INCOME TAX ACT, 1961

Section 11 Section 12A(2), proviso

Charitable trust - Exemption under section 11 - Registration granted in financial year 2014-15, exemption under section 11 claimed for assessment year 2011-12 - Interpretation of proviso to section 12A(2)

For the assessment year 2011-12, the benefit of sections 11 and 12 had been given to the assessee though application for registration under section 12 AA, was submitted in the assessment year 2015-16. It is by taking erroneous interpretation of the proviso to section 12A(2), ignoring the main provision. It is submitted that the benefit of exemption under sections 11 and 12 was not permissible to an assessee for the assessment prior to the date of application for registration of the Trust. The Tribunal had extended the benefit on the ground that assessment for the year 2011-12 was pending either before the Appellate Tribunal. In view of the above and taking note of the fact that an appeal was pending for the assessment year 2011-12 while the application for registration was accepted in favour of the assessee, thus the benefit of exemption under sections 11 and 12 had rightly been allowed by the Tribunal. Held: Assessee made an application for registration on 15-12-2014, i.e., in the assessment year 2015-16. The assessment in question was of the year 2011-12. The Tribunal had given interpretation to the proviso to hold that irrespective of the date of application, the benefit of sections 11 and 12 would be available to the assessee retrospectively, if the assessment proceedings were pending and pendency of such proceedings may be not only before the AO, but even before the Tribunal. The Tribunal was required to make distinction between charging provision where benefit of ambiguity is given to the assessee and the exemption notification or clause where interpretation is to be given in the form of revenue. The benefit of sections 11 and 12 would be extended from the assessment year immediately following the financial year in which the application was given. In the instant case the application for registration was given on 15-12-2014, i.e., in the financial year 2014. Since registration had been given on 8-6-2015, the benefit of sections 11 and 12 would be available for the following financial year in which application was made if the assessment proceedings for the relevant assessment year was pending till the date of registration. It cannot be for the assessment year 2011-12 due to pendency of the appeal before the Tribunal. If the benefit of sections 11 and 12 was extended for the assessment year 2011-12, despite submission of the application for registration on 15-12-2014, it would be in contravention of sub-section (2) of section 12. Proviso qualifies not only pendency of the assessment proceedings, but should before the assessing officer not else where.

Applied:Commr. of Cus. (Import) Mumbai v. Dilip Kumar and Co. & Ors. 2018 (9) SCC 1. Distinguished:CIT v. Mayur Foundation (2005) 194 CTR (Guj) 197 : 2005 TaxPub(DT) 1142 (Guj-HC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2011-12

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