Case Law Details
Sansthan Shree Eknath Maharaj Vishwastha Mandal Vs ITO (Exemption) (ITAT Pune)
There is no dispute on the fact that the assessee filed its return of income on 17.01.2017 for the year under consideration. The approval was granted by the ld. CIT(E) u/s 12AA on 16.05.2017. At this stage, it is relevant to take note of the mandate of sub-section (2) of section 12A granting benefit of exemption to the years prior to the grant of registration, which provides through the second proviso that : `where registration has been granted to the trust or institution under section 12AA or section 12AB, 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 the date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment year.‟ A bare perusal of the proviso amply transpires that where the subsequent registration has been granted u/s 12AA, then the benefit of such registration will also be conferred to earlier years for which assessment proceedings are pending before the AO as on the date of such registration. The crucial words used in the second proviso are the pendency of assessment proceedings. To put it simply, if the assessment proceedings are pending before the AO when the registration is granted by CIT(E), the registration so granted will also have effect and the AO will be obliged to grant exemption u/s 11 in respect of such assessment year. The authorities below have taken note of the mandate of the second proviso but interpreted the term „assessment proceedings‟ as commencing with the issuance of notice u/s 143(2) of the Act. That is the raison d`etre for denying the benefit of exemption in the extant case on the premise that notice u/s 143(2) was issued on 20.09.2017 and by that time the registration had already been granted by the ld. CIT(E) on 16.5.2017. In my opinion, the connotation of commencement, continuation and termination of `assessment proceedings‟ is fairly settled by authoritative pronouncement from the highest Court of the land in Auto & Metal Engineers And Ors. Vs. Union of India & Ors. (1998) 229 ITR 399 (SC) in which it has been held by the Hon‟ble Summit Court that the process of assessment commences with the filing of return or by issuance by the AO of notice to file a return and it culminates with the issuance of notice of demand u/s 156 of the Act. It is thus, manifest that the assessment proceedings commence with the filing of return and not when notice is issued for the first time u/s 143(2). Issuance of such a notice and passing of assessment order are parts of entire assessment proceedings which commences with the filing of return.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee arises out of the order passed by CIT(A)-2, Aurangabad on 05.12.2019 in relation to the assessment year 2016-17.
2. The assessee is aggrieved by the denial of exemption u/s 11 of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) which was denied by the authorities below on the ground that the registration granted subsequently by the ld. CIT(E) was not operative to the year under consideration.
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