ESS KAY FOUNDATION, JAIPUR v. CIT(E), JAIPUR

ITA 304/JPR/2020 | 2020-2021
Pronouncement Date: 01-03-2021 | Result: Allowed

Appeal Details

RSA Number 30423114 RSA 2020
Assessee PAN AABTE0649L
Bench Jaipur
Appeal Number ITA 304/JPR/2020
Duration Of Justice 4 month(s) 17 day(s)
Appellant ESS KAY FOUNDATION, JAIPUR
Respondent CIT(E), JAIPUR
Appeal Type Income Tax Appeal
Pronouncement Date 01-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 01-03-2021
Last Hearing Date 02-12-2020
First Hearing Date 02-12-2020
Assessment Year 2020-2021
Appeal Filed On 13-10-2020
Judgment Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCHE S A JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN JM & SHRI VIKRAM SING H YADAV AM VK;DJ VIHY LA-@ ITA. NOS. 303 & 304/JP/2020 M/S ESS KAY FOUNDATION G 1-2 NEW MARKET KHASA KOTHI JAIPUR. CUKE VS. THE CIT (EXEMPTION) JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABTE 0649 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI RAJEEV SOGANI (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI AMRISH BEDI (CIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 10/02/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 01/03/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV A.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDERS PASSED BY THE LD. CIT(E) JAIPUR U/S 12AA AND 80G(5 )(VI) DATED 23.09.2020. SINCE COMMON ISSUES ARE INVOLVED BOTH THESE APPEALS WERE HEARD TOGETHER AND DISPOSED OFF BY THIS CONSOL IDATED ORDER. 2. IN ITA NO. 303/JP/2020 THE ASSESSEE HAS TAKEN THE FOLLOWING SOLE GROUND OF APPEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(EXEMPTIONS) JAIPUR HAS ERRED IN NOT GRANTING R EGISTRATION U/S 12AA W.E.F. A.Y. 2020-21 AND GRANTING THE SAME ONLY W.E.F. 2021- 22 IGNORING THE FACT THAT THE APPLICATION FOR REGIS TRATION WAS ITA NOS. 303 &304/JP/2020 M/S ESS KAY FOUNDATION VS. CIT(E) 2 MOVED ON 04.02.2020 MAKING THE ASSESSEE TRUST ELIGI BLE FOR REGISTRATION W.E.F. 2020-21 IN TERMS OF SECTION 12A (2). THE ACTION OF THE LD. CIT(EXEMPTIONS) IS ILLEGAL UNJUSTIFIED ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DIRECTING LD. CIT(EXEMPTIONS) TO GRANT REGISTRATION W.E.F. A.Y. 2020-21. 3. IN ITA NO. 304/JP/2020 THE ASSESSEE HAS TAKEN THE FOLLOWING SOLE GROUND OF APPEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(EXEMPTIONS) JAIPUR HAS ERRED IN NOT GRANTING A PPROVAL U/S 80G W.E.F. A.Y. 2020-21 AND GRANTING THE SAME ONLY W.E.F. 2021- 22 IGNORING THE FACT THAT THE APPLICATION FOR GRANT OF APPROVAL WAS MOVED ON 05.02.2020 MAKING THE ASSESSEE TRUST ELIGI BLE FOR APPROVAL W.E.F. 2020-21. THE ACTION OF THE LD. CIT( EXEMPTIONS) IS ILLEGAL UNJUSTIFIED ARBITRARY AND AGAINST THE FAC TS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DIRECTING LD. CIT(E XEMPTIONS) TO GRANT APPROVAL W.E.F. A.Y. 2020-21. 4. DURING THE COURSE OF HEARING THE LD. AR SUBMITT ED THAT BOTH THESE APPEALS RELATE TO GRANT OF APPROVAL U/S 12AA AND 80G OF THE ACT RESPECTIVELY. IT WAS SUBMITTED THAT THE LD. CIT(E) HAS GRANTED APPROVAL W.E.F. A.Y. 2021-22 INSTEAD OF A.Y. 2020-21 WHICH I S THE LIMITED MATTER UNDER DISPUTE AND THE SUBJECT MATTER OF THE PRESENT APPEALS. 5. IT WAS SUBMITTED THAT IN THE INSTANT CASE THE A PPLICATION SEEKING REGISTRATION U/S 12AA WAS FILED ON 04-02-2020 AND THEREFORE THE ITA NOS. 303 &304/JP/2020 M/S ESS KAY FOUNDATION VS. CIT(E) 3 APPROVAL SHOULD HAVE BEEN GRANTED FROM A.Y. 2020-21 . IT WAS SUBMITTED THAT LD. CIT(E) WHILE GRANTING THE APPRO VAL CANNOT DEFER THE ASSESSMENT YEAR FOR WHICH THE APPROVAL SHOULD BE EF FECTIVE AS PROVIDED IN SECTION 12A(2). SECTION 12AA(1)(B) PROVIDES THAT AFTER THE NECESSARY ENQUIRY THE CIT(E) CAN EITHER REGISTER OR REFUSE T O REGISTER THE TRUST. IF REGISTRATION IS GRANTED THE APPLICABILITY WOULD BE GOVERNED BY THE PROVISIONS OF SECTION 12A(2) AND CIT(E) HAS NO DISC RETION IN THIS REGARD. 6. IT WAS FURTHER SUBMITTED THAT WITHOUT PREJUDICE TO ABOVE IT MAY BE NOTED THAT WHILE APPLICATION WAS FILED ON 04-02- 2020 THE FIRST NOTICE BY LD. CIT(E) WAS ISSUED ON AS LATE AS 14-07-2020. THE NOTICE REQUIRED AS MANY AS 26 DOCUMENTS/ CLARIFICATIONS/ INFORMATIO N. ALL THE 26 QUERIES WERE RESPONDED VIDE LETTER DATED 17-08-2020. THEREA FTER THE NOTICE DATED 11-09-2020 WAS ISSUED BY LD. CIT(E) AND IN RE SPONSE TO QUERY RELATED TO CERTAIN OBJECT CLAUSES OF THE TRUST AS D ESIRED IN THE SAID NOTICE THE TRUST FILED AN AFFIDAVIT DATED 22-09-20 20 AND THEREAFTER THE LD. CIT(E) HAS GRANTED THE APPROVAL W.E.F. A.Y. 202 1-22 ONLY BECAUSE OF THE FACT THAT AFFIDAVIT WAS FILED ON 22-09-2020. I T WAS SUBMITTED THAT THE PROVISO TO SECTION 2(15) HAS NOTHING TO DO WITH THE GRANT OF APPROVAL. THIS IS ALSO MANIFEST FROM THE PROVISIONS OF SECTION 13(8). THUS AN ENQUIRY WHICH HAD NO RELEVANCE FOR GRANT OF APPROVAL WAS STILL CONDUCTED BY THE LD. CIT(E) AND THE APPROVAL WAS GR ANTED W.E.F. SUBSEQUENT ASSESSMENT YEAR JUST BECAUSE THE DESIRED AFFIDAVIT IN THIS REGARD WAS FILED ON 22-09-2020. 7. IT WAS FURTHER SUBMITTED THAT APPROVAL IS GRANTE D BY LD. CIT(E) SUBJECT TO AS MANY AS 18 CONDITIONS. THE UNDERTAKIN G OBTAINED BY LD. ITA NOS. 303 &304/JP/2020 M/S ESS KAY FOUNDATION VS. CIT(E) 4 CIT(E) THROUGH THE AFFIDAVIT COULD ALSO HAVE BEEN M ADE A CONDITION BY LD. CIT(E) WHILE GRANTING THE APPROVAL. OTHERWISE ALSO IRRESPECTIVE OF WHETHER COMPELLED THROUGH AFFIDAVIT OR IMPOSED THRO UGH CONDITION THE REQUIREMENTS OF PROVISO TO SECTION 2(15) REMAIN MAN DATORY IN NATURE. COMPLIANCE OF PROVISO TO SECTION 2(15) WOULD BE SEE N ON YEAR-ON-YEAR BASIS BY AO WHILE FRAMING ASSESSMENT AND GRANTING BENEFIT OF SECTION 11. IN THIS REGARD THE ATTENTION IS ALSO DRAWN TOW ARDS CBDT CIRCULAR NO. 21/2016 DATED 27-05-2016 WHEREIN AT PARA 4 THE BOARD HAS DIRECTED THAT REGISTRATION U/S 12AA SHALL NOT BE CA NCELLED MERELY ON THE GROUND OF VIOLATION OF PROVISO TO SECTION 2(15) OF THE ACT. 8. IN SUPPORT RELIANCE WAS PLACED ON THE ORDER OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. JAIPUR STOCK EXCH ANGE [1996] 217 ITR 101 WHEREIN THE ORDER OF TRIBUNAL DATED 27-09-1991 IS R EFERRED IN WHICH IT WAS HELD THAT IF A BELATED APPLICATION IS ADMITT ED BY THE COMMISSIONER IN EXERCISE OF HIS DISCRETION UNDER THE PROVISO TO SECTION 12A(A) IT WOULD BE AS GOOD AS AN APPLICATION MOVED BEFORE 1-7 -1973 OR BEFORE THE EXPIRY OF ONE YEAR FROM THE DATE OF CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION WHICHEVER IS LATE R. IF THE COMMISSIONER DECIDES TO EXERCISE HIS DISCRETION FOR GRANTING REG ISTRATION HE CANNOT PUT A RIDER ON THE EFFECT OF HIS ORDER THAT IT WOUL D BE EFFECTIVE FROM A PARTICULAR DATE. 9. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HON BLE MADRAS HIGH COURT IN THE CASE OF NEW LIFE IN CHRIST EVANGELISTI C ASSOCIATION (NLC) VS. CIT [2000] 246 ITR 532. IN THE SAID ORDER AT PARA 7 IT WAS HELD THAT THE LANGUAGE OF THE SECTION DOES NOT SHOW THAT IN O RDER TO BE ABLE TO ITA NOS. 303 &304/JP/2020 M/S ESS KAY FOUNDATION VS. CIT(E) 5 GET REGISTRATION UNDER SECTION 12A THERE IS NECESS ITY OF FIRST ESTABLISHING AS TO HOW THE CONCERNED INSTITUTION OR AS THE CASE MAY BE THE SOCIETY WOULD BE ABLE TO CLAIM THE EXEMPTIONS UNDER SECTION 11 OR 12. IN INSISTING UPON THE SOCIETY IN CHANGING OR AMENDING ITS BYE-LAWS AND IN REFUSING TO CONSIDER THE APPLICATION ON THE GROUND THAT THOSE BYE-LAWS HAVE NOT BEEN CHANGED SO AS TO EXCLUDE THE RELIGIOU S ASPECT FROM THOSE BYE-LAWS THE COMMISSIONER HAS CLEARLY OVER-STEPPED HIS LIMITS. IT WAS FURTHER HELD AT PARA 8 THAT THE VIEW OF THE COMMISS IONER THAT UNLESS THE RELIGIOUS ASPECT OF THE SOCIETY IS REMOVED FROM THE BYE-LAWS THE APPLICATION COULD NOT BE TAKEN FOR CONSIDERATION I S CLEARLY ERRONEOUS. AND FINALLY THE HONBLE HIGH COURT AT PARA 9 HELD A S UNDER: 9.IN THAT VIEW OF THE MATTER IT WILL NOT BE NE CESSARY FOR THE PETITIONER TO COMPLY WITH THE OBJECTIONS AND/OR SUG GESTIONS MADE BY THE FIRST RESPONDENT AS A PRECONDITION FOR CONSI DERATION OF THE APPLICATION. THE FIRST RESPONDENT IS THEREFORE DI RECTED TO PASS AN ORDER IN THE LIGHT OF THE OBJECTIONS MADE ABOVE. TH E APPLICATION SHALL BE DISPOSED OF WITHIN ONE MONTH FROM TODAY. 10. IT WAS SUBMITTED THAT SIMILAR CONTENTIONS MAY BE CONSIDERED IN RESPECT OF MATTER RELATING TO GRANT OF APPROVAL U/S 80G WHEREIN ALSO THE LD. CIT(E) HAS GRANTED REGISTRATION W.E.F FROM A.Y 2021-22 INSTEAD OF A.Y 2020-21. 11. IT WAS SUBMITTED THAT IN VIEW OF THE ABOVE LD. CIT(E) MAY BE DIRECTED TO GRANT BOTH THE APPROVALS U/S 12AA AND 8 0G(5)(VI) EFFECTIVE FROM A.Y. 2020-21. 12. PER CONTRA IN HIS SUBMISSION LD. CIT/DR HAS R ELIED ON THE PROVISIONS OF SECTION 12AA OF THE ACT. IT WAS SUBMI TTED THAT IN THE ITA NOS. 303 &304/JP/2020 M/S ESS KAY FOUNDATION VS. CIT(E) 6 INSTANT CASE CERTAIN CLARIFICATIONS WERE REQUIRED FROM THE ASSESSEE REGARDING SOME OF THE OBJECTS WHICH ARE IN THE NATU RE OF COMMERCIAL OBJECTS AND ON RECEIPT OF AFFIDAVIT FROM THE ASSESS EE-FOUNDATION WHICH WAS RECEIVED ON 22.09.2020 THE LD. CIT(E) HAS GRAN TED APPROVAL EFFECTIVE FROM 22.09.2020. IT WAS SUBMITTED THAT ON APPRECIATION OF THE OBJECTS AND ACTIVITIES OF THE ASSESSEE-TRUST ONCE T HE APPROVAL HAS BEEN GRANTED IN SUCH CIRCUMSTANCES THERE ARE NO RESTRIC TION WHICH ARE IMPOSED ON THE POWER OF LD. CIT(E) TO GRANT APPROVA L EFFECTIVE FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH THE APPLICATION HAS BEEN FILED BY THE ASSESSEE. IT WAS SUBMITTED THAT THE LD. CIT(E) HAS TO DECIDE BASIS EXAMINATION OF FACTS AND THE CIRCUMSTANCES OF THE CASE AS TO WHEN THE APPROVAL SHALL BE EFFECT IVE FROM AND IN THE INSTANCE CASE ONCE THE LD. CIT(E) WAS SATISFIED AB OUT THE OBJECTS OF THE ASSESSEE-TRUST NOT BEING COMMERCIAL IN NATURE HE HAS GRANTED THE APPROVAL U/S 12AA AND 80G(5)(VI) FROM THE SAID DATE . HE ACCORDINGLY SUPPORTED THE ORDERS AND THE FINDINGS OF THE LD. CI T(E). 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SECTION 12AA PROVIDES THAT THE LD. CIT(E) ON RECEIPT OF AN APPLICATION SEEKING REGISTRATION OF THE TRUST U/S 12A(1) OF THE ACT SHALL CALL FOR SUCH DOCUMENTS OR INFORMATION FROM T HE TRUST AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE OBJ ECTS OF THE TRUST THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AND THE COMPLIANCE OF SUCH REQUIREMENTS OF ANY OTHER LAW FOR TIME BEING IN FOR CE BY THE TRUST AS ARE MATERIAL FOR THE PURPOSES OF ACHIEVING ITS OBJECTS AND AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST THE GENUINE NESS OF THE ACTIVITIES AND COMPLIANCE OF OTHER LAW AS SO SPECIFIED AND MAT ERIAL FOR ACHIEVEMENT OF ITS OBJECTS SHALL PASS AN ORDER IN WRITING REGISTERING THE ITA NOS. 303 &304/JP/2020 M/S ESS KAY FOUNDATION VS. CIT(E) 7 TRUST OR WHERE HE IS NOT SATISFIED PASSED AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST. THEREFORE WE FIND THAT AS FAR AS SECTION 12AA OF THE ACT IS CONCERNED THE LD CIT(E) IS BASICALLY REQUIR ED TO SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST THE GENUINENESS OF ITS ACTIVITIES AS WELL AS COMPLIANCE OF OTHER LAW TIME BEING IN FORCE AS APPL ICABLE TO SUCH TRUST FOR THE PURPOSES OF ACHIEVING ITS OBJECTS AND ONCE HE IS SO SATISFIED HE IS REQUIRED TO PASS AN ORDER EITHER REGISTERING THE TRUST OR REFUSING TO REGISTER THE TRUST AND IT NOWHERE TALKS ABOUT THE D ATE FROM WHICH THE REGISTRATION WILL BE GRANTED OR CAN BE MADE EFFECTI VE. 14. AT THE SAME TIME WHERE WE LOOK AT THE PROVISIO NS OF SECTION 12A(1) OF THE ACT IN RESPECT OF ANY APPLICATION MA DE BEFORE THE 1 ST DAY OF JUNE 2007 IT PROVIDES THAT THE PROVISIONS OF S ECTIONS 11 AND 12 SHALL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUST UN LESS THE PERSON IN RECEIPT OF THE INCOME HAS MADE AN APPLICATION FOR R EGISTRATION OF THE TRUST IN THE PRESCRIBED FORM AND IN THE PRESCRIBED MANNER BEFORE THE EXPIRY OF A PERIOD OF ONE YEAR FROM THE DATE OF CRE ATION OF THE TRUST. IT HAS BEEN FURTHER PROVIDED WHERE AN APPLICATION FOR REGISTRATION OF THE TRUST IS MADE AFTER EXPIRY OF THE AFORESAID PERIOD THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO INCOM E OF SUCH TRUST FROM THE DATE OF CREATION OF THE TRUST WHERE THE LD. CIT (E) FOR REASONS TO BE RECORDED IN WRITING IS SATISFIED THAT THE PERSON IN RECEIPT OF THE INCOME WAS PREVENTED FROM MAKING THE APPLICATION BEFORE TH E EXPIRY OF AFORESAID PERIOD FOR SUFFICIENT REASONS AND WHERE T HE LD. CIT(E) IS NOT SO SATISFIED THE PROVISIONS OF SECTIONS 11 AND 12 SHA LL APPLY FROM THE FIRST DAY OF THE FINANCIAL YEAR IN WHICH APPLICATION IS M ADE. FURTHER IF WE LOOKS AT THE PROVISIONS OF SUB-SECTION (2) TO SECTI ON 12A AS INSERTED BY ITA NOS. 303 &304/JP/2020 M/S ESS KAY FOUNDATION VS. CIT(E) 8 THE FINANCE ACT 2007 IN RESPECT OF APPLICATION MO VED ON OR AFTER 1 ST DAY OF JUNE 2007 IT PROVIDES THAT THE PROVISIONS O F SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WH ICH SUCH APPLICATION IS MADE. IT HAS BEEN FURTHER PROVIDED THAT WHERE RE GISTRATION HAS BEEN GRANTED TO THE TRUST U/S 12AA THAN THE PROVISIONS O F SECTIONS 11 AND 12 SHALL APPLY IN RESPECT OF ANY INCOME DERIVED FROM P ROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YEAR PRECEDING THE AFORESAI D 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 REMAIN THE SAME FOR SUCH PRECEDING AS SESSMENT YEAR. 15. WE THEREFORE FIND THAT UNDER THE ERSTWHILE PR OVISIONS IN RESPECT OF ANY APPLICATION MADE BEFORE THE 1 ST DAY OF JUNE 2007 WHERE THERE HAS BEEN A DELAY IN FILING THE APPLICATION SEEKING REGISTRATION THE LD. CIT(E) IS REQUIRED TO RECORDED IN WRITING HIS SATIS FACTION THAT PERSON SEEKING REGISTRATION WAS PREVENTED FROM MAKING THE APPLICATION BEFORE THE EXPIRY OF PERIOD OF ONE YEAR FROM THE DATE OF C REATION OF THE TRUST FOR SUFFICIENT REASONS AND ONLY IN SUCH A SCENARIO WHERE SUCH SATISFACTION HAS BEEN RECORDED THE TRUST WAS GRANT ED REGISTRATION FROM THE DATE OF CREATION OF THE TRUST. IN THE ALTERNAT E SCENARIO WHERE THE LD. CIT(E) WAS NOT SO SATISFIED ABOUT THE SUFFICIENCY O F THE REASONS FOR DELAY IN FILING THE APPLICATION REGISTRATION WAS E FFECTIVE FROM 1 ST DAY OF THE FINANCIAL YEAR IN WHICH THE APPLICATION IS MADE . HOWEVER UNDER THE AMENDED PROVISIONS IN RESPECT OF APPLICATIONS FILED ON OR AFTER 1 ST DAY OF JUNE 2007 THE LD. CIT(E) IS NO MORE REQUIRED TO R ECORD ANY SUCH SATISFACTION OR DISSATISFACTION REGARDING THE DELAY IN FILING THE APPLICATION ITA NOS. 303 &304/JP/2020 M/S ESS KAY FOUNDATION VS. CIT(E) 9 AND BY VIRTUE OF SUB-SECTION (2) TO SECTION 12A IT HAS NOW BEEN PROVIDED IN THE LEGISLATION ITSELF THAT THE PROVISI ONS OF SECTIONS 11 AND 12 SHALL APPLY IN ALL CASES FROM THE ASSESSMENT YEA R IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICAT ION IS MADE AND ENABLING PROVISIONS IN RESPECT OF ASSESSMENT PROCEE DINGS PENDING FOR THE PREVIOUS ASSESSMENT YEARS BEFORE THE ASSESSING OFFICER HAS ALSO BEEN PROVIDED. 16. ON A HARMONIOUS CONSTRUCTION OF PROVISIONS OF S ECTION 12AA READ WITH SECTION 12A OF THE ACT WE THEREFORE FIND THAT UNDER THE AMENDED LAW AS ARE APPLICABLE IN THE INSTANT CASE ONCE THE LD. CIT(E) IS SATISFIED ABOUT THE OBJECTS AND THE GENUINENESS OF THE ACTIVI TIES OF THE TRUST AND THE SUFFICIENT COMPLIANCE OF OTHER LAW FOR TIME BEI NG IN FORCE AS ARE MATERIAL FOR THE PURPOSE OF ACHIEVING ITS OBJECTS THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY FROM THE ASSESSMENT YEAR FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE. I N THE INSTANT CASE THE ASSESSEE HAS MADE AN APPLICATION ON 04.02.2020 AND IN LIGHT OF THE AFORESAID PROVISIONS WE FIND THAT WHERE THE REGIST RATION HAS BEEN GRANTED BY THE LD CIT(E) AFTER SATISFYING HIMSELF A BOUT THE OBJECTS AND GENUINENESS OF ITS ACTIVITIES THE PROVISIONS OF SE CTIONS 11 AND 12 SHALL APPLY IN THE CASE OF THE ASSESSEE FROM 01.04.2020 I .E. FROM A.Y 2020-21 ONWARDS. 17. NOW COMING SPECIFICALLY TO THE REASONING ADOP TED BY THE LD. CIT(E) FOR DIRECTING THE REGISTRATION TO BE EFFECTI VE FROM 22.09.2020 AND THE PROVISIONS OF SECTION 11 AND 12 TO APPLY FROM A .Y 2021-22. IN THIS REGARD WE FIND THAT THE ASSESSEE TRUST HAS FILED A N AFFIDAVIT REGARDING ITA NOS. 303 &304/JP/2020 M/S ESS KAY FOUNDATION VS. CIT(E) 10 ITS OBJECTS ON 22.09.2020. THE SAID AFFIDAVIT HAS BEEN FILED IN RESPONSE TO THE SHOW CAUSE NOTICE DATED 11.09.2020 WHEREIN T HE LD. CIT(E) HAS STATED THAT ON PERUSAL OF THE MOA OF THE TRUST IT IS NOTICED THAT OBJECT STATED AT POINT NO. III IV V VI VIII IX X XI I ARE RELATED TO COMMERCIAL ACTIVITIES AND THE ASSESSEE WAS ASKED T O CLARIFY HOW THESE ARE CHARITABLE OBJECTS IN LIGHT OF SECTION 2(15) OF THE ACT AND IN RESPONSE THE ASSESSEE SUBMITTED AN AFFIDAVIT STATI NG THAT IT SHALL NOT ACCEPT ANY FEES CHARGES ETC FOR THE FULFILLMENT OF THE AFORESAID OBJECTS AND THE ASSESSEE FOUNDATION HAS NO INTENTION TO CAR RY OUT ANY SUCH ACTIVITIES WHICH CAN BE TERMED IN THE NATURE OF TRA DE COMMERCE OR BUSINESS AS PER THE PROVISIONS OF SECTION 2(15) OF THE ACT. WE THEREFORE FIND THAT IT IS A CASE WHERE THE LD. CIT(E) HAS SOU GHT CERTAIN EXPLANATION/CLARIFICATION FROM THE ASSESSEE TRUST R EGARDING ITS OBJECTS VIDE SHOW CAUSE DATED 11.09.2020 WHICH HAS BEEN SUI TABLY EXPLAINED BY THE ASSESSEE BY WAY OF ITS AFFIDAVIT DATED 22 ND SEPTEMBER 2020 AND BASIS SUCH CLARIFICATION LD. CIT(E) WAS SATISFIED ABOUT THE CHARITABLE NATURE OF THE OBJECTS OF THE ASSESSEE FOUNDATION AN D THEREFORE ONCE THE OBJECTS HAVE BEEN FOUND TO BE CHARITABLE IN NAT URE THERE IS NO DISCRETION LEFT WITH THE LD CIT(E) TO RESTRICT THE APPLICABILITY OF PROVISIONS OF SECTION 11 AND 12 FROM DATE OF FURNISHING OF SUC H AFFIDAVIT AND RATHER AS PER THE PROVISIONS OF SUB-SECTION 2 TO S ECTION 12A THE PROVISIONS OF SECTION 11 AND 12 SHALL APPLY FROM 01 .04.2020 I.E. FROM A.Y 2020-21 ONWARDS AND THE ASSESSEE SHALL BE ENTIT LED TO CLAIM EXEMPTION UNDER SECTION 11 AND 12 FROM A.Y 2020-21. IN ANY CASE THE REQUIREMENTS OF PROVISO TO SECTION 2(15) REMAIN MAN DATORY IN NATURE AND THE COMPLIANCE THEREOF HAS TO BE EXAMINED BY TH E AO ON A YEARLY BASIS INCLUDING THAT FOR A.Y 2020-21 WHILE FRAMING THE ASSESSMENT AS ITA NOS. 303 &304/JP/2020 M/S ESS KAY FOUNDATION VS. CIT(E) 11 PER LAW. IN THE RESULT THE LD. CIT(E) IS DIRECTED TO GRANT REGISTRATION U/S 12AA EFFECTIVE FROM A.Y 2020-21 INSTEAD OF A.Y 2021 -22. FOLLOWING THE AFORESAID DISCUSSIONS THE LD. CIT(E) IS ALSO DIREC TED TO GRANT REGISTRATION U/S 80G(5)(VI) EFFECTIVE FROM A.Y 2020-21 INSTEAD O F A.Y 2021-22. IN THE RESULT BOTH THE APPEALS FILED BY THE ASSES SEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/03/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/03/2021. *GANESH KUMAR VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S ESS KAY FOUNDATION JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- CIT(E) JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR ITAT JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NOS. 303 & 304/JP/2020} VKNS'KKUQLKJ@ BY ORDER LGK;D IATHDKJ@ ASST. REGISTRAR