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

ITA 461/RJT/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0114 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 24-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Charitable institution; Retrospective amendment; Benefit of exemption; Condonation of delay; Reassessment proceedings
• Section: 43B; 12A; 12AA; 147; 148; 12; 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. 461/RJT/2014 2008-09 ROGI KALYAN SAMITI AT COMMUNITY HEALTH CENTRE BABRA, DIST. AMRELI PAN: AABTR6133N INCOME TAX OFFICER WARD-2(4) AMRELI 2. 462/RJT/2014 2009-10 -DO- -DO- 3. 463/RJT/2014 2010-11 -DO- -DO- 4. 466/RJT/2014 2007-08 -DO- -DO- ASSESSEE BY : SHRI M.J. RANPURA, AR REVENUE BY : SHRI C.S. ANJARIA, SR.DR ! )*+,& / DATE OF HEARING 19/09/2016 -. +,& / DATE OF PRONOUNCEMENT 26/10/2016 #/ O R D E R PER PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER : THIS BUNCH OF FOUR APPEALS BY THE SAME ASSESSEE IN ITA NOS.461 TO 463/RJT/2014 AND ITA NO.466/RJT/2014 ARE DIRECTED A GAINST THE ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 2 - COMMON ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS)-IV RAJKOT (CIT(A) IN SHORT) DATED 30/05/2014 PERTAINING TO ASSESSMENT YEARS (AYS) 2008-09, 2009-10, 2010-11 & 2007-08 RESPECTIV ELY. SINCE COMMON ISSUES AND FACTS ARE INVOLVED IN ALL THESE A PPEALS, THESE ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR T HE 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 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 ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 3 - 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). 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 4,06,576/- ON THE ALLEGED GROUND THAT THE APPELLANT TRUST IS REGI STERED U/S.12A91) 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. 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 UN DER THE BOMBAY PUBLIC TRUST AND SOCIETIES REGISTRATION ACT, 1980. AS RE PORTED, IT WAS ESTABLISHED ON 30/12/2005 MAINLY TO IMPLEMENT THE G OVERNMENT POLICIES RELATING TO MEDICAL RELIEF TO GENERAL PUBLIC. AS PER GOVERNMENT RESOLUTION DATED 20/07/2005 AND 27/09/2005 OF THE H EALTH AND FAMILY WELFARE DEPARTMENT OF THE STATE GOVERNMENT, THE BOA RD OF TRUSTEES COMPRISES OF SENIOR MEDICAL OFFICERS, MLAS OF THE C ONSTITUENCY AND OTHERS. THE ASSESSEE-TRUST IS STATED TO HAVE BEEN ESTABLISHED TO UNDERTAKE ACTIVITIES LIKE :- ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 4 - (A) TO UNDERTAKE ALL ACTIVITIES TO IMPROVE AND EXPAND PATIENT RELATED QUALITY SERVICES AND WELFARE ACTIVITIES. (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 HEAL TH ACTIVITIES AND TO IMPROVE ITS QUALITIES SO AS TO RENDER MEDICAL RELIE F SERVICES TO GENERAL PUBLIC. ITS MAIN SOURCE OF INCOME IS IN THE FORM OF GRANT RECEIVED FROM THE GOVERNMENT OF GUJARAT FROM TIME TO TIME. ALL THE AMOUNTS RECEIVED AS GRANTS ARE UTILIZED BY ACCOUNT PAYEE CHEQUES O NLY. IT IS FURTHER CASE OF THE ASSESSEE THAT GRANTS SO RECEIVED FROM S TATE GOVERNMENT ARE WITH SPECIFIC DIRECTIONS AND THUS AMOUNT OF GRANTS CAN BE UTILIZED ONLY FOR THE PURPOSE FOR WHICH IT IS ISSUED AND ACCOUNTS OF THE TRUST ARE DULY AUDITED. SUCH GRANTS RELEASED TO THE ASSESSEE ARE FOR SPECIFIC PURPOSES OF CARRYING ON THE ACTIVITIES VIZ; MAKING THE HEALTH C ENTRES CLEAN AND FOLLOW- UP FACILITIES FOR MEDICAL RELIEF UNDER THE GOVERNME NT SCHEMES. THUS, GRANTS SO RECEIVED ARE NOT IN THE NATURE OF INCOME PER SE . NOTABLY, THE ASSESSEE-TRUST IS ACTUALLY REGISTERED WITH THE COMM ISSIONER OF INCOME TAX (CIT) UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') ON 25/08/2011 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 THE TRUSTEES WE RE NOT AWARE ABOUT ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 5 - GETTING THE TRUST REGISTERED WITH THE INCOME TAX DE PARTMENT WITHIN THE SPECIFIED LIMIT TO AVAIL THE BENEFIT OF SECTION 11 & 12 AND FOR THE EARLIER YEARS. THUS, THE OBLIGATIONS SPELT UNDER SECTION 1 2A/12AA COULD NOT BE DISCHARGED WITHIN THE TIME LIMIT. THE ASSESSING OF FICER (AO) OBSERVED THAT INCOME OF THE TRUST BEFORE CLAIMING DEDUCTION/ EXEMPTION UNDER SECTION 11 OF THE ACT EXCEEDS THE MAXIMUM TAX LIMIT AND IN THE ABSENCE OF REGISTRATION GRANTED FOR THE RELEVANT ASSESSMENT YEARS IN APPEALS, I.E. AYS 2007-08 TO 2010-11, THE ASSESSEE IS NOT ENTITLE D TO GET DEDUCTION UNDER SECTION 11 OF THE ACT. THE AO ACCORDINGLY DE NIED EXEMPTION AS AVAILABLE TO CHARITABLE TRUSTS UNDER SECTION 11 OF THE ACT WHICH ARE REGISTERED UNDER SECTION 12AA OF THE ACT TO THE ASS ESSEE FOR THE RESPECTIVE ASSESSMENT YEARS PRIOR TO ACTUAL REGISTR ATION BY INITIATING REASSESSMENT PROCEEDINGS UNDER SECTION 147/148 OF T HE 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 EARLI ER ASSESSMENT YEARS. HE ACCORDINGLY 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. ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 6 - 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 TH E BOMBAY PUBLIC TRUST AND SOCIETIES REGISTRATION ACT, 1860 WITH EFFECT FR OM 30/12/2005 TO IMPLEMENT THE GOVERNMENT POLICIES RELATING TO MEDIC AL RELIEF TO GENERAL PUBLIC, ETC. THE ASSESSEE-TRUST IS ALSO SUBSEQUENT LY REGISTERED WITH THE CIT UNDER SECTION 12AA ALBEIT WITH EFFECT FROM 01/0 4/2010 RELEVANT TO AY 2011-12. THE LD.AR POINTED OUT THAT IN VIEW OF SUBSEQUENT REGISTRATION, THE CIT HAS ACCEPTED THAT THE ASSESS EE-TRUST IS DOING CHARITABLE ACTIVITIES APPROVED 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 AND IS HAVING WID ESPREAD MANAGEMENT AND IS NOT A CLOSELY HELD ENTITY. THE CHARITABLE O BJECTS OF THE TRUST ARE APPROVED BY CHARITY COMMISSIONER AND THE ACCOUNT 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 AC T FOR THE EARLIER ASSESSMENT YEARS ALSO RIGHT FROM THE CREATION OF TH E TRUST AT PAR WITH AY 2011-12 WHERE THE REGISTRATION IS ACTUALLY GRANTED. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT ALTHOUGH THE ASSESSEE WAS G RANTED REGISTRATION ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 7 - UNDER SECTION 12AA OF THE ACT W.E.F. 01/04/2010, TH E AFORESAID REGISTRATION WAS IN PLACE AT THE TIME OF ISSUANCE N OTICE UNDER SECTION 147/148 OF THE ACT AND ACCORDINGLY EXEMPTION UNDER SECTION 11 & 12 CAN BE CLAIMED RETROSPECTIVELY FROM THE DATE OF GRANT O F REGISTRATION IN VIEW OF THE PROVISO TO SECTION 12A OF THE ACT INSERTED B Y 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 P ROVISION AND, THEREFORE, HE AMENDMENT IS REMEDIAL IN NATURE. THU S, SUCH BENEFIT IS AVAILABLE UNDER SECTION 11 & 12 RETROSPECTIVELY SIN CE THE INCEPTION OF THE TRUST AND CANNOT BE DENIED MERELY ON THE GROUND THA T REGISTRATION IS 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 SPECIFIC REGISTRATION UNDER SECTION 12AA OF THE ACT IS AVAIL ABLE. FOR THIS PROPOSITION, HE RELIED UPON THE CBDT CIRCULAR NO.1/ 2015 DATED 25/01/2015 AND THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI BHANUSHALI MITRA MANDAL TRUST VS. ITO REPORTED IN (2016) 68 TAXMANN.COM 250 (AHD.) AND SREE SREE RAMK RISHNA SAMITI VS. DCIT REPORTED IN (2015) 64 TAXMANN.COM 330 (ITA T 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 ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 8 - PROSPECTIVE DATE FOR THE ASSESSMENT YEAR RELEVANT T O AY 2011-12 ONWARDS AND THEREFORE BENEFIT OF THE REGISTRATION CANNOT BE EXTENDED 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 S TATE GOVERNMENT FOR PHILANTHROPIC PURPOSES TOWARDS MEDICAL RELIEF TO GE NERAL PUBLIC. IT IS NOT IN DISPUTE THAT THE OBJECTS OF THE ASSESSEE-TRUST A RE CHARITABLE IN NATURE WITHIN THE MEANING OF SECTION 2(25) OF THE ACT. IT IS PERTINENT TO NOTE THAT REGISTRATION UNDER SECTION 12AA OF THE ACT WAS GRAN TED ON 25/08/2011 TO THE ASSESSEE WITH EFFECT FROM 01/04/2010. ADMITTED LY, THE NOTICE UNDER SECTION 148 WAS ISSUED FOR IMPUGNED ASSESSMENT YEAR S IN QUESTION ON 27/03/2012 SUBSEQUENT TO THE REGISTRATION UNDER SEC TION 12AA OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT EVEN FOR THE EARLIER YEARS PRIOR TO REGISTRATION UNDER SECTION 12AA OF THE ACT, THE ASSESSEE-TRUST W AS CARRYING ON THE SAME CHARITABLE OBJECTS AS PER ITS TRUST-DEED. THE RECEIPTS HAVE BEEN APPARENTLY BROUGHT TO TAX BY THE REVENUE ONLY ON TH E PRETEXT THAT THE ASSESSEE-TRUST DOES NOT HOLD REGISTRATION UNDER SEC TION 12AA IN THE IMPUGNED ASSESSMENT YEARS 2007-08 TO 2010-11. THE ONLY QUESTION THAT ARISES FOR OUR ADJUDICATION IN THE PRESENT 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 PROVIS O TO SECTION 12A(2) IS ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 9 - RETROSPECTIVE IN NATURE OR OTHERWISE. WE FIND THA T THE ISSUE IS NO LONGER RES INTEGRA AND SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SREE SREE RAMKRISHNA SAMITI VS. DCIT (SUPRA). THE RELEVANT FINDING OF T HE TRIBUNAL IN THE AFORESAID 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 ASSES SEE IS ON JURISDICTION AND SANCTION FOR ISSUE OF NOTICE U/S 148 OF THE ACT AND NON SUPPLY OF REAS ONS RECORDED FOR REOPENING 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 S TATEMENT FROM THE BAR. ACCORDINGLY, THE GROUND NOS. 1 & 2 RAISED BY THE ASSESSEE ARE DISMIS SED 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 DI SPUTE. ALL THE DONORS HAD FILED CONFIRMATIONS BEFORE THE LEARNED AO AND THE GENUINI TY OF THESE DONATIONS ARE PROVED BEYOND DOUBT 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 T HERE IS ABSOLUTELY NO DISPUTE. IT IS PERTINENT TO NOTE THAT THE REGISTRATION U/S 12AA OF THE ACT W AS GRANTED TO THE ASSESSEE ON 29.10.2010 WITH EFFECT FROM 1.4.2010. ADMITTEDLY, THE NOTICE U /S 148 OF THE ACT WAS ISSUED BY THE DCIT, CIRCLE 2 SILIGURI FOR THE ASST YEARS 2003-04 TO 200 8- 09 ON 30.3.2010. EVEN FOR THE EARLIER YEARS, THE ASSESSEE SOCIETY WAS CARRYING ON THE SAM E CHARITABLE OBJECTS AS PER THE TRUST DEED ON WHICH FACT ALSO THERE IS ABSOLUTELY NO DISPUTE. THE RECEIPTS WERE BROUGHT TO TAX ONLY ON THE PRETEXT THAT THE ASSESSEE SOCIETY IS NOT HAVING REG ISTRATION U/S 12AA OF THE ACT IN THE ASST YEARS 2003-04 TO 2008-09. 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 WHICH 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 RELA TION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FO LLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE: ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 10 - PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED T O THE TRUST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVISIONS OF SECTIONS 11 A ND 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FROM PROPERTY HELD UNDER TRUST OF AN Y ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PRO CEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICER AS ON DATE OF SUCH REGISTRATION A ND THE OBJECTS AND ACTIVITIES OF SUCH TRUST OR INSTITUTION REMAIN THE SAME FOR SUCH PRECE DING 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 AN Y ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR ONLY FOR NON-REGISTRATION OF SUCH TRUST OR INSTITUTION FOR 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 REFUS ED REGISTRATION OR THE REGISTRATION GRANTED TO IT WAS CANCELLED AT ANY TIME UNDER SECTI ON 12AA.' 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 GRA NTING REGISTRATION U/S 12AA OF THE ACT ON 29.10.2010 WITH EFFECT FROM 1.4.2010 AS REASSESSMEN T PROCEEDINGS GOT COMMENCED PURSUANT TO ISSUANCE OF NOTICE U/S 148 ON 30.3.2010 AS STATE D SUPRA. ADMITTEDLY, THE OBJECTS AND ACTIVITIES OF THE TRUST HAD REMAINED THE SAME IN PR ECEDING ASSESSMENT YEARS ALSO I.E ASST YEARS 2003-04 TO 2008-09. THOUGH THIS FIRST PROVISO TO SECTION 12A(2) TALKS ABOUT PENDENCY OF ASSESSMENT PROCEEDINGS, IT IS RELEVANT TO GET IN TO THE DEFINITION OF THE TERM 'ASSESSMENT' IN SECTION 2(8) OF THE ACT, WHEREIN IT IS DEFINED AS ' ASSESSMENT INCLUDES REASSESSMENT'. HENCE EVEN REASSESSMENT PROCEEDINGS THAT WERE PENDING WOU LD 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 IN STITUTION. READING THIS PROVISO WITH THE FIRST PROVISO TO SECTION 12A(2) AND APPLYING THE RULE OF HARMONIOUS CONSTRUCTION, IT COULD SAFELY BE CONCLUDED THAT THE LEGISLATURE IN ITS WISDOM HAD ONLY BROUGHT THIS PROVISO TO PREVENT GENUINE HARDSHIP THAT COULD BE CAUSED ON THE ASSESS EE DUE TO NON-REGISTRATION U/S 12AA OF THE ACT AND ACCORDINGLY IN OUR OPINION, THE PROVISO S TO SECTION 12A(2) OF THE ACT IS TO BE CONSTRUED 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 INS TITUTION HAD BEEN REFUSED REGISTRATION EARLIER OR THE REGISTRATION GRANTED EARLIER IS CANCELLED BY THE COMMISSIONER U/S 12AA OF THE ACT. THIS ALSO GOES TO PROVE THAT THE FIRST AND SECOND PROVIS O SHALL BE MADE APPLICABLE FOR THE TRUSTS FOR EARLIER ASSESSMENT YEARS ALSO WHO HAD NOT APPLIED F OR REGISTRATION U/S 12AA OF THE ACT 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 THE OBJECTS OF THE TRUST. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION O F THE HON'BLE APEX COURT RENDERED IN THE CASE OF ASSTT. CIT V.SURAT CITY GYMKHANA [2008] 300 ITR 214/170 TAXMAN 612 . DRAWING ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 11 - 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 TH E YEAR IN WHICH REGISTRATION U/S 12AA WAS GRANTED, THE EXISTENCE OF TRUST FOR CHARITABLE PURP OSES IN THE EARLIER YEARS CANNOT BE DOUBTED WITH. EVEN OTHERWISE, NO ADVERSE FINDINGS WERE GIVE N BY THE REVENUE WITH REGARD TO THE EXISTENCE OF THE ASSESSEE SOCIETY FOR CHARITABLE PU RPOSES 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 DATE D 21.1.2015 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 T O ABSENCE OF REGISTRATION, TAX LIABILITY IS FASTENED EVEN THOUGH THEY MAY OTHERWIS E BE ELIGIBLE FOR EXEMPTION AND FULFILL OTHER SUBSTANTIVE CONDITIONS. HOWEVER, THE POWER OF CONDONATION OF DELAY IN SEEKING 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 A FFECT GENUINE CHARITABLE TRUSTS AND SOCIETIES CARRYING ON GENUINE CHARITABLE OBJECTS IN THE EARLI ER YEARS AND SUBSTANTIVE CONDITIONS STIPULATED IN SECTION 11 TO 13 HAVE BEEN DULY FULFI LLED BY THE SAID TRUST. THE BENEFIT OF RETROSPECTIVE APPLICATION ALONE COULD BE THE INTENT ION OF THE LEGISLATURE AND THIS POINT IS FURTHER STRENGTHENED BY THE EXPLANATORY NOTES TO FI NANCE (NO. 2) ACT, 2014 ISSUED BY THE CENTRAL BOARD OF DIRECT 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 ASSESS MENT YEARS FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE LEARNED AO, UNLE SS THE REGISTRATION GRANTED EARLIER IS CANCELLED OR REFUSED FOR SPECIFIC REASONS. THE STAT UTE ALSO GOES ON TO PROVIDE THAT NO ACTION U/S 147 COULD BE TAKEN BY THE AO MERELY FOR NON-REG ISTRATION 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 TH E ACT, WE WOULD LIKE TO STATE THAT INCOME DEFINITION IS AN INCLUSIVE DEFINITION. AN INCLUSIVE DEFINITION EXTENDS THE SPECIFIC MEANING GIVEN IN THE STATED ITEMS BY THE GENERAL MEANING AS COMMO NLY UNDERSTOOD BY THE SAID EXPRESSION WHICH IS DEFINED IN A STATUTE. THE WORD INCOME AS I S COMMONLY UNDERSTOOD DOES NOT INCLUDE ANY DONATION SPECIFICALLY MEANT FOR UTILIZATION FOR ACQUIRING, CONSTRUCTING A CAPITAL ASSET, AS IS THE CASE HERE. FURTHER SECTION 2(24) HAD UNDERGO NE 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 TO GET INTO THE MEMORANDUM EXPLAINING THE PROVISIONS IN FINANCE ACT 1972 REPORTED ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 12 - IN 83 ITR (ST.) 173, WHEREIN PARAGRAPHS 24 AND 25 C LEARLY DEFINE THE SCOPE OF THE AMENDMENT WHEREIN IN PARAGRAPH 25(I) , THE CONCLUDING SENTENC E 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 REG ARDED AS INCOME.' 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 CONTRIBU TIONS/DONATIONS RECEIVED WITH A SPECIFIC DIRECTION THAT THEY WILL FORM PART OF THE CORPUS OF THE TRUST FOR UTILIZATION IN ACQUISITION/CONSTRUCTION OF A CAPITAL ASSET. THUS W HAT IS NOT INCOME AS PER THE DEFINITION OF THE 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 D ISTINGUISH 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 EXEMPTION PROVISION GRANTING EXEMPTION FROM TAXATION TO RECEIPTS WHICH ARE LIABLE TO TAXATION BUT FOR THE PROVISION 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 PROV ISION WORKABLE, A PROVISO WHICH SUPPLIES AN OBVIOUS OMISSION IN THE SECTION AND IS REQUIRED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONABLE INTERPRETATION, REQUIRES T O BE TREATED AS RETROSPECTIVE IN OPERATION, SO THAT A REASONABLE INTERPRETATION CAN BE GIVEN TO THE SECTION AS A WHOLE AND ACCORDINGLY 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 E FFECT 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 APPLIC ABILITY 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 SECTION 43B. WITHOUT THE FIRST PROVISO, EXPLANATION 2 WOULD NOT OBVIATE THE HARDSH IP OR THE UNINTENDED CONSEQUENCES OF SECTION 43B. THE PROVISO SUPPLIES AN OBVIOUS OMI SSION. BUT FOR THIS PROVISO THE AMBIT OF SECTION 43B BECOME UNDULY WIDE BRINGING WITHIN I TS SCOPE THOSE PAYMENTS, WHICH WERE NOT INTENDED TO BE PROHIBITED FROM THE CATEGOR Y 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 APPLIED WHILE CONSTRUING A STATUTE. LITERAL CONSTRUCTION SHOULD BE AVOIDED IF IT DEFEATS THE MANIFEST OBJECT AND PURPOSE OF THE ACT. ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 13 - 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 CURAT IVE OR MERELY DECLARATORY OF THE PREVIOUS LAW, RETROSPECTIVE OPERATION IS GENERALLY INTENDED' . IN FACT THE AMENDMENT 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 RETRO SPECTIVE 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 AFORESA ID PROVISION 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 TH E PROVISION WORKABLE, REQUIRES TO BE TREATED WITH RETROSPECTIVE OPERATION SO THAT REASON ABLE DEDUCTION CAN BE GIVEN TO THE SECTION 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 RETR OSPECTIVE CONSTRUCTION IS DIFFERENT. IF A LEGISLATION CONFERS A BENEFIT ON SOME PERSONS BUT W ITHOUT INFLICTING A CORRESPONDING DETRIMENT ON SOME OTHER PERSON OR ON THE PUBLIC GEN ERALLY, AND WHERE TO CONFER SUCH BENEFIT APPEARS TO HAVE BEEN THE LEGISLATORS OBJECT , THEN THE PRESUMPTION WOULD BE THAT SUCH A LEGISLATION, GIVING IT A PURPOSIVE CONSTRUCT ION, WOULD WARRANT IT TO BE GIVEN A RETROSPECTIVE EFFECT. THIS EXACTLY IS THE JUSTIFICA TION TO TREAT PROCEDURAL PROVISIONS AS RETROSPECTIVE. IN GOVERNMENT OF INDIA V. INDIAN TOB ACCO ASSOCIATION REPORTED IN (2005) 7 SCC 396, THE DOCTRINE OF FAIRNESS WAS HELD TO BE RELEVANT FACTOR TO CONSTRUE A STATUTE CONFERRING A BENEFIT, IN THE CONTEXT OF IT TO BE GI VEN A RETROSPECTIVE OPERATION. THE SAME DOCTRINE OF FAIRNESS, TO HOLD THAT A STATUTE WAS RE TROSPECTIVE IN NATURE, WAS APPLIED IN THE CASE OFVIJAY V. STATE OF MAHARASHTRA REPORTED I N (2006) 6 SCC 289. IT WAS HELD THAT WHERE A LAW IS ENACTED FOR THE BENEFIT OF COMMUNITY 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 WHE RE THE PRESUMPTION ATTACHES TOWARDS PROSPECTIVITY. IN THE INSTANT CASE, THE PRO VISO ADDED TO SECTION 113 OF THE ACT IS NOT BENEFICIAL TO THE ASSESSEE. ON THE CONTRARY, IT IS A PROVISION WHICH IS ONEROUS TO THE ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 14 - ASSESSEE. THEREFORE, IN A CASE LIKE THIS, WE HAVE T O PROCEED WITH THE NORMAL RULE OF PRESUMPTION AGAINST RETROSPECTIVE OPERATION. THUS, THE RULE AGAINST RETROSPECTIVE OPERATION IS A FUNDAMENTAL RULE OF LAW THAT NO STAT UTE SHALL BE CONSTRUED TO HAVE A RETROSPECTIVE OPERATION UNLESS SUCH A CONSTRUCTION APPEARS VERY CLEARLY IN THE TERMS OF THE ACT OR ARISES BY NECESSARY AND DISTINCT IMPLICA TION. DOGMATICALLY FRAMED, THE RULE IS NO MORE THAN A PRESUMPTION, AND THUS COULD BE DISPL ACED BY OUT WEIGHING FACTORS.' 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 COUNTER ACT THE EFFECT OF TRANSFER OF ASSETS SO FAR AS COMPUTATION OF INCOME OF THE ASSESSEE IS CON CERNED, THEN BEARING THAT PURPOSE IN MIND, WE SHOULD FIND OUT THE INTENTION FROM THE LAN GUAGE USED BY THE LEGISLATURE AND IF STRICT LITERAL CONSTRUCTION LEADS TO AN ABSURD RESU LT, I.E., RESULT NOT INTENDED TO BE SUBSERVED 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 PREFERRED TO THE STRICT LITE RAL 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 CO NSTRUCTION RESULTS IN EQUITY RATHER THAN IN INJUSTICE, THEN SUCH CONSTRUCTION SHOULD BE PREFERR ED TO THE LITERAL CONSTRUCTION. IT IS ONLY ELEMENTARY THAT A STATUTORY PROVISION IS TO BE INTE RPRETED UT RES MAGIS VALEAT QUAM PEREAT, I.E TO MAKE IT WORKABLE RATHER THAN REDUNDANT. APPL YING THIS LEGAL MAXIM, IT WOULD BE JUST AND FAIR TO HOLD THAT THE AMENDMENT IN SECTION 12A IS BROUGHT IN THE STATUTE TO CONFER BENEFIT OF EXEMPTION U/S 11 OF THE ACT ON THE GENUINE TRUST S WHICH HAD NOT CHANGED ITS OBJECTIVES AND HAD CARRIED ON THE SAME CHARITABLE OBJECTS IN THE P AST AS WELL AS IN THE CURRENT YEAR BASED ON WHICH THE REGISTRATION U/S 12AA IS GRANTED BY THE D IT(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 O NLY BE TAXED IN THE STATUS OF AN AOP DOES NOT REQUIRE ANY ADJUDICATION AS WE HOLD THAT THE AS SESSEE SOCIETY TO BE CONSTRUED AS A PUBLIC CHARITABLE TRUST AND ELIGIBLE TO CLAIM EXEMPTION U/ S 11 OF THE ACT FOR THE EARLIER ASSESSMENT YEARS, MORE ESPECIALLY, ASST YEARS 2003-04 TO 2008- 09 , THE DONATIONS RECEIVED FROM VARIOUS DONORS FOR CONSTRUCTION OF AN OLD AGE HOME WOULD TA KE THE CHARACTER OF CORPUS DONATIONS AS THEY ARE MEANT FOR SPECIFIC PURPOSES AND ACCORDINGL Y 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 CONSTRUCTION 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 PROCEEDINGS. HENCE IN ANY CASE, A REC EIPT WHICH IS BY BIRTH, CAPITAL IN NATURE, CANNOT CHANGE ITS CHARACTER MERELY FOR WANT OF REGI STRATION OF SOCIETY U/S 12AA OF THE ACT. IT IS NOT THE CASE OF THE REVENUE THAT THE DONATIONS R ECEIVED ARE MEANT FOR GENERAL FUNCTIONING OF THE CHARITABLE OBJECTS OF THE SOCIETY, IN WHICH EVE NT, THE DONATIONS RECEIVED THEREON WOULD TAKE THE CHARACTER OF REVENUE RECEIPTS REQUIRING TO BE CREDITED IN THE INCOME AND EXPENDITURE ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 15 - ACCOUNT FOR UTILIZATION TOWARDS CHARITABLE OBJECTS THEREON. HENCE WE HOLD THAT IN ANY CASE, THE DONATIONS RECEIVED BY THE ASSESSEE SOCIETY CANN OT BE 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 ASSESSE E SOCIETY ON 29.10.2010 WITH EFFECT FROM 1.4.2010) FOR THE RELEVANT ASSESSMENT YEARS AND ON NO OTHER GROUND, THE BENEFIT OF CHANGE IN LAW AS ABOVE BY FINANCE ACT 2014 SHOULD BE AVAILABL E AND FOR ALL THE YEARS, THE BENEFIT OF EXEMPTION SHOULD BE AVAILABLE ON THE DATE OF REGIST RATION AS ALL THE ASSESSMENTS WERE PENDING AS SHOWN ABOVE. IN THIS CONNECTION, IT REQUIRES MEN TION SPECIFICALLY THAT ALL THE RECEIPTS OF THE DONATION WERE PROVED ON ENQUIRY TO HAVE BEEN RECEIV ED FROM THE CLAIMED DONORS AND UTILIZED FOR THE SPECIFIC PURPOSE (CONSTRUCTION OF OLD AGE H OME) 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 CONSTRUED AS RETROSPECTIVE IN OPERATION. 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 THE ACT, THE ADJUDICATION OF GROUND NO. 9 BECOMES INFRUCTUOUS. THE EXPENDITURE INCURRED BY THE ASSESSEE SOCIETY WOULD ANYWAY BE TREATED AS APPLICATION OF INCOME FOR CHARITABLE OBJ ECTS AS THE INCURRENCE OF EXPENDITURE FOR CHARITABLE OBJECTS HAS NOT BEEN DISPUTED BY THE REV ENUE IN ANY OF THE ASSESSMENT YEARS UNDER APPEAL. HENCE THE GROUND NO. 9 OF THE ASSESSEE IS D ISMISSED 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 TH E AFORESAID DECISIONS OF THE COORDINATE BENCH OF THE TRIBUNAL AND FOR THE PA RITY OF REASONING, WE ALLOW THE BENEFIT OF REGISTRATION UNDER SECTION 12 AA OF THE ACT WITH RETROSPECTIVE EFFECT. THUS, THE ASSESSEE SHALL BE ENTITLED TO BENEFIT OF REGISTRATION UNDER SECTION 12AA OF THE ACT FOR ALL THE IMPUGNED ASSESSMENT YEARS IN APPEALS. IN VIEW OF THE AFOR ESAID OBSERVATIONS, WE ARE NOT INCLINED TO DEAL WITH GROUND RELATING TO E LIGIBILITY OF EXEMPTION ITA NOS.461 TO 463/R JT/2014 AND ITA NO.466/RJT/2014 ROGI KALYAN SAMITI VS. ITO AYS 2008-09 TO 2010-11 & 2007-08 RESPECTIVELY - 16 - CLAIMED UNDER SECTION 10 (23C) OF THE ACT. RESULTA NTLY, 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. THIS ORDER PRONOUNCED IN OPEN COURT ON 2 6 / 1 0/2016 SD/- SD /- .. ! '#$% () (#&) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 26/ 10 /2016 ..),.)../ T.C. NAIR, SR. PS / 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 .. 24.10.16 (DICTATION-PAD 2 0- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 24.10.16 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. 27.10.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.10.16 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