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

Facts

The assessee, a Religious Trust, filed its return for AY 2014-15, setting apart 15% funds, but was not registered under Section 12A for the impugned assessment year, although it obtained registration from AY 2017-18. The AO initiated reassessment proceedings under Section 147, taxing the entire surplus due to lack of 12A registration. The Ld. CIT(A) granted partial relief by accepting some income as agricultural income.

Held

The Tribunal held that the reassessment proceedings initiated by the AO under Section 147 for assessment years prior to the date of registration under Section 12A/12AA are not valid in law, relying on the third proviso to Section 12A(2) and a Supreme Court upheld decision of the Punjab & Haryana High Court. Consequently, the assessment orders for these years were quashed. The Tribunal also condoned a delay in filing one of the appeals.

Key Issues

Validity of reassessment proceedings under Section 147 for assessment years preceding the date of registration under Section 12A/12AA, specifically concerning the application of the third proviso to Section 12A(2) of the Income Tax Act.