May 2008
S. 12AA r.w. S. 12A : If order u/s.12AA not passed within stipulated period, registration deemed to have been granted
By C. N. Vaze, Shailesh Kamdar, Chartered Accountants
Reading Time 2 mins
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11 (2007) 17 SOT 281 (Delhi) (SB)
Bhagwad Swarup Shri Shri Devraha Baba Memorial
Shri Hari Parmarth Dham Trust v. CIT
ITA Nos. 363 (Delhi) of 2003
Dated : 31-8-2007
S. 12AA read with S. 12A of the Income-tax Act, 1961 — If
order u/s.12AA is not passed within the stipulated period, then registration is
deemed to have been granted.
The CIT passed the order refusing registration u/s.12A to the
assessee-trust beyond the stipulated period of six months from the end of the
month in which application for registration was filed. The assessee appealed
before the Tribunal and contended that once the time limit fixed by S. 12AA(2)
expired without the CIT having passed any order, it must be deemed that the
registration had been granted.
The Special Bench, following the decisions in the
undermentioned cases, allowed the assessee’s appeal :
(a) Karnataka Golf Association v. DIT, (2004) 91 ITD
1 (Bang.)
(b) Sardari Lal Oberoi Memorial Charitable Trust v. ITO,
(2005) 3 SOT 229 (Delhi)
(c) People Education & Economic Development Society v.
ITO, (2006) 100 ITD 87 (TM) (Chennai).
The Special Bench noted as under :
(1) The statutory authorities have no option, but to obey
the mandate of the law.
(2) Unless the statute provides for exceptions, the order
must be passed by statutory authorities in accordance with the time limit set
by the law. Ss.(2) of S. 12AA does not admit of any exception to the rule.
(3) Therefore, it is mandatory for the CIT to dispose of
the application for registration made u/s.12A within six months from the end
of the month in which the application was filed.
(4) While exercising such an important power available
u/s.12AA, the CIT should also pass an order within the time limit provided. It
would be incongruous to hold that conducting an enquiry into the claim for
registration is an important excise of the power, whereas passing of the order
within the time limit provided is not, and it can be done at any time.
