SRI SAHASRALINGESWARA SWAMY TEMPLE,PONNUR vs. INCOME TAX OFFICER, EXEMPTIONS WARD, GUNTUR

Facts

The assessee, a religious trust, was denied 15% exemption for Assessment Year 2014-15 by the AO because it lacked Section 12A registration for that year, though registration was obtained effective from A.Y. 2017-18. Reassessment proceedings under Section 147 were initiated, and the entire surplus was taxed. The Ld. CIT(A) granted partial relief but upheld the validity of the assessment.

Held

The Tribunal held that the reassessment proceedings initiated under Section 147 for assessment years prior to the date of the assessee's Section 12A/12AA registration were invalid, citing the third proviso to Section 12A(2) of the Income Tax Act. Relying on a Punjab & Haryana High Court decision, subsequently upheld by the Supreme Court, the Tribunal quashed the assessment order.

Key Issues

The key issue was the validity of reassessment proceedings initiated under Section 147 for assessment years preceding the date of a religious trust's Section 12A/12AA registration, specifically whether such action is barred by the third proviso to Section 12A(2) of the Income Tax Act.