Ma/359/2011 Of Ishan International Educationa v. Chief Commissioner Of Income Tax-I, Patna

IN THE HIGH COURT OF JUDICATURE AT PATNAMiscellaneous Appeal No.359 of 2011 ====================================================== Ishan International Educational Society, a Society registered under theSocieties Act, 1860 having its office at South End, Doctor’s Colony, MalahiPakri, Kankarbag P.O. Lohia Nagar, P.S. Kandarbagh through its DirectorArvind Kumar, son of Late Durga Singh, resident of South End, Doctor’sColony, Malahi Pakri, Kankarbag P.O. Lohia Nagar, P.S. Kankarbagh,District-Patna. ... ... Appellant Versus 1. Chief Commissioner Of Income Tax-I, Patna having its office at CentralRevenue Building, Beerchand Patel Marg, Patna. 2. Commissioner of Income Tax-I, Patna having its office at Central RevenueBuilding, Beerchand Patel Marg, Patna. 3. Addl. Commissioner of Income Tax, Range-1, Patna having its office atLoknayak Jai Prakash Bhavan, Dak Bungalow Road, Patna. ... ... Respondents ======================================================Appearance :For the Appellant/s: Mr. D.V.Pathy, AdvocateFor the Respondent/s: Mrs. Archana Sinha, Senior Standing Counsel ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHY CAV JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 26-09-2023 The question of law framed in the above case is as follows:- “Whether on the facts and in the circumstances ofthe case, in view of the statutory bar contained inthe second proviso to Sub-Section (2) of Section12A of the Income Tax Act, for taking action underSection 147 of the Act by the Assessing Officeronly on the ground of non-registration of theassessee for the said assessment year, the IncomeTax Tribunal was justified in confirming the orderof reassessment specially considering the fact thatthe assessee had been granted the benefit of exemption for all the preceding and all thesubsequent years?” 2. The appellant is an educational institution whoclaimed that it is covered under Section 10 (23C)(vi) of theIncome Tax Act, 1961 (for brevity, ‘the Act’). The appellantfiled return for the assessment year 2002-03 on 31.10.2003claiming exemption from the income tax on the basis of acertificate issued on 01.04.2002 under Section 12AA of theAct. A notice was issued by the 3[rd] respondent under Section147 of the Act on the premise that the appellant was notregistered with the 2[nd] respondent under Section 12AA ofthe Act in the previous year relevant to the assessment year.A reassessment was carried out on the above basis whichwas challenged before the first appellate authority. The firstappellate authority by Annexure-5 order found that theappellant is entitled to exemption under Sections 11 and 12of the Act since the appellant is registered as a charitabletrust under Section 12AA of the Act by the CIT-I, Patna on30.03.2005 itself while notice under Section 148 was issuedmuch later on 01.08.2006. The assessment records werefound to contain the copy of the order under Section 12AA of the Act granting registration to the appellant with effectfrom 01.04.2002. Expressing surprise at the denial ofexemption, the appellate authority observed that theformation of belief by the Assessing Officer to reopen theassessment under Section 147 of the Act was untenable. of the Act granting registration to the appellant with effectfrom 01.04.2002. Expressing surprise at the denial ofexemption, the appellate authority observed that theformation of belief by the Assessing Officer to reopen theassessment under Section 147 of the Act was untenable. 3. The Tribunal in an appeal by the Revenueoverturned the decision of the first appellate authority as isevident from Annexure-6. Before the Tribunal, it wasargued that since the certificate was issued under Section12AA with effect from 01.04.2002, the assessee is entitledto the exemption in the relevant assessment year. TheTribunal specifically referred to the explanatory note issuedby the Central Board of Direct Taxes (CBDT) pursuant toevery Finance Act, wherein it is clarified that anyamendment or insertion as on 1[st] of April would beapplicable to the concerned assessment year, unlessspecified otherwise. The Tribunal; according to us correctly,found that a certificate granted by the Commissioner witheffect from 01.04.2002 cannot be interpreted like a statutoryprovision applicable for the assessment year 2002-03;which is incorporated in the Act as on the first day of the assessment year. The certificate is a document grantingauthority to the assessee to claim the exemption from aparticular date and this would be applicable only from thefinancial year 2002-03. The assessment year 2002-03 beingrelatable to the financial year (previous year) 2001-02 theexemption would not be applicable. The assessee did nothave the benefit of registration under Section 12AA of theAct in the previous year to the relevant assessment year andhence it could not claim benefit of Section 10(23C) of theAct; especially when the receipt exceeded Rs.1 Crore. 4. The assessee cannot have a claim that merelybecause for the previous & subsequent assessment years,the assessee was granted exemption; for the subjectassessment year relatable to the relevant previous year, theassessee should be granted an exemption, though theassessee had not obtained a certificate under Section 12AAof the Act, for that particular year. The contention seems tostem from sub-section (2) of Section 12A and the secondproviso, which prohibits any action under Section 147;which sub-section, however applies only to those assesseswho made an application under the provisions of Section 11 and 12, after 01.06.2007. The assessee in this case made anapplication prior to that date since the order passed givingretrospective effect to the registration of the assessee wasdated 30.03.2005; the application being prior to that. 5. We find the order of the Tribunal to be perfectly in accordance with law and the provisions of the Act. Weanswer the question of law in favour of the Revenue andagainst the assessee. 6. The appeal stands rejected answering thequestion of law framed, as above. (K. Vinod Chandran, CJ) Partha Sarthy, J. I agree. Sunil/- (Partha Sarthy, J) AFR/NAFRNAFRCAV DATE21.09.2023Uploading Date26.09.2023Transmission Date