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vkns'k@ORDER vkns'k vkns'k vkns'k PER BENCH
These are the appeals filed by the assessee and are arising out of the following orders of the National Faceless Appeal Centre, Delhi [here in after (NFAC)] bearing dated and assessment year mentioned in the table below: Order passed by Order date Order No. Assessment Year NFAC 07-09-2021 ITBA/NFAC/S/ 2016-17
2 276 & 277/JP/2021 Janjati Mahila Vikas Sansthan vs. ITO, Exemption 250/2021-22/1035331449(1) NFAC 13-09-2021 ITBA/NFAC/S/ 2017-18 250/2021-22/1035494674(1) NFAC 17-09-2021 ITBA/NFAC/S/ 2018-19 250/2021-22/1035658121(1)
2. It is apparent from the grounds for all the three years wherein the only protest is not granting of the assessee benefit of registration u/s. 12A of the Income Tax Act, 1961 [ here in after referred as Act ] by the assessing officer while finalizing the assessment. The relevant grounds taken out by the assessee in all these years are extracted here in below paras.
2.1 In for A.Y 2016-17, the assessee has taken following grounds of appeal, which is reproduced here in below:
“1. That under the facts and circumstances of the case the learned Assessing Officer has erred in denying the exemption available under section 11 and 12 of the Income Tax Act and the Hon'ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre has further erred in upholding the order of the AO.
2. That under the facts and circumstances of the case the learned Assessing Officer has erred in disallowing the capital expenditure of Rs.3,10,754 and exemption of surplus income under section 11(1)(a) of Rs.5,80,036 against the application of income and further erred in assessing the total net taxable income at Rs.8,90,790 as against the Nil as returned income. Further, the Hon'ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre has further erred in upholding the order of the AO and confirming the additions made in the assessment order made by the learned Assessing Officer.
3. That under the facts and circumstances of the case the Hon'ble CIT (Appeals) has erred in not considering the first proviso to Section 12A(2) of the Act which was introduced vide Finance (No.2) Act, 2014.
4. The appellant craves liberty to raise additional ground and to modify/amend the ground of appeal at the time of hearing.”
2.2 In for A.Y 2017-18, the assessee has taken following grounds of appeal, which is reproduced here in below:
That under the facts and circumstances of the case the learned 1. Assessing Officer has erred in denying the exemption available under section 11 and 12 of the Income Tax Act and the Hon'ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre has further erred in upholding the order of the AO.
2. That under the facts and circumstances of the case the learned Assessing Officer has erred in disallowing an amount which was accumulated or set apart of Rs.2,52,430 u/s 11(1)(a) of the Income tax Act. The Hon'ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre has further erred in upholding the order of the AO and confirming the additions made in the assessment order made by the learned Assessing Officer.
3. That under the facts and circumstances of the case, the Hon'ble Commissioner of Income Tax (Appeals) has erred in disallowing the donation of Rs.42,000 considering that appellant society does not have valid registration under section 12A(a) of the Act and further erred in adding the same to the total income of the appellant. That under the facts and circumstances of the case the Hon'ble CIT 4. (Appeals) has erred in not considering the first proviso to Section 12A(2) of the Act which was introduced vide Finance (No. 2) Act, 2014. The appellant craves liberty to raise additional ground and to 5. modify/amend the ground of appeal at the time of hearing.”
following grounds of appeal, which is reproduced here in below:
1. That under the facts and circumstances of the case the learned Assessing Officer has erred in denying the exemption available under section 11 and 12 of the Income Tax Act and the Hon'ble CIT (Appeals) has further erred in confirming the rejection of exemption available under section 11 and 12 of the Act to the appellant.
2. That under the facts and circumstances of the case the learned Assessing Officer has erred in disallowing an amount which was accumulated or set apart of Rs. 11,86,765 u/s 11(1)(a) of the Income tax Act and further erred in adding the same to the total taxable income of the appellant. Further, the Hon'ble CIT (Appeals) has further erred in confirming the additions made in the assessment order made by the learned Assessing Order. 3. That under the facts and circumstances of the case the order passed by learned Assessing Officer u/s 143(3) of the Income-tax Act, 1961 is illegal, unlawful and against the principles of natural justice and Hon'ble CIT (Appeals)has further erred in not considering the ground of appeal
4. That under the facts and circumstances of the case the Hon'ble CIT (Appeals) has erred in not considering the first proviso to Section 12A(2) of the Act which was introduced vide Finance (No.2) Act, 2014.
5. The appellant craves liberty to raise additional ground and to modify/amend the ground of appeal at the time of hearing.”
3. Since, the issue in all the years is common, assessment year 2016- 17 is considered as lead case and the relevant facts, as culled out from the record from that folder. The return of income was filed on 31.03.2018 declaring total income at Rs. Nil. The case was selected for limited scrutiny by CASS. Notice u/s 143(3)/142(1) of the Act were issued from time to time. under the Rajasthan Societies Registration Act, 1958 with the registrar of society, Sawai Madhopur. During the assessment proceedings, the ld. Assessing Officer has observed that the assessee has not provided the copy of registration certificate u/s 12AA of the I.T. Act in the assessment proceedings. Therefore, assessee was issued a show cause notice to the trust on 16.11.2018 wherein assessee trust was asked to show cause as to why the claim of exemption u/s 11 should not be disallowed as the assessee failed to furnish the copy of registration certificate u/s 12AA of the I.T. Act which is pre-requisite the claim of the exemption u/s 11 of the Act.
In response, to the show cause notice, the assessee has submitted as under:-
“In compliance of this notice the society submitted its reply on 27.11.2018 which read as under: "In above reference we hereby submit that we have misplaced the registration u/s 12AA of the Income Tax Act 1961, Although we have submitted to your honor a copy of registration u/s 80G of the income Tax Act 1961, for which registration u/s 12AA is a prerequisite as per rule 11AA. We have also applied to the Commissioner of Income Tax Kota to issue a duplicate certificate of the registration and we will submit the same as soon as it will be available to us." 3.2 The learned assessing officer has observed that the reply of the assessee was carefully considered but found not tenable. Assessee is liable to produce original copy of registration u/s 12AA for the claim of exemption u/s 11 of the Act. Copy of 80G certificate does not suffice and possibilities of 12A registration cancellation /withdrawal and those possibilities can be ruled out only on production of copy of registration u/s 12AA of the IT Act, 1961. Just because assessee was having registration u/s 80G of the IT Act, 1961, so even till today, it is having valid registration u/s 12AA of the Act is merely an assumption and claim of exemption is not a matter of assumption. Therefore, claim of exemption u/s 11 of the Act, denied to assessee and status of the assessee trust is taken as 'AOP- Trust'.
3.3 Due to denial of exemption u/s 11, assessee trust is not entitled to claim surplus u/s 11(1) (a) and 11(2) of the Act. Trust is also not entitled to claim capital expenditure as allowable expenditure. Therefore, Capital expenditure of Rs.3,10,754/- and surplus u/s 11 (1) (a) of Rs.5,80,036/- added back in the income of the assessee.
4. Aggrieved from the order of the assessment the assessee has filed an appeal before the first appellate authority but remain failed. The relevant findings of the Ld. CIT(A)/NFAC is extracted here in below:
7. I have considered the facts and circumstances of the case, submissions of the appellant and material available on record. In this case, AO has disallowed the claim u/s 11(1)(a) and 11(2) of the IT Act, due to absence of u/s 12AA certificate. The appellant has challenged that claiming exemption under section 11 of the 7 276 & 277/JP/2021 Janjati Mahila Vikas Sansthan vs. ITO, Exemption Act, issuance of registration is one of the conditions and not the only condition. If Commissioner has granted the registration later than the creation of the Trust, it should be effective for all the years for which the constitution had remained the same. Appellant claims that in their case objects of the Society are same since inception and there is no change, registration granted in AY 2019-20 shall be valid for all the years. 7.1 During the appellate proceedings appellant has submitted 12AA Certificate issued by the CIT Exemption, Jaipur, vide vide order dated 03.12.2019, which shows that provisions of sections 11 and 12 shall apply in the case from the AY 2020-21 onwards. Therefore, it is very clear that the appellant is entitled to claim exemptions u/s 11 of the IT Act from AY 2020-21 onwards only. In view of the above and observations in the assessment order, there is no reason to interfere with the order of the AO and the same is upheld. Appellant fails on these grounds of appeal.
5. Before us, the ld. AR of the assessee filed written submission on various grounds which reads as under:-
“In the above referred case the appeal was filed against the order passed u/s 250 of the A.Y.2016-17. We would like to submit before your honour below mentioned submission: Ground No. 1:
That under the facts and circumstances of the case the learned Assessing Officer has erred in denying the exemption available under section 11 and 12 of the Income Tax Act and the Hon’ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre has further erred in upholding the order of the AO. Submission:
1. 1. The appellant M/s Janjati Mahila Vikas Sansthan is a charitable Sansthan, assessed to tax on PAN AAATJ5753D. The return of income declaring NIL income for the AY 2016-17 was filed on dated 31.03.2018.
2. The appellant society was created effective from 30 March, 1994 with the objective to promote education and providing awareness to earn the livelihood for woman and girls belonging to Janjati Samaj (Backward caste) through setting-up of small businesses and provide assistance in setting-up those businesses for common people. The original constitution/ memo was also drafted from that date only. There is no change in the terms or objects of deed/MOA of the society from the effective date till yet. The copy of the constitution along with registration certificate enclosed as Annexure-2 & 3.
3. The case was selected for limited scrutiny By CASS and during the course of assessment proceedings the appellant has filed all the required documents as are available with him before the learned AO.
4. The copy of registration certificate granted u/s 80G was also provided. It was also communicated that registration certificate granted u/s 12AA was misplaced. It was also explained that the 80G registration certificate was granted only for those Sansthan who have a registration certificate u/s 12AA of the IT Act. Being as per provisions of section 80G(5)(i), the section applies to donations to the institutions established in India for a charitable purposes and income of such institution would not be liable to inclusion in its total income under the provisions of section 11 and 12 or clause 23AA or clause 23C of section 10. Clearly after producing the certificate under section 80G (copy enclosed as Annexure – 4), it could not be presumed that 12A certificate was later on cancelled or withdrawn.
5. It is also important to note that when it was realized that original certificate granted u/s 12AA was misplaced, the appellant has again applied for registration u/s 12AA of the Income Tax Act and same was granted by the Honourable CIT Exemption, Jaipur vide order No. CIT Exemption Jaipur/12AA/2019-20/A/10933 dated 03.12.2019 (enclosed as Annexure-5) which clearly proves that since beginning the objects of the Sansthan was of charitable in nature and therefore the exemption claimed by the appellant u/s 11 and 12 was correct. The appellant has explained that registration u/s 12AA is now available to the Sansthan and being the objects of the A.Y.2016-17 was the same as of A.Y.2020-21, the deduction claimed u/s 11 and 12 should not be denied. However, the learned AO has not accepted the request and disallowed the capital expenditure of Rs. 3,10,754 and denied the exemption of surplus income u/s 11(1)(a) of Rs. 5,80,036 accumulated or set apart and added the same to the total income of the appellant.
6. We would like to bring to your kind consideration that appellant is regular in filing its return of income. For claiming the exemption under section 11 of the Act, issuance of registration is one of the conditions and not the only condition for claiming the exemption. Where the Commissioner has granted the registration later than the creation of the trust, it should be effective for all the years for which the constitution had remained the same. Since, in our case objects of the society
are same since inception and there is no change, registration granted in AY 2019-20 shall be valid for all the years. Thus availability of 80G certificate itself sufficient to prove that appellant was also registered u/s 12AA of the Income-tax Act. Further as explained above, the registration granted lateron shall also apply in the AY 2016-17 to grant the exemption u/s 11 & 12 of Income-tax Act. In view of the above, the appellant request your honour to accede to the above request and allow the exemption under section 11 and 12 of the Act in the AY 2016-17.
Ground No. 2: That under the facts and circumstances of the case the Hon’ble CIT (Appeals) has erred in not considering the first proviso to Section 12A(2) of the Act which was introduced vide Finance (No.2) Act, 2014. As provided in the 1st proviso to Section 12A(2) of the Income-tax Act, “the 1. provisions of Section 11 and 12 shall apply in respect of any income derived from the property held under Trust for any assessment year preceding A.Y. for which assessment proceeding are pending before the Assessing Officer.” Being since inception the objects of the Society were not changed, therefore, provisions of Section 11 and 12 shall apply in the AY 2016-17 too, though the certificate of registration u/s 12AA is applicable from 01.04.2019.
2. Further, It is relevant at this juncture to get into the amendment brought in section 12A by Finance Act 2014 with effect from 1.10.2014 by way of insertion of first proviso to section 12A(2) of the Act which is reproduced below for the sake of convenience : ‘Section 12A(2) Where an application has been made on or after the 1st day of June 2007, the provisions of section 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 date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment year: Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding theaforesaid assessment year only for non-registration of such trust or institution for the said assessment year: Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA.’ 3. Admittedly, the assessment proceedings were pending before the Learned AO for the Asst Years 2016-17 to 2018-19 as on the date of granting registration u/s 12AA of the Act on 03.12.2019 with effect from 1.4.2019 as assessment proceedings got commenced pursuant to issuance of notice u/s 143(2) on 08.08.2018 as stated supra. Admittedly, the objects and activities of the trust had remained the same in preceding assessment years also i.e. Asst Years 2016-17 to 2018-19.
The first proviso to Section 12A(2) of the Act had come into force vide Finance (No.2) Act, 2014, with effect from 1-10-2014. The proviso was introduces in order to mitigate the hardships caused to charitable institutions, which despite having satisfied the substantive conditions rendering them eligible for claim of exemption, however, for technical reasons were saddled with tax liability in the prior years, due to absence of registration under section 12AA.
5. The second proviso to section 12A(2) also provides that no action u/s 147 of the Act shall be taken merely for non-registration of trust or institution. Reading this proviso with the first proviso to section 12A(2) and applying the Rule of Harmonious Construction, it could safely be concluded that the legislature in its wisdom had only brought this proviso to prevent genuine hardship that could be caused on the assessee due to non-registration u/s 12AA of the Act and accordingly in our opinion, the provisos to section 12A(2) of the Act is to be construed as retrospective in operation. The third proviso to section 12A(2) of the Act also provides that the first and second proviso shall not be applicable if the trust or institution had been refused registration earlier or the registration granted earlier is cancelled by the Commissioner u/s 12AA of the Act. This also goes to prove that the first and second proviso shall be made applicable for the trusts for earlier assessment years also who had not applied for registration u/s 12AA of the Act at all. We, therefore, emphasise that the registration of trust under section 12A of the Act once done is a fait accompli and the AO cannot thereafter make further probe into the objects of the trust.
6. It will be relevant to get into the Explanatory Notes to the Provisions of the Finance (No. 2), 2014 as given in CBDT Circular No. 01 / 2015 dated 21.1.2015 in reference F.No. 142 / 13 /2014-TPL (enclosed as Annexure-6) which is reproduced herein below for the sake of convenience:-
Para 8 - Applicability of the registration granted to a trust or institution to earlier years Para 8.2Non-application of registration for the period prior to the year of registration caused genuine hardship to charitable organizations. Due to absence of registration, tax liability is fastened even though they may otherwise be eligible for exemption and fulfill other substantive conditions. However, the power of condonation of delay in seeking registration was not available. This clearly goes to prove that the first proviso to section 12A(2) was brought in the statute only as a retrospective effect with a view not to affect genuine charitable trusts and societies carrying on genuine charitable objects in the earlier years and substantive conditions stipulated in section 11 to13 have been duly fulfilled by the said trust. The benefit of retrospective application alone could be the intention of the legislature and this point is further strengthened by the Explanatory Notes to Finance (No. 2) Act, 2014 issued by the Central Board of Direct Taxes vide its Circular No. 01 / 2015 dated 21.1.2015. Apparently the statute provides that registration once granted in subsequent year, the benefit of the same has to be applied in the earlier assessment years for which assessment proceedings are pending before the Learned AO, unless the registration granted earlier is cancelled or refused for specific reasons. Therefore, Hon’ble CIT (Appeals) has erred in not considering the first proviso to Section 12A(2) of the Act which was introduced vide Finance (No.2) Act, 2014.
Ground No. 3: That under the facts and circumstances of the case the learned Assessing Officer has erred in disallowing the capital expenditure of Rs.3,10,754 and exemption of surplus income under section 11(1)(a) of Rs.5,80,036 against the application of income and further erred in assessing the total net taxable income at Rs.8,90,790 as against the Nil as returned income. Further, the Hon’ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre has further erred in upholding the order of the AO and confirming the additions made in the assessment order made by the learned Assessing Officer. Submission: 1. Further to the submissions made as above-mentioned in ground no. 1 and 2, we again hereby submit that the appellant has explained that registration u/s 12AA is now available to the Sansthan and being the objects of the A.Y.2016-17 was the same as of A.Y.2020-21, the deduction claimed u/s 11 and 12 should not be denied.
The above view can be supported with the pronouncement made by the Rajasthan High Court in the case of CIT vs. Vasu Puziya Jain Derashar Pedi Undri [1997] 228 ITR 247, where the assessee asked for condonation of delay in filing the application for registration, which was granted with reference to the date of application. The assessee has claimed exemption for an earlier period as well. The argument of the Revenue was that since it was the privilege of the Commissioner to condone or not to condone the delay, the date with reference to which such exemption should apply was also within his powers. The Tribunal, however, found that the assessee was entitled to exemption for all the years once it was found to be eligible for the same. The date of registration was immaterial. The important point for consideration is that once a trust is found registrable, registration is effective from the date of inception.
Thus, Firstly, availability of 80G certificate itself sufficient to prove that appellant was registered u/s 12AA of the Income-tax Act in A.Y. 2016-17. Secondly, as explained above, the registration granted later on shall also apply in the AY 2016-17 to grant the exemption u/s 11 & 12 of Income-tax Act. 4. Further, we would like to bring to your kind consideration that there are various pronouncements which specifically dealt with the similar issue and has considered the first proviso of Section 12A(2) of the Act and allowed the exemption under section 12AA even if the registration certificate was issuer after the relevant assessment year in which exemption has been claimed.
The following landmark pronouncements have been stated for your ready reference: (i) Sree Sree Ramkrishna Samity vs. DCIT, Circle-2,Siliguri, 1685/2012 (ITAT Kolkata) (ii) M/S Baba Amarnath Educational Society vs The Income Tax Officer-I, Moga pronounced on 31 January,2019 (ITA No.1318(Chd)/2012,366(Asr)/2014,638(Asr)/2014) (ITAT Amritsar) (iii) SNDP Yogam vs. ADIT (Exemption), Range-4, Kochi, IITA No.503-506 & 569/Coch/2014(ITAT Coch) which states that “All the Co-ordinate Benches in the aforesaid cases categorically held that amendment made by Finance Act, 2014 by inserting a proviso in Sec.12A of the Act shall be construed retrospectively in operation because the legislators in their wisdom have brought this proviso to prevent genuine hardship which could be caused on the assessee(s) due to non-registration u/s 12A of the Act.” (iv) In case of Shri Jain Shwetamber Murtipujak Fund Kapda Committee Vs. CIT (Exemption) (ITAT Indore) pronounced on 29.09.2020 held that “In our considered view all the documents are sufficient enough to prove that the claim of the assessee being registered u/s 12A of the Act is a charitable trust since 13.8.1973 has sufficient merit. Therefore there remains no dispute to the fact that the assesse trust was enjoying the benefit u/s 12A of the Act as a charitable trust and other benefits available to the charitable trusts u/s 11 of the Act since it is running for charitable purpose. In these given facts and circumstances of the case, we are of the considered viewthat the assessee trust should be granted the registration u/s 12AAof the Act w.e.f. 13.8.1973 in place of the registration granted from assessment year 2019-20 onwards. Ld. CIT (Exemption) is directed to amend his order dated 20.8.2019 and issue a fresh order of registration certificate u/s 12AA of the Act effective from 13.8.1973 so that the assessee could claim the benefits of the provision of Section 11 & 12 of the Act as and where applicable for the preceding Assessment Years. Once Ld. CIT (Exemption) grants the registration certificate u/s 12AA of the Act w.e.f. 13.8.1973 the assessee shall have liberty to move application before Ld. A.O for rectification of the assessment orders for various Assessment Years in order to avail the benefit of Section 11 of the Act available for charitable trust registered u/s 12AA of the Act so that the Ld. A.O. could decide accordingly for various assessment years where in assessee have been denied the benefit of exemption u/s 11 of the Act. (v) In CIT Vs. Vatika Township Pvt. Ltd. 367 ITR 466 (Supreme Court), the Constitutional Bench of the Hon’ble Supreme Court held that “if a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally; and where to confer such benefit appears to have been the legislators’ object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect”. In view of the above, the appellant request your honour to accede to the above request and allow the exemption under section 11 and 12 of the Act. Further allow the capital expenditure of Rs. 3,10,754 and the exemption of surplus income u/s 11(1)(a) of Rs. 5,80,036 accumulated or set apart and delete the addition of the same made to the total income of the appellant.
Kindly considered our written submission to finalize the appeal in the recent scenario of virtual hearing before the Bench.”
During the course of hearing the bench asked the ld. AR that whether in support of their contentions that the assessee enjoys the benefit of section 80(G) of the Act and for that 12A registration was mandatory, whether any efforts were made to call for the duplicate registration certificate from the records of the CIT(E)? In response the ld. AR submitted as under:
As directed by the Hon'ble Bench during the course of last hearing, we have written a request letter to the Commissioner of Income Tax (Exemption), Kailash Heights, 3rd Floor, Lal Kothi, Tonk Road, Jaipur on 02.04.2022 (Copy enclosed), whereby we have requested to provide copy of registration certification u/s 12A. We have also explained that department has granted the exemption certificate u/s 80G(5) of the Income Tax Act and being registration u/s 12A is a pre requisite requirement, we have requested that 12A certificate must have been granted to the Sansthan and in support we have also provided the copy of 80G certificate dated 25.04.2007. We have also conveyed to the Hon'ble Commissioner of Income Tax (Exemption) that the copy is required by the ITAT, Jaipur Bench and therefore the same may please be provided at the earliest. However, till date we have not received any communication form the office of the Commissioner of Income Tax (Exemption) Jaipur. Earlier on 22.11.2018 we have made the same request to the Commissioner of Income Tax, Kota, being at that time the exemption work was deal by the Commissioner of Income Tax, Kota to provide the registration certificate u/s 12A. The copy of the letter written at that time is also enclosed for ready reference.
The ld. AR of the assessee also submitted that subsequently as the assessee unable to have the copy of the 12A registration certificate they have again applied the same and the same was granted to the assessee from A.Y. 2020-21 and submitted that the department has neither given the copy nor stated that the registration u/s.12A and 80(G)(5) is cancelled subsequently and in the absence of the this facts placed on record merely denied. He also submitted that there is no change in the object of the society and the registration is already obtained and granted by the CIT(E) the assessee in the absence of any adverse finding the benefit cannot be denied. For this contention the ld. AR of the assessee relied upon the written submission and the judgement quoted in his submission. The ld. AR further submitted that they have already raised this contentions before the AO that the assessee has produced 80G certificate before the ld. Assessing Officer and alternatively argued that once the certificate u/s 80G is issued the absence of the 12A registration cannot be a question and it is the pre- requisite as before provisions of section 80G(5)(i) of the Act. The ld. AR of the assessee further submitted that even after the assessment they have applied afresh before the ld. CIT(E) for issue of registration certificate u/s 12AA of the Act which was granted vide order dated 3rd December, 2019.
The ld. AR further submitted that the department did not prove that the assessee exemption u/s 80G(5)(i) has been withdrawn as merely the assessee could not find that the original certificate exemption cannot be denied even subsequently the activities of the trust has been confirmed as the charitable and the registration has been granted. assessee and has not placed anything contrary that there was cancellation of recognition 80G(5) or 12A by the department for which the hearing was also adjourned to give sufficient time to find out the fact. But the ld. DR did not bring anything on record to counter the arguments of the ld. AR.
We have heard the rival contentions and also persuaded the written submission and case laws relied upon. Having persuaded the material and arguments serviced before us it is undisputed facts, that the assessee expressed that the 12A registration was not traceable but placed on record that after receipt of the 12A, 80(G) registration was granted and was effective and not cancelled till the completion of the assessment. They have made necessary efforts to bring the facts on record by applying to the CIT(E) by writing a letter and upon no response they have subsequently availed the registration u/s. 12AA of the Act. All these facts were not disputed by the ld. DR.
We have also persuaded the extract of the Notes to the Provisions of Finance (No. 2), 2014 as given in CBDT circular no. 01/2015 dated 21.01.2015 where in the board has clarified so as to applicability of the registration certificate the same is extracted here in below for the sake of brevity:
Applicability of the registration granted to a trust or institution to earlier years
8.1 The provisions of section 12A of the Income-tax Act, before amendment by the Act, provided that a trust or an institution can claim exemption under sections 11 and 12 only after registration under section 12AA of the said Act has been granted. In case of trusts or institutions which apply for registration after 1st June, 2007, the registration shall be effective only prospectively.
8.2 Non-application of registration for the period prior to the year of registration caused genuine hardship to charitable organisations. Due to absence of registration, tax liability is fastened even though they may otherwise be eligible for exemption and fulfil other substantive conditions. However, the power of condonation of delay in seeking registration was not available.
8.3 In order to provide relief to such trusts and remove hardship in genuine cases, section 12A of the Income-tax Act has been amended to provide that in a case where a trust or institution has been granted registration under section 12AA of the Income-tax Act, the benefit of sections 11 and 12 of the said Act shall be available in respect of any income derived from property held under trust in any assessment proceeding for an earlier assessment year which is pending before the Assessing Officer as on the date of such registration, if the objects and activities of such trust or institution in the relevant earlier assessment year are the same as those on the basis of which such registration has been granted.
8.4 Further, it has been provided that no action for reopening of an assessment under section 147 of the Income-tax Act shall be taken by the Assessing Officer in the case of such trust or institution for any assessment year preceding the first assessment year for which the registration applies, merely for the reason that such trust or institution has not obtained the registration under section 12AA for the said assessment year.
8.5 However, the above benefits would not be available in the case of any trust or institution which at any time had applied for registration and the same was refused under section 12AA of the Income-tax Act or a registration once granted was cancelled. 8.6 Applicability: - These amendments take effect from 1st October, 2014. granted and there is no contrary finding on record about the rejection of the trust registration the benefit of section 11 and 12 of the Act shall be available in respect of any income derived from held under trust in any assessment proceeding for an earlier assessment year which is pending before the Ld.AO. Here the ld. AR of the assessee already proved that the circumstantial evidence suggest that the assessee is having the registration but unable to provide the certificate and they have made sufficient effort to find out the truth and have also availed the fresh registration which is granted without any adverse observations on the activities of the trust.
In terms of the above observations made here in above, the denial of benefit under section 11 of the Act by the ld. AO merely on account non production of registration certificate is incorrect and we direct the AO to grant the benefit of section 11 & 12 benefit to the assessee and also direct to delete the addition made on this count consequent there upon.
In terms of this observations the appeal of the assessee in for assessment year 2016-17 is allowed. case in and we have heard both the parties and persuaded the materials available on record. The bench has noticed that the issues raised by the assessee in this appeal are largely have similar set of facts and grounds on not considered the assessee as registered u/s.12A of the Act. Therefore, it is not imperative to repeat the facts and findings in this appeal and bench feels that the decision taken by us in 275/JPR/2021 for the Assessment Year 2016-17 shall apply mutatis mutandis in ITA No. 276 & 277/JPR/2021 with an only exceptional observation that the addition of Rs. 42,000/- made in A. Y. 2017-18 in ITA No. 276/JPR/2021 the assessee has placed all the details before the ld. CIT(A) and he has considered the same and has not controvert the facts but since, the assessee was considered as not registered the benefit was not granted and thus this fact is not challenged by the ld. DR the same is considered based on the fact as not an anonymous donation and the benefit of registration not granted by the lower authorities is granted with the slight change in the fact for this amount of Rs. 42,000/- for A. Y. 2017-18.
In the result, three appeals of the assessee are allowed.
20 276 & 277/JP/2021 Janjati Mahila Vikas Sansthan vs. ITO, Exemption Order pronounced in the open court on 22/06/2022. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 22/06/2022 *Ganesh Kr. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Janjati Mahila Vikas Sansthan, Sawai Madhopur izR;FkhZ@ The Respondent- Income Tax Offficer, Exemption, Kota 2. 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA Nos. 275, 276 & 277/JP/2021) vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेजज. त्महपेजतंत