INCOME TAX OFFICER, EXEMPTIONS, NANDED, NANDED vs. ABHINAV MANAV VIKAS SANSTHA, LATUR

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2257/PUN/2025 िनधा�रण वष� / Assessment Year : 2019-20 Income Tax Officer, Vs. Abhinav Manav Vikas Exemptions, Nanded. Sanstha, 1, Shrikishan Somani School, More Nagar, Kanheri Road, Latur- 413512. PAN : AAATA3357N Appellant Respondent Revenue by : Shri Rajesh Haladkar Assessee by : Shri Bhuvanesh Kankani Date of hearing : 16.07.2026 Date of pronouncement : 06.10.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the Revenue is directed against the order dated 22.07.2025 passed by Ld. Addl./JCIT(A), Indore [‘Ld. CIT(A)’] for the assessment year 2019-20. 2. The Revenue has raised the following grounds of appeal :- “I. On the facts and in the circumstances of the case and in law, the Ld. Addl./Jt. CIT(A) erred in allowing exemption u/s 11 by applying registration granted u/s 12AA on 28-06-2022 to A.Y. 2019-20, сontrary to the proviso to section 12A(2) which restricts such benefit only to cases where assessment proceedings are pending before the Assessing Officer.

2 ITA No.2257/PUN/2025 II. The Ld. Addl./Jt. CIT(A) failed to appreciate that as per section 2(7A), an appellate authority is not an "Assessing Officer," and further, that an intimation u/s 143(1) is not an "assessment proceeding".” 3. Facts of the case, in brief, are that the assessee is a trust and had filed application for registration u/s 12A of the IT Act on 21.08.2019 which was rejected by Ld. CIT, Exemption on 26.02.2020, the assessee then preferred an appeal before the Tribunal. The Tribunal vide order dated 23.03.2021 restored the matter of registration u/s 12A of the IT Act to the file of Ld. CIT, Exemption to decide the issue afresh and Ld. CIT, Exemption, vide order dated 28.06.2022 granted registration u/s 12A of the IT Act to the assessee. In the meantime, the assessee filed its return of income on 30.11.2020 declaring total income of Rs.Nil after claiming exemption u/s 11 of the IT Act for the period under consideration. The return was processed u/s 143(1) of the IT Act on 12.02.2021 determining income of Rs.2,39,44,858/- since at that point of time the assessee was not registered u/s 12A of the IT Act. Being aggrieved, the assessee preferred an appeal before Ld. CIT(A). After considering the reply and submissions of the

3 ITA No.2257/PUN/2025 assessee, Ld. CIT(A) allowed the appeal filed by the assessee by observing as under :- “I have carefully considered facts of case and order passed by Ld. AO against which appeal has been preferred. I have gone through appellant’s submission, Form 35, intimation u/s 143(1) and provisions of relevant section and rules. 6.2 This appeal is related to A.Y. 2019-20. The applicant had filed an application for registration u/s 12AA of the Income Tax Act,1961 on 21-08-2019 before the CIT(Exemptions), Pune. The said application was rejected by the CIT(Exemptions), Pune vide order dated 26-02-2020. The applicant filed an appeal against the said order. The Hon’ble ITAT, 'A' BENCH, PUNE, vide order dated 23-03- 2021 in appeal ITA No. 496/PUN/2020has set-aside the impugned order and remanded the matter back to the file of CIT(E) for re- adjudication as per law while complying the principal of natural justice. After consideration, the Ld. CIT(E) has vide order dated 28.06.2022 has granted registration u/s 12AA valid up to 31.03.2021. Accordingly, the AO is directed to allow exemption and modify the computation of tax. These grounds of appeal are allowed.” 4. It is the above order against which the Revenue is in appeal before this Tribunal. 5. We have heard Ld. counsels from both the sides and perused the material available on record. In this regard, we find that it is the sole question before us to decide whether benefit of subsequent registration u/s 12A of the IT Act can be given to the assessee for the period for which an appeal is pending before Ld. CIT(A). In this regard, we find that the assessee relied on 2nd proviso to section 12A(2) of the IT Act in its written submission which was

4 ITA No.2257/PUN/2025 furnished before Ld. CIT(A) & the same was also referred and accepted by Ld. CIT(A) while allowing the appeal of the assessee. 6. On the other hand, Ld. DR appearing from the side of the Revenue strongly opposed the order passed by Ld. CIT(A) and submitted that appellate authority is not an Assessing Officer and even an intimation u/s 143(1) is not an assessment proceedings. 7. After considering the arguments of both the sides, we find that the issue raised in this appeal has already been decided by the Tribunal in many other cases involving the identical issue wherein it was held that the benefit of proviso to section 12A(2) of the IT Act can be granted to the assessee, if, appeal is pending for any assessment year, preceding to the year for which registration has been granted u/s 12A of the IT Act. In this regard, Ld. Counsel of the assessee drew our attention to circular issued by CBDT on 21.01.2015 and also placed reliance on following case laws decided by Hon’ble Court and coordinate benches of this Tribunal :- (i) Lady Kikabaí Lady Kikabai Premchand Iyambail Trust Vs. ITO Exemption, Ward 1, Pune [ITA No.1403/Pun/2019]. (ii) Mount Carmel Society v. ITO, Pune [ITA Nos. 987 to 989/PUN/2016].

5 ITA No.2257/PUN/2025 (iii) SNDP Yogam v. ADIT(E), Kochi [ITA Nos. 503 to 506 & 569/Coch/2014]. (iv) CIT v. Mayur Foundation [2005] 274 ITR 562 (Gujarat). (v) Chhattisgarh Rajya Open School Madhyamik Siksha Mandal vs. DCIT, Exemption [2025] 176 taxmann.com 49 (Chhattisgarh) [10-06-2025]. (vi) CIT (Exmp) Vs. Shree Shyam Mandir Committee [ITA No. 234/2016 (Raj HC) / (2016) 400 ITR 466(Raj HC)]. (vii) Shri Parnami Panchayat vs. ITO (Exemption) [2024] 161 taxmann.com 438 (Jaipur Trib.) [18-08-2023]. 8. In this regard, we find that Hon’ble High Court of Chhattisgarh in the case of Chhattisgarh Rajya Open School Madhyamik Siksha Mandal (supra) has accepted the contention raised by the assessee that appeal pending before Tribunal against order of Commissioner (Appeals) is continuation of original proceedings of Assessing Officer and thus assessment proceedings in appeal pending before Appellate Court i.e. Tribunal is deemed to be assessment proceedings before Assessing Officer within meaning of first proviso to section 12A(2) and, thus, registration granted to assessee-society operated retrospectively for all relevant years including assessment year 2016-17. The relevant finding of Hon’ble High Court of Chhattisgarh in the case of Chhattisgarh Rajya Open School Madhyamik Siksha Mandal (supra) is as under :-

6 ITA No.2257/PUN/2025

“12. In the instant case, admittedly, on the date of registration i.e. 14- 7-2023, the assessment proceeding which has been affirmed by the Commissioner of Income Tax (Appeals), was pending before the ITAT, which came to be dismissed on 7-9-2023. The question for consideration would be, whether the assessment proceeding as stated in first proviso to Section 12A(2) of the IT Act can be taken as pending appeal, in other words, whether the assessment proceeding pending in appeal can be taken to be the proceeding pending before the Assessing Officer? Since appeal was pending before the ITAT under Section 253 of the IT Act, though it was second appeal, but in that appeal, substantial question of law was not required to be formulated which was required to be formulated in appeal under Section 260A of the IT Act, as such, that appeal pending before the ITAT against the assessment order affirmed by the CIT (Appeals) is the continuation of original assessment proceedings by the Assessing Officer. 13. It is a settled position of law that an appeal is a continuation of the proceedings of the original court. Ordinarily, the appellate jurisdiction involves a rehearing on law as well as on fact and is invoked by an aggrieved person. The first appeal is a valuable right of the appellant and therein all questions of fact and law decided by the trial court are open for reconsideration. Therefore, the first appellate court is required to address itself to all the issues and decide the case by giving reasons. The court of first appeal must record its findings only after dealing with all issues of law as well as fact and with the evidence, oral as well as documentary, led by the parties. The judgment of the first appellate court must display conscious application of mind and record findings supported by reasons on all issues and contentions [see: Santosh Hazari v. Purushottam Tiwari (2001) 3 SCC 179 followed in Madhukar v. Sangram (2001) 4 SCC 756, B.M. Narayana Gowda v. Shanthamma (2011) 15 SCC 476, H.K.N. Swami v. IrshadBasith (2005) 10 SCC 243 and Sri Raja Lakshmi Dyeing Works v. RangaswamyChettiar (1980) 4 SCC 259. 14. It is held that appeal pending before the ITAT against the order of the CIT (Appeals) affirming the order of the Assessing Officer is the continuation of the original proceedings of the Assessing Officer and thus, the assessment proceeding in appeal pending before the appellate Court i.e. ITAT is deemed to be the assessment proceeding before the Assessing Officer within the meaning of first proviso to Section 12A(2) of the IT Act and we accordingly hold that appeal proceedings pending before the ITAT are deemed to be the assessment proceeding before the Assessing Officer within the meaning of Section 12A of the IT Act. The impugned order so passed after the effective date of grant of registration and subsequent grant of registration on 14-7-2023 operates retrospectively for all relevant years in the

7 ITA No.2257/PUN/2025 present case, assessment year 2016-17, though registration was granted with effect from 1-4-2019, as we find that the object of the appellant Society is charitable in nature within the meaning of Section 12A(2) of the IT Act and on which there is absolutely no dispute. Accordingly, we are unable to sustain the impugned order and set aside the same. The appellant Society is entitled for exemption under Sections 11 & 12 of the IT Act. The Assessing Officer is directed to pas consequential order as stated above for the assessment year 2016- 17, expeditiously. 15. The substantial question of law is answered in favour of the assessee and against the Revenue.” 9. Respectfully following the above judgement of Hon’ble High Court of Chhattisgarh in the case of Chhattisgarh Rajya Open School Madhyamik Siksha Mandal (supra), we are of the considered opinion that where registration u/s 12AA was granted during pendency of appeal before Tribunal, such appeal was deemed continuation of assessment proceedings, and assessee was entitled to retrospective exemption under sections 11 & 12 by virtue of 2nd proviso to section 12A(2) of the IT Act with regard to that year also for which the appeal is pending. Therefore, we do not find any error in the order passed by Ld. CIT(A) wherein he directed the Assessing Officer to allow the benefit of exemption u/s 11 of the IT Act and modify the computation of tax for assessment year 2019-20. Thus, the ground no.1 raised by the Revenue is dismissed.

8 ITA No.2257/PUN/2025 10. In ground no.2, the Revenue has challenged that as per section 2(7A), an appellate authority is not an "Assessing Officer," and further, that an intimation u/s 143(1) is not an "assessment proceeding". In this regard, we find that Hon’ble Supreme Court in the case of Jute Corpn. of India Ltd. v. CIT [1991] 187 ITR 688 has held that the declaration of law is clear that the power of the AAC is coterminous with that of the ITO and if that is so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the ITO. The scope of his power is coterminous with that of the ITO. He can do what the ITO can do and also direct him to do what he has failed to do. Accordingly, we do not find any merit in this ground of Revenue that the appellate authority cannot step into the shoes of the Assessing Officer since the power of appellate authority is coterminous with that of the Assessing Officer. Therefore, pendency of appeal before Ld. CIT(A) can be said to be pendency of assessment proceedings and the benefit of proviso to section 12A(2) was rightly allowed to the assessee. Regarding another claim of Ld. DR that an intimation u/s 143(1) is not an "assessment proceeding", we find that a coordinate bench of

9 ITA No.2257/PUN/2025 this Tribunal in the case of Calvary Mennonite Brethren Chruch vs. Income-tax Officer, Exemption, [2026] 188 taxmann.com 543 (Hyderabad - Trib.) has allowed the appeal of the assessee wherein exemption u/s 11 was granted to the assessee under identical facts in the light of second proviso to section 12A(2) of the IT Act by observing as under :- “12. We have considered the rival submissions as well as relevant material on record. At the outset we note that the return of income was processed by the CPC on 23.08.2022 whereas the assessee was granted provisional registration on 07.04.2022 which means the proceedings for the assessment were pending before the Assessing Officer on the date of grant of registration u/sec.12A of the Act and hence, the benefit of second proviso to sec.12A(2) as exist prior to the omission vide Finance Act, 2023 is available to the assessee for the assessment year 2021-2022. For ready reference, the second proviso to Sec.12A(2) is quoted as under: "Provided further that where registration has been granted to the trust or institution under section 12AAor section 12AB, 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." 13. Thus, the proviso specifically grants the benefit of secs.11 and 12 in case where the registration is granted during the pendency of the assessment proceedings before the Assessing Officer. Accordingly, the Assessing Officer is directed to allow the claim of exemption u/secs.11 and 12 of the Act for the assessment year 2021-2022 after necessary verification.” 11. Respectfully following the above decision of coordinate bench of this Tribunal passed in the case of Calvary Mennonite

10 ITA No.2257/PUN/2025 Brethren Chruch (supra), wherein the proceedings u/s 143(1) of the IT Act pending before CPC were treated to be pendency of assessment proceedings, we do not find any error in the order passed by Ld. CIT(A) on this issue. Thus, the ground no.2 raised by the Revenue is dismissed. 12. In the result, the appeal filed by the Revenue is dismissed. Order pronounced on this 06th day of October, 2026. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 06th October, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.10.07 17:09:22 +05'30' आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Addl./JCIT(A), Indore. 4. The Pr. CIT/CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.