Appeal details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 5302 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 10 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
02-06-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Assessment Year
2007-2008
Appeal Filed On
05-07-2013
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NOS. 651/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08 . M/S. SHYAM MANDIR COMMITTEE, KHATUSHYAM JI, DISTRICT SIKAR. CUKE VS. THE ACIT, CIRCLE, SIKAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAETS 1286 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI MAHENDRA GARGIEYA (ADVOCATE ) JKTLO DH VKSJ LS@ REVENUE BY : SHRI S.K. JAIN (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05.05.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 2/06/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. CIT (A)-III, JAIPUR DATED 09.04.2013. THE ASSESSEE HAS FILED THE PRESEN T APPEAL ON FOLLOWING GROUNDS :- 1. THE IMPUGNED ADDITIONS AND DISALLOWANCES MADE IN THE ORDER UNDER SECTION 143(3) READ WITH 147 OF THE ACT DATED 9.4.2013 ARE BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT O F JURISDICTION AND VARIOUS OTHER REASONS AND HENCE THE SAME MAY KI NDLY BE DELETED. 2.1 RS. 2,08,00,000/-: THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE TAXING OF THE I NCOME BY INVOKING SEC. 2(24) OF THE ACT WHICH BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, THE SUBJECTED RECEIPT CLAIMED AS NON-TAXABLE KINDLY BE HELD SO. 2 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT 2.2. THE LD. CIT (A) FURTHER ERRED IN LAW AS WELL A S ON THE FACTS OF THE CASE IN NOT APPRECIATING THAT THE SUBJECTED RECEIPT WAS A CAPITAL RECEIPT AND/OR NOT BEING IN THE NATURE OF INCOME, W AS NOT TAXABLE HENCE, THE ADDITION SO MADE BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN F ULL. 2.3. THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE TAXING THE INCOME WHILE INVOKING SEC . 115BBC OF THE ACT WHICH BEING CONTRARY TO THE PROVISIONS OF L AW AND FACTS ON THE SUBJECTED RECEIPT, THE PROVISION KINDLY BE H ELD NON- APPLICABLE. 2. BEFORE WE DECIDE THE ISSUE RELATING TO GROUND NOS. 1,2.1, 2.2 AND 2.3, IT WOULD BE RELEVANT TO MENTION THE BRIEF FACTS AS UNDER. 2.1. ON 04.03.1986 THE DEED OF APPELLANT TRUST WAS REGISTERED AND THE TRUST HAS STARTED DOING ITS ACTIVITIES. THE PRIMARY ACTIVITY OF THE TRUST IS TO LOOK AFTER, MANAGE AND ADMINISTER THE AFFAIRS OF THE FAMOUS TEMPLE OF LORD SHYAMJI AT KHATUSHYAMJI. THE KHATUSHYAMJI TEMPLE IS A HISTORICAL TEMPLE AND RELATE BACK TO THE AGE OF PANDAVAS. THE TEMPLE IS ASSOCIATED WITH THE GREAT WARRIOR AND DONOR BARBAREEK WHO WAS BLESSED BY LORD KRISHNA AND THEREAFTER INCA RNATED AS LORD SHYAM. THE TEMPLE IS FAVOUS AND LACS OF PEOPLE VISIT THE TEMPL E ON FALGUN MAHOTSAVA, EKADASI, SHYAM JAYANTI ORGANIZED BY THE APPELLANT TRUST. AS IS PREVALANT IN ALL TEMPLES, VARIOUS GULAKS/HUNDIES WERE/ ARE BEING KEPT FOR CO LLECTING THE DONATIONS ETC. THE TRUST AFTER GETTING ITSELF FORMALLY CONSTITUTED APP LIED FOR GRANT OF EXEMPTION UNDER SECTION 12AA VIDE THEIR APPLICATION DATED 16.03.200 9. HOWEVER, VIDE ORDER DATED 28.01.2010 PASSED BY THE TRIBUNAL IN ITA NO. 789/JP /2009 HAS DIRECTED TO GRANT REGISTRATION TO THE APPELLANT TRUST WITH EFFECT FRO M 1.4.2008. THE PRESENT DISPUTE PERTAINS TO THE ASSESSMENT YEAR 2007-08 I.E. PRIOR TO THE GRANT OF REGISTRATION PURSUANT TO THE ORDER PASSED BY THIS TRIBUNAL. AT T HIS STAGE IT IS RELEVANT TO NOTE THAT 3 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 28.0 1.2008 IN RESPONSE TO NOTICE UNDER SECTION 148. HOWEVER, THEREAFTER THE RETURN W AS PROCESSED ON 12.03.2010 AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT ON 26.12.2011 WHEREIN THE AO HAS HELD AS UNDER :- 5. THE REPLIES OF THE ASSESSEE HAVE BEEN DULY CON SIDERED. IT IS CLEAR FROM THE TWO SUBMISSIONS DATED 14.12.2011 AND DATED 22.12.2011 THAT THE ASSESSEE HAS MADE CONTRADICTORY CLAIMS IN RESPE CT OF THE RECEIPTS OF RS. 2,08,00,000/-. WHILE IN THE REPLY DATED 14.1 2.2011 IT HAS CLAIMED THAT THE SAID RECEIPTS ARE CAPITAL RECEIPTS AND HENCE CAN NOT BE TREATED AS INCOME, IN THE REPLY DATED 22.12.2011 IT HAS CLAIMED THAT THE SAME HAD BEEN RECEIVED FOR THE SPECIFIC PURPOSE OF RENOVATION AND HENCE CANNOT BE TREATED AS INCOME. AS REGARDS THE A SSESSEES CLAIM THAT THE RECEIPTS OF RS. 2,08,00,000/- ARE CAPITAL IN NATURE, IT IS SEEN THAT SUCH CLAIM IS EXCLUSIVELY BASED ON THE CONTENT ION THAT THE ASSESSEE TRUST NOT BEING REGISTERED U/S 12A DURING THE YEAR UNDER CONSIDERATION, WAS HAVING THE STATUS OF AOP AND ACC ORDINGLY THE SAID RECEIPTS BORE THE CHARACTER OF CAPITAL RECEIPT. THI S CONTENTION OF THE ASSESSEE IS WHOLLY UNACCEPTABLE IN VIEW OF THE FACT THAT THERE BEING NO SEPARATE STATUS OF AN UNREGISTERED TRUST, THE ASSES SEE HAS BEEN TREATED UNDER THE RESIDUARY STATUS OF AN AOP. THIS FACT BY ITSELF DOES NOT TAKE AWAY THE BASIC IDENTITY AND CHARACTER OF THE ASSESS EE WHICH IS THAT OF A TRUST. IN THE INSTANT CASE AND FOR PURPOSE OF RESOL VING THE QUARREL AT HAND, IT WOULD BE WORTHWHILE TO REFER TO THE PROVIS IONS OF SECTION 2(24)(IIA) WHICH PROVIDES AS UNDER :- INCOME INCLUDES VOLUNTARY CONTRIBUTION RECEIVED BY A TRUST CREATED WHOLLY OR PARTLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY A N INSTITUTION ESTABLISHED WHOLLY OR PARTLY FOR SUCH PURPOSES (OR BY AN ASSOCIATION AND INSTITUTION REFERRED TO IN CLAUSE ( 21) OR CLAUSE (23) OR BY A FUND OR TRUST OR INSTITUTION REFERRED TO IN SUB-CLAUSE (IV) OR SUB-CLAUSE (V). 3. FEELING AGGRIEVED BY THE ORDER PASSED BY THE AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A). THE LD. CIT (A) HAS HELD AS UND ER :- IN THESE GROUNDS OF THE APPEAL THE AO HELD THAT T HE ASSESSEE HAS MADE CONTRADICTORY CLAIMS IN RESPECT OF THE RECEIPT S OF RS. 2,08,00,000/- BECAUSE IN REPLY DATED 14.12.2011 IT IS CLAIMED THAT THE SAID RECEIPTS ARE CAPITAL RECEIPTS AND CAN NOT BE T REATED AS INCOME, 4 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT WHEREAS REPLY IN DATED 22.12.2011 IT IS CLAIMED THA T THE SAME HAD BEEN RECEIVED FOR THE SPECIFIC PUROSE OF RENOVATION AND HENCE CAN NOT BE TREATED AS INCOME. THAT ASSESSEES CLAIM THAT S UCH RECEIPTS OF RS. 2,08,00,000/- ARE OF CAPITAL NATURE, IS EXCLUSIVELY BASED ON THE CONTENTION THAT THE ASSESSEE TRUST IS NOT REGISTERE D U/S 12A AND WAS HAVING THE STATUS OF AOP. HOWEVER, THERE IS NO SEPA RATE STATUS OF AN UNREGISTERED TRUST. HENCE THE RESIDUARY STATUS OF A N AOP IS ADOPTED BUT THIS DOES NOT TAKE AWAY THE BASIC IDENTITY AND CHARACTER OF THE ASSESSEE WHICH IS THAT OF A TRUST. THAT ASSESSEE IS COVERED U/S 2(24) BECAUSE THE RECEIPTS ARE ADMITTEDLY VOLUNTARY CONTR IBUTIONS, THEREFORE SEC. 2(24)(IIA) IS SQUARELY APPLICABLE. THAT THE DO NATIONS WERE RECEIVED BY WAY OF DONATION BOX AND HENCE WERE ANONYMOUS. AL THOUGH THE ASSESSEE TRUST CLAIMED THAT A REGISTER WAS ALSO KEP T FOR RECORDING THE COLLECTIONS, BUT WAS NOT PRODUCED FOR VERIFICATION. DONATION RECEIPTS ISSUED IF ANY WERE ALSO NOT PRODUCED. HENCE SECTION 11BBC IS CLEARLY ATTRACTED. THE CASE LAWS CITED BY THE A/R FOR THE A PPELLANT ARE FOUND DISTINGUISHABLE ON FACTS. HENCE, RECEIPTS OF RS 2,0 8,00,000/- WAS HELD TO BE THE INCOME OF THE ASSESSEE TRUST AS PROVIDED U/S 2(24) AND SEC. 115BBC. 4. NOW THE ASSESSEE IS BEFORE US. THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS AND HAS NOT PRESSED GROUND NO. 1. ON 4 TH MAY, 2016 THE ASSESSEE HAS MOVED AN APPLICATION FOR ADMITTING THE ADDITIONAL GROUND OF APPEAL. THE ADDITIONAL GROUND OF APPEAL IS AS UNDER :- THE VERY ACTION TAKEN U/S 147 R/W 148 IS BAD IN L AW WITHOUT JURISDICTION AND BEING VOID AB-INITIO, THE SAME KIN DLY BE QUASHED. CONSEQUENTLY THE IMPUGNED ASSESSMENT FRAMED U/S 143 (3)/148 DATED 09.04.2013 ALSO KINDLY BE QUASHED. THE APPELLANT BE HELD ENTITLED TO THE BENEFITS OF S EC. 11 & 12 AND ITS TOTAL INCOME IS EXEMPTED IN VIEW OF SEC. 12A(2) OF THE ACT WHICH IS HAVING A RETROSPECTIVE BENEFIT. 4.1 THE LD. D/R FOR THE REVENUE HAS SUBMITTED THAT THIS GROUND CANNOT BE TAKEN INTO CONSIDERATION AT THIS STAGE. HOWEVER, CONSIDER ING THE NATURE OF GROUND, THE GROUND BEING TECHNICAL AND LEGAL IN NATURE AND IT G OES TO THE ROOT OF THE MATTER, THE ASSESSEES ADDITIONAL GROUND IS ADMITTED. 5 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT 5. NOW WE WILL DEAL WITH THE ADDITIONAL GROUND HERE IN ABOVE BEFORE WE DEAL WITH THE OTHER GROUNDS. 5.1. FOR THE PURPOSE OF ADJUDICATING THE ADDITIONAL GROUND, IT IS NECESSARY TO REPRODUCE SECTION 12A OF THE IT ACT, WHICH PROVIDES AS UNDER :- 12A. CONDITIONS FOR APPLICABILITY OF SECTIONS 11 & 12. (1) THE PROVISIONS OF SECTION 11 AND SECTION 12 SHALL N OT APPLY IN RELATION TO THE INCOME OF ANY TRUST OR INSTITUTION UNLESS THE FOLLOWING CONDITIONS ARE FULFILLED, NAMELY :- (A) THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APP LICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IN THE PRE SCRIBED FORM AND IN THE PRESCRIBED MANNER TO THE COMMISSIONER BEFORE TH E 1 ST DAY OF JULY, 1973, OR BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF THE CREATION OF THE TRUST OR THE ESTABLISHM ENT OF THE INSTITUTION, WHICHEVER IS LATER AND SUCH TRUST OR I NSTITUTION IS REGISTERED UNDER SECTION 12AA. PROVIDED THAT WHERE AN APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION IS MADE AFTER THE EXPIRY OF THE PERIOD AFORESAID, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN REL ATION TO THE INCOME OF SUCH TRUST OR INSTITUTION, - (I) FROM THE DATE OF THE CREATION OF THE TRUST OR THE E STABLISHMENT OF THE INSTITUTION IF THE COMMISSIONER IS, FOR REAS ONS TO BE RECORDED IN WRITING, SATISFIED THAT THE PERSON IN R ECEIPT OF THE INCOME WAS PREVENTED FROM MAKING THE APPLICATION BE FORE THE EXPIRY OF THE PERIOD AFORESAID FOR SUFFICIENT REASO NS; (II) FROM THE 1 ST DAY OF THE FINANCIAL YEAR IN WHICH THE APPLICATION IS MADE, IF THE COMMISSIONER IS NOT SO SATISFIED. PROVIDED FURTHER THAT THE PROVISIONS OF THIS CLAUSE SHALL NOT APPLY IN RELATION TO ANY APPLICATION MADE ON OR AFTER THE 1 ST DAY OF JUNE, 2007. (AA) THE PERSON IN RECEIPT OF THE INCOME HAS MADE A N APPLICATION FOR REGISTRATION OF THE TRUST OR INSTITUTION ON OR AFTE R THE 1 ST DAY OF JUNE, 2007 IN THE PRESCRIBED FORM AND MANNER TO THE COMMISSIONER AND SUCH TRUST OR INSTITUTION IS REGIS TERED UNDER SECTION 12AA. (B) WHERE THE TOTAL INCOME OF THE TRUST OR INSTITUTION AS COMPUTED UNDER THIS ACT WITHOUT GIVING EFFECT TO THE PROVISI ONS OF SECTION 11 6 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT AND SECTION 12 EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX IN ANY PREVIOUS YEAR, THE ACCOUNTS OF THE TRUST OR INSTITUTION FOR THAT YEAR HAVE BEEN AUDITE D BY AN ACCOUNTANT AS DEFINED IN THE EXPLANATION BELOW SUB- SECTION (2) OF SECTION 288 AND THE PERSON IN RECEIPT OF THE INCOME FURNISHES ALONG WITH THE RETURN OF INCOME FOR THE RELEVANT ASSESSME NT YEAR THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SI GNED AND VERIFIED BY SUCH ACCOUNTANT AND SETTING FORTH SUCH PARTICULA RS AS MAY BE PRESCRIBED. (2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SH ALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE. THE FINANCE ACT NO. 2 OF 2014 HAS INSERTED THE PROV ISO TO SUB-SECTION (2) OF SECTION 12A WITH EFFECT FROM 1.10.2014. WE ARE REPRODUCING HEREIN BELOW SUB-SECTION (2) OF SECTION 12A FIRST PROVISO, SECOND PROVISO AND THIRD PROVISO FOR THE SAKE OF CLARITY. [PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED TO THE TR UST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVISION S OF SECTIONS 11 AND 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FRO M PROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YEAR PRECEDING THE AF ORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS A RE PENDING BEFORE THE ASSESSING OFFICER AS ON THE 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 SHALL BE TAKEN BY THE ASSESSING OFFICER IN CASE OF SUCH TRUST OR INST ITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR ONLY FOR NON REGISTRATION OF SUCH TRUST OR INSTITUTION FOR THE S AID ASSESSMENT YEAR: PROVIDED ALSO THAT PROVISIONS CONTAINED IN THE FIRST AND SECOND PROVISO SHALL NOT APPLY IN CASE OF ANY TRUST OR INS TITUTION WHICH WAS REFUSED REGISTRATION OR THE REGISTRATION GRANTED TO IT WAS CANCELLED AT ANY TIME UNDER SECTION 12AA.] A BARE READING OF THE PROVISO CLEARLY PROVIDES THAT IF AT THE TIME OF GRANT OF REGISTRATION UNDER SECTION 12A THE ASSESSMENT PROCE EDINGS ARE PENDING BEFORE THE 7 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT AO AND THE OBJECT AND ACTIVITIES OF THE TRUST REMAI N THE SAME FOR SUCH PRECEDING ASSESSMENT YEARS, THEN THE BENEFIT OF REGISTRATION FOR SECTIONS 11 & 12 ARE REQUIRED TO BE GIVEN TO THE TRUST ON THE INCOME DERIVED FROM THE PROPERTY HELD UNDER THE TRUST. IN THE PRESENT CASE AS MENTIONED HEREIN ABO VE, THE APPELLANT HAS FILED APPLICATION FOR GRANT OF REGISTRATION 16.03.2009 AN D THE REGISTRATION WAS DIRECTED TO BE GRANTED BY THE ORDER OF THE TRIBUNAL WITH EFFECT FROM 1.4.2008. THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) ON 13.3.2 010 .THE ASSESSMENT ORDER WAS PASSED ON 26.12.2011 UNDER SECTION 143(3) READ WITH SECTION 147 OF THE IT ACT AND. THUS WHEN THE ORDER WAS PASSED BY THE TRIBUNAL ON 28.01.2010 THE ASSESSMENT PROCEEDINGS WERE PENDING BEFORE THE AO. THEREFORE, THE BENEFIT OF REGISTRATION IS REQUIRED TO BE GIVEN FOR THE PRECED ING ASSESSMENT YEARS I.E. 2007-08. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE JU DGMENT OF ITAT IN ITA NO. 503 TO 506 & 569/COCH/2014 IN THE MATTER OF SNDP YOGAM VS. THE ADIT (EXEMPTION) WHEREIN IN PARA 7, 7.1 AND 7.2 IT HAS BEEN HELD AS UNDER :- 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS, PERUSED THE RELEVANT MATERIALS ON RECORD AND THE CASE LAW ON WH ICH THE LEARNED AR HAD PLACED STRONG RELIANCE. THE PRIMARY ISSUE FOR O UR CONSIDERATION IS WHETHER THE CIT (A) IS JUSTIFIED IN CONFIRMING THE AOS ACTION, FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION, IN ASSESSING THE ENTIRE INCOMES OF THE ASSESSEE FROM ALL THE INSTITUTIONS AT THE MA XIMUM MARGINAL RATE. IN THIS CONTEXT, IT IS APPROPRIATE TO REFER THE AME NDMENT TO SECTION 12A(2) OF THE ACT AND ITS PROVISO. FOR READY REFERE NCE THE SAME IS REPRODUCED BELOW : (SECTION 12A(2) & ITS PROVISO) [(2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTE R THE 1 ST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SH ALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR 8 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH S UCH APPLICATION IS MADE:] [PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED TO THE TR UST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVISION S OF SECTIONS 11 AND 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FRO M PROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YEAR PRECEDING THE AF ORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS A RE PENDING BEFORE THE ASSESSING OFFICER AS ON THE 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 SHALL BE TAKEN BY THE ASSESSING OFFICER IN CASE OF SUCH TRUST OR INST ITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR ONLY FOR NON REGISTRATION OF SUCH TRUST OR INSTITUTION FOR THE S AID ASSESSMENT YEAR: PROVIDED ALSO THAT PROVISIONS CONTAINED IN THE FIRST AND SECOND PROVISO SHALL NOT APPLY IN CASE OF ANY TRUST OR INS TITUTION WHICH WAS REFUSED REGISTRATION OR THE REGISTRATION GRANTED TO IT WAS CANCELLED AT ANY TIME UNDER SECTION 12AA.] WE HAVE GONE THROUGH THE PROVISIONS OF THE ACT AND HAVE ALSO GONE THROUGH THE RECORD. IN OUR VIEW, THE PROVISO TO SUB-SECTION (2) OF SECTION 12A HAS RETROSPECTIVE APPLICATION AND HAS BEEN INSERTED IN THE ACT TO REM OVE THE HARDSHIP OF THE CHARITABLE TRUSTS/INSTITUTIONS. ADMITTEDLY, IN THE PRESENT CAS E WHEN THE REGISTRATION WAS GRANTED ON 05.03.2010 WITH EFFECT FROM 01.04.2008, THE ASSE SSMENT PROCEEDINGS FOR 2007-08 WERE PENDING BEFORE THE AO. THEREFORE, THE ASSESSEE CANNOT BE TREATED AS ASSOCIATION OF PERSONS AND IS REQUIRED TO BE TREATE D AS REGISTERED TRUST UNDER SECTION 12A OF THE IT ACT. WE FIND NO REASON TO DI SAGREE WITH THE JUDGMENT PASSED BY THE COORDINATE BENCH (SUPRA) WHERE THE COORDINAT E BENCH HAS GIVEN THE BENEFIT OF REGISTRATION OF THE TRUST FOR THE A.Y. 2006-07 T HOUGH THE APPLICATION FOR REGISTRATION WAS GRANTED ON 29.07.2013. RESPECTFUL LY FOLLOWING THE JUDGMENT OF THE COORDINATE BENCH, WE ARE OF THE VIEW THAT THE ASSES SEE BEFORE US IS ALSO REQUIRED TO 9 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT BE TREATED AS REGISTERED TRUST FOR THE A.Y. 2007-08 DE HORS THE DIRECTION ISSUED BY THE TRIBUNAL TO GRANT THE REGISTRATION WITH EFFECT FROM 1.4.2008, IN THE LIGHT OF NEW AMENDMENT REFERRED HEREIN ABOVE AND ALSO IN VIEW OF THE JUDGMENT OF COORDINATE BENCH. WE MAY LIKE TO ADD THAT THOUGH THE TRIBUNAL VIDE ORDER DATED 28.1.2010 HAS DIRECTED TO GRANT THE REGISTRATION FROM 1.4.2008, I N OUR VIEW WHEN THERE IS A CONFLICT BETWEEN THE ORDER PASSED BY THE TRIBUNAL AND THE SU BSEQUENT LEGISLATURE WHICH IS BENEFICIAL IN NATURE, THE SUBSEQUENT LEGISLATURE AN D THE BENEFIT FLOWING FROM THE SUBSEQUENT LEGISLATURE SHOULD BE GIVEN TO THE ASSES SEE. IT IS NONE OF THE PARTYS CASE THAT THE ASSESSMENT PROCEEDINGS HAVE REACHED TO THE FINALITY AND, THEREFORE, IN VIEW OF THE CHANGE IN LAW, THE BENEFICIAL LEGISLATION SH OULD BE APPLIED TO THE BENEFIT OF THE ASSESSEE. EVEN OTHERWISE, IN THE MATTER OF HOWRAH M UNICIPAL CORPORATION & ORS. V. GANGES ROPE CO. LTD. & ORS., (2004) 1 SCC 663 IT HA S BEEN HELD BY THE HONBLE SUPREME COURT THAT IF THERE IS A CHANGE IN LAW DURI NG THE PENDENCY OF THE APPEAL, THE CHANGE IN LAW SHOULD BE MADE APPLICABLE AND SHO ULD BE APPLIED TO THE PENDING APPEALS. IN THE PRESENT CASE THE APPEAL IS PENDING BEFORE THE TRIBUNAL FOR THE YEAR 2007-08 AND THERE IS A CHANGE IN LAW WITH EFFECT FR OM 1.10.2014. THEREFORE, THE BENEFIT WHICH ARE AVAILABLE TO THE ASSESSEE ON ACCO UNT OF INSERTION ARE REQUIRED TO BE EXTENDED OR PASSED ON TO THE ASSESSEE. WE, THER EFORE, HOLD THAT THE ASSESSEE IS ENTITLED TO BENEFIT UNDER SECTION 11 & 12 FOR THE A .Y. 2007-08 ON ACCOUNT OF THE FACT THAT THE ASSESSMENT PROCEEDINGS ARE PENDING. IN VI EW THEREOF, NOW WE WILL DEAL WITH THE REOPENING UNDER SECTION 147/148 OF THE IT ACT. 5.2. IT IS THE CONTENTION OF THE LD. A/R THAT SOLE BASIS OF REOPENING UNDER SECTION 147 WAS THE LEVY WAS NOT REJECTED AND, THEREFORE, THE AMOUNT OF RS. 2.08 CRORE IS 10 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT REQUIRED TO BE TREATED AS THE INCOME INSTEAD OF BEI NG THE CAPITAL RECEIPT. THE LD. COUNSEL RELIED UPON VARIOUS JUDGMENTS AS UNDER :- CIT VS. BIJLI COTTON MILLS (P) LTD. 116 ITR 60 (SC) CIT VS. MADURAI MILLS CO. LTD. 89 ITR 45 (SC) MAHILA SIDH NIRMAN YOJNA VS. IAC 50 TTJ 494 (DEL.) SMT. BASANTI DEVI AND SHRI CHAKHAN LAL GARG EDUCA TION TRUST ITA NO. 5082/DEL/ 2010 ITO VS. GAUDIYA GRANTH ANUVED TRUST (2013) 28 ITR 0161 (AGRA TRIB.) SHANKAR BHAGWAN VS. ITO, 61 ITD 196 (CAL.) 5.3. THE LD. D/R FOR THE REVENUE HAS SUBMITTED THAT PROVISIONS OF SECTION 147/148 ARE ATTRACTED AS THE ORIGINAL RETURN OF INCOME WAS ONLY PROCESSED AND THERE WAS NO APPLICATION OF MIND IN SCRUTINY ASSESSMENT. IT WAS SUBMITTED BY THE LD. D/R THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME AS AOP AND NOT AS REGISTERED TRUST. THEREFORE THE AMOUNT OF RS. 2.08 CRORES THOUGH HAS MENTIONED IN THE RETURN OF INCOME BUT THERE WAS NO APPLICATION OF MIND AND, TH EREFORE, HAS SUBMITTED THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. THER EFORE, THE AUTHORITIES BELOW WERE RIGHT IN REOPENING THE CASE OF THE ASSESSEE. 5.4. WE HAVE HEARD THE RIVAL PARTIES AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. IN OUR VIEW, IT IS ADMITTED CASE THAT THE ASSESSEE WAS INCORPORATED IN THE YEAR 1986 AND THEREAFTER HAS BEEN CONTINUED TO DISCHARGE ITS FUNCTION AS REGISTERED TRUST AND WAS LOOKING AFTER THE AFFAIRS OF KHATU SHYAMJI. BY VIRTUE OF ORDER OF THE TRIBUNAL 11 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT DATED 28/1/2010 THE REGISTRATION WAS GRANTED WITH E FFECT FROM 1.4.2008, HOWEVER HAVE HELD THAT THE ASSESSEE, THOUGH WAS NOT REGISTE RED AND THE APPLICATION WAS NOT PROCESSED BUT THE BENEFIT OF BEING THE REGISTERED T RUST WERE REQUIRED TO BE EXTENDED TO THE ASSESSEE U/S 11 & 12 OF THE IT ACT. IN VIEW THEREOF, THE ASSESSEE IS REQUIRED TO BE TREATED AS REGISTERED TRUST WITH EFFECT FROM 1.4.2007. SINCE WE HAVE ALREADY HELD THAT THE ASSESSEE IS REQUIRED TO BE TREATED AS REGISTERED TRUST W.E.F. 1.4.2007, THEREFORE, IN OUR VIEW, IF WE READ THE SECOND PROVI SO TO SUB-SECTION (2) OF SECTION 12A, THEN IT IS CLEAR THAT THE REOPENING U/S 147/14 8 IS NOT PERMITTED. FOR READY REFERENCE, WE ARE REPRODUCING HEREIN BELOW SECOND P ROVISO TO SUB-SECTION (2) OF SECTION 12A :- PROVIDED FURTHER THAT NO ACTION UNDER SECTION 147 SHALL BE TAKEN BY THE ASSESSING OFFICER IN CASE OF SUCH TRUST OR INST ITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSMENT YEAR ONLY FOR NON REGISTRATION OF SUCH TRUST OR INSTITUTION FOR THE S AID ASSESSMENT YEAR: A BARE READING OF THE ABOVE SAID PROVISION THOUGH I NSERTED WITH EFFECT FROM 1.10.2014, IN OUR VIEW, CLEARLY MANDATES THAT NO RE OPENING CAN BE MADE ON ACCOUNT OF NON REGISTRATION OF THE TRUST. IN VIEW THEREOF , WE HOLD THAT THE REOPENING MADE BY THE AO U/S 147/148 OF THE ACT WAS ILL FOUNDED AN D WAS NOT IN ACCORDANCE WITH LAW. IN VIEW THEREOF THIS GROUND IS DECIDED IN FAVO UR OF THE ASSESSEE AND AGAINST THE REVENUE. 5.5. SINCE WE HAVE HELD THAT THE REOPENING UNDER SE CTION 147/148 WAS BAD IN LAW, THEREFORE, WE DO NOT FIND IT APPROPRIATE TO EXAMINE THE OTHER GROUNDS MENTIONED BY THE ASSESSEE AS THE OTHER GROUNDS ORIGINATES FROM R EOPENING OF THE ASSESSMENT PROCEEDINGS. SINCE WE HAVE HELD THAT THE REOPENING WAS BAD IN LAW, THEREFORE, ALL 12 ITA NO. 651/JP/2013 SHREE SHYAM MANDIR COMMITTEE VS. ACIT THE OTHER GROUNDS ARE ALSO DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 2/06/2016. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 2/06/2016 DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-SHREE SHYAM MANDIR COMMITTEE, KHATUSH YAM JI,SIKAR. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE, SIKAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 651/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR
