1. As per
proviso to section 12A(2) inserted by Finance Act 2014 w.e.f. 01-10-2014
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 the date of such registration
and the objects and activities of such trust or institution remain the same for
such preceding assessment year
2. ITAT Kolkatta in
ITA 1680 to 1685/2012 Sree Sree Ramkrishna Samity , pronounced on
09-10-2015 held
that the above proviso is retrospective in operation.
3.Further
that the Appeal
proceedings are continuation of assessment proceedings and powers of appellate
authority are coterminuous with assessing officer has been held by supreme
court in CIT v Kanpur Coal Syndicate (1964) 53 ITR 225 (SC); CIT v
Jute Corporation, 187 ITR 688; National Thermal Power Co. Ltd. v CIT (1998) 229
ITR 383 (SC); Ahmedabad Electrecity Co. Ltd. v CIT 199 ITR 351 (Bom) (FB)
4. However inspite of above position of law, if on the date of
registration of trust the case of the assessee trust is pending before
appellate authorities, the assessee may be denied the benefit of section 11 and
12 inspite of the fact that Para 8.2 of memorandum explaining the provisions of
Finance Act says that
“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”
5.Hence
the position of law should be clarified to provide benefit to trusts even if
proceedings are pending before appellate bodies.
