St. John's Educational Trust , Chennai V. ITO, Exemptions, Ward-4, Chennai

ITA 358/CHNY/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4096 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 29-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N DEVANATHAN
• Keywords: Charitable institution; Retrospective amendment; Benefit of exemption; Condonation of delay
• Section: 147; 12; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.358/CHNY/2018 / ASSESSMENT YEAR : 2010-11 ST.JOHNS EDUCATIONAL TRUST , NO.13,NEW COLONY, PORUR, CHENNAI 600 116. VS. THE INCOME TAX OFFICER, EXEMPTIONS, WARD -4, CHENNAI -34. [PAN AAITS 7349 L ] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : MR.N.DEVANATHAN,ADVOCATE $% ! ' # /RESPONDENT BY : MR.CLEMENT RAMESH KUMAR, ADDITIONAL CIT D.R & ' ' () / DATE OF HEARING : 11 - 1 0 - 201 8 * ' () / DATE OF PRONOUNCEMENT : 11 - 1 0 - 201 8 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-17, CHENNA I IN ITA NO.267/2012-13 DATED 24.08.2017 FOR THE ASSESSMENT YEAR 2010-11. 2. MR.N.DEVANATHAN REPRESENTED ON BEHALF OF THE ASSESSEE AND MR.CLEMENT RAMESH KUMAR REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY LD.A.R THAT THE ASSESSEE IS A TRUST FORMED ON 19.12.2007 AND RUNS SCHOOLS. IT WAS A SUB MISSION THAT THE ITA NO.358/CHNY/2018 :- 2 -: ASSESSEE HAD APPLIED FOR REGISTRATION U/S.12AA OF T HE ACT, AND WAS GRANTED REGISTRATION FROM THE ASSESSMENT YEAR 2011 -12. IT WAS A SUBMISSION THAT WHEN THE ASSESSMENT FOR ASSESSMENT YEAR 2010-11 WAS TAKEN UP, THE LD. ASSESSING OFFICER ON THE GROU ND THAT THE ASSESSEE-TRUST WAS NOT REGISTERED U/S.12AA OF THE A CT, REFUSED TO GIVE THE ASSESSEE THE BENEFIT OF EXEMPTION UNDER SECTION 11 & 12 OF THE ACT. IT WAS A SUBMISSION THAT IN VIEW OF THE PROVI SO TO SECTION 12A(2), THOUGH THE SAID PROVISO HAD BEEN IN TRODUCED WITH EFFECT FROM 01.10.2014, THE SAME HAS BEEN HELD TO B E RETROSPECTIVE IN OPERATION BY THE CO-ORDINATE BENCH OF KOLKATA IN TH E CASE OF SREE SREE RAMKRISHNA SAMITY VS. DCIT IN ITA NO.1680 TO 1685/K OLKATA/2012 DATED 09.10.2015 WHEREIN PARA 6.8 OF THE ORDER, IT HAS BEEN HELD AS FOLLOWS:- 6.8. IT WILL BE RELEVANT TO GET INTO THE EXPLANAT ORY NOTES TO THE PROVISIONS OF THE FINANCE (NO. 2), 2014 AS GIVEN IN CBDT CIRCULAR NO. 01 / 2015 DATED 21.1.2015 IN REFERENCE F.NO. 14 2/13 /2014-TPL WHICH IS REPRODUCED HEREIN BELOW FOR THE SAKE OF CO NVENIENCE :- PARA 8 - APPLICABILITY OF THE REGISTRATION GRANTED TO A TRUST OR INSTITUTION TO EARLIER YEARS PARA 8.2 NON-APPLICATI ON OF REGISTRATION FOR THE PERIOD PRIOR TO THE YEAR OF REGISTRATION CA USED GENUINE HARDSHIP TO CHARITABLE ORGANIZATIONS. DUE TO ABSENC E OF REGISTRATION, TAX LIABILITY IS FASTENED EVEN THOUGH THEY MAY OTHE RWISE BE ELIGIBLE FOR EXEMPTION AND FULFILL OTHER SUBSTANTIVE CONDITI ONS. HOWEVER, THE POWER OF CONDONATION OF DELAY IN SEEKING REGISTRATI ON 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 EFFECT WITH A VIEW NOT TO AFFECT GENUINE CHARITABLE TRUSTS AND SOCIETI ES CARRYING ON GENUINE CHARITABLE OBJECTS 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 APPLIC ATION ALONE COULD ITA NO.358/CHNY/2018 :- 3 -: 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 PROVIDES THAT REGISTRATION O NCE GRANTED IN 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 LEARNED AO, UNLESS THE REGISTRAT ION GRANTED EARLIER IS CANCELLED OR REFUSED FOR SPECIFIC REASON S. THE STATUTE ALSO GOES ON TO ITA NOS. 1680-1685/KOL/2012 SREE SREE RA MKRSIHNA SAMITY PROVIDE THAT NO ACTION U/S 147 COULD BE TAKE N BY THE AO MERELY FOR NON-REGISTRATION OF TRUST FOR EARLIER YE ARS. 4. IN REPLY, LD.D.R VEHEMENTLY SUPPORTED THE ORDER S OF LD. ASSESSING OFFICER AND THE LD.CIT(A). IT WAS A SUBM ISSION THAT AS THE LD. ASSESSING OFFICER AND THE LD.CIT(A) HAS NOT CO NSIDERED THE PROVISIONS OF FIRST PROVISO TO SECTION 12A(2) OF TH E ACT, THE ISSUE COULD BE RESTORED TO THE FILE OF LD. ASSESSING OFFICER FO R ADJUDICATION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE FIRST PROVISO TO SECTION 12A(2) SHOWS IT AS FOLLOWS :- PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED TO THE TR UST OR INSTITUTION U/S.12AA, THEN, THE PROVISIONS OF TH E 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 A RE PENDING BEFORE THE LD. ASSESSING OFFICER AS ON THE DATE OF SUCH REGISTRATION, AND THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INS TITUTION REMAIN THE SAME FOR SUCH PRECEDING ASSESSMENT YEAR. A PERUSAL OF THE DECISION OF THE CO-ORDINATE BENCH OF KOLKATA IN THE CASE OF SREE SREE RAMKRISHNA SAMITY VS. DCIT REFERR ED TO SUPRA, ITA NO.358/CHNY/2018 :- 4 -: WHICH HAS BEEN EXTRACTED ABOVE, CLEARLY SHOWS THAT THE CBDT CIRCULAR NO.1 OF 2015 ALSO SPECIFIES THAT THE SAID PROVISO W AS INTRODUCED FOR ASSISTING THE GENUINE CHARITABLE TRUST CARRYING ON GENUINE CHARITABLE OBJECTS, IS NO MORE DISPUTE. IN VIEW OF THE FACT, T HE ASSESSEE-TRUST HAS BEEN GRANTED THE BENEFIT OF SECTION 12AA OF THE ACT , RESPECTFULLY FOLLOWING THE PRINCIPLES LAID DOWN BY THE CO-ORDINA TE BENCH OF KOLKATA IN THE CASE OF SREE SREE RAMKRISHNA SAMITY VS. DCIT REFERRED TO SUPRA, THE LD. ASSESSING OFFICER IS DIRECTED TO TRE AT THE ASSESSEE-TRUST AS HAVING THE BENEFIT OF REGISTRATION U/S.12AA OF T HE ACT FOR THE IMPUGNED ASSESSMENT YEAR. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 11 TH OCTOBER, 2018, AT CHENNAI. SD/- SD/- ( . ) (A.MOHAN ALANKAMONY) ! ' / ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) # ' / JUDICIAL MEMBER - ' / CHENNAI . / DATED: 11 TH OCTOBER, 2018. K S SUNDARAM / ' $(01 2 1( / COPY TO: 1 . ! / APPELLANT 3. & 3( () / CIT(A) 5. 145 $(6 / DR 2. $% ! / RESPONDENT 4. & 3( / CIT 6. 57 8' / GF