By K. B. Bhujle, Advocate
33 CIT(Exemption) vs.
Karnataka State Students Welfare Fund
[2022] 444 ITR 436 (Kar.)
A.Y.: 2012-13
Date of order: 30th November, 2021
S. 12A of ITA, 1961
Reassessment — Charitable purpose — Registration — Effect — Law applicable — Effect of amendment of s. 12A — Charitable institution entitled to exemption for assessment years prior to registration — Reassessment proceedings cannot be initiated on ground of non-registrationThe assessee is a trust eligible for exemption u/s 11 of the Income-tax Act, 1961. For the A.Y. 2012-13, reassessment order u/s 143(3) r.w.s 148 of the Act came to be passed, whereby the Assessing Officer held that the assessee had not applied the income for charitable purposes as required u/s 11 and 12 from 2014-15 onwards (i.e., after 23rd September, 2014. A survey revealed that the assessee has accumulated huge income and was claiming exemption under the Act without obtaining registration u/s 12AA.
The Tribunal allowed the appeal and quashed the reassessment order holding that the same is bad in law for violating the second and third proviso to s.12A(2) of the Act.
On appeal by the Revenue, the Karnataka High Court upheld the decision of the Tribunal and held as under:
“i) The provisions of section 12A of the Income-tax Act, 1961, before amendment by the Finance (No. 2) Act, 2014, provided that a trust or an institution can claim exemption under sections 11
