGE 8 OF 9 THE TRIBUNAL ORDER IN THE CASE OF SNDP YOGAM VS. AS SISTANT DIRECTOR OF INCOME-TAX (SUPRA) AND IN TURN ALSO FOLLOWING ANOTH ER TRIBUNAL ORDER RENDERED IN THE CASE OF SREE SREE RAMAKRISHNA SAMITY VS. DY. CI T AS REPORTED IN TS- 6208-ITAT-2015(KOLKATA), I HOLD THAT IN THE FACTS O F PRESENT CASE, THE ASSESSEE SHOULD GET THE BENEFIT OF REGISTRATION GRANTED SUBS EQUENTLY BECAUSE THIS IS NOT THE CASE OF THE AO THAT THE ASSESSEE TRUST IS NOT A GENUINE TRUST AND THIS IS ALSO NOT THE CASE OF THE AO THAT THE TRUST HAS CHANGED I TS OBJECTIVES. THIS IS ADMITTED POSITION THAT IN THE EARLIER YEARS ALSO, B EFORE GRANTING OF REGISTRATION U/S. 12AA, THE ASSESSEE WAS HAVING THE SAME CHARITA BLE OBJECTIVES, BASED ON WHICH THE REGISTRATION U/S. 12AA WAS GRANTED BY CIT (E). HENCE IN LINE WITH PARA 7.5 OF THIS TRIBUNAL ORDER AS REPRODUCED ABOVE , I DIRECT THE CIT(E) TO GRANT EXEMPTION TO ASSESSEE FOR ALL THE ASSESSMENT YEARS BEING ASSESSMENT YEAR 2014-15 WHICH IS UNDER DISPUTE IN PRESENT APPEAL AN D SUBSEQUENT ASSESSMENT YEARS PRIOR TO ASSESSMENT YEAR 2018-19 FOR WHICH TH E REGISTRATION IS ALREADY GRANTED BY CIT(E) SUBJECT TO THE SAME CONDITIONS WH ICH ARE PRESCRIBED BY TRIBUNAL IN THE CASE OF SNDP YOGAM VS. ASSISTANT DI RECTOR OF INCOME-TAX (SUPRA) AS REPRODUCED ABOVE. IF THE REGISTRATION I S GRANTED BY CIT (E) FOR THE PRESENT YEAR, THEN THE INCOME OF THE ASSESSEE SHOUL D BE ASSESSED AFRESH U/S. 11 AS PER LAW. 8. BEFORE PARTING, I FEEL IT PROPER TO BRING THIS O N RECORD THAT AFTER THE HEARING OF THIS APPEAL, A JUDGMENT OF HONBLE RAJASTHAN HIGH C OURT RENDERED IN THE CASE OF CIT (EXEMPTIONS) VS. M/S SHREE SHYAM MANDIR COMM ITTEE IN D. B. INCOME TAX APPEAL NO. 234/2016 DATED 23.10.2017 HAS COME T O MY NOTICE IN WHICH, THE TRIBUNAL ORDER RENDERED IN THE CASE OF SNDP YOGAM V S. ASSISTANT DIRECTOR OF INCOME-TAX (SUPRA) AND IN THE CASE OF SREE SREE RAM AKRISHNA SAMITY VS. DY. CIT (SUPRA) WERE APPROVED AND IT WAS HELD THAT FIRS T AND SECOND PROVISO TO SECTION 12A (2) ARE APPLICABLE RETROSPECTIVELY AND IF THE ASSESSMENT IS PENDING BEFORE APPELLATE AUTHORITY, IT SHOULD BE DEEMED AS TO BE ASSESSMENT PROCEEDINGS PENDING BEFORE THE ASSESSING OFFICER W ITHIN THE MEANING OF THAT TERM AS ENVISAGED UNDER THE PROVISO AND THEREFORE, IF THE ASSESSEE HAS OBTAINED REGISTRATION U/S 12AA DURING THE PENDENCY OF APPEAL, THE ASSESSEE IS ITA NO.1757/BANG/2018 PAGE 9 OF 9 ENTITLED FOR EXEMPTION U/S 11. THIS JUDGMENT FORTIF IES THE VIEW TAKEN BY ME IN THE ABOVE PARA. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 13 TH JULY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.