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Issues:
1. Timeliness of passing order under section 12AA(2) of the Income-tax Act, 1961. 2. Rejection of application for grant of registration under section 12AA of the Act. Issue 1: Timeliness of passing order under section 12AA(2) of the Income-tax Act, 1961: The appeal was against an order passed by the CIT, Dehradun under section 12AA(1)(b) of the Income-tax Act, 1961. The assessee contended that the order was passed beyond the statutory period prescribed under section 12AA(2) of the Act. The application for registration was filed on 2-8-2002, and the order was passed on 7-11-2003, exceeding the six-month limit from the end of the month in which the application was received. Citing the case of Sardari Lal Oberoi Memorial Charitable Trust, the Tribunal found the order to be belated and barred by limitation. The Tribunal emphasized the mandatory nature of the time limit, stating that once the period of limitation expires, the subsequent order refusing registration is a nullity. Consequently, the Tribunal deemed the application to have been allowed due to the delay in passing the order. Issue 2: Rejection of application for grant of registration under section 12AA of the Act: The Commissioner rejected the application for registration as the society failed to prove its eligibility for exemption under section 12AA of the Act. The Commissioner highlighted discrepancies in the society's financial activities and doubted the genuineness of its objectives. The onus to prove qualification for exemption was on the society, which it failed to discharge satisfactorily. However, the Tribunal, following the precedent set by the Sardari Lal Oberoi Memorial Charitable Trust case, ruled in favor of the assessee. The Tribunal directed the grant of registration to the assessee, deeming the application to have been allowed due to the delay in passing the order. The appeal filed by the assessee was allowed, and the order was pronounced in open court on 21-7-2006.
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