Shree Sanatan Ashram Charitable Trust, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-2 (4), AMRELI

ITA 178/RJT/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4090 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 13-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Condonation of delay; Set aside
• Section: 143(3); 12A; 12AA; 250; 143(2); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ITA NO.178/RJT/2016 ( / ASSESSMENT YEAR : 2011-12) SHREE SANTAN ASHRAM CHARITABLE TRUST SHREE CHAMUNDA TEMPLE VANKIYA BHOD KHAMBA / VS. THE I.T.O. WARD-2(4) AMRELI ./ ./ PAN/GIR NO. : AAJTS 7402 B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : NONE (WRITTEN SUBMISSION) / RESPONDENT BY : SHRI PRAVEEN VERMA, SR.DR / DATE OF HEARING 27/02/2019 / DATE OF PRONOUNCEMENT 11 /03/2019 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANC E OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)3, RAJKOT [CIT(A) IN SHORT] VIDE APPEAL N O.CIT(A)-3/0685/13- 14 DATED 31/03/2014 ARISING IN THE ASSESSMENT ORD ER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 25/02/2014 RELEVANT TO ASSESSMENT YEAR (AY) 2011-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 2 - 1. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN TRE ATING THE ASSESSEE AS NOT LIABLE OF EARNING INCOME AS EXEMPT FROM INCOME-TAX FOR A.Y. 2011-12 AND THERE BY CONFIRMING TOTAL ADDITION OF RS. 19,93,828 /- AND NET ADDITION OF RS. 17,33,984/-. THE SAME NEEDS CANCELLATION. 2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN TRE ATING THE ASSESSEE AS NOT LIABLE OF EARNING INCOME AS EXEMPT FROM INCOME-TAX FOR A.Y. 2011-12 AND CONFIRMING RAISING DEMAND OF RS. 5,51,140/-. THE SA ME NEEDS MODIFICATION. 3. WITHOUT VERIFYING HIS RECORDS, THE LD. CIT(A) HA S ERRED IN LAW AND FACTS IN TREATING THE ASSESSEE AS NOT LIABLE OF EARNING INCO ME AS EXEMPT FROM INCOME- TAX FOR A.Y. 2011-12 AND CONFIRMING ASSESSMENT ORDE R IS PASSED. THE SAME NEEDS MODIFICATION. 4. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN TRE ATING THE ASSESSEE AS NOT LIABLE OF EARNING INCOME AS EXEMPT FROM INCOME-TAX FOR A.Y. 2011-12 ON THE GROUNDS THAT REGISTRATION CERTIFICATE U/S. 12A IS N OT FURNISHED BY THE ASSESSEE. THE SAME NEEDS MODIFICATION. 5. TAKING INTO CONSIDERATION THE LEGAL, STATUTORY, FACTUAL AND ADMINISTRATIVE ASPECTS, NO DEMAND OUGHT TO HAVE BEEN CONFIRMED AS RAISED WITHOUT CONSIDERING THE MATTER PROPERLY. THE SAME NEEDS DEL ETION. 6.1. WITHOUT PREJUDICE, THE LD. CIT(A) HAS ERRED IN NOT DECIDING THE GROUND NO. 6 OF THE GROUND TAKEN BEFORE HIM, WHICH RUNS AS UND ER : 6. WITHOUT PREJUDICE, THE LD. A.O. HAS ERRED IN LAW AND FACTS IN NOT GRANTING DEDUCTION FOR EXPENSES INCURRED TO EARN TH E INCOME / RECEIPTS AS MENTION IN THE ACCOUNTS IGNORING THE SETTLED LAW THAT NO INCOME CAN BE EARNED WITHOUT INCURRING EXPENSES. THE ADDITION NEEDS DELETION. 6.2. WITHOUT PREJUDICE, THE LD. CIT(A) HAS ERRED IN NOT DECIDING THE GROUND NO. 6 OF THE GROUND TAKEN BEFORE HIM ALTHOUGH HE HAS RE -PRODUCED THE ABOVE GROUND AS WELL SUBMISSIONS MADE BY THE ASSESSEE THE RE ON WITHOUT CONSIDERING THE SAME AT ALL. THE ORDER PASSED BY HIM NEEDS CANC ELLATION. 6.3. WITHOUT PREJUDICE, THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT GRANTING DEDUCTION FOR EXPENSES INCURRED TO EARN TH E INCOME 7 RECEIPTS AS MENTION IN THE ACCOUNTS IGNORING THE SETTLED LAW TH AT NO INCOME CAN BE EARNED WITHOUT INCURRING EXPENSES. THE ADDITION NEEDS DELE TION. ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 3 - 7. WITHOUT PREJUDICE, THE ASSESSMENT ORDER IS BAD I N LAW AND DESERVES ANNULMENT. 8. THE ORDER PASSED U/S. 143(3) NEEDS CANCEL LATION BEING BAD IN LAW. 9. WITHOUT PREJUDICE, THE DEMAND IS RAISED AGAINST THE STATUTORY PROVISIONS OF THE INCOME-TAX ACT. THE SAME NEEDS CANCELLATION. 10. WITHOUT PREJUDICE, NO ADEQUATE, SUFFICIENT AND REASONABLE OPPORTUNITY HAS BEEN PROVIDED WHILE PASSING ASSESSMENT ORDER. THE A SSESSMENT ORDER MADE NEEDS ANNULMENT. 11. WITHOUT PREJUDICE, NO ADEQUATE, SUFFICIENT AND REASONABLE OPPORTUNITY HAS BEEN PROVIDED WHILE PASSING APPEAL ORDER. THE ASSES SMENT ORDER MADE NEEDS ANNULMENT. 12. THE APPELLANT ALSO HUMBLY PRAYED FOR REFUND OF APPEAL FEES FOR THIS APPEAL AMOUNTING TO RS. 10,000/- COMPEL TO BE PAID BY THE LD. CIT(A). FOR NOT CONSIDERING AND DECIDING THE GROUND NO. 6 AS MENTIO NED AT PARA'S 6.1, 6.2 & 6.3 AS MENTIONED ABOVE. 13. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND A ND/OR SUBSTITUTE ANY OR ALL GROUND OF APPEAL BEFORE THE ACTUAL HEARING TAKES PL ACE. 3. EVEN THOUGH THE ASSESSEE HAS RAISED AS MANY AS 13 GROUNDS OF APPEAL, BUT THE EFFECTIVE GRIEVANCE OF THE ASSESSEE REVOLVES TO THE FACT THAT CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO BY M AKING DISALLOWANCE UNDER SECTION 11 OF THE ACT. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A PUBLIC CHARITABLE TRUST AND CLAIMED EXEMPTION UNDER SECTION 11 OF THE ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 4 - ACT. HOWEVER, THE AO DURING THE ASSESSMENT PROCEEDI NGS FOUND THAT THE ASSESSEE WAS REGISTERED UNDER SECTION 12AA OF THE A CT WITH EFFECT FROM 1 ST APRIL 2011. THEREFORE HE WAS OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO EXEMPTION FROM THE FINANCIAL YEAR 2011-12 CORRES PONDING TO THE ASSESSMENT YEAR 2012-13. AS THE YEAR UNDER CONSIDER ATION IS THE ASSESSMENT YEAR 2011-12, THEREFORE, THE AO DISALLOW ED THE EXPENSES CLAIMED BY THE ASSESSEE. ACCORDINGLY, THE AO TREATE D THE ENTIRE AMOUNT OF EXPENDITURE CLAIMED BY IT AS ITS INCOME AND ADDE D TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO LD . CIT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THERE IS NO CH ANGE IN THE ACTIVITIES AND OBJECTS OF THE TRUST. THEREFORE THE REGISTRATIO N CERTIFICATE UNDER SECTION 12AA OF THE ACT GRANTED IN THE ASSESSMENT Y EAR 2012-13 SHOULD HAVE BEEN TREATED AS REGISTERED AND GRANTED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AS WELL. 6. THE ASSESSEE ALSO SUBMITTED THAT ITS CASE IS COVERED UNDER THE PROVISO TO SECTION 12A(2) OF THE ACT WHICH STATES T HAT THE BENEFIT OF SECTION 11 AND 12 SHALL BE APPLIED TO THE ASSESSEE WHERE THE ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE AO. THOUGH SUCH AMENDMENT IS APPLICABLE WITH EFFECT FROM 1 ST OCTOBER 2014, THE COURTS HAVE HELD THAT SUCH AMENDMENT IS APPLICABLE RETROSPECTIVELY. ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 5 - 7. THE ASSESSEE WITHOUT PREJUDICE TO THE ABOVE ALSO SUBMITTED THAT IT IS ENTITLED TO THE DEDUCTION UNDER SECTION 57(III) OF THE ACT ON ACCOUNT OF THE EXPENSES CLAIMED AGAINST ITS GROSS RECEIPTS. 8. HOWEVER, THE LD. CIT(A) DISAGREED WITH THE C ONTENTION OF THE ASSESSEE BY OBSERVING THAT THE AMENDMENT MADE BY WA Y OF PROVISO TO SECTION 12A(2) OF THE ACT IS APPLIED PROSPECTIVELY. ACCORDINGLY THE LD. CIT(A) CONFIRMED THE ORDER OF THE AO. 9. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A), A SSESSEE IS IN APPEAL BEFORE US. THE LD. AR BEFORE US FILED WRITTEN SUBMI SSION WHICH IS REPRODUCED AS UNDER: KIND ATTENTION IS INVITED TO THE HEARING FIXED OF THE ABOVE MATTER ON 27-02-2019. 2.1 AT THE OUTSET IT MAY HUMBLY BE SUBMITTED THAT T HE APPEAL CONTAINS FOLLOWING TWO GROUNDS, BOTH ARE FULLY COVERED BY TH E DECISIONS AS MENTIONED BELOW: 1. THE LD. A.O. HAS DETERMINED INCOME AT RS.19, 9 3,828/- WHICH IS GROSS RECEIPTS AND HAS DENIED EXPENSES OF RS.17,33, 984/- FOR NOT OBTAINING REGISTRATION U/S 12A. THE HON. DELHI HIGH COURT IN THE CASE OF DDIT (EXEMPTION) V/S PETROLEUM SPORTS PROMOTION BOARD 362 ITR 235 DELHI (COPY ENCLOSED) HAS BEEN PLEASED TO HOLD THAT TAXING THE GROSS RECEIPT OF THE ASSESSEE AND NOT THE INCOME, I S NOT PERMISSIBLE UNDER THE INCOME TAX ACT. 2. THE HON. COURT HAS THUS HOLD THAT EVEN IN ABSE NCE OF REGISTRATION U/S. 12A, THEN FULL PLAY MUST BE ALLOWED TO SECTION 57(III) AND EXPENDITURE INCURRED HAS TO BE ALLOWED. ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 6 - 3. THE MATTER IS ALSO COVERED BY THE DECISIONS OF HON. PRESENT BENCH IN ME CASE OF SHRI GHELABHAI POPATBHAI SHINGALA ITA NO. 742/RJT/2014 DATED 31-1-2019 (COPY ENCLOSED) WHERE THE HON. BENCH HOLD THAT IN THE INTEREST OF JUSTICE AND FAIR PLAY, , WE RESTORE THE MATTER TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICA TION AS PER THE PROVISIONS OF LAW. THUS THE MATTER NEEDS RESTORATION TO THE LD. A.O. F OR FRESH ADJUDICATION TO GIVE DEDUCTION OF EXPENSES AS PER D ECISION OF THE HON. DELHI HIGH COURT CITED SUPRA 2.2 AT PARA 4 ON PAGE NO. 2 OF THE ASSESSMENT ORDER THE LD. A.O. WHILE DISALLOWING EXPENDITURE OF RS. 17,33,984/- HAS NOT GIVEN ANY GROUNDS NOR HAS TAKEN ANY OTHER OBJECTION EXCEPT NON OBTAIN ING OF REGISTRATION U/S 12A. 2.3. THUS, THE LD. A.O. HAS DENIED CLAIM MADE U/S. 11(1) & 11(2) VIDE PARA NO. 9 OF THE ASSESSMENT ORDER. THIS IS ALSO ER RONEOUS SINCE IN VIEW OF DECISIONS OF THE HON. DELHI HIGH COURT IN THE CA SE OF DDI (EXEMPTION) V/S. PETROLEUM SPORTS PROMOTION BOARD 3 62 ITR 235 (DEL.) (COPY ENCLOSED) THE SAME CANNOT BE DISALLOWED OR IT HAS TO BE ALLOWED U/S. 57(III). IT IS THEREFORE SUBMITTED THAT THE CL AIM MADE BY THE ASSESSEE MAY KINDLY BE DIRECTED TO BE ALLOWED SINCE THE GROS S RECEIPT OF THE ASSESSEE IS RS. 17,33,984/- AND TOTAL CLAIMED OF EX EMPTION U/S. 11 OF RS. 19,93,828/- AS PER INCOME AND EXPENDITURE ACCOUNT D ULY AUDITED BY THE CHARTERED ACCOUNTANT TOGETHER WITH COMPUTATION OF I NCOME WERE FURNISHED ALONG WITH THE RETURN OF INCOME. INCOME 2.4. AS PER ASSESSMENT ORDER PARA 4 THE LD. A.O . HAS RE-COMPUTED THE MENTIONING AS UNDER: 1. INCOME DERIVED ON A/C. OF DISALLOWANCE OF RS. 19 ,93,828/- BEING EXEMPTION CLAIMED U/S. 11 OF THE ACT AND WITHDRAWN DUE TO LACK OF CERTIFICATE U/S. 12AA DURING THE PERIOD UNDER CONSI DERATION. RS. 17,33,984/- 2.5. THUS THE ENTIRE RECEIPT OF THE ASSESSEE HAS BE EN TAXED BY THE LD. A.O. WHICH IS ALSO NOT PERMISSIBLE AS PER DECISIONS OF THE HON. DELHI HIGH COURT AS MENTIONED ABOVE. ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 7 - 3. IT IS THEREFORE HUMBLY PRAYED THAT THE LD. A.O. MAY KINDLY BE DIRECTED TO GIVE DEDUCTIONS OF EXPENSES INCURRED BY THE ASSESSEE. 4. THE APPEAL ALSO CONTAINS THE GRIEVANCE OF THE AS SESSEE FOR NOT CONSIDERING REGISTRATION GRANTED TO THE ASSESSEE BY THE C.I.T. VIDE ORDER DATED 27-9-2012, TREATING THE SAME AS APPLICABLE FO R A.Y. 2012-13. SINCE THE ASSESSMENT UNDER APPEAL RELATES TO A.Y. 2 011-12, THE ASSESSMENT WHEREOF IS COMPLETED ON 25-2-2014 , THUS AS ON DATE OF GRANTING REGISTRATION ON 27-9-2012 IT IS EVIDENCE THAT ASSESSMENT PROCEEDINGS WERE PENDING AS ON THAT DATE FOR A.Y. 2 011-12 WHICH IS UNDER APPEAL AND ASSESSMENT WHEREOF IS COMPLETED TH EREAFTER ON 25-2- 2014. THUS THE AMENDMENTS INTRODUCE VIDE FINANCE (N O. 2) ACT 2014 WAS APPLICABLE TO THE CASE OF ASSESSEE SINCE IT HAS BEEN TREATED AS RETROSPECTIVE BY THE FOLLOWING DECISIONS: 1. HON. IT AT AHMADABAD IN THE CASE OF BHANUSHALI MITRAMANDAL TRUST 2. HON. IT AT PUNE IN THE CASE OF SHRI VISHVAKALYAN JIVRAKSHA PRATISHTHAN 3. HON. IT AT COCHIN BENCH IN THE CASE OF SNDP YOGA M 4. HON. IT AT KOLKATA IN THE CASE OF SHRI SHRI RAMK RISHNA SAMITI 5. HON. IT AT AMRITSAR IN THE CASE OF ST. JUDE'S 6. THE HON. IT AT AMRITSAR IN THE CASE OF PUNJAB ED UCATIONAL SOCIETY VIDE ORDER DATED 20-11-2017 (COPY ENCLOSED) HAS BEEN PLEASED TO CONSIDER ALL THE ABOVE DECISIONS AND ALSO GUIDELINES OF THE HON SUPREME COURT IN THE DECISION AS MENTION IN THE ORD ER AND HAS BEEN PLEASED TO HOLD THAT THE AMENDMENT IS TO BE CONSIDE RED AS RETROSPECTIVE. SINCE IN THE PRESENT CASE UNDER APPEAL BEFORE THIS HON. B ENCH AND THAT WAS INVOLVED IN THE DECISIONS OF PUNJAB EDUCATIONAL SOC IETY CITED SUPRA CONTAINS THE SAME ASSESSMENT YEAR INVOLVED I.E. IDE NTICAL ASSESSMENT YEAR. I.E. AY 2011-12 IS INVOLVED AND RELATES TO EN TIRE IDENTICAL MATTERS. THE DETAILS FACTUAL POSITIONS OF THE PRESENT CASE I S SUBMITTED BELOW. SINCE THE APPEAL ORDER AT PARA 5.2 ITSELF CONTAINS THE DE TAILS OF 12A CERTIFICATE GRANTED TO THE ASSESSEE VIDE ORDER DATED 27-9-2012 AND ASSESSMENT ORDER AT PARA 4 PAGE 2 CONTAINS APPLICABILITY OF 12A WITH EFFECT FROM 1-4-2011, I.E. FOR A.Y. 2012-13, THUS THE GRIEVANCE OF THE ASSESSEE THAT IT IS TO BE ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 8 - CONSIDERED FOR A.Y. 2011-12 TREATING THE AMENDMENT AS APPLICABLE RETROSPECTIVELY IS FULLY COVERED BY THE DECISIONS C ITED SUPRA. 5. THE OF FACTUAL POSITION IS REPRODUCED BEL OW : 1. THE ASSESSEE FILED RETURN OF INCOME DECLARING NI L INCOME. THE LD. A.O. DURING THE COURSE OF SCRUTINY ASSESSMENT CALLE D FOR CERTIFICATE U/S. 12A WHICH THE ASSESSEE PRODUCED RECEIVED FROM THE C IT - III, RAJKOT VIDE ORDER DATED 27-9-2012 WHICH IS APPLICABLE FROM A.Y. 2012-13. THE LD. A.O. THEREFORE DENIED EXEMPTION U/S. 11 AND DIS ALLOWED AN AMOUNT OF RS. 19,93,8287- TREATING THE SAME AS INCOME DERI VED ON ACCOUNT OF DISALLOWANCE AND ULTIMATELY MADE ADDITION OF RS. 17 ,33,984/-. 2. CONSEQUENTLY DEMAND OF RS. 5,51,1407- IS RAISED ONLY FOR THE REASON THAT REGISTRATION U/S. 12A IS APPLICABLE FOR A.Y. 2 012-13. SINCE IN A.Y. 2012-13 AND IN THIS YEAR THERE IS NO CHANGE OF THE ACTIVITIES, NOR OBJECT OF THE TRUST AND NO OTHER CHANGES ARE THERE, THE CA SE OF THE ASSESSEE OUGHT TO HAVE BEEN TREATED AS REGISTERED U/S. 12A F OR THIS YEAR ALSO I.E. FOR A.Y. 2011-12 AT PAR WITH A. Y. 2012-13 ON DEEME D BASIS. 6.1. COPY OF REGISTRATION U/S. 12A RECEIVED FROM HO N. CIT SIR IS ALSO ENCLOSED HERE WITH. THE ASSESSEE HAS OBTAINED FORM NO. 12A (COPY ENCLOSED) FROM THE HON. CIT, RAJKOT ISSUED UNDER NO . CIT-RAJ-III / 12AA / 79 / 2012-13 / 162 DATED 27-9-2012 EFFECTIVE FROM A.Y. 2012-13. THUS THE ASSESSEE HAS BEEN HELD ENTITLED FOR OBTAIN ING 12A IN SUBSEQUENT YEARS 6.2. IT IS THEREFORE HUMBLY SUBMITTED THAT VIDE FI NANCE (NO. 2) ACT 2014 A PROVISO HAS BEEN INSERTED BELOW THE PROVISIONS 12 A(2) WHICH ALSO PROVIDES THAT ONCE A REGISTRATION IS GRANTED IN SUB SEQUENT YEAR, THE SAME IS TO BE CONSIDERED AS GRANTED FOR PRECEDING Y EAR ALSO. IN THE CASE OF ASSESSEE THE REGISTRATION U/S. 12A HAS BEEN GRAN TED BY THE HON. CIT SIR W.E.F. A.Y. 2012-13 AND THEREFORE THE SAME CAN BE CONSIDERED FOR A.Y. 2011-12 ALSO IN LIEU OF AMENDMENTS. ALTHOUGH T HE AMENDMENTS IS W.E.F. 1-10-2014, THE SAME CAN BE CONSIDERED AS RET ROSPECTIVE IN VIEW OF FOLLOWING JUDICIAL GUIDELINES : 1.2. THE MATTER CAN BE CONSIDERED AS COVERED BY THE DECISIONS OF HON. CALCUTTA HIGH COURT IN THE CASE OF CIT V/S. VIRGIN CREATORS IN G.A. NO. 3200 / 2011 DATED 23-11-2011. WHICH PROVIDES THAT S UCH AMENDMENTS CAN BE CONSIDERED AS RETROSPECTIVE. THIS VIEW HAS B EEN FOLLOWED BY THE ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 9 - HON. IT AT AHMEDABAD IN THE CASE OF M/S. ALPHA PROJ ECTS. THE HON. ITAT RAJKOT HAS ALSO BEEN PLEASED TO FOLLOW THE ABO VE VIEWS IN THE CASE OF M/S. VIJYA PRINTERS JETPUR (ITA NO. 11 / RJT / 2012) THE ORDER OF THE VIJYA PRINTERS PASSED BY THE HON. ITAT, RAJK OT HAS ALSO BEEN CONFIRMED BY THE HON. GUJARAT HIGH COURT. 1.3. THE HON. CALCUTTA HIGH COURT IN THE ABOVE DECISIONS HAS FOLLOWED THE DECISIONS OF THE HON. SUPREME COURT IN THE CASE OF ALLIED MOTORS 224 ITR 677 (SC) & ALOM EXTRUSIONS 319 ITR ' 306 (SC) AND IN THE CASE OF R.B. JODHA MAL KUTHIALA 82 ITR 570 (SC) WHERE IT IS HELD THAT A PROVISION WHICH WAS INSERTED THE REMEDY TO MAKE A P ROVISION WORKABLE REQUIRES TO BE TREATED WITH RETROSPECTIVE OPERATION SO THAT REASONABLE DEDUCTION CAN BE GIVEN TO THE SECTION AS WELL. 6.3. THEREFORE IN VIEW OF THE AMENDMENTS AS PER FIN ANCE (NO. 2) ACT, 2014 WHICH IS TO BE TREATED AS RETROSPECTIVE IN VIE W OF DECISIONS OF THE HON. CALCUTTA HIGH COURT IN THE CASE OF CIT V/S. VI RGIN CREATORS CITED SUPRA TOGETHER WITH DECISIONS OF THE HON. SUPREME C OURT THE APPEAL OF THE ASSESSEE NEEDS ACCEPTANCE. 7. IT IS THEREFORE PRAYED THAT THE APPEAL ON THIS ISSUE MAY KINDLY BE ALLOWED. ALTERNATIVELY IT IS PRAYED THAT MATTER MAY KINDLY BE RESTORED TO THE LD. A.O. SINCE THE ASSESSEE IS FACING UTMOST DIFFICULTIES FOR ISSUANCE OF NOTICE U/S 226(3) WHERE BANK ACCOUNTS ARE ATTACHED AND A PIOS ACTIVIT IES IS RUINED FOR UNCALLED PAYMENT OF A PAPER DEMAND OF RS. 5,51,1407 - 8. IN ANY CASE THE MOST HON. BENCH MAY KIND LY CONSIDER 1. TO ALLOW APPEAL AS PRAYED FOR ............... AND /OR 2. MAY RESTORE THE MATTER BACK TO THE FILE OF LD. A.O. FOR FRESH ADJUDICATION AS PER DECISIONS GIVEN IN THE CASE OF GHELABHAI POPATBHAI SHINGALA (COPY ENCLOSED) BY THIS MOST HON. VARY BENCH. ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 10 - 10. ON THE OTHER HAND, THE LD. DR VEHEMENTLY SUPP ORTED THE ORDER OF AUTHORITIES BELOW. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE INSTANT CASE RELATES TO THE DISALLOWANCE OF THE EXPENDITURE CLAIMED BY THE ASSE SSEE AGAINST THE GROSS RECEIPTS AND TREATING THE SAME AS INCOME OF THE ASS ESSEE ON THE GROUND THAT THE ASSESSEE DOES NOT HOLD VALID REGISTRATION CERTIFICATE UNDER SECTION 12AA OF THE ACT FOR THE YEAR UNDER CONSIDERATION. A S SUCH THE REGISTRATION UNDER SECTION 12AA OF THE ACT WAS GRAN TED WITH EFFECT FROM THE ASSESSMENT YEAR 2012-13, BUT THE SAME WAS HELD AS INAPPLICABLE FOR THE YEAR UNDER CONSIDERATION. 11.1. IT IS AN UNDISPUTED FACT THAT THE REGISTR ATION UNDER SECTION 12AA OF THE ACT WAS GRANTED VIDE DATED 27-09-2012 AND TH E NOTICE UNDER SECTION 143(2) FOR THE ASSESSMENT YEAR UNDER CONSID ERATION WAS ISSUED DATED 17-09-2012. THUS, IT IS CLEAR THAT THE ASSE SSMENT PROCEEDINGS WERE PENDING BEFORE THE AO WHEN THE NOTICE UNDER SECTION 143(2) WAS ISSUED UPON THE ASSESSEE. AS SUCH WE NOTE THAT THE ASSESSE E HAS MADE AN APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT IN THE FINANCIAL YEAR 2011-12. 11.2. NOW THE QUESTION ARISES WHETHER THE PROVI SO TO SECTION 12A(2) OF THE ACT CAN BE HELD AS APPLICABLE RETROSPECTIVELY. IF YES THEN THE ISSUE ON HAND IS COVERED IN FAVOR OF THE ASSESSEE BY SUCH AM ENDMENT AS DISCUSSED ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 11 - ABOVE. BUT SUCH AMENDMENT WAS BROUGHT UNDER THE STA TUTE WITH EFFECT FROM 1 ST OCTOBER 2014 WHICH IMPLIES THAT SUCH AN AMENDMENT CANNOT BE APPLIED RETROSPECTIVELY. HOWEVER, REGARDING THIS, W E NOTE THAT SEVERAL COURTS HAVE HELD THAT SUCH AN AMENDMENT IS APPLIED RETROSPECTIVELY. IN THIS CONNECTION WE FIND SUPPORT AND GUIDANCE FROM T HE ORDER OF AHMEDABAD TRIBUNAL IN THE CASE OF SHREE BHANUSHALI MITRA MANDAL TRUST V. INCOME-TAX OFFICER REPORTED IN 68 TAXMANN.COM 250 WHEREIN IT WAS HELD AS UNDER: 7.2. IT IS ALSO RELEVANT TO REPRODUCE THE EXPLAN ATORY NOTES TO THE PROVISIONS OF FINANCE (NO.2) ACT, 2014 AS GIVEN IN CBDT CIRCULAR NO.01/2015 DATED 21.01.2015 IN REFERENCE F. NO.142/ 13/2014-TPL, WHICH READ AS FOLLOWS: '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 FASTENED EVEN THOUGH THEY MAY OTHERWISE BE ELIGIBLE FOR EXEMPTION AND FULFILL OTH ER SUBSTANTIVE CONDITIONS. HOWEVER, THE POWER OF CONDONATION OF DELAY IN SEEKI NG REGISTRATION WAS NOT AVAILABLE.' THIS CLEARLY GOES TO PROVE THAT THE FIRST PROVISO T O SECTION 12A(2) WAS BROUGHT IN THE STATUTE ONLY AS A RETROSPECTIVE EFFE CT WITH A VIEW NOT TO AFFECT GENUINE CHARITABLE TRUSTS AND SOCIETIES CARR YING ON GENUINE CHARITABLE OBJECTS IN THE EARLIER YEARS AND SUBSTAN TIVE CONDITIONS STIPULATED IN SECTION 11 TO 13 HAVE BEEN DULY FULFI LLED BY THE SAID TRUST. THE BENEFIT OF RETROSPECTIVE APPLICATION ALONE COULD BE THE INTENTION OF THE LEGISLATURE AND THIS POINT IS FURTHER STRENGTHENED BY THE EXPLANATORY NOTES TO FINANCE (NO.2) ACT, 2014 ISSUED BY THE CENTRAL B OARD OF DIRECT TAXES VIDE ITS CIRCULAR NO. 01/2015 DATED 21.1.2015. APPA RENTLY THE STATUTE PROVIDES THAT REGISTRATION ONCE GRANTED IN SUBSEQUE NT YEAR, THE BENEFIT OF THE SAME HAS TO BE APPLIED IN THE EARLIER ASSESSMEN T YEARS FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE LD. A .O., UNLESS THE REGISTRATION GRANTED EARLIER IS CANCELLED OR REFUSE D FOR SPECIFIC REASONS. ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 12 - THE STATUTE ALSO GOES ON TO PROVIDE THAT NO ACTION U/S147 COULD BE TAKEN BY THE AO MERELY FOR NON-REGISTRATION OF TRUST FOR EAR LIER YEARS. 11.3. IN VIEW OF THE ABOVE, THERE REMAINS NO AMBI GUITY THAT THE AMENDMENT IS APPLICABLE RETROSPECTIVELY. THEREFORE IN OUR CONSIDERED VIEW, THE ASSESSEE DESERVES TO CLAIM THE BENEFIT UN DER SECTION 11 OF THE ACT FOR THE YEAR UNDER CONSIDERATION. 11.4. AS WE HAVE DECIDED THE ISSUE IN FAVOR OF THE ASSESSEE ON ACCOUNT OF THE RETROSPECTIVE OPERATION OF THE PROVISO TO SE CTION 12A(2) OF THE ACT, WE ARE NOT INCLINED TO ADJUDICATE OTHER POINTS OF C ONTENTION RAISED BY THE AR IN THE WRITTEN SUBMISSION. THUS WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HI M BY DISALLOWING THE EXEMPTION UNDER SECTION 11 OF THE ACT. THUS THE GRO UND OF APPEAL OF THE ASSESSEE IS ALLOWED 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 11/03/2019 SD/- SD/- (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 11/03/2019 &.., .(.. / T.C. NAIR, SR. PS ITA NO.178/RJT/2016 SHREE SANTAN ASHRAM CHARITABLE TRUST VS. ITO ASST.YEAR 2011-12 - 13 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-3, RAJKOT 5. 012 ((*+ , *+ , & /DR,ITAT, RAJKOT 6. 2=> ? / GUARD FILE. / BY ORDER, 0 ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) $%, & / ITAT, RAJKOT 1. DATE OF DICTATION .. 4.3.19 (WORD PROCESSED BY HO NBLE AM IN HIS COMPUTER BY DRAGON) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 7.3.19 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.12.3.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 12.3.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER