Rogi Kalyan Samiti, Rajula V. The Income Tax Officer, Ward- 2(4), AMRELI

ITA 450/RJT/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0102 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 21-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M J RANPURA AR SHRI YOEGH
• Keywords: Charitable institution; Retrospective amendment; Benefit of exemption; Condonation of delay; Reassessment proceedings
• Section: 43B; 12A; 12AA; 147; 148; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] .., ! '#$%,#&#'' BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER SL. NO(S) ITA NO(S) ASSESSMENT YEAR(S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 450/RJT/2014 2007-08 ROGI KALYAN SAMITI AT COMMUNITY HEALTH CENTRE RAJULA, DIST. AMRELI PAN: AAALR 0458 B INCOME TAX OFFICER WARD-2(4) AMRELI 2. 451/RJT/2014 2008-09 -DO- -DO- 3. 452/RJT/2014 2009-10 -DO- -DO- 4. 453/RJT/2014 2010-11 -DO- -DO- ASSESSEE BY : SHRI M.J. RANPURA, AR REVENUE BY : SHRI YOEGH PANDEY, CIT-DR ! )*+,& / DATE OF HEARING 23/09/2016 -. +,& / DATE OF PRONOUNCEMENT 28/10/2016 #/ O R D E R PER BENCH : THIS BUNCH OF FOUR APPEALS BY THE SAME ASSESSEE IN ITA NOS.450/RJT/2014 TO 453/RJT/2014 ARE DIRECTED AGAIN ST THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV RAJKOT (CIT(A) ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 2 - IN SHORT) DATED 30/05/2014 PERTAINING TO ASSESSMEN T YEARS (AYS) 2007- 08, 2008-09, 2009-10 & 2010-11 RESPECTIVELY. SINCE COMMON ISSUES AND FACTS ARE INVOLVED IN ALL THESE APPEALS, THESE ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIE NCE. 2. THE COMMON GROUNDS RAISED IN ALL THESE FOUR APPE ALS READ AS UNDER:- 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE W ITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS)-IV, RAJKOT [HEREINAFTER REFERRED TO AS THE CIT(A) ERRED ON F ACTS AS ALSO IN LAW IN CONFIRMING INITIATION OF ACTION U/S.147 OF THE INCO ME-TAX ACT, 1961 [HEREINAFTER REFERRED AS TO THE ACT] AS VALID. 3.0 THE LD. INCOME-TAX OFFICER [HEREINAFTER REFERRE D TO AS THE AO] GRIEVOUSLY ERRED ON FACTS AS ALSO IN LAW IN NOT TRE ATING THE AMOUNT OF GRANT RECEIVED FROM THE STATE GOVERNMENT AS EXEMPT THOUGH IT WAS OBLIGATORY ON THE PART OF THE AO TO ASSESS THE INCO ME IN ACCORDANCE WITH THE PROVISIONS OF LAW AND GRANT THE EXEMPTION ACCORDINGLY WHETHER SUCH EXEMPTION IS CLAIMED OR NOT. THE INCOME FROM GRANT MAY KINDLY BE HELD AS EXEMPT. 4.0 WITHOUT PREJUDICE TO THE ABOVE, THE LD.AO GRIEV OUSLY ERRED IN LAW AND ON FACTS IN IGNORING THE FACT THAT THE APPELLAN T IS A TRUST TO IMPLEMENT THE OBJECTS OF MEDICAL RELIEF TO GENERAL PUBLIC AND ITS MAIN SOURCE OF ITS INCOME IS GRANT FROM THE GOVERNMENT O F GUJARAT AND IS ELIGIBLE FOR EXEMPTION U/S.10(23C)(IIIAC/AE) OF THE ACT. THEREFORE, IT WAS OBLIGATORY ON THE PART OF THE AO TO CONSIDER TH AT THE INCOME OF THE APPELLANT WAS EXEMPT AS PER THE PROVISIONS OF 10(23 C)(IIIAC/AE) ACT AND GRANT THE SAME ACCORDINGLY WHETHER SUCH EXEMPTIONS ARE CLAIMED OR NOT BY THE APPELLANT. THE AO BE DIRECTED TO HOLD THE I NCOME AS EXEMPT U/S.10(23C)(IIIA/AE). ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 3 - 5.0 THE LEARNED CIT(A) ERRED ON FACTS AS ALSO IN L AW DECLINING TO INTERFERE WITH THE ACTION OF THE AO IN DISALLOWING THE CLAIM OF EXEMPTION U/S.11 OF THE ACT AND THEREBY CONFIRMING DISALLOWAN CE OF 1,02,537/- ON THE ALLEGED GROUND THAT THE APPELLANT TRUST IS R EGISTERED U/S.12A(A) OF THE ACT DURING A.Y. 2011-12 AND THEREFORE, EXEMPTIO N IS AVAILABLE FROM A.Y. 2011-12 ONLY. THE AO OUGHT TO HAVE ALLOWED TH E EXPENSES INCURRED FOR THE PURPOSE AND THE DISALLOWANCE MADE IS TOTALLY UNJUSTIFIED ON FACTS AS ALSO IN LAW AND MAY KINDLY BE DELETED. 3. THE IDENTICAL ISSUE HAS ALREADY BEEN DECIDED IN THE CASE OF SAME ASSESSEE IN ITA NOS. 461 TO 463/RJT/014 AND 466/RJT /2014 FOR AYS 2008-09, 2009-10, 2010-11 & 2007-08 RESPECTIVELY VI DE ORDER DATED 26.10.2016. THE EARLIER ORDER OF THE TRIBUNAL SQUA RELY COVERS THE ISSUES INVOLVED IN ENTIRETY. THEREFORE THE ORDER OF THE T RIBUNAL IS REPRODUCED HEREUNDER:- THIS BUNCH OF FOUR APPEALS BY THE SAME ASSESSEE I N ITA NOS.461 TO 463/RJT/2014 AND ITA NO.466/RJT/2014 ARE DIRECTED A GAINST THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV RAJKOT (CIT(A) IN SHORT) DATED 30/05/2014 PERTAINING TO ASSESSMENT Y EARS (AYS) 2008-09, 2009- 10, 2010-11 & 2007-08 RESPECTIVELY. SINCE COMMON I SSUES AND FACTS ARE INVOLVED IN ALL THESE APPEALS, THESE ARE BEING DISP OSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE COMMON GROUNDS RAISED IN ALL THESE FOUR APPE ALS READ AS UNDER:- 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE W ITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS)-IV, RAJKOT [HEREINAFTER REFERRED TO AS THE CIT(A) ERRED ON F ACTS AS ALSO IN LAW IN CONFIRMING INITIATION OF ACTION U/S.147 OF THE INCO ME-TAX ACT, 1961 [HEREINAFTER REFERRED AS TO THE ACT] AS VALID. 3.0 THE LD. INCOME-TAX OFFICER [HEREINAFTER REFERRE D TO AS THE AO] GRIEVOUSLY ERRED ON FACTS AS ALSO IN LAW IN NOT TRE ATING THE AMOUNT OF GRANT ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 4 - RECEIVED FROM THE STATE GOVERNMENT AS EXEMPT THOUGH IT WAS OBLIGATORY ON THE PART OF THE AO TO ASSESS THE INCOME IN ACCORDANCE W ITH THE PROVISIONS OF LAW AND GRANT THE EXEMPTION ACCORDINGLY WHETHER SUCH EX EMPTION IS CLAIMED OR NOT. THE INCOME FROM GRANT MAY KINDLY BE HELD AS E XEMPT. 4.0 WITHOUT PREJUDICE TO THE ABOVE, THE LD.AO GRIEV OUSLY ERRED IN LAW AND ON FACTS IN IGNORING THE FACT THAT THE APPELLANT IS A TRUST TO IMPLEMENT THE OBJECTS OF MEDICAL RELIEF TO GENERAL PUBLIC AND ITS MAIN SO URCE OF ITS INCOME IS GRANT FROM THE GOVERNMENT OF GUJARAT AND IS ELIGIBLE FOR EXEMPTION U/S.10(23C)(IIIAC/AE) OF THE ACT. THEREFORE, IT WA S OBLIGATORY ON THE PART OF THE AO TO CONSIDER THAT THE INCOME OF THE APPELLANT WAS EXEMPT AS PER THE PROVISIONS OF 10(23C)(IIIAC/AE) ACT AND GRANT THE S AME ACCORDINGLY WHETHER SUCH EXEMPTIONS ARE CLAIMED OR NOT BY THE APPELLANT . THE AO BE DIRECTED TO HOLD THE INCOME AS EXEMPT U/S.10(23C)(IIIA/AE). 5.0 THE LEARNED CIT(A) ERRED ON FACTS AS ALSO IN L AW DECLINING TO INTERFERE WITH THE ACTION OF THE AO IN DISALLOWING THE CLAIM OF EXEMPTION U/S.11 OF THE ACT AND THEREBY CONFIRMING DISALLOWANCE OF 4,06,576/- ON THE ALLEGED GROUND THAT THE APPELLANT TRUST IS REGISTERED U/S.12A91) O F THE ACT DURING A.Y. 2011- 12 AND THEREFORE, EXEMPTION IS AVAILABLE FROM A.Y. 2011-12 ONLY. THE AO OUGHT TO HAVE ALLOWED THE EXPENSES INCURRED FOR THE PURPOSE AND THE DISALLOWANCE MADE IS TOTALLY UNJUSTIFIED ON FACTS A S ALSO IN LAW AND MAY KINDLY BE DELETED. 2.1. FIRST, WE TAKE UP THE APPEAL, I.E. ITA NO.461 /RJT/2014 AS A LEAD CASE FOR ADJUDICATION OF ISSUES INVOLVED. 2.2. PERTINENT FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS A CHARITABLE TRUST IS STATED TO BE DULY REGISTERED UNDER THE BOM BAY PUBLIC TRUST AND SOCIETIES REGISTRATION ACT, 1980. AS REPORTED, IT WAS ESTABLISHED ON 30/12/2005 MAINLY TO IMPLEMENT THE GOVERNMENT POLIC IES RELATING TO MEDICAL RELIEF TO GENERAL PUBLIC. AS PER GOVERNMENT RESOL UTION DATED 20/07/2005 AND 27/09/2005 OF THE HEALTH AND FAMILY WELFARE DEPARTM ENT OF THE STATE GOVERNMENT, THE BOARD OF TRUSTEES COMPRISES OF SENI OR MEDICAL OFFICERS, MLAS OF THE CONSTITUENCY AND OTHERS. THE ASSESSEE- TRUST IS STATED TO HAVE BEEN ESTABLISHED TO UNDERTAKE ACTIVITIES LIKE :- (A) TO UNDERTAKE ALL ACTIVITIES TO IMPROVE AND EXPAND PATIENT RELATED QUALITY SERVICES AND WELFARE ACTIVITIES. ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 5 - (B) TO INTRODUCE USER CHARGES TO CREATE A STRONG RESOUR CE BASE. (C) TO PUT MANAGEMENT STRUCTURE IN PLACE THAT COULD FUL FILL THE OBJECTIVE OF THE COMMUNITY PARTICIPATION. (D) TO ENSURE CLEANLINESS AND REFURBISHING OF THE HOSPI TAL. 2.3. IT IS THE CASE OF THE ASSESSEE THAT THE OBJECT S OF THE TRUST IS TO IMPLEMENT THE OBJECTS OF DEVELOPMENT OF PUBLIC HEALTH ACTIVIT IES AND TO IMPROVE ITS QUALITIES SO AS TO RENDER MEDICAL RELIEF SERVICES T O GENERAL PUBLIC. ITS MAIN SOURCE OF INCOME IS IN THE FORM OF GRANT RECEIVED F ROM THE GOVERNMENT OF GUJARAT FROM TIME TO TIME. ALL THE AMOUNTS RECEIV ED AS GRANTS ARE UTILIZED BY ACCOUNT PAYEE CHEQUES ONLY. IT IS FURTHER CASE O F THE ASSESSEE THAT GRANTS SO RECEIVED FROM STATE GOVERNMENT ARE WITH SPECIFIC DIRECTIONS AND THUS AMOUNT OF GRANTS CAN BE UTILIZED ONLY FOR THE PURPO SE FOR WHICH IT IS ISSUED AND ACCOUNTS OF THE TRUST ARE DULY AUDITED. SUCH GRANT S RELEASED TO THE ASSESSEE ARE FOR SPECIFIC PURPOSES OF CARRYING ON THE ACTIVI TIES VIZ; MAKING THE HEALTH CENTRES CLEAN AND FOLLOW-UP FACILITIES FOR MEDICAL RELIEF UNDER THE GOVERNMENT SCHEMES. THUS, GRANTS SO RECEIVED ARE NOT IN THE N ATURE OF INCOME PER SE. NOTABLY, THE ASSESSEE-TRUST IS ACTUALLY REGISTERED WITH THE COMMISSIONER OF INCOME TAX (CIT) UNDER SECTION 12AA OF THE INCOME T AX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') ON 25/08/201 1 WITH EFFECT FROM 01/04/2010, I.E. EFFECTIVE FROM FINANCIAL YEAR (FY) 2010-11 RELEVANT TO AY 2011-12. IT IS THE CASE OF THE ASSESSEE THAT AS T HE TRUSTEES WERE NOT AWARE ABOUT GETTING THE TRUST REGISTERED WITH THE INCOME TAX DEPARTMENT WITHIN THE SPECIFIED LIMIT TO AVAIL THE BENEFIT OF SECTION 11 & 12 AND FOR THE EARLIER YEARS. THUS, THE OBLIGATIONS SPELT UNDER SECTION 12A/12AA COULD NOT BE DISCHARGED WITHIN THE TIME LIMIT. THE ASSESSING OFFICER (AO) OBSERVED THAT INCOME OF THE TRUST BEFORE CLAIMING DEDUCTION/EXEMPTION UNDER SEC TION 11 OF THE ACT EXCEEDS THE MAXIMUM TAX LIMIT AND IN THE ABSENCE OF REGISTR ATION GRANTED FOR THE RELEVANT ASSESSMENT YEARS IN APPEALS, I.E. AYS 200 7-08 TO 2010-11, THE ASSESSEE IS NOT ENTITLED TO GET DEDUCTION UNDER SEC TION 11 OF THE ACT. THE AO ACCORDINGLY DENIED EXEMPTION AS AVAILABLE TO CHARIT ABLE TRUSTS UNDER SECTION 11 OF THE ACT WHICH ARE REGISTERED UNDER SECTION 12 AA OF THE ACT TO THE ASSESSEE FOR THE RESPECTIVE ASSESSMENT YEARS PRIOR TO ACTUAL REGISTRATION BY INITIATING REASSESSMENT PROCEEDINGS UNDER SECTION 1 47/148 OF THE ACT. THE AO OBSERVED THAT THE TRUST IS REGISTERED UNDER SECTION 12AA OF THE ACT FROM AY 2011-12 ONWARDS AND, ACCORDINGLY, THE TRUST IS NOT ENTITLED TO GET DEDUCTION UNDER SECTION 11 OF THE ACT FOR THE EARLIER ASSESSM ENT YEARS. HE ACCORDINGLY ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 6 - CONSIDERED THE TOTAL INCOME DECLARED IN THE RETURN OF INCOME AS SUSCEPTIBLE TO TAX. 3. IN THE FIRST APPEAL, THE CIT(A) DECLINED TO INTE RFERE WITH THE ACTION OF THE AO. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LD.AR MR.M.J. RANPURA SUBMITTED AT THE OUTSE T THAT THE ASSESSEE IS A PUBLIC TRUST DULY REGISTERED UNDER THE BOMBAY PUB LIC TRUST AND SOCIETIES REGISTRATION ACT, 1860 WITH EFFECT FROM 30/12/2005 TO IMPLEMENT THE GOVERNMENT POLICIES RELATING TO MEDICAL RELIEF TO G ENERAL PUBLIC, ETC. THE ASSESSEE-TRUST IS ALSO SUBSEQUENTLY REGISTERED WITH THE CIT UNDER SECTION 12AA ALBEIT WITH EFFECT FROM 01/04/2010 RELEVANT TO AY 2 011-12. THE LD.AR POINTED OUT THAT IN VIEW OF SUBSEQUENT REGISTRATION, THE CI T HAS ACCEPTED THAT THE ASSESSEE-TRUST IS DOING CHARITABLE ACTIVITIES APPRO VED UNDER SECTION 2(15) OF THE ACT AND IS NOT ESTABLISHED FOR MAKING PROFITS. THE LD.AR FURTHER ASSERTED THAT THE TRUST IS ENGAGED IN CHARITABLE PURPOSES AN D IS HAVING WIDESPREAD MANAGEMENT AND IS NOT A CLOSELY HELD ENTITY. THE C HARITABLE OBJECTS OF THE TRUST ARE APPROVED BY CHARITY COMMISSIONER AND THE ACCOUN T OF THE ASSESSEE-TRUST ARE AUDITED FROM TIME TO TIME. THE LD.AR THEREFORE SUBMITTED THAT NOTWITHSTANDING THE FACT THAT THE REGISTRATION UNDE R SECTION 12AA OF THE ACT BY THE CIT RELATES TO FY 2010-11, I.E. AY 2011-12, THE ASSESSEE IS ENTITLED TO BENEFIT AS PER THE PROVISIONS OF THE ACT FOR THE EA RLIER ASSESSMENT YEARS ALSO RIGHT FROM THE CREATION OF THE TRUST AT PAR WITH A Y 2011-12 WHERE THE REGISTRATION IS ACTUALLY GRANTED. THE LD.AR FOR TH E ASSESSEE SUBMITTED THAT ALTHOUGH THE ASSESSEE WAS GRANTED REGISTRATION UNDE R SECTION 12AA OF THE ACT W.E.F. 01/04/2010, THE AFORESAID REGISTRATION WAS I N PLACE AT THE TIME OF ISSUANCE NOTICE UNDER SECTION 147/148 OF THE ACT AN D ACCORDINGLY EXEMPTION UNDER SECTION 11 & 12 CAN BE CLAIMED RETROSPECTIVEL Y FROM THE DATE OF GRANT OF REGISTRATION IN VIEW OF THE PROVISO TO SECTION 12A OF THE ACT INSERTED BY FINANCE (NO.2) ACT, 2014. THE LD.AR SUBMITTED THAT THE OBJECTS OF SUCH AMENDMENT WAS TO REMOVE THE GENUINE HARDSHIP CAUSED BY THE EARLIER PROVISION AND, THEREFORE, HE AMENDMENT IS REMEDIAL IN NATURE. THUS, SUCH BENEFIT IS AVAILABLE UNDER SECTION 11 & 12 RETROSPE CTIVELY SINCE THE INCEPTION OF THE TRUST AND CANNOT BE DENIED MERELY ON THE GROUND THAT REGISTRATION IS ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 7 - GRANTED WITH EFFECT FROM LATER DATE. THE LD.AR ACC ORDINGLY PLEADED THAT IT BE HELD THAT ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT FOR THE VARIOUS ASSESSMENT YEARS IN APPEALS FOR WHICH NO SP ECIFIC REGISTRATION UNDER SECTION 12AA OF THE ACT IS AVAILABLE. FOR THIS PRO POSITION, HE RELIED UPON THE CBDT CIRCULAR NO.1/2015 DATED 25/01/2015 AND THE DE CISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SH RI BHANUSHALI MITRA MANDAL TRUST VS. ITO REPORTED IN (2016) 68 TAXMANN. COM 250 (AHD.) AND SREE SREE RAMKRISHNA SAMITI VS. DCIT REPORTED IN (2015) 64 TAXMANN.COM 330 (ITAT KALKATTA BENCH). 6. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DERS OF THE AO AND CIT(A) AND CONTENDED THAT THE REGISTRATION HAS BEEN GRANTED FROM THE PROSPECTIVE DATE FOR THE ASSESSMENT YEAR RELEVANT T O AY 2011-12 ONWARDS AND THEREFORE BENEFIT OF THE REGISTRATION CANNOT BE EXT ENDED TO THE EARLIER ASSESSMENT YEARS. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE-LAWS CITED. THE ASSESSEE-TRUST, IN THE INSTANT CASE, IS IN RECEIPT OF DONATIONS FROM STATE GOVERNMENT FOR PHILANTHROPIC PURPOSES TOWARDS MEDICAL RELIEF TO GE NERAL PUBLIC. IT IS NOT IN DISPUTE THAT THE OBJECTS OF THE ASSESSEE-TRUST ARE CHARITABLE IN NATURE WITHIN THE MEANING OF SECTION 2(25) OF THE ACT. IT IS PERTINE NT TO NOTE THAT REGISTRATION UNDER SECTION 12AA OF THE ACT WAS GRANTED ON 25/08/ 2011 TO THE ASSESSEE WITH EFFECT FROM 01/04/2010. ADMITTEDLY, THE NOTICE UND ER SECTION 148 WAS ISSUED FOR IMPUGNED ASSESSMENT YEARS IN QUESTION ON 27/03/ 2012 SUBSEQUENT TO THE REGISTRATION UNDER SECTION 12AA OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT EVEN FOR THE EARLIER YEARS PRIOR TO REGISTRATION UNDER S ECTION 12AA OF THE ACT, THE ASSESSEE-TRUST WAS CARRYING ON THE SAME CHARITABLE OBJECTS AS PER ITS TRUST- DEED. THE RECEIPTS HAVE BEEN APPARENTLY BROUGHT TO TAX BY THE REVENUE ONLY ON THE PRETEXT THAT THE ASSESSEE-TRUST DOES NOT HOL D REGISTRATION UNDER SECTION 12AA IN THE IMPUGNED ASSESSMENT YEARS 2007-08 TO 20 10-11. THE ONLY QUESTION THAT ARISES FOR OUR ADJUDICATION IN THE PR ESENT APPEALS IS WHETHER THE AMENDMENT BROUGHT IN THE SECTION 12A BY FINANCE (NO .2) ACT, 2014 WITH EFFECT FROM 01/10/2014 BY INSERTION OF FIRST PROVISO TO SE CTION 12A(2) IS RETROSPECTIVE IN NATURE OR OTHERWISE. WE FIND THAT THE ISSUE IS NO LONGER RES INTEGRA AND SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SREE SREE RAMKRISHNA SAMITI VS. DCIT (SUPRA). ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 8 - THE RELEVANT FINDING OF THE TRIBUNAL IN THE AFORESA ID CASE ARE EXTRACTED HEREUNDER:- 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE FIRST TWO GROUNDS RAISED BY THE ASSESSEE IS ON JURISDICTION AND SANCTION FOR ISSUE OF NOTICE U/S 1 48 OF THE ACT AND NON SUPPLY OF REASONS RECORDED FOR R EOPENING THE ASSESSMENT. ON SPECIFIC QUERY FROM THE BENCH DURING THE COURSE OF HEARING, THE LEARNED AR STATED THAT THOSE GROUNDS ARE NOT PRESSED WHICH IS TAKEN AS A STATEMENT FROM THE BAR. ACCORDI NGLY, THE GROUND NOS. 1 & 2 RAISED BY THE ASSESSEE ARE DISMISSED AS NOT PRESSED. 6.1 WE FIND THAT THE ASSESSEE TRUST WAS IN RECEIPT OF DONATIONS FROM VARIOUS PHILANTHROPISTS INCLUDING SILIGURI MUNICIPAL CORPORATION AND THESE DONATIONS WERE ADMITTEDLY UTILIZED BY THE ASSESSEE TRUST TOWARDS CONSTRUCTION OF OLD AGE HOME UNDER THE NAME AND STYLE OF 'SHESH BASANTA'. ON THESE FACTS, THERE IS ABSOLUTELY NO DISPUTE. ALL THE DONORS HAD FILED CONFIRMATIONS BEFORE THE LEARNED AO AND THE GENUINITY OF THESE DONATIONS ARE PROVED BEYOND DOUB T BY THE ASSESSEE. THE LEARNED AO HAS ACCEPTED THE SAME IN THE REMAND PROCEEDINGS. 6.2 WE FIND THAT THE OBJECTS OF THE ASSESSEE SOCIETY A RE CHARITABLE IN NATURE WITHIN THE MEANING OF SECTION 2(15) OF THE ACT ON WHICH FACT THERE IS ABS OLUTELY NO DISPUTE. IT IS PERTINENT TO NOTE THAT TH E REGISTRATION U/S 12AA OF THE ACT WAS GRANTED TO THE ASSESSEE ON 29.10.2010 WITH EFFECT FROM 1.4.2010. ADMITTEDLY, THE NOTICE U/S 148 OF THE ACT WAS ISSUE D BY THE DCIT, CIRCLE 2 SILIGURI FOR THE ASST YEARS 2003-04 TO 2008- 09 ON 30.3.2010. EVEN FOR THE EARL IER YEARS, THE ASSESSEE SOCIETY WAS CARRYING ON THE SAME CHARITABLE OBJECTS AS PER THE TRUST DEED ON WH ICH FACT ALSO THERE IS ABSOLUTELY NO DISPUTE. THE RECEIPTS WERE BROUGHT TO TAX ONLY ON THE PRETEXT TH AT THE ASSESSEE SOCIETY IS NOT HAVING REGISTRATION U/S 12AA OF THE ACT IN THE ASST YEARS 2003-04 TO 2008-0 9. 6.3 IT IS RELEVANT AT THIS JUNCTURE TO GET INTO THE AM ENDMENT BROUGHT IN SECTION 12A BY FINANCE ACT 2014 WITH EFFECT FROM 1.10.2014 BY WAY OF INSERTION OF FIRST PROVISO TO SECTION 12A(2) OF THE ACT WHIC H IS REPRODUCED BELOW FOR THE SAKE OF CONVENIENCE : 'SECTION 12 A (2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1ST DAY OF JUNE 2007, THE PROVISIONS OF SECTION 11 AND 12 SHALL APPLY IN RELATION TO THE IN COME 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 T O THE TRUST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL AP PLY IN RESPECT OF ANY INCOME DERIVED FROM PROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YEAR PR ECEDING THE AFORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICER AS ON DATE OF SUCH REGISTRATION 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 S HALL BE TAKEN BY THE ASSESSING OFFICER IN CASE OF SUCH TRUST OR INSTITUTION FOR ANY ASSESSMENT YEA R PRECEDING THE AFORESAID ASSESSMENT YEAR ONLY FOR NON-REGISTRATION OF SUCH TRUST OR INSTITUTION F OR THE SAID ASSESSMENT YEAR: PROVIDED ALSO THAT PROVISIONS CONTAINED IN THE FIRS T AND SECOND PROVISO SHALL NOT APPLY IN CASE OF ANY TRUST OR INSTITUTION WHICH WAS REFUSED REGISTRA TION OR THE REGISTRATION GRANTED TO IT WAS CANCELLED AT ANY TIME UNDER SECTION 12AA.' ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 9 - 6.4 ADMITTEDLY, THE REASSESSMENT PROCEEDINGS WERE PEND ING BEFORE THE LEARNED AO FOR THE ASST YEARS 2003-04 TO 2008-09 AS ON THE DATE OF GRANTING REGIS TRATION U/S 12AA OF THE ACT ON 29.10.2010 WITH EFFECT FROM 1.4.2010 AS REASSESSMENT PROCEEDINGS GO T COMMENCED PURSUANT TO ISSUANCE OF NOTICE U/S 148 ON 30.3.2010 AS STATED SUPRA. ADMITTEDLY, THE O BJECTS AND ACTIVITIES OF THE TRUST HAD REMAINED THE SAME IN PRECEDING ASSESSMENT YEARS ALSO I.E ASST YE ARS 2003-04 TO 2008-09. THOUGH THIS FIRST PROVISO TO SECTION 12A(2) TALKS ABOUT PENDENCY OF ASSESSMEN T PROCEEDINGS, IT IS RELEVANT TO GET INTO THE DEFINITION OF THE TERM 'ASSESSMENT' IN SECTION 2(8) OF THE ACT, WHEREIN IT IS DEFINED AS 'ASSESSMENT INCLUDES REASSESSMENT'. HENCE EVEN REASSESSMENT PRO CEEDINGS THAT WERE PENDING WOULD ALSO COME UNDER THE AMBIT OF THE FIRST PROVISO TO SECTION 12A (2) OF THE ACT. 6.5 THE SECOND PROVISO TO SECTION 12A(2) ALSO PROVIDES THAT NO ACTION U/S 147 OF THE ACT SHALL BE TAKEN MERELY FOR NON-REGISTRATION OF TRUST OR INSTITUTION . READING THIS PROVISO WITH THE FIRST PROVISO TO SE CTION 12A(2) AND APPLYING THE RULE OF HARMONIOUS CONSTRUC TION, IT COULD SAFELY BE CONCLUDED THAT THE LEGISLATURE IN ITS WISDOM HAD ONLY BROUGHT THIS PRO VISO TO PREVENT GENUINE HARDSHIP THAT COULD BE CAUSED ON THE ASSESSEE DUE TO NON-REGISTRATION U/S 12AA OF THE ACT AND ACCORDINGLY IN OUR OPINION, THE PROVISOS TO SECTION 12A(2) OF THE ACT IS TO BE CONS TRUED AS RETROSPECTIVE IN OPERATION. 6.6 THE THIRD PROVISO TO SECTION 12A(2) OF THE ACT ALS O PROVIDES THAT THE FIRST AND SECOND PROVISO SHALL NOT BE APPLICABLE IF THE TRUST OR INSTITUTION HAD B EEN REFUSED REGISTRATION EARLIER OR THE REGISTRATIO N GRANTED EARLIER IS CANCELLED BY THE COMMISSIONER U/ S 12AA OF THE ACT. THIS ALSO GOES TO PROVE THAT THE FIRST AND SECOND PROVISO SHALL BE MADE APPLICABLE F OR THE TRUSTS FOR EARLIER ASSESSMENT YEARS ALSO WHO HAD NOT APPLIED FOR REGISTRATION U/S 12AA OF THE AC T AT ALL. 6.7 WE HOLD THAT THE REGISTRATION OF TRUST UNDER SECTI ON 12A OF THE ACT ONCE DONE IS A FAIT ACCOMPLI AND THE AO CANNOT THEREAFTER MAKE FURTHER PROBE INTO TH E OBJECTS OF THE TRUST. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF THE HON'BLE APEX COURT RE NDERED IN THE CASE OF ASSTT. CIT V.SURAT CITY GYMKHANA [2008] 300 ITR 214/170 TAXMAN 612 . DRAWING ANALOGY FROM THIS JUDGEMENT, THE LOGICAL INFERENCE COULD BE THAT AS LONG AS THE OBJECTS WERE CHARITABLE IN NATURE IN THE EARLIER YEARS AND IN T HE YEAR IN WHICH REGISTRATION U/S 12AA WAS GRANTED, TH E EXISTENCE OF TRUST FOR CHARITABLE PURPOSES IN THE EARLIER YEARS CANNOT BE DOUBTED WITH. EVEN OTHERWIS E, NO ADVERSE FINDINGS WERE GIVEN BY THE REVENUE WITH REGARD TO THE EXISTENCE OF THE ASSESSEE SOCIET Y FOR CHARITABLE PURPOSES IN THE ASSESSMENT YEARS UNDER APPEAL. 6.8 IT WILL BE RELEVANT TO GET INTO THE EXPLANATORY NO TES TO THE PROVISIONS OF THE FINANCE (NO. 2), 2014 AS GIVEN IN CBDT CIRCULAR NO. 01/2015 DATED 21.1.20 15 IN REFERENCE F.NO. 142/13/2014-TPL WHICH IS REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE : PARA 8 - APPLICABILITY OF THE REGISTRATION GRANTED TO A T RUST OR INSTITUTION TO EARLIER YEARS 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 ABSENC E OF REGISTRATION, TAX LIABILITY IS FASTENED EVEN THOUGH THEY MAY OTHERWISE BE ELIGIBLE FOR EXEMPTION AND FULFILL OTHER 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 EFFECT WITH A VIEW NOT TO AFFECT GENU INE CHARITABLE TRUSTS AND SOCIETIES 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 BEN EFIT OF RETROSPECTIVE APPLICATION ALONE COULD BE TH E INTENTION OF THE LEGISLATURE AND THIS POINT IS FURT HER STRENGTHENED BY THE EXPLANATORY NOTES TO FINANC E ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 10 - (NO. 2) ACT, 2014 ISSUED BY THE CENTRAL BOARD OF DI RECT TAXES VIDE ITS 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 YE ARS FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE LEARNED AO, UNLESS THE REGISTRATION GRAN TED EARLIER IS CANCELLED OR REFUSED FOR SPECIFIC REASONS. THE STATUTE ALSO GOES ON TO PROVIDE THAT N O ACTION U/S 147 COULD BE TAKEN BY THE AO MERELY FO R NON-REGISTRATION OF TRUST FOR EARLIER YEARS. 6.9 WITH REGARD TO THE ARGUMENTS OF THE LEARNED DR THA T DONATIONS RECEIVED BY ASSESSEE FALLS UNDER THE DEFINITION OF INCOME U/S 2(24)(IIA) OF THE ACT, WE WOULD LIKE TO STATE THAT INCOME DEFINITION IS A N INCLUSIVE DEFINITION. AN INCLUSIVE DEFINITION EXTEN DS THE SPECIFIC MEANING GIVEN IN THE STATED ITEMS B Y THE GENERAL MEANING AS COMMONLY UNDERSTOOD BY THE S AID EXPRESSION WHICH IS DEFINED IN A STATUTE. THE WORD INCOME AS IS COMMONLY UNDERSTOOD DOES NOT INCL UDE ANY DONATION SPECIFICALLY MEANT FOR UTILIZATION FOR ACQUIRING, CONSTRUCTING A CAPITAL A SSET, AS IS THE CASE HERE. FURTHER SECTION 2(24) HA D UNDERGONE AMENDMENT BY WAY OF INSERTION OF CLAUSE ( IIA) BY FINANCE ACT, 1972 WITH EFFECT FROM 1.4.1973. IN THIS CONNECTION, IT WILL BE RELEVANT T O GET INTO THE MEMORANDUM EXPLAINING THE PROVISIONS IN FINANCE ACT 1972 REPORTED IN 83 ITR (ST.) 173, W HEREIN PARAGRAPHS 24 AND 25 CLEARLY DEFINE THE SCOPE OF THE AMENDMENT WHEREIN IN PARAGRAPH 25(I) , THE CONCLUDING SENTENCE IS AS UNDER: 'CONTRIBUTIONS RECEIVED WITH A SPECIFIC DIRECTION T HAT THEY WILL FORM PART OF THE CORPUS OF THE TRUST OR DISTRIBUTION WILL, HOWEVER, NOT BE REGARDED AS I NCOME.' THUS THE RELEVANT CLAUSE DEFINING INCOME IN SECTION 2(24)(IIA) AS INTRODUCED WITH EFFECT FROM 1.4.1973 WAS CLEARLY NOT INTENDED TO COVER CONTRIBUTIONS/DON ATIONS RECEIVED WITH A SPECIFIC DIRECTION THAT THEY WILL FORM PART OF THE CORPUS OF THE TRUST FOR UTILI ZATION IN ACQUISITION/CONSTRUCTION OF A CAPITAL ASS ET. THUS WHAT IS NOT INCOME AS PER THE DEFINITION OF TH E WORD INCOME IN THE ACT CANNOT BE BROUGHT TO TAX UNDER ANY OTHER PROVISION OF THE ACT. WE FIND THAT THE ORDER OF THE LEARNED CITA FAILED TO DISTINGUISH BETWEEN A CASE WHERE A RECEIPT IS NOT AN INCOME AT THE STAGE OF ITS RECEIPT AND A CASE WHERE IT IS NOT SO BUT IS CLAIMED TO BE EXEMPT BECAUSE OF ANY EXEMPTIO N PROVISION GRANTING EXEMPTION FROM TAXATION TO RECEIPTS WHICH ARE LIABLE TO TAXATION BUT FOR THE P ROVISION GRANTING EXEMPTION. 6.10 WE HOLD THAT IT IS AN ESTABLISHED POSITION IN LAW THAT A PROVISO WHICH IS INSERTED TO REMEDY UNINTENDED CONSEQUENCES AND TO MAKE THE PROVISION W ORKABLE, 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, REQUIRES TO BE TREATED AS RETROSPEC TIVE IN OPERATION, SO THAT A REASONABLE INTERPRETAT ION 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 OPERATION WITH EFFECT FROM THE DATE WHEN THE CONDITION OF ELIGIBILITY FOR EXEMPTION UNDER SECTION 11 & 12 AS MENTIONED IN SECTION 12A PROVIDED FOR REGISTRATION U/S 12AA AS A PRE-CONDITION FOR APPLICABILITY OF SECTION 12A. RELIANCE IN THIS REGARD IS PLACED ON THE FOLLOWING DECISIONS : ALLIED MOTORS (P.) LTD. V. CIT [1997] 224 ITR 677/91 TAXMAN 205 (SC) - JUDGEMENT BY THREE JUDGES OF THE SUPREME COURT 'THE DEPARTMENTAL UNDERSTANDING ALSO APPEARS TO BE THAT SECTION 43B, THE PROVISO AND EXPLANATION 2 HAVE TO BE READ TOGETHER AS EXPRESSIN G THE TRUE INTENTION OF SECTION 43B. EXPLANATION 2 HAS BEEN EXPRESSLY MADE RETROSPECTIVE . THE FIRST PROVISO, HOWEVER, CANNOT BE ISOLATED FROM EXPLANATION 2 AND THE MAIN BODY OF SE CTION 43B. WITHOUT THE FIRST PROVISO, EXPLANATION 2 WOULD NOT OBVIATE THE HARDSHIP OR THE UNINTENDED CONSEQUENCES OF SECTION 43B. THE PROVISO SUPPLIES AN OBVIOUS OMISSION. BUT FOR T HIS PROVISO THE AMBIT OF SECTION 43B BECOME ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 11 - UNDULY WIDE BRINGING WITHIN ITS SCOPE THOSE PAYMENT S, WHICH WERE NOT INTENDED TO BE PROHIBITED FROM THE CATEGORY OF PERMISSIBLE DEDUCTIONS. IN THE CASE OF GOODYEAR INDIA LTD. V. STATE OF HARY ANA (1991) 188 ITR 402, SUPREME COURT SAID THAT THE RULE OF REASONABLE CONSTRUCTION MUST BE AP PLIED WHILE CONSTRUING A STATUTE. LITERAL CONSTRUCTION SHOULD BE AVOIDED IF IT DEFEATS THE MA NIFEST OBJECT AND PURPOSE OF THE ACT. AS OBSERVED BY G.P. SINGH IN HIS PRINCIPLES OF STAT UTORY INTERPRETATION, 4TH EDN., PAGE 291, 'IT IS WELL SETTLED THAT IF A STATUTE IS CURATIVE OR MEREL Y DECLARATORY OF THE PREVIOUS LAW, RETROSPECTIVE OPERATION IS GENERALLY INTENDED'. IN FACT THE AMEND MENT WOULD NOT SERVE ITS OBJECT IN SUCH A SITUATION, UNLESS IT IS CONSTRUED AS RETROSPECTIVE. THE VIEW, THEREFORE, TAKEN BY THE DELHI HIGH COURT CANNOT BE SUSTAINED.' CIT V. VIRGIN CREATIONS IN ITAT NO. 302 OF 2011 IN GA 3200/2011 DATED 23.11.2011, THE HON'BLE CALCUTTA HIGH COURT IN THE CONTEXT OF RETROSPECTIVE APPLICABILITY OF AMENDMENT TO SECTION 40(A)(IA) OF THE ACT HELD AS BELOW: 'THE SUPREME COURT IN THE CASE OF ALLIED MOTORS P L TD AND ALSO IN THE CASE OF ALOM EXTRUSIONS LTD HAS ALREADY DECIDED THAT THE AFORESAID PROVISIO N HAS RETROSPECTIVE APPLICATION. AGAIN, IN THE CASE REPORTED IN 82 ITR 570, THE SUPREME COURT HELD THAT THE PROVISION, WHICH HAS INSERTED THE REMEDY TO MAKE THE PROVISION WORKABLE, REQUIRES TO BE TREATED WITH RETROSPECTIVE OPERATION SO THAT REASONABLE DEDUCTION CAN BE GIVEN TO THE SECTI ON AS WELL'. CIT V. VATIKA TOWNSHIP (P.) LTD. [2014] 367 ITR 466/227 TAXMAN 121/49 TAXMANN.COM 24 9 (SC) - FIVE JUDGES DECISION OF THE SUPREME COURT : 'WE WOULD ALSO LIKE TO POINT OUT, FOR THE SAKE OF C OMPLETENESS, THAT WHERE A BENEFIT IS CONFERRED BY A LEGISLATION, THE RULE AGAINST A RETROSPECTIVE CONSTRUCTION IS DIFFERENT. IF A LEGISLATION CONFERS A BENEFIT ON SOME PERSONS BUT WITHOUT INFLICTING A CORRESPONDING DETRIMENT ON SOME OTHER PERSON OR ON THE PUBLIC GENERALLY, AND WHERE TO CONFER SUC H BENEFIT APPEARS TO HAVE BEEN THE LEGISLATORS OBJECT, THEN THE PRESUMPTION WOULD BE THAT SUCH A L EGISLATION, GIVING IT A PURPOSIVE CONSTRUCTION, WOULD WARRANT IT TO BE GIVEN A RETROSPECTIVE EFFECT . THIS EXACTLY IS THE JUSTIFICATION TO TREAT PROCEDURAL PROVISIONS AS RETROSPECTIVE. IN GOVERNME NT OF INDIA V. INDIAN TOBACCO ASSOCIATION REPORTED IN (2005) 7 SCC 396, THE DOCTR INE OF FAIRNESS WAS HELD TO BE RELEVANT FACTOR TO CONSTRUE A STATUTE CONFERRING A BENEFIT, IN THE CONTEXT OF IT TO BE GIVEN A RETROSPECTIVE OPERATION. THE SAME DOCTRINE OF FAIRNESS, TO HOLD T HAT A STATUTE WAS RETROSPECTIVE IN NATURE, WAS APPLIED IN THE CASE OFVIJAY V. STATE OF MAHARASHTRA REPORTED IN (2006) 6 SCC 289. IT WAS HELD THAT WHERE A LAW IS ENACTED FOR THE BENEFIT OF COMM UNITY AS A WHOLE, EVEN IN THE ABSENCE OF A PROVISION THE STATUTE MAY BE HELD TO BE RETROSPECTI VE IN NATURE. HOWEVER, WE ARE CONFRONTED WITH ANY SUCH SITUATION HERE. IN SUCH CASES, RETROSPECTIVITY IS ATTACHED TO BENEF IT THE PERSONS IN CONTRADISTINCTION TO THE PROVISION IMPOSING SOME BURDEN OR LIABILITY WHERE T HE PRESUMPTION ATTACHES TOWARDS PROSPECTIVITY. IN THE INSTANT CASE, THE PROVISO ADD ED TO SECTION 113 OF THE ACT IS NOT BENEFICIAL TO THE ASSESSEE. ON THE CONTRARY, IT IS A PROVISION WH ICH IS ONEROUS TO THE ASSESSEE. THEREFORE, IN A CASE LIKE THIS, WE HAVE TO PROCEED WITH THE NORMAL RULE OF PRESUMPTION AGAINST RETROSPECTIVE OPERATION. THUS, THE RULE AGAINST RETROSPECTIVE OPE RATION IS A FUNDAMENTAL RULE OF LAW THAT NO STATUTE SHALL BE CONSTRUED TO HAVE A RETROSPECTIVE OPERATION UNLESS SUCH A CONSTRUCTION APPEARS VERY CLEARLY IN THE TERMS OF THE ACT OR ARISES BY N ECESSARY AND DISTINCT IMPLICATION. DOGMATICALLY FRAMED, THE RULE IS NO MORE THAN A PRESUMPTION, AND THUS COULD BE DISPLACED BY OUT WEIGHING FACTORS.' ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 12 - CIT V. J.H. GOTLA [1985] 156 ITR 323/23 TAXMAN 14J (SC) 'IF THE PURPOSE OF A PARTICULAR PROVISION IS EASILY DISCERNIBLE FROM THE WHOLE OF THE SCHEME OF THE ACT WHICH IN THIS CASE, IS TO COUNTERACT THE EFFECT OF TRANSFER OF ASSETS SO FAR AS COMPUTATION OF INCOME OF THE ASSESSEE IS CONCERNED, THEN BEARING T HAT PURPOSE IN MIND, WE SHOULD FIND OUT THE INTENTION FROM THE LANGUAGE USED BY THE LEGISLATURE AND IF STRICT LITERAL CONSTRUCTION LEADS TO AN ABSURD RESULT, I.E., RESULT NOT INTENDED TO BE SUBS ERVED BY THE OBJECT OF THE LEGISLATION FOUND IN THE MANNER INDICATED BEFORE, THEN ANOTHER CONSTRUCTION IS POSSIBLE APART FROM STRICT LITERAL CONSTRUCTION THEN THAT CONSTRUCTION SHOULD BE PREFE RRED TO THE STRICT LITERAL CONSTRUCTION.' 6.11 WE ALSO HOLD THAT THOUGH EQUITY AND TAXATION ARE O FTEN STRANGERS , ATTEMPTS SHOULD BE MADE THAT THESE DO NOT REMAIN ALWAYS SO AND IF A CONSTRUCTION RESULTS IN EQUITY RATHER THAN IN INJUSTICE, THEN S UCH CONSTRUCTION SHOULD BE PREFERRED TO THE LITERAL CON STRUCTION. IT IS ONLY ELEMENTARY THAT A STATUTORY PROVISION IS TO BE INTERPRETED UT RES MAGIS VALEAT QUAM PEREAT, I.E TO MAKE IT WORKABLE RATHER THAN REDUNDANT. APPLYING THIS LEGAL MAXIM, IT WOULD BE J UST AND FAIR TO HOLD THAT THE AMENDMENT IN SECTION 12A IS BROUGHT IN THE STATUTE TO CONFER BENEFIT OF EXEMPTION U/S 11 OF THE ACT ON THE 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 CURRENT YEAR BASED ON WHICH THE REGI STRATION U/S 12AA IS GRANTED BY THE DIT(EXEMPTIONS). 6.12 WE HOLD THAT THE ARGUMENTS OF THE LEARNED AR THAT, EVEN ASSUMING WITHOUT CONCEDING, IN THE WORST SCENARIO, THE ASSESSEE SOCIETY COULD ONLY BE TAXED IN THE STATUS OF AN AOP DOES NOT REQUIRE ANY ADJUDICATION AS WE HOLD THAT THE ASSESSEE SOCIETY T O BE CONSTRUED AS A PUBLIC CHARITABLE TRUST AND ELIGIBLE TO CLAIM EXEMPTION U/S 11 OF THE ACT FOR T HE EARLIER ASSESSMENT YEARS, MORE ESPECIALLY, ASST YEARS 2003-04 TO 2008-09 , THE DONATIONS RECEIVED F ROM VARIOUS DONORS FOR CONSTRUCTION OF AN OLD AGE HOME WOULD TAKE THE CHARACTER OF CORPUS DONATIONS A S THEY ARE MEANT FOR SPECIFIC PURPOSES AND ACCORDINGLY WOULD BE EXEMPT U/S 11(1)(D) OF THE ACT . EVEN OTHERWISE, THE SAID DONATION RECEIPTS ARE ONLY CAPITAL IN NATURE AS IT IS RECEIVED FOR CONSTR UCTION OF AN OLD AGE HOME ON WHICH FACT THERE IS ABSOLUTELY NO DISPUTE. THE LEARNED AO ALSO HAD DULY ACCEPTED THE NATURE OF DONATIONS, GENUINITY OF THE DONORS AND ITS UTILIZATION IN THE REMAND PROCEE DINGS. HENCE IN ANY CASE, A RECEIPT WHICH IS BY BIRTH, CAPITAL IN NATURE, CANNOT CHANGE ITS CHARACT ER MERELY FOR WANT OF REGISTRATION OF SOCIETY U/S 1 2AA OF THE ACT. IT IS NOT THE CASE OF THE REVENUE THAT THE DONATIONS RECEIVED ARE MEANT FOR GENERAL FUNCTIONING OF THE CHARITABLE OBJECTS OF THE SOCIET Y, IN WHICH EVENT, THE DONATIONS RECEIVED THEREON WOULD TAKE THE CHARACTER OF REVENUE RECEIPTS REQUIR ING TO BE CREDITED IN THE INCOME AND EXPENDITURE ACCOUNT FOR UTILIZATION TOWARDS CHARITABLE OBJECTS THEREON. HENCE WE HOLD THAT IN ANY CASE, THE DONATIONS RECEIVED BY THE ASSESSEE SOCIETY CANNOT B E BROUGHT TO TAX IN THE ASSESSMENT. 6.13 WE HOLD THAT SINCE THE ONLY REASON FOR DENIAL OF E XEMPTION U/S 11 WAS ABSENCE OF REGISTRATION U/S 12AA (WHICH WAS GRANTED TO ASSESSEE SOCIETY ON 29.1 0.2010 WITH EFFECT FROM 1.4.2010) FOR THE RELEVANT ASSESSMENT YEARS AND ON NO OTHER GROUND, THE BENEFI T OF CHANGE IN LAW AS ABOVE BY FINANCE ACT 2014 SHOULD BE AVAILABLE AND FOR ALL THE YEARS, THE BENE FIT OF EXEMPTION SHOULD BE AVAILABLE ON THE DATE OF REGISTRATION AS ALL THE ASSESSMENTS WERE PENDING AS SHOWN ABOVE. IN THIS CONNECTION, IT REQUIRES MENTION SPECIFICALLY THAT ALL THE RECEIPTS OF THE D ONATION WERE PROVED ON ENQUIRY TO HAVE BEEN RECEIVE D FROM THE CLAIMED DONORS AND UTILIZED FOR THE SPECIF IC PURPOSE (CONSTRUCTION OF OLD AGE HOME) FOR WHICH THEY WERE RECEIVED. IN CONCLUSION, WE HOLD THAT THE INSERTION OF THE PR OVISO TO SECTION 12A(2) OF THE ACT HAS TO BE CONSTR UED AS RETROSPECTIVE IN OPERATION. ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 13 - RESPECTFULLY FOLLOWING THE VARIOUS JUDICIAL PRECEDE NTS RELIED UPON AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ALLOW THE GROUND NOS. 3 TO 8 RAISED BY THE ASSESSEE. 6.14 IN VIEW OF THE FINDING GIVEN BY US HEREINABOVE WIT H REGARD TO THE STATUS OF THE ASSESSEE SOCIETY AND ITS ELIGIBILITY TO CLAIM EXEMPTION U/S 11 OF TH E ACT, THE ADJUDICATION OF GROUND NO. 9 BECOMES INFRUCTUOUS. THE EXPENDITURE INCURRED BY THE ASSESS EE SOCIETY WOULD ANYWAY BE TREATED AS APPLICATION OF INCOME FOR CHARITABLE OBJECTS AS THE INCURRENCE OF EXPENDITURE FOR CHARITABLE OBJECTS HAS NOT BEEN DISPUTED BY THE REVENUE IN ANY OF THE ASSESSMENT YE ARS UNDER APPEAL. HENCE THE GROUND NO. 9 OF THE ASSESSEE IS DISMISSED AS INFRUCTUOUS. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PAR TLY ALLOWED. 8. WE ALSO FIND THAT SIMILAR VIEW HAS BEEN TAKEN BY THE AHMEDABAD TRIBUNAL IN THE CASE OF SHRI BHANUSHALI MITRA MANDA L TRUST VS. ITO (SUPRA). RESPECTFULLY FOLLOWING THE DECISION OF THE AFORESAI D DECISIONS OF THE COORDINATE BENCH OF THE TRIBUNAL AND FOR THE PARITY OF REASONI NG, WE ALLOW THE BENEFIT OF REGISTRATION UNDER SECTION 12AA OF THE ACT WITH RET ROSPECTIVE EFFECT. THUS, THE ASSESSEE SHALL BE ENTITLED TO BENEFIT OF REGISTRATI ON UNDER SECTION 12AA OF THE ACT FOR ALL THE IMPUGNED ASSESSMENT YEARS IN APPEAL S. IN VIEW OF THE AFORESAID OBSERVATIONS, WE ARE NOT INCLINED TO DEAL WITH GROUND RELATING TO ELIGIBILITY OF EXEMPTION CLAIMED UNDER SECTION 10 ( 23C) OF THE ACT. RESULTANTLY, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED IN THE TERMS AS INDICATED ABOVE. 9. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED IN THE TERMS AS INDICATED ABOVE. 4. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED IN THE TERMS AS NARRATED IN THE TRIBUNALS ORDER DATED 26/ 10/2016. THIS ORDER PRONOUNCED IN OPEN COURT ON 28 /10/2016 SD/- SD/- .. ! '#$% () (#&) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 28 / 10 /2016 ..),.)../ T.C. NAIR, SR. PS ITA NOS.450 TO 453/R JT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2007-08 TO 2010-11 RESPECTIVELY - 14 - / COPY OF THE ORDER FORWARDED TO : 1. 34 / THE APPELLANT 2. 534 / THE RESPONDENT. 3. 6 , ! 7, / CONCERNED CIT 4. ! 7, ( ) / THE CIT(A)-IV, RAJKOT 5. 89 ,) , , /DR,ITAT, RAJKOT 6. %:* / GUARD FILE. / BY ORDER, 58, , //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !', / ITAT, RAJKOT 1. DATE OF DICTATION .. 27.10.16 (COVERED ASSESSEES OWN CASE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 27.10.16 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. 28.10.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28.1016 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