M/s Punjab Educational Society, Moga V. The Income Tax Officer-II, Moga

ITA 459/ASR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7725 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-11-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 07-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARAM SINGH D R
• Keywords: Charitable institution; Principle of natural justice; Retrospective amendment; Competent authority; Condonation of delay
• Section: 143(3); 12A; 12AA; 12

Judgement Text

PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 1 1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH , AMRITSAR BEFORE SHRI T.S. KAPOOR, AM AND SHRI RAVIS H SOOD, JM ./ I.T.A. NO. 459/ASR/2016 ( / ASSESSMENT YEAR: 2011-12) M/S PUNJAB EDUCATIONAL SOCIETY, H. NO. 818, ST. NO. 5, GEETA COLONY, MOGA / VS. INCOME TAX OFFICER- II, MOGA, ././ PAN/GIR NO. AABTP0609B ( / // / APPELLANT) : ( / RESPONDENT) ! ' / APPELLANT BY : SHRI ASHWANI KUMAR, A.R ! ' / RESPONDENT BY : SHRI DHARAM SINGH, D.R. # $ ! %&/ // / DATE OF HEARING : 14/11/2017 '( ! %& / DATE OF PRONOUNCEMENT : 20 /11/2017 PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 2 2 )* / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER PA SSED BY THE CIT(A)-4, LUDHIANA, DATED 30.06.2016, WHICH IN ITSE LF ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 143(3) OF TH E INCOME TAX ACT, 1961, (FOR SHORT ACT), DATED 30.08.2013. THE ASSESSEE ASSAILING THE ORDER OF THE CIT (A) HAD RAISED BEFORE US THE F OLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING AN ADDITION OF RS.34,31,521/- ( AS SURPLUS OF THE SOCIETY) AS THE SOCIETY IS NOT APPROVED U/S 10(23C) (VI) OR (VIA) OF THE ACT DURING THE PERIOD UNDER CONSIDERATION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT THE AMENDED PROVISIONS OF THE SECTION 12A/12AA OF THE ACT W.E.F. 01.10.2014 AS APPLICABLE TO PENDING ASSESSMENTS ORDERS DOES NOT HAVE RETROSPECTIVE EFFECT AS SUCH CONFIRME D THE ADDITION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN REJECTING THE ADDITIONAL GROUND OF APPEAL THAT THE SOCIETY WHICH WAS REGISTERED U/S 12A/12AA OF THE ACT ON 03.04.201 2, WAS NOT REGISTERED DURING THE PERIOD UNDER CONSIDERATION. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE WHICH IS AN EDUCATIONAL INSTITUTION HAD FILED ITS RETURN OF INCOME FOR A.Y 2011-12 ON 29.09.2011, DECLARING TOTAL INCOME AT RS . NIL. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSE D AS SUCH UNDER SEC. 143(1) OF THE ACT ON 21.08.2012. THE CASE OF THE ASSESSEE WAS THEREAFTER TAKEN UP FOR SCRUTINY ASSESSMENT AND A N OTICE UNDER SEC. 143(2), DATED 27.09.2012 WAS ISSUED TO THE ASSESSEE . PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 3 3 3. THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDING S IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE SOCIETY DURIN G THE YEAR UNDER CONSIDERATION HAD SHOWN EXCESS OF INCOME OVER EXPEN DITURE OF RS.34,31,521/-, WHICH WAS TRANSFERRED TO ITS RESERV E AND SURPLUS ACCOUNT. THE A.O OBSERVING THAT THE GROSS RECEIPTS OF THE ASSESSEE SOCIETY, WHICH WAS NEITHER REGISTERED UNDER SEC. 12 A NOR APPROVED UNDER SEC. 10(23C)(VI) OF THE ACT HAD DURING THE PERIOD 01.04.2010 TO 31.03.2011 RELEVANT TO A.Y 2011-12 EXCEEDED 1 CR ORE, THEREFORE, CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE S AME MAY NOT BE BROUGHT TO TAX IN ITS HANDS. THE MAIN THRUST OF THE ASSESSEE IN ITS REPLY TO THE AFORESAID QUERY WAS THAT AS IT WAS REG ISTERED UNDER SEC. 12AA(1)(B)(I) OF THE INCOME TAX ACT, 1961 WITH TH E COMPETENT AUTHORITY, VIDE THE LATTERS ORDER NO. CIT III/JB/LDH/12A/292/2011-12, DATED 03.04.2012 WITH E FFECT FROM AY 2012-13, THEREFORE, IT BEING A CHARITABLE SOCIET Y WHICH WAS RUNNING AN EDUCATIONAL INSTITUTION, THUS, COULD NOT BE DENIED EXEMPTION FOR THE REASON THAT ITS GROSS RECEIPTS HA D EXCEEDED RS.1 CRORE IN A.Y 2011-12. IT WAS FURTHER AVERRED THAT A S THE ASSESSEE SOCIETY HAD APPLIED ITS INCOME PURELY FOR THE ACCOM PLISHMENT OF ITS OBJECTS AS PER SEC. 11(5), THEREFORE, ITS INCOME CO ULD NOT BE SUBJECTED TO TAX. HOWEVER, THE A.O NOT FINDING FAVO UR WITH THE CONTENTIONS OF THE ASSESSEE, THEREIN BEING OF THE V IEW THAT AS THE ASSESSEE SOCIETY HAD NEITHER APPLIED FOR THE GRANT OF REGISTRATION UNDER SEC. 12AA WITH THE PRESCRIBED AUTHORITY I.E. COMMISSIONER OF INCOME TAX, NOR WAS APPROVED UNDER SEC. 10(23C)(VI) OR (VIA) BY THE CHIEF COMMISSIONER OF INCOME TAX IN A.Y 2011-12, TH EREFORE, DID PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 4 4 NOT FIND FAVOUR WITH THE EXPLANATION OF THE ASSESSE E AND MADE AN ADDITION OF RS.34,31,521/- TO ITS RETURNED INCOME. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE CIT(A). THE ASSESSEE BY WAY OF AN ADDITIONAL GROUND OF APPEAL AVERRED BEFORE THE CIT(A) THAT AS THE ASSESSEE SOCI ETY WAS GRANTED REGISTRATION UNDER SEC. 12AA BY THE COMMISSIONER OF INCOME TAX- III, LUDHIANA ON 03.04.2012, AND OBJECTS AND ACTIVI TIES OF THE ASSESSEE SOCIETY DURING THE YEAR UNDER CONSIDERATIO N, I.E. AY: 2011- 12 WERE THE SAME AS WERE THERE BEFORE THE A.O AT TH E TIME OF GRANT OF REGISTRATION, THEREFORE, AS PER THE AMENDED PROV ISIONS OF SEC. 12A/12AA OF THE INCOME TAX, 1961, AS WERE MADE AVAI LABLE ON THE STATUTE VIDE THE FINANCE ACT, 2014 WITH EFFECT FROM 1 ST OCTOBER, 2014, THE ADDITION OF RS.34,31,521/- MADE BY THE A. O WAS LIABLE TO BE DELETED. THE ASSESSEE SUBMITTED BEFORE THE CIT(A ) THAT THE FIRST PROVISO TO SEC. 12A(2) WAS MADE AVAILABLE ON THE STATUTE I N ORDER TO MITIGATE THE HARDSHIPS CAUSE TO THE CHARITABLE INST ITUTIONS. IT WAS SUBMITTED BY THE ASSESSEE THAT WHERE REGISTRATION U NDER SEC. 12AA WAS GRANTED TO AN ASSESSEE UNDER SEC. 12AA, THEN TH E ASSESSEE WOULD ALSO BE ENTITLED FOR THE BENEFIT OF SEC. 11 A ND 12 IN THE PRIOR YEARS, SUBJECT TO SATISFACTION OF TWO FOLD CONDITIO NS, VIZ. (I) THAT ASSESSMENT PROCEEDINGS IN SUCH PRECEDING YEARS WAS PENDING BEFORE THE A.O ON THE DATE OF GRANT OF REGISTRATION ; AND (II) THE OBJECTS AND ACTIVITIES OF THE ASSESSEE DURING THE S AID YEAR WERE THE SAME WHICH HAD BEEN CONSIDERED BY THE COMMISSIONER OF INCOME TAX WHILE GRANTING THE REGISTRATION. IT WAS THUS SU BMITTED BY THE PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 5 5 ASSESSEE THAT AS IN ITS CASE ON 03.04.2012 WHEN THE REGISTRATION UNDER SEC. 12AA WAS GRANTED BY THE CIT, THE ASSESSM ENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y 2011-12 WERE PENDING, AND THE OBJECTS AND ACTIVITIES OF THE ASSE SSEE SOCIETY HAD ALSO NOT WITNESSED ANY CHANGE, THEREFORE, THE FIRST PROVISO OF SEC. 12A(2) WAS CLEARLY ATTRACTED. THUS IT WAS SUBMITTED BY THE LD. A.R THAT THE PROVISIONS OF SEC. 11 AND 12 WERE CLEARLY APPLICABLE TO ITS CASE, AND RESULTANTLY THE ADDITION OF RS.34,31,521/ - MADE BY THE A.O WAS LIABLE TO BE SET ASIDE. 5. THE CIT(A) AFTER DELIBERATING ON THE CONTENTIONS OF THE ASSESSEE WAS HOWEVER NOT PERSUADED TO ACCEPT THE SAME. THE C IT(A) DELIBERATING ON THE CLAIM OF THE ASSESSEE AS REGARD S THE APPLICABILITY OF THE FIRST PROVISO OF SEC. 12A(2), OBSERVED THAT AS THE SAME WAS MADE AVAILABLE ON THE STATUTE BY THE LEGISLATURE VI DE THE FINANCE (NO. 2) ACT, 2014, WITH EFFECT FROM 01.10.2014 AND WAS NOT GIVEN A RETROSPECTIVE EFFECT, THEREFORE, THE SAME WAS NOT A PPLICABLE TO THE CASE OF THE ASSESSEE WHEREIN THE EXEMPTION UNDER SE C. 12AA HAD BEEN ALREADY BEEN GRANTED TO THE ASSESSEE ON 03.04. 2012 FOR AY 2012-13 ONWARDS. THUS, ON THE BASIS OF THE AFORESAI D OBSERVATIONS THE CIT(A) DECLINED TO ACCEPT THE AFORESAID CONTENT ION OF THE ASSESSEE. THE CIT(A) OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE AS A MATTER OF FACT WAS NOT COVERED BY THE EXEMPTION CONTEMPLATED UNDER SEC. 12A OR UNDER SEC. 10(23C)(VI). IT WAS FURTHER OBSERVED BY THE CIT(A) THAT AS THE ASSESSEE SOCIETY WAS NOT REGISTERED UNDER SEC. 12AA DURING THE PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 6 6 YEAR UNDER CONSIDERATION, THEREFORE, IT WAS NOT ELI GIBLE FOR CLAIM OF EXEMPTION UNDER SEC. 11 AND 12 OF THE ACT. THUS, ON THE BASIS OF HER AFORESAID OBSERVATIONS THE CIT(A) UPHELD THE AD DITION MADE BY THE A.O AND DISMISSED THE APPEAL OF THE ASSESSEE. 6. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE US. THAT AT THE VERY OUTSET OF THE HEARING OF THE APPEAL THE LD. AUTHORIZED REPRESENTA TIVE (FOR SHORT A.R) FOR THE ASSESSEE SUBMITTED THAT THOUGH THE C ASE OF THE ASSESSEE WAS SQUARELY COVERED BY THE FIRST PROVISO OF SEC. 12A(2) OF THE ACT, HOWEVER, THE CIT(A) HAD WRONGLY CONCLUDE D THAT THE SAME WAS NOT APPLICABLE TO THE CASE OF THE ASSESSEE. THE LD. A.R. IN ORDER TO DRIVE HOME HIS AFORESAID CONTENTION, DREW OUR AT TENTION TO THE FIRST PROVISO OF SEC. 12A(2), WHICH WAS MADE AVAILABLE ON THE STA TUTE VIDE THE FINANCE (NO. 2) ACT, 2014 WITH EFFECT FROM 01.10.2014. THE LD. A.R SUBMITTED THAT AS THE SAID STATUTORY PROVIS ION WAS MADE AVAILABLE ON THE STATUTE TO MITIGATE THE HARDSHIPS BEING FACED BY CHARITABLE INSTITUTIONS, THEREFORE, THE SAME BEING A BENEFICIAL PROVISION WAS TO BE ACCORDED A RETROSPECTIVE APPLIC ABILITY. THE LD. A.R IN ORDER TO BUTTRESS HIS AFORESAID CONTENTION T OOK SUPPORT OF THE MEMORANDUM EXPLAINING THE PROVISIONS OF THE FINANCE (NO.2) BILL, 2014, IN CONTEXT OF THE INCORPORATION OF THE FIRST PROVISO TO SEC.12A(2). THE LD. A.R IN ORDER TO FORTIFY HIS AFO RESAID CLAIM THAT RETROSPECTIVE EFFECT WAS TO BE GIVEN TO THE AFORESA ID STATUTORY PROVISION, THEREIN RELIED ON THE JUDGMENT OF THE HO NBLE SUPREME COURT IN THE CASE OF CIT VS. VATIKA TOWNSHIP PVT. L TD. 367 ITR 466 PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 7 7 (SC). THE LD. A.R SUBMITTED THAT THE ISSUE THAT THE FIRST PROVISO OF SEC. 12A(2) WAS TO BE GIVEN A RETROSPECTIVE EFFECT HAD ALREADY BEEN LOOKED INTO AND ADJUDICATED BY THE INCOME TAX APPEL LATE TRIBUNAL, COCHIN BENCH, COCHIN IN THE FOLLOWING CASES:- (I) SNDP YOGAM VS. ADIT (EXEMPTION) (ITA NO.503 TO 506 AND 569/COCH/2014); DATED 01.03.2016 (II) SANTHULA CHARITABLE TRUST VS. DDIT (EXEMPTION) (ITA NO. 538/COCH/2015; DATED 10.06.2016. THE LD. A.R FURTHER SUBMITTED THAT A SIMILAR VIEW H AD ALSO BEEN TAKEN BY THE ITAT, B BENCH, PUNE IN THE CASE OF M /S SHRI VISHWA KALYAN JIVRAKSHA PRATISTHAN VS. ITO (ITA NO. 2013/P N/2014); DATED 22/07/2016 AND ITAT, AHMEDABAD, SMC BENCH I N THE CASE OF SHRI BHANUSHALI MITRA MANDAL TRUST VS. ITO (ITA NO. 2515/AHD/2015; DATED 22.02.2016. THE LD. A.R IN ORD ER TO SUPPORT HIS AFORESAID CLAIM TOOK US THROUGH THE ORDER OF TH E ITAT, COCHIN BENCH IN THE CASE OF SNDP YOGAM (SUPRA). THE LD. A. R DREW OUR ATTENTION TO PAGE 10 PARA 7.3 OF THE ORDER, WHEREIN THE TRIBUNAL AFTER DELIBERATING AT LENGTH ON THE EXPLANATORY NOT ES OF THE MEMORANDUM TO FINANCE (NO. 2) BILL, 2014, HAD THERE IN CONCLUDED THAT THE AMENDMENT TO SEC. 12A WITH EFFECT FROM 01. 10.2014 WAS RETROSPECTIVE IN NATURE. IT WAS SUBMITTED BY THE LD . A.R THAT AS THE ASSESSEE HAD FILED ITS INCOME TAX RETURN ON 28.09.2 011, WHICH WAS SUBJECTED TO SUMMARY ASSESSMENT UNDER SEC. 143(1) O N 21.08.2012, THUS, IN THE BACKDROP OF THE FACT THAT THE ASSESSEE WAS PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 8 8 GRANTED REGISTRATION UNDER SEC. 12AA ON 03.04.2012, AND THE OBJECTS AND ACTIVITIES OF THE ASSESSEE SOCIETY HAD NOT WITNESSED ANY CHANGE DURING THE YEAR UNDER CONSIDERATION, VIZ. A .Y 2011-12, AS AGAINST THOSE AT THE TIME OF GRANT OF REGISTRATION BY THE COMMISSIONER OF INCOME TAX, THEREFORE, THE FIRST PROVISO OF SEC. 12A(2) WAS CLEARLY APPLICABLE TO THE CASE OF THE AS SESSEE. IT WAS THUS SUBMITTED BY THE LD. A.R. THAT THE CIT(A) BY M ISCONCEIVING THE SCOPE AND GAMUT OF APPLICABILITY OF THE FIRST PROVISO OF SEC. 12A(2) HAD ERRED IN SUSTAINING THE ADDITION OF RS.34.31,52 1/-, WHICH THEREIN WAS LIABLE TO BE STRUCK DOWN. PER CONTRA, T HE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) PLACED RELIANCE ON THE ORDER OF THE A.O AND THE CIT(A). IT WAS SUBMITTED B Y THE LD. D.R THAT AS THE APPEAL OF THE ASSESSEE DID NOT MERIT ACCEPTA NCE, THEREFORE, THE SAME WAS LIABLE TO BE DISMISSED. 7. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BO TH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIE S AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ISSUE INVOLVE D IN THE PRESENT APPEAL LIES IN A NARROW COMPASS. WE ARE OF THE CONS IDERED VIEW THAT OUR INDULGENCE IN THE PRESENT APPEAL IS SOUGHT FOR ADJUDICATING AS TO WHETHER THE CIT(A) WAS RIGHT IN CONCLUDING THAT THE FIRST PROVISO OF SEC.12A(2) WOULD BE APPLICABLE TO THE FACTS OF T HE PRESENT ASSESSEE BEFORE US, OR NOT. WE FIND THAT THE FIRST PROVISO OF SEC. 12A(2) HAD BEEN MADE AVAILABLE ON THE STATUTE VIDE THE FINANCE (NO. 2) ACT, 2014, WITH EFFECT FROM 01.10.2014. THAT A P ERUSAL OF THE EXPLANATORY NOTES OF THE MEMORANDUM TO FINANCE (NO. 2) BILL, 2014 PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 9 9 EXPLAINING THE OBJECTS AND REASONS FOR MAKING AVAIL ABLE THE FIRST PROVISO TO SEC. 12A(2) ON THE STATUTE REVEALS THAT IT WAS I N ORDER TO MITIGATE THE HARDSHIPS CAUSED TO CHARITABLE INSTITU TIONS, WHICH DESPITE HAVING SATISFIED THE SUBSTANTIVE CONDITIONS RENDERING THEM ELIGIBLE FOR CLAIM OF EXEMPTION, HOWEVER, FOR TECHN ICAL REASONS WERE SADDLED WITH TAX LIABILITY IN THE PRIOR YEARS, DUE TO ABSENCE OF REGISTRATION UNDER SEC. 12AA. WE FIND THAT THE ISSU E BEFORE US, AS TO WHETHER THE BENEFICIAL PROVISIONS MADE AVAILABLE ON THE STATUTE BY THE LEGISLATURE IN ALL ITS WISDOM, VIDE THE FINANCE (NO. 2) ACT, 2014 WITH EFFECT FROM 01.10.2014 WERE TO BE GIVEN A RETR OSPECTIVE EFFECT, OR NOT, HAD ALREADY DELIBERATED UPON AND ADJUDICATE D BY THIS TRIBUNAL IN BUNCH MATTERS OF ST. JUDE ST JUDES CONV ENT SCHOOL, JALANDHAR & OTHERS VS. ACIT, CIRCLE-III, JALANDHAR (ITA NO. 749/ASR/2013, DATED 26.09.2016). WE FIND THAT THE T RIBUNAL AFTER GIVING A THOUGHTFUL CONSIDERATION TO THE ISSUE AS R EGARDS THE RETROSPECTIVE APPLICABILITY OF THE AFORESAID STATUT ORY PROVISION, HAD THEREIN CONCLUDED AS UNDER:- 17. THE FIRST ISSUE BEFORE US AS TO WHETHER THE TW O PROVISOS TO SECTION 12A(2) ARE APPLICABLE TO ALL THE APPEALS BEFORE US, RETROS PECTIVELY, AS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, OR WHETHER, SI NCE THE PROVISOS HAVE BEEN BROUGHT IN W.E.F. 01.10.2014 AND THEY HAVE NOT BEEN MADE APPLICABLE RETROSPECTIVELY, THE SAME ARE NOT APPLIC ABLE FOR EARLIER PERIODS, AS SUBMITTED BY THE DEPARTMENT. 18. NOW, A BARE READING OF THE FIRST PROVISO SECTION 12 A(2) SHOWS THAT IT HAS NOT BEEN MADE APPLICABLE RETROSPECTIVELY. IT HAS BE EN 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 PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 10 10 RETROSPECTIVELY. HOWEVER, THE LAW IS WELL SETTLED T O THE EFFECT THAT IF THE PROVISO BROUGHT IN AS A PROCEDURAL OR BENEFICIAL ON E, INTENDING TO REMOVE HARDSHIP, IT IS APPLICABLE RETROSPECTIVELY. 19. IN C.B RICHARDS ELLIS MAURITIUS LTD. VS. CIT, W.P. NO. 8359/2010, DECIDED ON 25/05/2012 (COPY ON RECORD), IT HAS BEEN HELD THAT PROCEDURAL LAW, WHEN AMENDED OR SUBSTITUTED, IS GENERALLY RETR OSPECTIVE 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 UNINTENDED CON SEQUENCES AND TO MAKE THE PROVISION WORKABLE, A PROVISO WHICH SUPPLI ES AN OBVIOUS OMISSION IN THE SECTION AND IS REQUIRED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONABLE INTERPRETATION, IS REQUIRE D TO BE TREATED AS RETROSPECTIVE IN OPERATION, SO THAT A REASONABLE IN TERPRETATION CAN BE GIVEN TO THE SECTION AS A WHOLE. IT IS, THUS, TRITE THAT IF A PROVISION IS CURATIVE OR MERELY DECLARATORY OF THE PREVIOUS LAW, RETROSPECTI VE OPERATION THEREOF IS GENERALLY INTENDED. 21. IN CIT VS. VATIKA TOWNSHIP PVT. LTD., 367 ITR 466 (SC), THE CONSTITUTIONAL BENCH OF THE HONBLE SUPREME COURT HELD THAT IF A LEGISLATION CONFERS A BENEFIT ON SOME PERSONS BUT WITHOUT INFLICTING A CO RRESPONDING DETRIMENT ON SOME OTHER PERSON OR ON THE PUBLIC GENERALLY, AN D WHERE TO CONFER SUCH BENEFIT APPEARS TO HAVE BEEN THE LEGISLATORS OBJEC T, THEN THE PRESUMPTION WOULD BE THAT SUCH A LEGISLATION, GIVING IT A PURPO SIVE CONSTRUCTION, WOULD WARRANT IT TO BE GIVEN A RETROSPECTIVE EFFECT. 22. IN GOVERNMENT OF INDIA VS. INDIAN TOBACCO ASSOCIAT ION, [2005] 7 SCC 396, THE DOCTRINE OF FAIRNESS WAS HELD TO BE A RELEVANT FACTOR TO CONSTRUE A STATUTE CONFERRING A BENEFIT, IN THE CONTEXT OF IT TO BE GIVEN A RETROSPECTIVE OPERATIONS. 23. IN VIJAY VS. STATE OF MAHARASHTRA, [2006] 6 SCC 2 86, THE HONBLE SUPREME COURT WENT TO THE EXTENT OF HOLDING THAT WH ERE A LAW IS ENACTED PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 11 11 FOR THE BENEFIT OF THE COMMUNITY AS A WHOLE, EVEN I N 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 MATT ER OF PROCEDURE. EVEN THE HEADING OF CHAPTER (XIV) OF THE ACT, WHICH DEAL S WITH ASSESSMENT, ITSELF IS PROCEDURE FOR ASSESSMENT. LIKEWISE, GRANT OF R EGISTRATION IS ALSO A PROCEDURAL ASPECT, SINCE REGISTRATION IS BUT A ST EP IN AID FOR EXEMPTION U/S 11. AS SUCH, THE PROVISOS TO SEC. 12A(2) ARE AL SO PROCEDURAL. 25. SO FAR AS REGARDS THE BRINGING IN OF THE FIRST PROV ISO TO SECTION 12A(2), THE MEMORANDUM EXPLAINING THE PROVISIONS OF THE FINANCE (NO.2) BILL, 365 ITR (STATUTE) 175 ITSELF ELABORATES THE INTENTION OF TH E LEGISLATURE BEHIND INSERTION THEREOF IN THE STATUTE BOOK. IT STATES, I NTER ALIA, THAT NON- APPLICATION OF REGISTRATION FOR THE PERIOD PRIOR TO THE YEAR OF REGISTRATION CAUSES GENUINE HARDSHIP TO CHARITABLE ORGANIZATION. 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 UNDE R 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 REGISTRATION U/S 12AA OF THE ACT, THE BENEFIT OF SECTIONS 11 AND 12 SHALL BE AVAILABLE IN RESPECT OF ANY INCOME DERIVED FROM PROPERTY HELD UNDER TRUST IN ANY ASSES SMENT PROCEEDINGS FOR ANY EARLIER ASSESSMENT YEAR, WHICH IS PENDING BEFOR E THE ASSESSING OFFICER AS ON THE DATE OF SUCH REGISTRATION, IF THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION IN THE RELEVANT EARLIER A SSESSMENT YEAR ARE THE SAME AS THOSE ON THE BASIS OF WHICH SUCH REGISTRATI ON HAS BEEN GRANTED. 26. THUS, CLEARLY, THE PROVISION OF SEC. 12A OF THE ACT ENTAILED UNINTENDED CONSEQUENCES OF NON-APPLICATION OF REGISTRATION FOR THE PERIOD PRIOR TO THE YEAR OF REGISTRATION AND, THEREBY, NON-GRANT OF EXE MPTION U/SS 11 AND 12 UP TO GRANT OF REGISTRATION. THIS POSITION WAS ALSO RECOGNIZED BY THE CBDT WHILE ISSUING THE EXPLANATORY NOTES TO THE PROVISIO NS OF THE FINANCE (NO.2) ACT, 2014 VIDE CBDT CIRCULAR NO. 1 OF 2015, DATED 2 1/1/2015. IT WAS THIS PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 12 12 ANOMALY WHICH WAS CURED BY BRINING IN THE FIRST PRO VISO TO SEC.12A(2). THIS PROVISO, EVEN AS AVOWED BY THE ABOVE QUOTED MEMORAN DUM EXPLAINING THE PROVISIONS OF THE FINANCE (NO.2) BILL, HAS SOUGHT T O REMEDY THE SAID UNINTENDED HARDSHIP VISITING TRUSTS AND INSTITUTION S. IT HAS SUPPLIED THE AFORESAID OMISSION IN THE SECTION AND HAS THEREBY M ADE THE PROVISION OF THE SECTION WORKABLE, PROVIDING A REASONABLE INTERP RETATION TO IT BY PROVIDING THE BENEFIT MANDATED BY IT. IT IS, THUS A CURATIVE PROVISO, WHICH IS BUT MERELY DECLARATORY OF THE PREVIOUS LAW. IT HAS, BY REMOVAL OF THE HARDSHIP, RENDERED THE PROCEDURE MORE RELIEF-ORIENT ED. IT ADEQUATELY COMPLIES WITH THE NATURAL JUSTICE PRINCIPLE OF FAIR NESS TO ALL. HENCE, IT HAS TO BE PRESUMED AND CONSTITUTED AS RETROSPECTIVE IN NAT URE, IN ORDER TO GIVE THE SECTION A PURPOSIVE INTERPRETATION. 27. IN SHREE SHREE RAMKRISHNA SAMITY VS. DY. CIT, [201 6] 156 ITD 646 (KOL), THE ABOVE POSITION HAS ELABORATELY BEEN CONSIDERED TO HOLD THE FIRST PROVISO TO SECTION 12A(2) TO BE RETROSPECTIVELY APPLICABLE. THE SAID DECISION HAS BEEN FOLLOWED IN SNDP YOGUM, (SUPRA). 28. IN VIEW OF THE ABOVE DISCUSSION AND RESPECTFULLY FO LLOWING THESE DECISIONS, IN THE ABSENCE OF ANY DECISION TO THE CONTRARY HAVI NG BEEN CITED BEFORE US BY THE DEPARTMENT, WE HOLD THAT THE FIRST PROVISO T O SECTION 12A(2) OF THE ACT IS APPLICABLE RETROSPECTIVELY . 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE AFO RESAID OBSERVATIONS OF THE TRIBUNAL AND ARE PERSUADED TO B E IN AGREEMENT WITH THE VIEW TAKEN THEREIN. WE THUS FINDING NO REA SON TO TAKE A DIFFERENT VIEW, THUS, ARE OF THE CONSIDERED VIEW TH AT THE FIRST PROVISO OF SEC. 12A(2) AS HAD BEEN MADE AVAILABLE ON THE ST ATUTE VIDE THE FINANCE (NO. 2) ACT. 2014, WITH EFFECT FROM 01.10 .2014, BEING A BENEFICIAL PROVISION INTENDED TO MITIGATE THE HARDS HIPS IN CASE OF GENUINE CHARITABLE INSTITUTIONS, THUS, FIND OURSELV ES TO BE IN PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 13 13 AGREEMENT WITH THE VIEW TAKEN BY THE TRIBUNAL IN TH E AFORESAID APPEALS. WE THUS, ARE OF THE CONSIDERED VIEW THAT T HE FIRST PROVISO OF SEC. 12A(2) WOULD BE APPLICABLE TO THE CASE OF THE PRESENT ASSESSEE. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) AND CONSEQUENTLY DELETE THE ADDITION OF RS.34,31,521/- SUSTAINED BY HER. THE GROUND OF APPEAL NO. 1 TO 3 RAISED BY THE ASSESSEE BEFORE US IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. 9. THE APPEAL OF THE ASSESSEE IS ALLOWED IN TERMS OF O UR AFORESAID OBSERVATIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 2 0.11.2017 SD/- SD/- (T.S. KAPOOR) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL ME MBER +) 20 . 11.2017 PS. ROHIT KUMAR )* )* )* )* ! !! ! % , % , % , % , -,% -,% -,% -,% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. #. ( ) / THE CIT(A)- 4. #. / CIT 5. ,/0 % , , DR, ITAT, AMRITSAR PUNJAB EDUCATION SOCIETY, MOGA VS. ITO ITA NO. 459/ASR/2016 AY: 2011-12 14 14 6. 01 2$ / GUARD FILE. ,% % //TRUE COPY// )* # )* # )* # )* # / BY ORDER, 3 33 3 / 4 4 4 4 (DY./ASSTT. REGISTRAR) , ITAT, AMRITSAR