The Tax Publishers2020 TaxPub(DT) 5055 (Bang-Trib)

INCOME TAX ACT, 1961

Section 147 Section 12A(2)

Where AO reopened assessment of assessee for reason that assessee did not have registration under section 12A for the years under consideration, even though assessee was granted registration from assessment year 2014-15, action of AO was untenable because second proviso to section 12A(2) specifically bars AO from taking action under section 147 only for the reason of non-registration of such trust or institution for the said assessment year.

Reassessment - Validity - Assessments of the years under consideration were only reopened because assessee did not have registration under section 12A -

Assessee was established by education department of Government of Karnataka. It was not filing return of income and sought registration under section 12AA as a charitable organization. It was accorded registration under section 12AA. Pursuant to survey operations under section 133A, revenue alleged that assessee was accumulating huge income year after year and was claiming exemption under section 11 without having registration under section 12AA. AO reopened assessments of the years under consideration by issuing notices under section 148. Assessee contested reopening of assessments by placing reliance on the second proviso to section 12A(2). Held: In instant case, registration under section 12A was granted to assessee on 23-9-2014. Second proviso to section 12A(2) specifically bars AO from taking action under section 147 only for the reason of non-registration of such trust or institution for the said assessment year. However, in instant case, AO reopened assessment only for the reason of non-registration of the assessee under section 12A and consequently to tax the surplus earned by the assessee during the years under consideration. AO did not properly understand the binding circular issued by CBDT, which clearly explains the meaning of provisos inserted in section 12A(2). Reasons recorded by AO that assessments of the years under consideration were only reopened because assessee did not have registration for the years under consideration, even though assessee was granted registration from assessment year 2014-15 and further the registration certificate was in operation at the time the notices under section 148 were issued. Accordingly, action of AO was in violation of the second proviso to section 12A(2).

REFERRED : CIT (Exemptions) v. Shree Shyam Mandir (2018) 400 ITR 466 (Raj-HC) : 2018 TaxPub(DT) 536 (Raj-HC), Bandanthamma Mathu Kalamma Trust v. ITO [ITA No. 1761 1766/Bang/2018 dated 26- 2-2020], SNDP Yogam v. Asstt. DIT (Exemption) (2016) 161 ITD 1 (Cochin) : 2016 TaxPub(DT) 1890 (Coch-Trib) and Sree Sree Ramkrishna Samity v. Dy. CIT (2016) 156 ITD 646 (Kol-Trib) : 2016 TaxPub(DT) 154 (Kol-Trib.

FAVOUR : In assessee's favour.

A.Y. : 2009-10 to 2013-14



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