2010 (12) TMI 962 - HC - Income Tax

Condonation of delay - no sufficient cause was shown for such delay - rejection order of this matter was taken up before the Tribunal wherein Tribunal held that the explanation for belated application under Section 12A was to be accepted and delay should be condoned. It also held that registration should be granted from the inception of the trust i.e. from 1.4.1999 retrospectively - Held that - Rejection of the application of 2005 was on the ground that Director of Tax (Exemption) had rejected the application in 2002 and similarly the reason for allowing the condonation of delay, thus present appeal has to be disposed of by remanding the matter back to the tribunal to dispose appeal afresh appeal is disposed of. Also make it clear that tribunal shall consider the application dated 21.9.2006 for registration under Section 12A of the Act only from 2002-03 onwards and all contentions are kept open.

Summary

Issues:
1. Application for registration under Section 12A of the Income Tax Act, 1961.
2. Condonation of delay for the period between 10.1.1980 and 1.4.2001.
3. Rejection of earlier application for registration.
4. Tribunal's order for grant of registration.
5. Challenge by revenue in ITA 44/2006.
6. Consideration of application for registration filed under Section 12A on 21.9.2006.
7. Tribunal's order in ITA 591/2007 for retrospective registration from 1.4.1999.
8. Remanding the matter back to the tribunal for fresh disposal.

Detailed Analysis:

1. The judgment pertains to an appeal concerning the respondent's application for registration under Section 12A of the Income Tax Act, 1961, seeking condonation of delay for the period between 10.1.1980 and 1.4.2001. An earlier application for registration was filed on 9.1.2002, which was rejected by the Director of Income Tax (Exemption) and the subsequent application for condonation of delay was also dismissed.

2. The Tribunal considered the appeal against the rejection of the application and ordered the grant of registration on 26.8.2005. However, this order was challenged by the revenue in ITA 44/2006, which was allowed on 9.1.2010, stating that the tribunal did not consider the deletion of Section 10(22) of the Act and the registration granted cannot be valid for a specific period.

3. The High Court held that the DIT (Exemptions) must reconsider the application filed on 21.9.2006 afresh on its merits. The rejection of the earlier application in 2002 led to the rejection of the 2006 application. The Tribunal in ITA 591/2007 accepted the explanation for the belated application and ordered retrospective registration from 1.4.1999, which was challenged by the revenue.

4. Due to the rejection of the 2005 application and the acceptance of the condonation of delay, the Court remanded the matter back to the tribunal for fresh disposal in ITA 591/2007. The tribunal was directed to consider the 2006 application for registration under Section 12A only from 2002-03 onwards, keeping all contentions open for consideration.

5. In conclusion, the appeal was disposed of with the directive to the tribunal for a fresh consideration of the registration application, ensuring that all relevant factors are taken into account from the specified period onwards, as per the provisions of the Income Tax Act, 1961.