Smt. Sudesh Khanna, Prop. M/s. R.T. Textiles, Amritsar. V. The Income Tax Officer, Amritsar.

ITA 44/ASR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9583 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-09-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 12-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Assessee Lawyers: GUNJEET SINGH SYAL S
• Keywords: Charitable institution; Retrospective amendment; Benefit of exemption; Condonation of delay; Capital expenditure
• Section: 143(3); 12A; 12AA; 147; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENC H, AMRITSAR BEFORE: SHRI A.D. JAIN, JM & SHRI T.S. KAPOOR, AM ITA NO. 749/(ASR)/2013 ASSESSMENT YEAR : 2010-11 ST. JUDES CONVENT SCHOOL, NAKODER, C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAETS 3007 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS. 04/(ASR)/2016 ASSESSMENT YEARS : 2006-07 ST. JUDES CONVENT SCHOOL, NAKODER, C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAETS 3007 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS. 05, 06,07, 08/(ASR)/2016 ASSESSMENT YEARS : 2007-08, 2008-09, 2009-10 & 2012 -13 ST. JUDES CONVENT SCHOOL, NAKODER, C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. INCOME TAX OFFICER, EXEMPTION WARD, JALANDHAR. PAN NO.: AAETS 3007 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS.28, 29, 30, 31, 32, 33/(ASR)/2016 ASSESSMENT YEARS : 2006-07, 2007-08, 2008-09, 2009- 10, 2011-12 & 2012-13 ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 2 ST. FRANCIS CONVENT SCHOOL, JANDIALA GURU, C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. INCOME TAX OFFICER, (EXEMPTION), JALANDHAR. PAN NO.: AAHTS1635E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 44/(ASR)/2014 ASSESSMENT YEARS : 2010-11 ST. FRANCIS CONVENT SCHOOL, JANDIALA GURU, C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAHTS1635E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 752/(ASR)/2013 ASSESSMENT YEARS : 2010-11 ST. FRANCIS CONVENT SCHOOL, FATEHGARH CHURIAN, C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAAFTS5347F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 09/(ASR)/2016 ASSESSMENT YEARS : 2006-07 ST. FRANCIS CONVENT SCHOOL, FATEHGARH CHURIAN, C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAAFTS5347F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS.10, 11, 12 & 13/(ASR)/2016 ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 3 ASSESSMENT YEARS : 2007-08, 2008-09, 2009-10 & 2012 -13 ST. FRANCIS CONVENT SCHOOL, FATEHGARH CHURIAN, C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. INCOME TAX OFFICER, (EXEMPTION), JALANDHAR. PAN NO.: AAAFTS5347F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 750/(ASR)/2013 ASSESSMENT YEAR : 2010-11 ST. CHRIST THE KING CONVENT SCHOOL, PATHANKOT C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAEFC0236G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO.14/(ASR)/2016 ASSESSMENT YEAR : 2006-07 ST. CHRIST THE KING CONVENT SCHOOL, PATHANKOT C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAEFC0236G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS. 15 TO 18/(ASR)/2016 ASSESSMENT YEARS : 2007-08, 2008-09, 2009-10 & 2012 -13 ST. CHRIST THE KING CONVENT SCHOOL, PATHANKOT C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. INCOME TAX OFFICER (EXEMPTION) , JALANDHAR. PAN NO.: AAEFC0236G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 4 ITA NO. 751/(ASR)/2013 ASSESSMENT YEAR : 2010-11 ST. FRANCIS CONVENT SCHOOL, TARN TARAN C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAFTS5346E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO.23/(ASR)/2016 ASSESSMENT YEAR : 2006-07 ST. FRANCIS CONVENT SCHOOL, TARN TARAN C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAFTS5346E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS. 24 TO 27/(ASR)/2016 ASSESSMENT YEAR : 2007-08, 2008-09, 2009-10 & 2012- 13 ST. FRANCIS CONVENT SCHOOL, TARN TARAN C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. INCOME TAX OFFICER (EXEMPTION), JALANDHAR. PAN NO.: AAFTS5346E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS. 19, 20, 21 & 22(ASR)/2016 ASSESSMENT YEARS :2007-08, 2008-09, 2011-12 & 2012- 13 ST. JOSEPHS CONVENT SCHOOL, PHAGWARA. C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. INCOME TAX OFFICER (EXEMPTION), JALANDHAR. ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 5 PAN NO.: AACTS9035M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 01/(ASR)/2016 ASSESSMENT YEAR : 2011-12 ST. ANTONYS CONVENT SCHOOL, ADAMPUR. C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAFAS4318F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 03/(ASR)/2016 ASSESSMENT YEAR : 2011-12 ST. CHRIST THE KING CONVENT SCHOOL, BHOLATH C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAAAC9355M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT TA NO.02/(ASR)/2016 ASSESSMENT YEARS : 2011-12 SACRED HEART CONVENT SCHOOL, PATTI C/O- BISHOP HOUSE, CIVIL LINES, JALANDHAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-III, JALANDHAR. PAN NO.: AAFAS4771C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ASSESSEE BY : SHRI AJAY VOHRA (SR. ADV.) ALONGWITH SH.ROHIT GARG, SH. PREM SINGH & SH. GUNJEET SINGH SYAL, ADVOCATES REVENUE BY: SH. BHAWANI SHANKER, DR ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 6 DATE OF HEARING : 01/07/2016 DATE OF PRONOUNCEMENT : 26/09/2016 ORDER PER BENCH WHAT WE HAVE BEFORE US IS TWO BATCHES OF ASSESSEE S APPEALS (38 APPEALS IN ALL) IMPINGING UPON THE PROVISIONS OF SE CTION 12A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT). THE FIRST BATCH INVOLVES CASES WHERE THE PROVISIONS OF SECTIONS 147/148 OF TH E ACT HAVE BEEN INVOKED AND ASSESSMENTS HAVE BEEN FRAMED PURSUANT T HERETO. THE SECOND BATCH PERTAINS TO ASSESSMENTS FRAMED U/S 143(3) OF THE ACT. 2. THE DETAILS OF THESE APPEALS ARE AS FOLLOWS:- S. NO. NAME OF THE APPELLANT SCHOOL ASSESSMENT YEARS NO. OF APPEALS 1. ST. JUDES CONVENT SCHOOL, NAKODAR A.Y. 2006-07 TO 2010-11 AND 2012-13 6 2. ST. FRANCIS CONVENT SCHOOL, JANDIALA GURU A.Y. 2006-07 TO 2012-13 7 3. ST. FRANCIS CONVENT SCHOOL, FATEHGARH CHURIAN A.Y. 2006-07 TO 2010-11 AND 2012-13 6 4. CHRIST THE KING CONVENT SCHOOL, PATHANKOT A.Y. 2006-07 TO 2010-11 AND 2012-13 6 5. ST. FRANCIS CONVENT SCHOOL, TARN TARAN A.Y. 2006-07 TO 2010-11 AND 2012-13 6 6. ST. JOSEPH CONVENT SCHOOL, PHAGWARA A.Y. 2007-08, 2008-09, 2011-12 AND 2012-13 4 7. ST. ANTONYS CONVENT SCHOOL, ADAMPUR A.Y. 2011-12 1 8. CHRIST THE KING CONVENT SCHOOL, BHOLATH A.Y. 2011-12 1 9. SACRED HEART CONVENT SCHOOL, PATTI A.Y. 2011-12 1 ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 7 TOTAL 38 3. THE FIRST BATCH OF APPEALS SEEKS RELIEF UNDER THE FIRST PROVISO TO SECTION 12A(2) OF THE ACT. THE APPEALS IN THIS BATC H ARE AS FOLLOWS:- NAME OF THE APPELLANT SCHOOL APPEAL NUMBERS ASSESSMENT YEARS NO. OF APPEALS ST. JUDES CONVENT SCHOOL, NAKODAR ITA NO. 749/ASR/2013 & 8/ASR/2016 A.Y. 2010-11 AND 2012-13 2 ST. FRANCIS CONVENT SCHOOL, FATEHGARH CHURIAN ITA NO. 752/ASR/2013 & 13/ASR/2016 A.Y. 2010-11 AND 2012-13 2 ST. FRANCIS CONVENT SCHOOL, JANDIALA GURU ITA NO. 44/ASR/2014, 32/ASR/16 & 33/ASR/2016 A.Y. 2010-11 TO 2012-13 3 CHRIST THE KING CONVENT SCHOOL, PATHANKOT ITA NO. 750/ASR/2013 & 18/ASR/2016 A.Y. 2010-11 AND 2012-13 2 ST. JOSEPH CONVENT SCHOOL, PHAGWARA ITA NO. 22/ASR/2016 A.Y. 2012-13 1 ST. FRANCIS CONVENT SCHOOL, TARN TARAN ITA NO. 751/ASR/2013 & 27/ASR/2016 A.Y. 2010-11 AND 2012-13 2 ST. ANTONYS CONVENT SCHOOL, ADAMPUR ITA NO. 01/ASR/2016 A.Y. 2011-12 1 CHRIST THE KING CONVENT SCHOOL, BHOLATH ITA NO. 3/ASR/2016 A.Y. 2011-12 1 SACRED HEART CONVENT SCHOOL, PATTI ITA NO. 2/ASR/2016 A.Y. 2011-12 1 TOTAL 15 IN THE FOLLOWING FIVE CASES OF THIS BATCH OF APPEALS , FOR AY 2010-11 IN ALL THE CASES, A COMMON ADDITIONAL GROUND HAS BEEN TAKE N: ITA NO. 749/ASR/2013, ST. JUDES CONVENT SCHOOL, N AKODAR ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 8 ITA NO. 750/ASR/2013, CHRIST THE KING CONVENT SCHO OL, PATHANKOT ITA NO. 751/ASR/2013, IN ST. FRANCIS CONVENT SCHOO L, TARN TARAN ITA NO. 752/ASR/2013, IN ST. FRANCIS CONVENT SCHOO L, FATEHGARH CHURIAN ITA NO. 44/ASR/2014, IN ST. FRANCIS CONVENT SCHOOL , JANDIALA GURU. 4. THE SECOND BATCH ASKS FOR APPLICATION OF THE SECOND PROVISO TO SECTION 12A(2) OF THE ACT. THE DETAILS OF THESE APPEALS ARE AS FOLLOWS:- NAME OF THE APPELLANT SCHOOL APPEAL NUMBERS ASSESSMENT YEARS NO. OF APPEALS ST. JUDES CONVENT SCHOOL, NAKODAR ITA NO. 4 TO 7/ASR/2016 A.Y. 2006-07 TO 2009-10 4 ST. FRANCIS CONVENT SCHOOL, FATEHGARH CHURIAN ITA NO. 9 TO 12/ASR/2016 A.Y. 2006-07 TO 2009-10 4 ST. FRANCIS CONVENT SCHOOL, JANDIALA GURU ITA NO. 28 TO 31/ASR/2016 A.Y. 2006-07 TO 2009-10 4 CHRIST THE KING CONVENT SCHOOL, PATHANKOT ITA NO. 14 TO 17/ASR/2016 A.Y. 2006-07 TO 2009-10 4 ST. JOSEPH CONVENT SCHOOL, PHAGWARA ITA NO. 19 TO 21/ASR/2016 A.Y. 2007-08, 2008-09 & 2011-12 3 ST. FRANCIS CONVENT SCHOOL, TARN TARAN ITA NO. 23 TO 26/ASR/2016 A.Y. 2006-07 TO 2009-10 4 TOTAL 23 ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 9 5. ALL THESE APPEALS ARE SIMILAR AND SO, THEY AR E BEING DECIDED BY THIS COMMON ORDER. THE ARGUMENTS HAVE BEEN RAISED QUA IT A NO. 749/ASR/2013 AND SO, THE FACTS ARE BEING TAKEN FROM THIS APPEAL. 6. THE FACTS, AS PLEADED, ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860. THE ASS ESSEE-SOCIETY HAS BEEN FORMED SOLELY FOR EDUCATIONAL PURPOSES, AS IS EVIDE NT FROM THE AIMS AND OBJECTS CONTAINED IN ITS MEMORANDUM OF ASSOCIATION ( PAGE-1 OF THE PAPER BOOK). IN FURTHERANCE OF ITS OBJECTS, THE ASSESSEE- SOCIETY HAD, DURING THE RELEVANT YEAR, BEEN MANAGING AND RUNNING VARIOUS CO NVENT SCHOOLS FOR IMPARTING EDUCATION TO CHILDREN OF ALL CASTES AND C REEDS, WITHOUT ANY DISCRIMINATION. IT WAS GRANTED APPROVAL/REGISTRATION UNDER SECTION 10(23C)(VI) OF THE ACT BY THE CCIT, VIDE ORDER DATE D 29.01.2008, APPLICABLE FROM ASSESSMENT YEAR 2007-08 AND ONWARDS (PAPER BOOK, PAGE- 54), WHICH IS APPLICABLE TO ANY UNIVERSITY OR EDUCA TIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FO R PURPOSES OF PROFIT .... ON THE BASIS OF THE NOTIFICATION UNDER SECTION 10(2 3C)(VI) IN FORCE AT THE RELEVANT TIME, THE ASSESSEE FILED RETURNS OF INCOME FOR ASSESSMENT YEARS 2006-07 TO 2012-13 AT NIL, CONSIDERING:- (I) THE PAYMENT OF EDUCATION EXTENSION SERV ICES' TO THE DIOCESE OF JALANDHAR, NOTIFIED UNDER SECTION 10(23C)(VI), AS WE LL AS REGISTERED UNDER ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 10 SECTION 12A OF THE ACT AND PURSUING THE OBJECT OF P ROMOTING EDUCATION THROUGH RUNNING VARIOUS SCHOOLS, AS APPLICATION OF INCOME; AND (II) THAT THE SURPLUS REFLECTED IN THE INCOM E AND EXPENDITURE ACCOUNT, AFTER TAKING INTO ACCOUNT CAPITAL EXPENDITURE INCUR RED DURING THE YEAR, IF ANY, AS APPLICATION OF INCOME, WAS BELOW 15% OF THE G ROSS RECEIPTS. THE AFORESAID APPROVAL/REGISTRATION GRANTED UNDER S ECTION 10(23C)(VI) OF THE ACT WAS, HOWEVER, SUBSEQUENTLY WITHDRAWN BY THE CCI T, VIDE ORDER DATED 21.03.2013 (PAPER BOOK, PAGES 79-85). PRIOR T HERETO, THE ASSESSEE HAD APPLIED FOR REGISTRATION UNDER SECTION 12A OF T HE ACT, VIDE APPLICATION DATED 02.11.2012, WHICH WAS DULY GRANTED BY CIT, VIDE ORDER DATED 25.02.2013 (PAPER BOOK, PAGES 11-12). THE ASSESSEE WAS, THUS, IN TERMS OF SECTION 12A(2), ELIGIBLE TO CLAIM EXEMPTION IN R ESPECT OF ITS INCOME UNDER SECTION 11 OF THE ACT, FOR THE ASSESSMENT YEA R 2013-14 AND ONWARDS. AT THE TIME WHEN THE ASSESSING OFFICER INITI ATED ACTION UNDER SECTIONS 147/148 (IN THE SECOND BATCH OF CASES), RE GISTRATION OF THE ASSESSEE UNDER SECTION 10(23C)(VI) WAS CANCELLED AND REGISTRATION UNDER SECTION 12A OF THE ACT WAS NOT APPLICABLE FOR THOSE YEARS. SIMILARLY, IN THE FIRST BATCH OF CASES, TOO, AT THE TIME WHEN THE ASS ESSMENT WAS COMPLETED FOR THOSE YEARS, THE ASSESSEE WAS NEITHER REGISTERED UNDER SECTION 10(23)(C)(VI), NOR WAS THE SUBSEQUENT REGISTRATION UNDER SECTION 12A OF ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 11 THE ACT APPLICABLE FOR THOSE ASSESSMENT YEARS. THE ASSESSING OFFICER, ACCORDINGLY, COMPLETED ASSESSMENT UNDER SECTION 147 (IN THE SECOND BATCH OF CASES) AND REGULAR ASSESSMENT UNDER SECTION 143( 3) OF THE ACT (IN THE FIRST BATCH OF CASES), SUBJECTING THE ASSESSEE SOCI ETY TO TAX, ON THE AGGREGATE OF THE SURPLUS/(DEFICIT) AS REFLECTED IN THE INCOME & EXPENDITURE ACCOUNT, AND PAYMENT MADE TO THE DIOCESE OF JALANDH AR. IN THE IMPUGNED ASSESSMENT/REASSESSMENT FOR THE ASSESSMENT YEAR(S) 2006-07 TO 2012-13, THE ASSESSING OFFICER OBSERVED THAT PAYMENT OF EDU CATION EXTENSION SERVICES TO THE DIOCESE OF JALANDHAR WAS NOT ALLOWAB LE AS DEDUCTIBLE EXPENDITURE, NOR COULD IT BE REGARDED AS APPLICATIO N OF INCOME, IN VIEW OF THE FACT THAT THE ASSESSEE-SOCIETY WAS NOT ENTITLED TO EXEMPTION UNDER EITHER SECTION 10(23C)(VI), OR SECTION 11 OF THE AC T. FEELING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE CIT (APPEALS), WHO DISMISSED THE APPEAL. 7. IN ITA 749/ASR/2013, THE ASSESSEES APPEAL FO R A.Y. 2010-11, THE FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) HAS ERRED IN HOLDING THAT GROUND NO. 4 (THAT EXEMPTION U/S 10(23C)(VI) CANNOT BE WITHDRAWN RETROSPECTIVELY) DOES NOT ARISE FROM THE ASSESSMENT ORDER. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE INCOME OF THE ASSESSEE IS EXEMPT U/S 10(23C)(VI). ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 12 3. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, PAYMENT OF EDUCATION EXTENSION SERVICES TO ANOTHER SOCIETY, M/ S. DIOCESE OF JALANDHAR OF RS. 85,00,000/- IS NOT DISALLOWABLE, ESPECIALLY WHEN THE NATURE AND VERACITY OF SUCH EXPENSE HAD BEEN VERIFIED BY THE LD CCIT, AS WE LL AS THE LD. AO. 4. THAT WITHOUT PREJUDICE TO GROUND 3 ABOVE, PAYM ENT MADE TO THE DIOCESE OF JALANDHAR SHOULD BE CONSIDER ED FOR USE OF LAND FOR THE SCHOOL BEING RUN BY THE ASS ESSEE SOCIETY. 5. THAT THE DOMINANT OBJECT OF THE SOCIETY IS TO RUN SCHOOL AND IS THEREFORE OUTSIDE THE AMBIT OF TAXATION. 5. THAT THE OBSERVATIONS OF THE LD. CIT(A) ARE P ATENTLY WRONG AND ARE CHALLENGED. 7. THAT THE AUTHORITY BELOW HAS FAILED TO CONSIDE R THE EXPLANATION FILED BY THE ASSESSEE IN PROPER CONTEXT AND THE FINDINGS OF THE AUTHORITY BELOW ARE NOT SUSTAINA BLE IN LAW. 8. THE FOLLOWING ADDITIONAL GROUND HAS ALSO BEEN TAKEN: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE APPELLANT HAVING BEEN GRANTED REGISTRATION UNDE R SECTION 12A VIDE ORDER DATED 25/02/2013, THEREFORE, THE BEN EFIT OF SUCH EXEMPTION SHOULD BE GRANTED FOR THE YEAR UNDER CONSIDERATION ALSO, IN VIEW OF THE AMENDMENT MADE IN SECTION 12A VIDE FINANCE (NO. 2) ACT, 2014. 9. THE ADDITIONAL GROUND IS ADMITTED, BEING BASE D ON THE AMENDMENT MADE IN SECTION 12A(2) OF THE ACT, BY VIRTUE OF FIN ANCE (NO. 2) ACT, 2014, W.E.F. 01/10/2014, POST PASSING OF THE IMPUGNED ORDE R. 10. APROPOS THE MERITS OF THE ADDITIONAL GROUND, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT AS PER THE MANDATE OF T HE AMENDED SECTION ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 13 12A OF THE ACT, THE BENEFIT OF EXEMPTION SHOULD BE GRANTED TO THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, SINCE THE ASSESSM ENT PROCEEDINGS FOR THE SAID ASSESSMENT YEAR WERE PENDING AS ON 25/2/2013, T HE DATE ON WHICH THE ASSESSEE WAS GRANTED REGISTRATION U/S 12A AND SI NCE THE OBJECTS AND ACTIVITIES OF THE ASSESSEE REMAINED THE SAME AS IN THE EARLIER YEARS. 11. PER CONTRA, THE LD DR HAS SUBMITTED THAT THE AMENDMENT INTRODUCED IN SECTION 12A(2) OF THE ACT, BY VIRTUE OF FINANCE (NO.2) ACT, 2014, BY WAY OF THE FIRST PROVISO ADDED TO THE SECTION, SPECIFIC ALLY STATES THAT THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RES PECT OF ANY INCOME, DERIVED FROM PROPERTY HELD UNDER TRUST, OF ANY ASSE SSMENT YEAR PRECEDING THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANC IAL YEAR IN WHICH AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTIT UTION IS MADE BY THE PERSON IN RECEIPT OF THE INCOME, FOR WHICH, ASSESSM ENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICER. ACCORDING TO THE LD. DR, SINCE AT THE SAID RELEVANT TIME, THE ASSESSMENT PROCEEDINGS FOR THE SAID ASSESSMENT YEAR WERE NOT PENDING BEFORE THE ASSESSING OFFICER, THE PROVISIONS OF THE FIRST PROVISO TO SECTION 12A(2) ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE. THEREFORE, AS PER LD. DR, THE BENEFIT OF EXEMPTION CANNOT BE GRANTED TO THE ASSESSEE FOR THE SAID ASSESSMENT YEA R. ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 14 12. IN RESPONSE TO THIS, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE ASSESSMENT PROCEEDINGS PENDING IN APPEAL A RE DEEMED TO BE ASSESSMENT PROCEEDINGS PENDING BEFORE THE ASSESSING OFFICER. FOR THIS PROPOSITION, THE LD. COUNSEL HAS PLACED RELIANCE ON THE DECISIONS IN THE CASES OF SNDP YOGAM VS. ADIT, (2016) 68 TAXMANN.C OM 152 (COCHIN- TRIB) AND SHREE BHANUSHALI MITRA MANDAL TRUST, (2 016) 68 TAXMANN.COM 250 (AHMEDABAD-TRIB). 13. THE LD. DR HAS FURTHER SUBMITTED THAT IN ANY CASE, THE SAID FIRST PROVISO HAS BEEN INSERTED BY FINANCE (NO.2) ACT, 20 14 W.E.F. 01/4/2014 AND AS SUCH, IT IS NOT APPLICABLE RETROSPECTIVELY. 14. FOR THIS, THE LD. COUNSEL FOR THE ASSESSEE H AS, AGAIN, CITED THE DECISION IN THE CASE OF SNDP YOGAM, (SUPRA). 15. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES WITH REFERENCE TO THE MERITS OF THE ADDITIONAL GROUND. T HE RELEVANT PORTION OF SECTION 12A OF THE ACT IS AS FOLLOWS:- SECTION 12A- CONDITIONS AS TO REGISTRATION OF TRUS TS, ETC. (1) THE PROVISIONS OF SECTION 11 AND SECTION 12 SHALL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUST OR INSTITUTION UNL ESS THE FOLLOWING CONDITIONS ARE FULFILLED, NAMELY : ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 15 (AA) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN AP PLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION ON OR AFTER T HE 1 ST DAY OF JUNE, 2007 IN THE PRESCRIBED FORM AND MANNER TO THE PRINCIPA L COMMISSIONER OR COMMISSIONER AND SUCH TRUST OR INSTITUTION IS REGISTERED UNDER SECTION 12AA; .. . ..... (2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL A PPLY 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 GRANTE D TO THE TRUST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVISIONS OF SECTION 11 AND 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FROM P ROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDIN G BEFORE THE ASSESSING OFFICER AS ON THE DATE OF SUCH REGISTRA TION 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 INSTITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR ONLY FOR NON-REGISTRATION OF SUCH TRUST OR INSTITUTION FOR THE SAI D ASSESSMENT YEAR. 16. THUS, AS PER THE PROVISIONS OF SECTION 12A, IF A TRUST OR INSTITUTION HAS APPLIED FOR REGISTRATION ON OR AFTER 01/6/2007 AND SUCH REGISTRATION HAS BEEN GRANTED TO IT, THE PROVISIONS OF SECTIONS 11 A ND 12 SHALL NOT APPLY TO ITS INCOME. IF THE APPLICATION FOR REGISTRATION HAS BEEN MADE ON OR AFTER 01/6/2007, THE PROVISIONS OF SECTIONS 11 AND 12 SHA LL APPLY FOR ANY ASSESSMENT YEAR PRECEDING THE ASSESSMENT YEAR IMMED IATELY FOLLOWING THE FINANCIAL YEAR IN WHICH THE APPLICATION FOR REGISTRA TION WAS MADE, FOR WHICH YEAR, THE ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICER ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 16 AS ON THE DATE OF THE REGISTRATION AND THE OBJECTS AND ACTIVITIES OF THE TRUST OR INSTITUTION REMAINED THE SAME AS THOSE ON THE BASIS OF WHICH THE REGISTRATION WAS GRANTED. ACCORDING TO THE SECOND PR OVISO TO SECTION 12A(2), WHERE FOR THE ASSESSMENT YEAR IMMEDIATELY FO LLOWING THE FINANCIAL YEAR IN WHICH THE APPLICATION FOR REGISTRATION WAS M ADE, THE TRUST OR INSTITUTION IS NOT REGISTERED, NO ACTION U/S 147 SH ALL BE TAKEN FOR ANY ASSESSMENT YEAR PRECEDING THE SAID ASSESSMENT YEAR. 17. THE FIRST ISSUE BEFORE US IS AS TO WHETHER T HE TWO PROVISOS TO SECTION 12A(2) ARE APPLICABLE TO ALL THE APPEALS BEFORE US, RESPECTIVELY, AS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, OR WH ETHER, SINCE THE PROVISOS HAVE BEEN BROUGHT IN W.E.F. 01/10/2014 AND THEY HAVE NOT BEEN MADE APPLICABLE RETROSPECTIVELY, THE SAME ARE NOT A PPLICABLE FOR EARLIER PERIODS, AS SUBMITTED BY THE DEPARTMENT. 18. NOW, A BARE READING OF THE FIRST PROVISO TO S ECTION 12A(2) SHOWS THAT IT HAS NOT BEEN MADE APPLICABLE RETROSPECTIVELY. IT HAS BEEN INSERTED IN THE ACT W.E.F. 01/10/2014, BY VIRTUE OF THE FINANCE (NO. 2) ACT, 2014. THUS, ORDINARILY, IT OUGHT TO BE TAKEN AS APPLICABLE ONLY PROSPECTIVELY, AND NOT RETROSPECTIVELY. HOWEVER, THE LAW IS WELL SETTLED TO THE EFFECT THAT IF THE PROVISO BROUGHT IN AS A PROCEDURAL OR BENEFICIAL ON E, INTENDING TO REMOVE HARDSHIP, IT IS APPLICABLE RETROSPECTIVELY. ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 17 19. IN C.B. RICHARDS ELLIS MAURITIUS LTD. VS. C IT, W.P.(C) NO. 8359/2010, DECIDED ON 25/5/2012 (COPY ON RECORD), I T HAS BEEN HELD THAT PROCEDURAL LAW, WHEN AMENDED OR SUBSTITUTED, IS GENE RALLY RETROSPECTIVE AND APPLIES FROM THE DATE OF ITS ENFORCEMENT AND TO THIS EXTENT, IT CAN BE RETROSPECTIVE. 20. IN ALLIED MOTORS (P) LTD. VS. ITO, 224 ITR 677 (SC), IT HAS BEEN HELD THAT A PROVISO, WHICH IS INTENDED TO REMEDY UN INTENDED CONSEQUENCES AND TO MAKE THE PROVISION WORKABLE, A P ROVISO WHICH SUPPLIES AN OBVIOUS OMISSION IN THE SECTION AND IS REQUIRED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONABLE INTERP RETATION, IS REQUIRED TO BE TREATED AS RETROSPECTIVE IN OPERATION, SO THAT A REASONABLE INTERPRETATION CAN BE GIVEN TO THE SECTION AS A WHOL E. IT IS, THUS, TRITE THAT IF A PROVISION IS CURATIVE OR MERELY DECLARATO RY OF THE PREVIOUS LAW, RETROSPECTIVE OPERATION THEREOF IS GENERALLY INTEND ED. 21. IN CIT VS. VATIKA TOWNSHIP PVT. LTD., 367 I TR 466 (SC), THE CONSTITUTIONAL BENCH OF THE HON'BLE SUPREME COURT H ELD THAT IF A LEGISLATION CONFERS A BENEFIT ON SOME PERSONS BUT WI THOUT INFLICTING A CORRESPONDING DETRIMENT ON SOME OTHER PERSON OR ON THE PUBLIC GENERALLY, AND WHERE TO CONFER SUCH BENEFIT APPEARS TO HAVE BEE N THE LEGISLATORS OBJECT, THEN THE PRESUMPTION WOULD BE THAT SUCH A LE GISLATION, GIVING IT A ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 18 PURPOSIVE CONSTRUCTION, WOULD WARRANT IT TO BE GIVEN A RETROSPECTIVE EFFECT. 22. IN GOVERNMENT OF INDIA VS. INDIAN TOBACCO A SSOCIATION, [2005] 7 SCC 396, THE DOCTRINE OF FAIRNESS WAS HELD TO BE A R ELEVANT FACTOR TO CONSTRUE A STATUTE CONFERRING A BENEFIT, IN THE CON TEXT OF IT TO BE GIVEN A RETROSPECTIVE OPERATION. 23. IN VIJAY VS. STATE OF MAHARASHTRA, [2006] 6 SCC 286, THE HON'BLE SUPREME COURT WENT TO THE EXTENT OF HOLDING THAT WHE RE A LAW IS ENACTED FOR THE BENEFIT OF THE COMMUNITY AS A WHOLE, EVEN IN THE ABSENCE OF A PROVISION, THE STATUTE MAY BE HELD TO BE RETROSPECT IVE IN NATURE. 24. NOW, UNDENIABLY, THE ASSESSMENT OF INCOME IS A MATTER OF PROCEDURE. EVEN THE HEADING OF CHAPTER (XIV) OF THE ACT, WHICH DEALS WITH ASSESSMENT, ITSELF IS PROCEDURE FOR ASSESSMENT. L IKEWISE, GRANT OF REGISTRATION IS ALSO A PROCEDURAL ASPECT, SINCE REG ISTRATION IS BUT A STEP-IN- AID FOR EXEMPTION U/S 11. AS SUCH, THE PROVISOS TO SECTION 12A(2) ARE ALSO PROCEDURAL. 25. SO FAR AS REGARDS THE BRINGING IN OF THE FIR ST PROVISO TO SECTION 12A(2), THE MEMORANDUM EXPLAINING THE PROVISIONS OF THE FINANCE (NO.2) BILL, 365 ITR (STATUTE) 175 ITSELF ELABORATES THE I NTENTION OF THE LEGISLATURE BEHIND INSERTION THEREOF IN THE STATUTE BOOK. IT ST ATES, INTER ALIA, THAT NON- APPLICATION OF REGISTRATION FOR THE PERIOD PRIOR TO THE YEAR OF REGISTRATION ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 19 CAUSES GENUINE HARDSHIP TO CHARITABLE ORGANIZATIONS . DUE TO ABSENCE OF REGISTRATION, TAX LIABILITY GETS ATTACHED EVEN THOU GH THEY MAY OTHERWISE BE ELIGIBLE FOR EXEMPTION AND FULFILL THE OTHER SUBSTA NTIVE CONDITIONS. THE POWER OF CONDONATION OF DELAY IS NOT AVAILABLE UNDER THE SECTION. IN ORDER TO PROVIDE RELIEF TO SUCH TRUSTS AND REMOVE HARDSHI P IN GENUINE CASES, IT IS PROPOSED TO AMEND SECTION 12A OF THE ACT TO PROVIDE THAT IN A CASE WHERE A TRUST OR INSTITUTION HAS BEEN GRANTED REGISTRATIO N U/S 12AA OF THE ACT, THE BENEFIT OF SECTIONS 11 AND 12 SHALL BE AVAILABL E IN RESPECT OF ANY INCOME DERIVED FROM PROPERTY HELD UNDER TRUST IN AN Y ASSESSMENT PROCEEDINGS FOR ANY EARLIER ASSESSMENT YEAR, WHICH I S PENDING BEFORE THE ASSESSING OFFICER AS ON THE DATE OF SUCH REGISTRATI ON, IF THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION IN THE RELE VANT EARLIER ASSESSMENT YEAR ARE THE SAME AS THOSE ON THE BASIS OF WHICH SUC H REGISTRATION HAS BEEN GRANTED. 26. THUS, CLEARLY, THE PROVISIONS OF SECTION 12A OF THE ACT ENTAILED UNINTENDED CONSEQUENCES OF NON-APPLICATION OF REGIS TRATION FOR THE PERIOD PRIOR TO THE YEAR OF REGISTRATION AND, THEREBY, NON -GRANT OF EXEMPTION U/SS 11 AND 12 UP TO GRANT OF REGISTRATION. THIS POSITIO N WAS ALSO RECOGNIZED BY THE CBDT WHILE ISSUING THE EXPLANATORY NOTES TO THE PROVISIONS OF THE FINANCE (NO.2) ACT, 2014, VIDE CBDT CIRCULAR NO. 1 OF 2015, DATED 21/1/2015. IT WAS THIS ANOMALY, WHICH WAS CURED BY BRI NING IN THE FIRST ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 20 PROVISO TO SECTION 12A(2). THIS PROVISO, EVEN AS AV OWED BY THE ABOVE- QUOTED MEMORANDUM EXPLAINING THE PROVISIONS OF THE FINANCE (NO.2) BILL, HAS SOUGHT TO REMEDY THE SAID UNINTENDED HARDSHIP V ISITING TRUSTS AND INSTITUTIONS. IT HAS SUPPLIED THE AFORESAID OMISSIO N IN THE SECTION AND HAS THEREBY MADE THE PROVISION OF THE SECTION WORKABLE, PROVIDING A REASONABLE INTERPRETATION TO IT BY PROVIDING THE BE NEFIT MANDATED BY IT. IT IS, THUS, A CURATIVE PROVISO, WHICH IS BUT MERELY DE CLARATORY OF THE PREVIOUS LAW. IT HAS, BY REMOVAL OF THE HARDSHIP, RENDERED TH E PROCEDURE MORE RELIEF-ORIENTED. IT ADEQUATELY COMPLIES WITH THE NAT URAL JUSTICE PRINCIPLE OF FAIRNESS TO ALL. HENCE, IT HAS TO BE PRESUMED AND C ONSTRUED AS RETROSPECTIVE IN NATURE, IN ORDER TO GIVE THE SECTI ON A PURPOSIVE INTERPRETATION. 27. IN SHREE SHREE RAMKRISHNA SAMITY VS. DY.CIT , [2016] 156 ITD 646 (KOL), THE ABOVE POSITION HAS ELABORATELY BEEN CONS IDERED TO HOLD THE FIRST PROVISO TO SECTION 12A(2) TO BE RETROSPECTIVELY APP LICABLE. THE SAID DECISION HAS BEEN FOLLOWED IN SNDP YOGUM, (SUPRA). 28. IN VIEW OF THE ABOVE DISCUSSION AND RESPECTF ULLY FOLLOWING THESE DECISIONS, IN THE ABSENCE OF ANY DECISION TO THE CO NTRARY HAVING BEEN CITED BEFORE US BY THE DEPARTMENT, WE HOLD THAT THE FIRST PROVISO TO SECTION 12A(2) OF THE ACT IS APPLICABLE RETROSPECTIVELY. ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 21 29. LIKEWISE, FOR THE SAME REASONING, IT IS ALSO HELD, REGARDING THE SECOND BATCH OF APPEALS, THAT EVEN THE SECOND PROVI SO TO SECTION 12A(2) IS RETROSPECTIVE IN NATURE AND THE COMPLETED ASSESSMEN TS IN THESE CASES OUGHT NOT TO HAVE BEEN REOPENED ONLY FOR NON-REGIST RATION FOR THE RELEVANT ASSESSMENT YEARS. 30. THIS BRINGS US TO THE NEXT QUESTION, I.E., WH ETHER THE ASSESSMENT PROCEEDINGS PENDING BEFORE THE ASSESSING OFFICER, AS STATED IN THE FIRST PROVISO TO SECTION 12A(2) CAN BE TAKEN AS PENDING IN APPEAL, OR, IN OTHER WORDS, WHETHER PROCEEDINGS PENDING IN APPEAL CAN BE T AKEN TO BE PROCEEDINGS PENDING BEFORE THE ASSESSING OFFICER. T HIS ISSUE ALSO STANDS ANSWERED IN FAVOUR OF THE ASSESSEE BY SHREE BHANUSH ALI MITRA MANDAL TRUST, (SUPRA), WHEREIN, IT WAS HELD THAT APPEAL IS A CONTINUATION OF THE ORIGINAL PROCEEDINGS AND ASSESSMENT PROCEEDINGS PEN DING BEFORE AN APPELLATE AUTHORITY SHOULD BE DEEMED TO BE ASSESSM ENT PROCEEDINGS PENDING BEFORE THE ASSESSING OFFICER WITHIN THE MEA NING OF SECTION 12A. SNDP YOGUM, (SUPRA), IS TO THE SAME EFFECT. AGAIN , NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR NOTICE. ACCORDINGLY, IT IS HELD THAT THE APPELLATE PROCEEDINGS BEFORE THE APPELLATE AUTHORITIES ARE DE EMED TO BE ASSESSMENT PROCEEDINGS PENDING BEFORE THE ASSESSING OFFICER. 31. IN ALL THESE CASES, THE IMPUGNED ORDERS WERE PASSED AFTER THE RESPECTIVE DATES OF GRANT OF REGISTRATION. THUS, WE HOLD THAT SUBSEQUENT ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 22 GRANT OF REGISTRATION IN ALL THESE CASES OPERATES R ETROSPECTIVELY FOR ALL THE RELEVANT YEARS UNDER CONSIDERATION. 32. NOW, APROPOS THE MERITS, THE QUESTION IS WHETH ER PAYMENT OF EDUCATION EXTENSION SERVICES TO THE DIOCESE OF JALA NDHAR, NOTIFIED U/S 10 (23C)(VI), AS WELL AS REGISTERED U/S 12A OF THE ACT AND PERSUING THE OBJECT OF PROMPTING EDUCATION THROUGH RUNNING VARIOUS SCHO OLS, CAN BE REGARDED AS APPLICATION OF INCOME. 33. HERE, IT IS NOT IN DISPUTE THAT THE DIOCESE OF JALANDHAR IS NOT ONLY REGISTERED U/S 12A OF THE ACT, IT IS ALSO NOTIFIED U/S 10(23C)(VI) OF THE ACT. BESIDES, FOR A.YS. 2007-08 TO 2013-14, VIDE ORDERS PASSED U/S 143(3) OF THE ACT (COPIES ON RECORD), ITS STANDS TAKEN NOTE O F THAT THE DIOCESE OF JALANDHAR IS RUNNING VARIOUS SCHOOLS AND THAT EXEMP TION U/SS 11 AND 12 OF THE ACT HAS BEEN ALLOWED WITH REGARD TO ITS INCOME. T HEREFORE, IT HAS WRONGLY BEEN HELD IN THE IMPUGNED ORDER THAT THE PAY MENT OF EDUCATION EXTENSION SERVICES MADE BY THE ASSESSEE TO THE DIOC ESE OF JALANDHAR OUT OF THE CURRENT YEAR INCOME, AS IS ALSO AVAILABLE FR OM THE INCOME AND EXPENDITURE ACCOUNT OF THE RELEVANT FINANCIAL YEARS , IS NOT ALLOWABLE AS APPLICATION OF INCOME. 34. IN THIS REGARD, IN CIT VS SARLADEVI SARABHA I TRUST (NO. 2), 172 ITR 698 (GUJ), IT HAS BEEN HELD THAT WHEN A CHARITABLE T RUST DONATES ITS INCOME TO ANOTHER TRUST HAVING SIMILAR OBJECTS, THE PROVISIONS OF SECTION ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 23 11(1)(A) CAN BE SAID TO HAVE BEEN MET BY SUCH DONOR TRUST. FOR THIS PROPOSITION, THE ASSESSEE HAS CORRECTLY RELIED ON THE FOLLOWING DECISIONS TOO: (I) CIT VS THANTHI TRUST 239 ITR 502 (SC) (II) CIT VS HINDUSTAN CHARITY TRUST 139 ITR 913 (CAL.) (III) CIT VS SHRI RAM MEMORIAL FOUNDATION 26 9 ITR 35 (DEL.) (IV) CIT VS NIRMALA BAKUBHAI FOUNDATION 226 ITR 394 (GUJ). YET AGAIN, THESE DECISIONS HAVE REMAINED UNCONTROVE RTED. 35. THEN, SECTION 11(3)(D) OF THE ACT, WHICH WAS B ROUGHT IN BY THE FINANCE ACT, 2002, W.E.F. 01/4/2003, BARS DONATION BY A CHARITABLE TRUST TO ANOTHER CHARITABLE TRUST, OUT OF ACCUMULATED INCOME , FROM BEING CONSIDERED AS APPLICATION OF INCOME. HOWEVER, AS IS PATENT ON RECORD, THE PAYMENT OF EDUCATION EXTENTION SERVICES MADE BY THE ASSESSEE TO THE DIOCESE OF JALANDHAR IS OUT OF ITS CURRENT YEARS I NCOME AND NOT OUT OF ANY ACCUMULATED INCOME. 36. IN THIS REGARD, IN DIT(E) VS. BAGRI FOUNDAT ION, 344 ITR 193 (DEL), IT HAS BEEN HELD THAT THE RESTRICTION/EMBARGO IN DONAT ION BY ONE CHARITABLE TRUST TO ANOTHER IS ONLY RESTRICTED TO ACCUMULATION S MADE IN EXCESS OF 15% OF INCOME OF THE TRUST, AS REFERRED TO IN SECTION 1 1(2) OF THE ACT; AND THAT THE SAID PROHIBITION DOES NOT APPLY TO CURRENT YEAR INCOME, OR EVEN TO ACCUMULATIONS UP TO 15% U/S 11(1)(A) OF THE ACT. ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 24 37. OTHER THAN THE ABOVE, THE ASSESSING OFFICER HAS OBSERVED THAT THE DIOCESE OF JALANDHAR WAS ALSO HAVING SOME RELIGIOUS OBJECTS. THIS, HOWEVER, IS NOT AT ALL DETRIMENTAL TO THE CLAIM OF T HE ASSESSEE. IT MAY BE REITERATED THAT THE DIOCESE OF JALANDHAR STANDS NOT IFIED U/S 10(23C)(VI) OF THE ACT. THIS PROVISION, IT MAY BE NOTED, IS APPLIC ABLE TO UNIVERSITIES AND EDUCATIONAL INSTITUTIONS, WHICH EXIST SOLELY FOR ED UCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT. NEITHER THE ASSESSMENT ORDER/S OF THE ASSESSEE/S, NOR THE ASSESSMENT ORDER/S OF THE DIOCE SE OF JALANDHAR, CARRY ANY FINDING OF THE DIOCESE OF JALANDHAR PURSUING RE LIGIOUS OBJECTS. MERELY HAVING RELIGIOUS OBJECTS DOES NOT AMOUNT TO PURSUIN G RELIGIOUS OBJECTS. IT IS THE ACTUAL OBJECTS PERSUED AND THE ACTUAL ACTIVITIE S UNDERTAKEN, WHICH ARE OF CONSEQUENCE SO FAR AS REGARDS OUR PRESENT PURPOS ES. THE DECISIONS IN HARF CHARITABLE TRUST VS CCIT, 376 ITR 110 (P&H) AND DIGEMBER JAIN SOCIETY FOR CHILD WELFARE VS DGIT(E), 185 TAXMAN 2 55 (DEL.) ARE ELOQUENT DECISIONS ON THIS MATTER, IN FAVOUR OF THE ASSESSEE . 38. THEREFORE, IT CANNOT BE DENIED THAT THE DIOC ESE OF JALANDHAR IS ENGAGED SOLELY IN PURSUING THE OBJECT OF EDUCATION. IT RUNS VARIOUS SCHOOLS. HENCE, IT IS BUT A CHARITABLE INSTITUTION PURSUING OBJECTS WHICH ARE SIMILAR TO THOSE OF THE ASSESSEE. THAT BEING SO, THE AMOUNT PAID TO THE DIOCESE OF JALANDHAR BEING OUT OF THE CURRENT YEAR INCOME AND NOT OUT OF ACCUMULATED INCOME, SUCH PAYMENT OF EDUCATION EXTEN SION SERVICES TO THE ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 25 DIOCESE OF JALANDHAR IS TO BE ALLOWED AS APPLICATION OF THE INCOME. IT IS SO ORDERED. 39. IN VIEW OF THE ABOVE DISCUSSION, WE HOLD THAT (1) THE SUBSEQUENT GRANT OF REGISTRATION IN ALL THE CASES RESPECTIVELY OPERATES RETROSPECTIVELY FOR ALL THE YEARS UNDER CONSIDERATION; AND (2) PAYM ENT OF EDUCATION EXTENSION SERVICES TO THE DIOCESE OF JALANDHAR IS A PPLICATION OF INCOME, DULY SATISFYING THE PROVISIONS OF SECTIONS 11(1)(A) AND 11(3)(D) OF THE ACT. 40. TO REITERATE, THE ISSUES RAISED IN ALL THESE APPEALS ARE THE SAME AND, THEREFORE, OUR ABOVE OBSERVATIONS SHALL, MUTATIS MU TANDIS, APPLY TO ALL THESE APPEALS, RESPECTIVELY. 41. IN THE RESULT, ALL THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON _________ SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER FNUKAD@ DATED:- 26 TH SEPTEMBER, 2016 * RANJAN VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANTS- ST. JUDES CONVENT SCHOOL, NAKODER, JALANDHAR AND OTHERS. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE-III, JALANDHAR/ITO (EXEWMPTION) JALANDHAR. 3. VK;DJ VK;QDR@ CIT, JLR 4. VK;DJ VK;QDR@ CIT(A), JLR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, AMRITSAR. TRUE COPY ITA NO. 749(ASR)/2013 & OTHERS (38 APPEALS) 26 BY ORDER