M/S SHIVA EDUCATIONAL SOCIETY,BILASPUR vs. ACIT, MANDI

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ITA 490/CHANDI/2017Status: HeardITAT Chandigarh28 April 2020AY 2010-115 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the first proviso to Section 12AA(2) allows the benefit of Sections 11 and 12 for preceding assessment years if the assessment is pending and registration is granted. The matter was restored to the Assessing Officer for verification.

What were the facts?

The assessee, M/s Shiva Educational Society, appealed against the CIT(A)'s order for AY 2010-11. The assessee claimed benefits under Sections 11 and 12 of the IT Act, which were denied by the lower authorities.

What were the issues?

Whether the assessee is entitled to the benefit of Sections 11 and 12 for AY 2010-11, given that registration under Section 12AA was granted subsequently but the assessment was pending.

Which sections of the Income-tax Act were involved?

Section 11,Section 12,Section 12AA

AI-generated summary — verify with the full judgment below

आदेश/Order

1.

The present appeal has been preferred by the assessee against the order dated 31.01.2017 of the Commissioner of Income Tax (Appeals), Palampur [hereinafter referred to as ‘CIT(A)’].

2.

The assessee in this appeal has taken following grounds of appeal:- 1. That the order of Ld. CIT(A) is against the law and facts of the case.

2. That the Ld. CIT(A) and Ld. Assessing Officer both have erred by not allowing the depreciation which is - M/s Shiva Educational Society, Bilaspur (H.P.) 2 mandatory and allowable as per the provisions of the Income Tax Act and as interpreted by Hon'ble Courts.

3. That the Ld. CIT(A) has grossly erred in not allowing the benefit of provisions of Section 11 and 12 after registration of appellant under Section 12AA, which otherwise is allowable to the year under consideration as per proviso to Section 12AA and is applicable retrospectively and to pending assessments also.

4. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard and disposed off.

2. The assessee in this appeal has agitated the confirmation of additions made by the Assessing Officer treating the assessee as an ‘AOP’. However, before us, Ld. Counsel for the assessee has stated that the assessee has been granted registration u/s 12A of the Income Tax Act, 1961 (in short 'the Act') for assessment year 2011-12 on 11.9.2010, whereas, the assessment year involved in the present appeal is assessment year 2010-11. That assessment order in this case has been passed on 24.12.2012 i.e. after the grant of registration in the subsequent year by the assessee on 19.11.2020. The assessee in this respect has relied upon the first proviso to section 12A(2) of the I.T.

Act, which reads as under:-

Conditions for applicability of sections 11 and 12.

12A. (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:— …….

- M/s Shiva Educational Society, Bilaspur (H.P.) 3 (2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall 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:

Provided that where registration has been granted to the trust or institution under section 12AA, then, the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are 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 institution for any 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 first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA.”

3.

A perusal of the above proviso reveals that it has been provided that where the registration has been granted to a Trust or Institution u/s 12AA of the Act, then the provisions of section 11 & 12 shall apply to the income of such an assessee from the property held under the trust of any preceding assessment year also subject to the condition of the assessment of such preceding year is pending before the Assessing Officer on the date of such registration. The Ld. counsel, therefore, has - M/s Shiva Educational Society, Bilaspur (H.P.) 4 submitted that as per the aforesaid proviso that since the assessment for the year under consideration was pending before the Assessing Officer, hence, the assessee is entitled to deduction as per provisions of sections 11 &12 of the Act.

4.

The Ld. DR, on the other hand, has relied on the findings of the lower authorities.

5.

Considering the above submissions of the Ld. AR of the assessee, the matter is restored to the file of the Assessing Officer for verification of the facts and if the contention of the assessee is found true, the Assessing Officer will allow the benefit of the relevant provisions to the assessee in accordance with law.

In the result, the appeal of the assessee stands allowed for statistical purposes.

Order pronounced in the Open Court on 06.05.2020

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