SRI SAHASRALINGESWARA SWAMY TEMPLE,GUNTUR vs. INCOME TAX OFFICER (EXEMPTION WARD), GUNTUR

Facts

A Religious Trust, registered under Section 12A from AY 2017-18, was reassessed under Section 147/148 for AYs 2013-14 to 2016-17 by the AO, who denied 15% exemption for surplus income due to lack of 12A registration in those years. The CIT(A) granted partial relief by accepting some income as agricultural. The assessee appealed, arguing that reassessment proceedings for prior years based solely on non-registration were invalid as per the third proviso to Section 12A(2) of the Income Tax Act.

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 were invalid in law, relying on the third proviso to Section 12A(2) and Supreme Court precedent. The Tribunal quashed the assessment orders and allowed the assessee's appeal.

Key Issues

The key legal issue was the validity of reassessment proceedings initiated under Section 147 for assessment years preceding the year of Section 12A registration, specifically whether such action is barred by the third proviso to Section 12A(2) of the Income Tax Act, 1961.