AKHIL BHARTIYA SHREE KHANDAL, AJMER V. INCOME TAX OFFICER (EXEMPTION), AJMER

ITA 345/JPR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6903 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 12-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P P MEENA JCIT A
• Keywords: Charitable institution; Maximum Marginal Rate; Retrospective amendment; Benefit of exemption
• Section: 143(3); 12A; 12AA; 147; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 345/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA, PUSHKAR, AJMER. CUKE VS. THE ITO (EXEMPTION), AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABAA 4456 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI P.P. MEENA (JCIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 23/10/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 07/01/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A), AJMER DATED 13.12.2017 FOR ASSESSMENT YEAR 2013-14. 2. IN ITS APPEAL, THE ASSESSEE HAS TAKEN VARIOUS GR OUNDS OF APPEAL, HOWEVER, THE EFFECTIVE GROUND OF APPEAL RELATES TO THE FINDINGS OF THE LD. CIT(A) THAT THE ASSESSEE TRUST IS NOT REGISTERE D U/S 12AA FOR THE IMPUGNED ASSESSMENT YEAR IGNORING THE FACT THAT ONC E THE REGISTRATION U/S 12AA WAS GRANTED TO THE ASSESSEE W.E.F. 09.02.2 016, THE SAME ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 2 WOULD APPLY TO ALL PENDING ASSESSMENT AS PER PROVIS O TO SECTION 12AA OF THE ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE TRUST IS REGISTERED UNDER THE RAJASTHAN SOCIETIES ACT VIDE R EGISTRATION DATED 27.10.1952 BY THE REGISTRAR OF SOCIETIES, AJMER. TH E RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 28.08.2013 DECLARING T OTAL INCOME AT NIL. AS PER THE ASSESSING OFFICER AS THE ASSESSEE TRUST WAS NOT REGISTERED U/S 12A(A) OF THE INCOME TAX ACT, THE ASSESSEE WOUL D BE ASSESSED AS AOP AT THE MAXIMUM MARGINAL RATE IN TERMS OF SECTIO N 164 OF THE ACT AND BASED ON THE EXAMINATION CARRIED OUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND TAKEN INTO CONSIDERATION , THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSED INCOME WAS DETERMINED AT RS. 8,39,300/- WHICH WAS BROUGHT TO TAX AT THE MAXIMUM MARGINAL R ATE. 3. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION S SO MADE BY THE ASSESSING OFFICER. AS PER THE LD. CIT(A), THOUGH TH E ASSESSEE TRUST HAS BEEN GRANTED REGISTRATION U/S 12AA OF THE ACT, HOWE VER AS PER THE ORDER DATED 08.07.2016 ISSUED BY THE LD. CIT(E) THE PROVISIONS OF SECTIONS 11 & 12 SHALL APPLY IN THE CASE OF THE ASS ESSEE FROM 09.02.2016. THEREFORE, BASIS THE SAID ORDER PASSED BY THE LD. CIT(E), THE LD. CIT(A) HELD THAT THE ASSESSEE TRUST CANNOT BE TREATED AS REGISTERED U/S 12AA OF THE ACT IN RESPECT OF ASSESS MENT YEAR 2013-14 AND THEREFORE, IN THE ABSENCE OF REGISTRATION U/S 1 2AA, VARIOUS ADDITIONS MADE BY THE AO WAS CONFIRMED. ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 3 4. DURING THE COURSE OF HEARING, LD. AR DRAWN OUR R EFERENCE TO THE FIRST PROVISO TO SECTION 12AA AND SUBMITTED THAT WH ERE THE ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICE R AND THE OBJECT/ ACTIVITIES OF THE ASSESSEE TRUST REMAINED THE SAME FOR THE PRECEDING ASSESSMENT YEAR, THEN THE BENEFIT OF REGISTRATION F OR SECTION 11 & 12 ARE REQUIRED TO BE GIVEN TO THE ASSESSEE TRUST. IN SUPP ORT, RELIANCE WAS PLACED ON THE DECISION OF THE COORDINATE BENCH IN C ASE OF SNDP VS. ASSISTANT DIRECTOR OF INCOME TAX (EXEMPTION) 161 IT D 1(COCHIN) AND THE DECISION OF THE COORDINATE BENCH IN CASE OF SRE E SREE RAMKRISHNA SAMITY VS. DCIT 156 ITD 646 (KOL). 5. THE LD. DR IS HEARD WHO HAS RELIED ON THE FINDI NGS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE TRUST HAS APPLIED FOR REGISTRATION U/S 12AA ON 19.01.2016 AND HAS BEEN GRANTED REGISTRATION BY THE LD CIT(E) VIDE HIS ORDER DATED 08.07.2016. WHETHER SUCH REGISTRATION CAN BE CONSIDERED AND PROVISIONS OF SECTION 11 AND 12 CAN APPLY FOR IMPUNGED ASSESSMENT YEAR, WE REFER TO THE PROVISIONS OF SECTION 12A WHICH READS AS UNDER:- (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 ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH S UCH APPLICATION IS MADE: PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED TO THE TR UST OR INSTITUTION UNDER SECTION 12AA , THEN, THE PROVISIONS OF SECTIONS 11 AND ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 4 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FROM 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 THE S AID 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 . 7. IN THE INSTANT CASE, THE PROVISIONS OF SECTION 1 1 AND 12 SHALL APPLY FOR ASSESSMENT YEAR 2016-17. FOR ANY ASSESSM ENT YEAR PRECEDING THE ASSESSMENT YEAR 2016-17, IT IS TO BE SEEN THAT FOR SUCH ASSESSMENT YEAR, WHETHER ASSESSMENT PROCEEDINGS ARE PENDING BE FORE THE ASSESSING OFFICER AS ON THE DATE OF SUCH REGISTRATI ON I.E, 8.7.2016 AND SECONDLY, THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION REMAIN THE SAME FOR SUCH PRECEDING ASSESSMENT YEAR. 8. FOR THE IMPUNGED ASSESSMENT YEAR, THOUGH THE ASS ESSEE TRUST HAS MOVED ITS APPLICATION SEEKING REGISTRATION U/S 12AA ON 19.01.2016, HOWEVER BY THE TIME THE ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS PASSED BY THE ASSESSING OFFICER ON 22.03.2016, THE REGISTRATION WAS NOT GRANTED BY THE LD CIT(E). THEREAFTER, ON MATTERS A RISING OUT OF SUCH ASSESSMENT PROCEEDINGS AND CONSEQUENT ASSESSMENT OR DER, AN APPEAL WAS FILED BY THE ASSESSEE TRUST BEFORE THE LD. CIT( A) ON 12.04.2016. ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 5 SUCH AN APPELLATE PROCEEDINGS BEFORE THE LD CIT(A) ARE IN CONTINUATION OF THE ORIGINAL PROCEEDINGS AND THE ASSESSMENT PRO CEEDINGS PENDING IN APPEAL BEFORE THE LD CIT(A) SHALL BE DEEMED TO BE A SSESSMENT PROCEEDINGS PENDING BEFORE THE ASSESSING OFFICER WI THIN THE MEANING OF PROVISO TO SECTION 12A. DURING THE PENDENCY OF THE APPEAL BEFORE THE LD CIT(A), THE LD CIT(E) HAS GRANTED THE REGISTRATION ON 8.07.2016. THEREFORE, REGISTRATION U/S 12AA WAS GRANTED TO TH E ASSESSEE TRUST WELL BEFORE ITS APPEAL ARISING OUT OF THE ASSESSMENT ORD ER WAS DISPOSED OFF BY THE LD CIT(E) VIDE HIS ORDER DATED 13.12.217. IT FOLLOWS THAT THE ASSESSEE TRUST WHICH OBTAINED REGISTRATION DURING T HE PENDENCY OF APPEAL BEFORE THE LD CIT(A) SHALL BE ENTITLED FOR E XEMPTION UNDER SECTION 11 AND 12 OF THE ACT. IN THIS REGARD, WE R EFER TO THE DECISION OF THE COORDINATE BENCH IN CASE OF SNDP YOGAM VS. ACIT(E ) (SUPRA) WHERE AS THE RELEVANT FINDINGS READS AS UNDER:- 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS , PERUSED THE RELEVANT MATERIALS ON RECORD AND THE CASE LAW ON WH ICH THE LEARNED AR HAD PLACED STRONG RELIANCE. THE PRIMARY ISSUE FOR O UR CONSIDERATION IS WHETHER THE CIT (A) IS JUSTIFIED IN CONFIRMING THE AO'S ACTION, FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION, IN ASSESSING THE ENTIRE INCOMES OF THE ASSESSEE FROM ALL THE INSTITUTIONS AT THE MA XIMUM MARGINAL RATE. IN THIS CONTEXT, IT IS APPROPRIATE TO REFER THE AME NDMENT TO SECTION 12A(2) OF THE ACT AND ITS PROVISO. FOR READY REFERE NCE THE SAME IS REPRODUCED BELOW: (SECTION 12A(2) & ITS PROVISO) ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 6 '[(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 WHICH SUCH APPLICATION IS MADE:] [PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED TO THE TRUST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVISION S OF SECTIONS 11 AND 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FROM PROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YEAR PRECEDING T HE AFORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS A RE PENDING BEFORE THE ASSESSING OFFICER AS ON THE DATE OF SUCH REGISTRATION AND THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITU TION REMAIN THE SAME FOR SUCH PRECEDING ASSESSMENT YEAR: PROVIDED FURTHER THAT NO ACTION UNDER SECTION 147 S HALL 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 FIRS T 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 EXPL ANATORY NOTE TO THE PROVISIONS OF THE FINANCE (NO.,2) ACT 2014 AS G IVEN IN CBDT NO.1/15 DATED 21.1.2015 ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 7 '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 FA STENED EVEN THOUGH THEY MAY OTHERWISE BE ELIGIBLE FOR EXEMPTION AND FU LFILL OTHER SUBSTANTIVE CONDITIONS. HOWEVER, THE POWER OF CONDO NATION OF DELAY 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 RETROSP ECTIVE APPLICATION ALONE COULD BE THE INTENTION OF THE LEGISLATURE AND THIS POINT IS FURTHER STRENGTHENED BY THE EXPLANATORY NOTES TO FINANCE (N O.2) ACT, 2014 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES VIDE IT S CIRCULAR NO. 01/2015 DATED 21.1.2015. APPARENTLY THE STATUTE PRO VIDES THAT REGISTRATION ONCE GRANTED IN SUBSEQUENT YEAR, THE B ENEFIT OF THE SAME HAS TO BE APPLIED IN THE EARLIER ASSESSMENT YEARS F OR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE LD. A.O., UNLESS THE REGISTRATION GRANTED EARLIER IS CANCELLED OR REFUSED FOR SPECIFI C REASONS. 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 EARLIER Y EARS. 7.2 WHEN SECTION 12A OF THE ACT WAS AMENDED BY INTRODU CING 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 PENDING IN APPEAL BEFORE THE ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 8 FIRST APPELLATE AUTHORITY. DURING SUCH PENDENCY, TH E ASSESSEE WAS GRANTED REGISTRATION U/S 12AA OF THE ACT ON 29.07.2 013 W.E.F. THE ASSESSMENT YEAR 2013-14. THOSE APPEALS WERE THE CON TINUATION OF THE ORIGINAL PROCEEDINGS AND THAT THE POWER OF THE COMM ISSIONER OF INCOME-TAX WAS CO-TERMINUS WITH THAT OF THE ASSESSI NG OFFICER [ADIT (EXEMPTION) IN THE PRESENT CASE] WERE TWO WELL ESTA BLISHED PRINCIPLES OF LAW. IN VIEW OF THE ABOVE AND GOING BY THE PRINCIPL E OF PURPOSIVE INTERPRETATION OF STATUES, AN ASSESSMENT PROCEEDING WHICH IS PENDING IN APPEAL BEFORE THE APPELLATE AUTHORITY SHOULD BE DEE MED TO BE 'ASSESSMENT PROCEEDINGS PENDING BEFORE THE ASSESSIN G OFFICER' WITHIN THE MEANING OF THAT TERM AS ENVISAGED UNDER THE PRO VISO. IT FOLLOWS THERE-FROM THAT THE ASSESSEE WHICH OBTAINED REGISTR ATION U/S 12AA OF THE ACT DURING THE PENDENCY OF APPEAL WAS ENTITLED FOR EXEMPTION CLAIMED U/S 11OF THE ACT. 7.3 THE EXPLANATORY MEMORANDUM TO FINANCE (NO.2) BILL, 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 RESPECT O F WHICH, DUE TO ABSENCE OF REGISTRATION U/S 12AA TAX LIABILITY GOT ATTACHED THOUGH OTHERWISE THEY WERE ELIGIBLE FOR EXEMPTION BY FULFILLING OTHER SUB STANTIVE CONDITIONS THAT THE AMENDMENT WAS BROUGHT IN. THAT BEING SO, DENYIN G SUCH BENEFIT TO A TRUST LIKE THE ASSESSEE WHO HAD OBTAINED REGISTRA TION U/S 12AA DURING THE PENDENCY OF THE APPEALS FILED AGAINST THE ORDER S OF THE ASSESSING AUTHORITY, BY NARROWLY INTERPRETING THE TERM, 'PEND ING BEFORE THE ASSESSING OFFICER' SO AS TO EXCLUDE ITS PENDENCY BE FORE THE APPELLATE AUTHORITY, WILL BE DOING VIOLENCE TO THE PROVISIONS OF THE STATUTE AND, AS SUCH, LIABLE TO BE INTERFERED WITH. MOREOVER, UNDER THE SCHEME OF THE ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 9 ACT, SECTIONS 11 AND 12 ARE SUBSTANTIVE PROVISIONS WHICH PROVIDE FOR EXEMPTIONS TO A RELIGIOUS OR CHARITABLE TRUST. SECT IONS 12A AND 12AA DETAIL THE PROCEDURAL REQUIREMENTS FOR MAKING AN AP PLICATION TO CLAIM EXEMPTIONS 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 NOT THE REGISTRATION U/S 12AA BY ITSELF THAT OFFERS IMM UNITY FROM TAXATION. 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, THEREBY REMOVING THE HARDSHIP IN GENUINE CASES LIKE THE PRESENT ASSESSEE UNDER CONSIDERATION. 7.4 TAKING INTO ACCOUNT THE ABOVE FACTS AND CIRCUMSTAN CES OF THE ISSUE, WE ARE OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN TAKING A STAND THAT REGISTRATION U/S 12A WAS NOT APPLICABLE TO THE ASSE SSEE 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 V. DY. CIT [2016] 156 ITD 646/[2015] 64 TAXMANN.COM ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 10 330 WHERE IT WAS HELD THAT AMENDMENT TO SECTION 12A W. E.F. 01.10.2014 IS RETROSPECTIVE. THE RELEVANT FINDING O F THE HON'BLE KOLKATA BENCH IN CASE OF SREE SREE RAMKRISHNA SAMITY (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 INTERPRETATION CAN BE GIVEN TO THE SECTION AS A WHOLE AND ACCORDIN GLY THE SAID INSERTION OF FIRST PROVISO TO SECTION 12A(2) OF THE ACT WITH EFFECT FROM 1.10.2014 SHOULD BE READ AS RETROSPECTIVE IN O PERATION WITH EFFECT FROM THE DATE WHEN THE CONDITION OF ELIGIBIL ITY FOR EXEMPTION UNDER SECTION 11 & 12 AS MENTIONED IN SECTION 12A P ROVIDED FOR REGISTRATION U/S.12AA AS A PRE-CONDITION FOR APPLIC ABILITY 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 R ATHER THAN IN INJUSTICE, THEN SUCH CONSTRUCTION SHOULD BE PREFERR ED TO THE LITERAL CONSTRUCTION. IT IS ONLY ELEMENTARY THAT A STATUTOR Y PROVISION IS TO BE INTERPRETED UT RES MAGISVALEAT QUAM PEREAT, I.E TO MAKE IT WORKABLE RATHER THAN REDUNDANT. APPLYING THIS LEGAL MAXIM, I T WOULD BE JUST AND FAIR TO HOLD THAT THE AMENDMENT IN SECTION 12A IS BROUGHT IN THE STATUTE TO CONFER BENEFIT OF EXEMPTION U/S 11 OF TH E ACT ON THE ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 11 GENUINE TRUSTS WHICH HAD NOT CHANGED ITS OBJECTIVES AND HAD CARRIED ON THE SAME CHARITABLE OBJECTS IN THE PAST AS WELL AS IN THE CURRENT YEAR BASED ON WHICH THE REGISTRATION U/S.12AA IS GR ANTED BY THE DIT (EXEMPTIONS).' 7.5 IN LIGHT OF THE AFORESAID REASONING AND ORDER OF T HE TRIBUNAL IN CASE OF SREE SREE RAMKRISHNA SAMITY (SUPRA), WE DIRECT T HE 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 INCOME T AX ACT, 1961 DOES NOT AUTOMATICALLY EXEMPT THE INCOME OF THE TRU ST/INSTITUTION. THE QUESTION OF TAXABILITY OF THE INCOME OF THE TRU ST/INSTITU TION SHALL BE EXAMINED AND DECIDED UPON BY THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT BASED ON THE CONDUCT OF THE ACTIVITIES, COMPLIANCE WITH VARIOUS STATUTORY AND OTHER REQUIRE MENTS, ETC., AS REFERRED TO IN SECTIONS 2(15), 11, 12 & 13 OF THE I NCOME T AX ACT, 1961, WITHOUT PREJUDICE TO THE FACT OF GRANTING MER ELY 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 RELIEF OF THE POOR, EDUCATION AND M EDICAL RELIEF AS DEFINED IN SECTION 2(15) OF THE INCOME TAX ACT SHALL NOT BE A CHARITABLE PURPOSE, I F IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRAD E, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY O THER ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 12 CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY. (III ) AMENDMENTS TO THE DEED/MEMORANDUM, RULES AND REGULA TIONS, 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 A NY OF THE STIPULATIONS LAID DOWN IN THE INCOME TAX ACT, 1961, (V ) THE SOCIETY/TRUST SHALL REGULARLY FILE ITS INCOME T AX RETURN.' 9. AT THE SAME TIME, WE FIND THAT THERE IS NO FINDI NG OF THE LOWER AUTHORITIES AS TO WHETHER THE OBJECTS AND ACTIVITIE S OF SUCH TRUST OR INSTITUTION FOR THE IMPUNGED ASSESSMENT YEAR REMAIN THE SAME AS IN ASSESSMENT YEAR 2016-17. 10. IN LIGHT OF ABOVE DISCUSSIONS, THE ASSESSEE TRU ST IS CONSIDERED AS REGISTERED U/S 12AA AND ELIGIBLE FOR EXEMPTION UNDE R SECTION 11 AND 12 OF THE ACT FOR THE IMPUNGED ASSESSMENT YEAR SUBJECT TO EXAMINATION BY THE ASSESSING OFFICER AS TO WHETHER THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION FOR THE IMPUNGED ASSESSMENT YE AR REMAIN THE SAME AS IN ASSESSMENT YEAR 2016-17. THE MATTER IS ACCORD INGLY SET-ASIDE TO THE FILE OF THE ASSESSING OFFICER WHO SHALL EXAMINE AS TO WHETHER THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION FOR THE IMPUNGED ASSESSMENT YEAR REMAIN THE SAME AS IN ASSESSMENT YE AR 2016-17. ITA NO. 345/JP/2018 AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA VS. IT O(E) 13 11. THE OTHER GROUNDS OF APPEAL ARE CONSEQUENTIAL I N NATURE AND HENCE, NOT BEING ADJUDICATED UPON AND THE SAME ARE ALSO SET-ASIDE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE SA ME AFRESH AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE TRUST. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07/01/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07/01/2019. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- AKHIL BHARTIYA SHREE KHANDAL VIPRA MAHASABHA, AJMER 2. IZR;FKHZ@ THE RESPONDENT- ITO(E), AJMER. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 345/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR