Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI R.S. SYAL
PER R.S.SYAL, VP : This appeal by the assessee emanates from the order passed by the CIT(A)-10, Pune on 01-10-2018 in relation to the assessment year 2014-15.
The assessee has raised an additional ground, which reads as under : “Whether the appellant having been granted registration u/s.12AA of the Income Tax Act vide order dated 28-09-2017, during the pendency of proceedings before CIT(A), would be entitled to exemption u/s.11 of the Act
2 ITA No.44/PUN/2019 Shri Krishnabai Ghat Trust
for the year under consideration, i.e. A.Y. 2014-15 in view of the Proviso to Section 12A sub-section (2) and the provisions of Section 11 and 12 would apply accordingly”.
It is apparent from a perusal of the above ground itself that
a legal issue has been raised therein. Since no investigation of
fresh facts is necessary to adjudicate this ground, I am, ergo,
admitting the same to be taken up for disposal on merits.
Succinctly the factual matrix of the case is that the assessee
trust filed its return declaring total income at Nil. During the
course of assessment proceedings, the Assessing Officer (AO)
observed that the assessee was established to maintain, repair,
preserve and operate Ghat on the banks of Krishna river, Karad,
Dist. Satara. The AO completed the assessment at a total income
at Rs.5,60,430/- in view of the fact that the assessee-trust was
not registered u/s.12AA of the Income-tax Act, 1961 (hereinafter
also called `the Act’). The assessee appealed against the
assessment order contending that the additions made by the AO
were unwarranted. Not convinced, the ld. CIT(A) dismissed the
appeal, against which the assessee has approached the Tribunal.
I have heard both the sides and gone through the relevant
material on record. First of all, I am espousing the additional
3 ITA No.44/PUN/2019 Shri Krishnabai Ghat Trust
ground raised by the assessee through which it has been
contended that the assessee was granted registration by the ld.
CIT (Exemptions) vide his order dated 28-09-2017 and as such
the benefit of such registration ought to have been granted for
the extant appeal as well. In order to appreciate the rival
contentions, it would be apposite to note down the relevant part
of the mandate of sub-section (2) of section 12A, which is as
under :
`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: (italicized for emphasis)
A close scrutiny of the provision indicates that where an
assessee has made an application for registration after the date
specified in the sub-section (2), the provisions of sections 11 and
12 of the Act shall apply from the assessment year immediately
4 ITA No.44/PUN/2019 Shri Krishnabai Ghat Trust
following the financial year in which such application is made.
First proviso to this section is relevant for our purpose. This
proviso states that where the registration has been granted to the
assessee u/s.12AA, then the provisions of sections 11 and 12
shall apply to 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 remained the same for
such preceding assessment year”. Crux of the provision is that if
registration has been granted subsequently and the proceedings
for some earlier year are pending before the AO as on the date of
granting the registration, then the benefit of sections 11 and 12
should be granted to such earlier years as well provided the
objects and activities of the trust remained the same. It is
relevant to note that the registration in the extant case was
granted by the CIT (Exemptions), Pune on 28-09-2017. The
assessment in this case was completed u/s.143(3) of the Act on
15-12-2016. Thereafter, the assessee preferred first appeal before
the ld. CIT(A) against the said assessment order, which came to
be decided by means of impugned order dated
01-10-2018. This manifests that as on the date of grant of
5 ITA No.44/PUN/2019 Shri Krishnabai Ghat Trust
registration by the ld. CIT (Exemptions), though the assessment
order had already been passed but the appeal of the assessee was
pending before the ld. CIT(A). Under such circumstances, a
question arises as to whether or not the benefit of first proviso
can be extended to the assessee?
If we go by the plain language of the provision and
interpret it strictly, then the pendency of the assessment
proceedings before the AO is sine qua non for getting the
extended benefit of registration in terms of the mandate of the
proviso. Section 250 of the Act deals with the procedure in
appeal before the CIT(A). Sub-section (4) of section 250
provides that the Commissioner (Appeals) may, before disposing
of any appeal, make such further inquiry as he thinks fit. Sub-
section (5) of this section provides that the Commissioner
(Appeals) may, at the hearing of an appeal, allow the appellant to
go into any ground of appeal not specified in the grounds of
appeal. Section 251 deals with the powers of the CIT(A). Clause
(a) of sub-section (1) of section 251 provides that in an appeal
against an order of assessment, he may confirm, reduce, enhance
or annul the assessment. Clause (c) provides that in any other
6 ITA No.44/PUN/2019 Shri Krishnabai Ghat Trust
case, he may pass such orders in the appeal as he thinks fit.
Explanation to section 251 provides that in disposing of an
appeal, the CIT(A) may consider and decide any matter arising
out of the proceedings in which the order appealed against was
passed, notwithstanding that such matter was not raised before
him. A close scrutiny of the above provisions abundantly shows
that the CIT(A) can not only allow the appellant to go into any
fresh ground of appeal not specified in the grounds of appeal, but
he can suo motu consider and decide any matter arising out of
the assessment proceedings even if such a matter was not raised
before him. Thus, it is overt that he can take up new issues
arising from the assessment at his own volition as well as at the
instance of the assessee. Further, he is empowered to confirm,
reduce, enhance or annul the assessment. It is thus clearly borne
out from the above provisions that the CIT(A) has got plenary
powers in an appeal before him against an assessment order.
What AO can do, can be done by CIT(A) in an appeal before
him. Even what the AO could have done but failed to do, can
also be done by him. It shows that the powers of a CIT(A) in an
appeal against an assessment order are almost similar to those of
an AO. If extend this analogy to the provisions of section
7 ITA No.44/PUN/2019 Shri Krishnabai Ghat Trust
12A(2), an irresistible conclusion which follows is that the
benefit of the proviso is available not only when the assessment
proceedings are pending before the AO but also when an appeal
against the assessment order is pending before the ld. CIT(A). It
is so for the reason that the appeal proceedings are nothing but
continuation of the assessment proceedings.
At this juncture, it would be pertinent to note that the main
object of proviso to section 12A(2) is to liberally grant the
benefit of registration when the trust is otherwise engaged in
genuine charitable activities and the registration has been
actually granted albeit after the close of the relevant period.
Purpose of this proviso is to benefit assessees in the given
circumstances subject to the fulfillment of other conditions. In
such a situation, the object of the proviso is furthered if its
benefit is made available to the extended assessment
proceedings, being, the proceedings before CIT(A). As at the
time of granting registration by the ld. CIT (Exemptions) to the
assessee, the appeal of the assessee was pending before the ld.
CIT(A), in my considered opinion, the benefit of first proviso to
section 12A(2) ought to have been granted. My view is fortified
8 ITA No.44/PUN/2019 Shri Krishnabai Ghat Trust
by the judgment of Hon’ble Rajasthan High Court in CIT
(Exemptions) Vs. Shree Shyam Mandir Committee (2018) 400
ITR 466 (Raj.) in which it has been held that “an assessment
proceedings which is pending in appeal before the appellate
authority should be deemed to be “assessment proceedings
pending before the AO.” within the meaning of the term as
envisaged under the proviso. It follows there from that the
assessee which obtained registration u/s.12AA of the Act during
the pending of appeal was entitled for exemption claimed u/s.11
of the Act”. The additional ground thus raised is allowed by
holding that the assessee would be entitled to exemption u/ss. 11
and 12 of the Act for the year under consideration on the raison
d’etre that the registration was, in fact, granted to the assessee
u/s.12AA during the pendency of proceedings before the ld.
CIT(A).
In the light of my above conclusion on the additional
ground, the impugned order is set-aside and the matter is
restored to the file of AO for framing a de novo assessment as
per law after allowing a reasonable opportunity of hearing to the
assessee. Needless to say, the assessee in such assessment
9 ITA No.44/PUN/2019 Shri Krishnabai Ghat Trust
proceedings would be considered to have been granted
registration and the provisions of sections 11 and 12 shall apply
pro tanto.
In the result, the appeal is allowed for statistical purposes.
Order pronounced in the Open Court on 03rd May, 2019.
Sd/- (R.S.SYAL) उपा�य� उपा�य�/ VICE PRESIDENT उपा�य� उपा�य�
पुणे Pune; �दनांक Dated : 03rd May, 2019 सतीश
आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत / Copy of the Order is forwarded to : अ�ेिषत आदेश आदेश आदेश अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / 3. The CIT (Appeals)-10, Pune 4. The Pr. CCIT, Pune िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / 5. DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6. // True copy // आदेशानु आदेशानुसार सार/ BY ORDER, आदेशानु आदेशानु सार सार
// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
10 ITA No.44/PUN/2019 Shri Krishnabai Ghat Trust
Date 1. Draft dictated on 02-05-2019 Sr.PS 2. Draft placed before author 02-05-2019 Sr.PS 3. Draft proposed & placed JM before the second member 4. Draft discussed/approved JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *