INCOME TAX ACT, 1961

Section 11 Section 12 Section 12A(2)

Charitable trust - Exemption under section 11 - Registration under section 12A - In subsequent year retrospective benefit of registration granted

Assessee trust was engaged in the activities of eye donation, body donation, funeral, activities etc. and had been registered on 29-9-2006 under the Chhattisgarh Society Registration Act 1973. Application for registration under section 12A was filed on 26-3-2010 before the CIT and the registration under section 12A was granted to the assessee trust with effect from 27-4-2009. AO observed from the return of income filed by the assessee for assessment years 2008-09 and 2009-10 that the assessee had claimed exemption, under section 11, without having been registered under section 12A for the year under reference although the registration under section 12A was granted by the CIT, with effect from 27-4-2009, before completion of assessment and the objects and genuineness of its activities remain undisputed. However, AO had disallowed exemption so claimed by the assessee under section 11. CIT(A) dismissed the appeal of the assessee.Held: The assessment order was passed on 23-1-2013 under section 143(3) read with section 147 and when the order of registration under section 12A with effect from 27-4-2009 vide Order, dated 18-6-2010 passed by the CIT the assessment proceedings were pending before the AO. Therefore, the benefit of registration was required to be given for the preceding assessment years i.e., 2008-09 and 2009-10. Since, the Proviso to sub-section (2) of section 12A had retrospective application and had been inserted in the Act to remove the hardship of charitable trusts/institutions. Therefore, the assessee was required to be treated as registered trust under section 12A for the assessment years 2008-09 and 2009-10. In the present case the reopened assessment was pending before the AO for the years 2008-09 and 2009-10, and there was a change in law with effect from 1-10-2014 in favour of assessee and therefore, the benefits which are available to the assessee on account of insertion of the Proviso to sub-section (2) of section 12A with retrospective application in the Act to remove the hardship of charitable trusts/institutions, then these are required to be extended or passed on to the assessee. There was no change in the objects and activities of the earlier and subsequent assessment years and further, there was no finding that the assessee had carried on any activity not in accordance with its objectives and therefore, in the absence of any finding of facts being given by the AO or the CIT(A), the exemption under sections 11 and 12 can not be denied. Accordinlgy, the AO was directed to grant the beneft of sections 11 and 12 to the assessee for the assessment years 2008-09 and 2009-10.

Relied:SNDP Yogam v. Asstt. Director of Income Tax (Exemption) (2017) 186 TTJ (Coch) 277 : 2016 TaxPub(DT) 1890 (Coch-Trib) : (2016) 68 taxmann.com 152 (Coch), Sree Sree Ramkrishna Samity v. Dy. CIT (2015) 64 taxmann.com 330 (Kol) : 2016 TaxPub(DT) 154 (Kol-Trib) and Shyam Mandir Committee v. Asstt. CIT (2016) 179 TTJ (JP-Trib) 752 : 2016 TaxPub(DT) 3530 (Jp-Trib) [ITA No. 651/Jp/2013].

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