2014 (5) TMI 1134 - AT - Income Tax

Registration under section 12AA denied - non disposal of application - Held that - Since the ld. Commissioner of Income-tax has not disposed of the application for registration within a period of six months consequent to the order of the Tribunal remitting the matter back to him vide its order dated 28.1.2010 registration under section 12AA of the Act will be deemed to have been granted. Accordingly we direct the ld. Commissioner of Income-tax to grant registration under section 12AA of the Act forthwith. - Decided n favour of assessee

Summary

Issues:
1. Denial of registration under section 12AA of the Income-tax Act, 1961.
2. Time limitation for passing orders under section 12AA.
3. Deemed grant of registration due to delay in passing orders.

Analysis:
1. The appeal was filed against the denial of registration under section 12AA. The appellant argued that the order was illegal as it was passed after the expiry of six months from a previous order. The appellant contended that the activities were not of a business nature and met the criteria for charitable purposes. The appellant also argued that the application of the proviso to section 2(15) was incorrect in this context. The appellant highlighted that it was an 'Authority' constituted by the State Government and not an industry and trade association. The appellant further emphasized that it should be treated as an extended arm of the State Government, exempt from Union Taxation, and therefore eligible for registration under section 12AA.

2. The Tribunal examined the time limitation issue for passing orders under section 12AA. The Tribunal noted that if the Commissioner of Income-tax does not pass an order within six months from the receipt of the Tribunal's order, registration is deemed to have been granted. Citing a relevant judgment, the Tribunal upheld the appellant's objection and directed the Commissioner to issue approval of registration, as the order was passed after a significant delay.

3. Relying on the judgment of the jurisdictional High Court, the Tribunal concluded that the failure to dispose of the application for registration within six months led to a deemed grant of registration. Consequently, the Tribunal directed the Commissioner to grant registration under section 12AA without further delay. The judgment emphasized the importance of timely consideration of such applications and upheld the principle that delays should not disadvantage the applicant.