Retrospective effect of Section 12A.

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CHARTERED ACCOUNTANT
10 Points Joined June 2023

I have query regarding 

Retrospective effect of section 12A

Can a trust who is provisionally registered under section 12, claim section 11 exemption for the prior period i.e AY 2020-21. 

Points to consider:- before 1-4-2023  Section 12A(2) provides exemption for trust who claim exemption for prior period based on the registration taken subsequently.

But after amendment as per Finance Act 2023, the section of roll back provision of 12A(2) was removed.

No my question is can a trust claim 11 exemption for the AY 2020-21 based on the 13A registration taken on 2024. 

One more doubt is that which finance act should we refer FA 2023 which is effective from 1-4-2023. 

Or Finance Act 2014. Which provides section 12A(2) retrospective effect of section 12 on certain conditions. 

I need guidance to file an apeal in this matter.

Thanks in advance.🤝🏻

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On 17 April 2025 at 22:07 Report
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Master in Accounts & high court Advocate
9157 Points Joined December 2011

To determine if a trust can claim Section 11 exemption for the prior period (AY 2020-21) based on the registration taken subsequently (2024), let's break it down: -

*Pre-amendment scenario*: Before April 1, 2023, Section 12A(2) allowed trusts to claim exemptions for prior periods based on subsequent registration. -

 *Post-amendment scenario*: The Finance Act 2023 removed the roll-back provision of Section 12A(2), effective from April 1, 2023.

This change implies that registration granted after a certain period may not automatically allow exemption benefits for prior years. Given this context, the trust's eligibility for Section 11 exemption for AY 2020-21 based on registration taken in 2024 is uncertain and may depend on specific circumstances and interpretations of the law.

Key Considerations - *Finance Act 2014*: This act provided Section 12A(2) with retrospective effect under certain conditions. However, the Finance Act 2023's amendments might have overridden these provisions. -

*Finance Act 2023*: As the current governing law, its provisions would likely apply to registrations and exemptions post-April 1, 2023. Filing an Appeal If you're considering filing an appeal, focus on¹: - *Grounds for appeal*: Argue that the trust's registration under Section 12A should be considered for exemption benefits prior to registration, based on the principle of retrospective application. - *Relevant case laws*: Cite relevant judgments that support the trust's claim for exemption. - *Documentation*: Ensure all necessary documents, including registration certificates and financial records, are in order. Recommended Approach - *Consult a tax professional*: Given the complexities of tax laws and the specific circumstances of your trust, consulting a professional can help navigate the appeal process. - *Fresh application*: If the appeal is not feasible, consider filing a fresh application for registration and claiming exemptions for future periods. By carefully evaluating the trust's eligibility and following the necessary procedures, you can make an informed decision regarding the appeal.²

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On 18 April 2025 at 14:55


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