June 2008
If Commissioner does not pass order granting/refusing registration within time limit u/s.12AA, then Commissioner is deemed to have allowed registration, though the Act does not provide as to what could be done if Commissioner does not pass order
By C. N. Vaze, Shailesh Kamdar, Chartered Accountants
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20 (2008) 299 ITR (AT) 161 (Delhi) (SB)
Bhagwad Swarup Shri Shri Devraha Baba Memorial Shri Hari
Parmarth Dham Trust v. CIT
Dated : 31-8-2007
S.12AA : If the Commissioner does not pass any order
granting/refusing registration within the time limit set u/s.12AA, then the
Commissioner is deemed to have allowed the registration, though the Act does not
provide as to what could be done if Commissioner does not pass the order.
Facts :
The assessee, a charitable institution, applied to the
Commissioner for registration u/s.12AA on October 23, 2001. The time limit for
passing the order was to come to an end on April 30, 2002. The Commissioner
initiated enquiries as late by 3rd April 2002 and ultimately refused
registration on 26th May 2003 i.e., after the time limit set u/s.12AA. On
appeal, the ITAT (SB) held that the registration would be deemed to have been
granted since the Commissioner did not pass the order within the time limit set
by-law. While allowing the appeal, the ITAT referred to the following :
The action of Commissioner of not passing any order either
granting or refusing registration would lead to following :
(1) If the application for registration were to abate, the
assessee would be required to apply again for no fault of his.
(2) If the application were to be treated as pending, then
the Commissioner would get extended period of limitation which the Section
does not allow.
(3) If the application were to be deemed to have been
refused, then the assessee must be in a position to file an appeal to the
Tribunal, which it will not be able to do in the absence of a written order.
(4) Therefore, by the process of exclusion, the
Com-missioner must be deemed to have allowed the registration. The rights of
the Department would also be protected in the sense that it would be open to
the Commissioner to cancel the registration by invoking Ss.3 of S. 12AA. If
aggrieved by the cancellation, the assessee would also have a right to appeal
to the Tribunal u/s.253 (1)(c).
Cases referred to :
(i) Sambodh Organisation v. CIT, (Delhi Bench)
(ii) Karnataka Golf Association v. DIT, (E) 2005
Bangalore 272 ITR (AT) 123 and a few more.
