2012 (12) TMI 1158 - AT - Income Tax

Summary

Issues Involved:
1. Validity of the order passed by CIT beyond the prescribed time limit.
2. Deemed registration date of the charitable trust.

Summary:

Issue 1: Validity of the order passed by CIT beyond the prescribed time limit

The appellant, a charitable trust, filed an application for registration u/s 12A(a) of the IT Act on 30th March 2006. The CIT, Bikaner, granted registration w.e.f. 1st April 2005, but the appellant contended that the order was not as per law as it was passed beyond the six-month period prescribed u/s 12AA(2) of the Act. The Tribunal noted that the CIT indeed passed the order beyond the permitted time, which makes the order invalid in the eyes of law. The Tribunal relied on the decision of the Hon'ble Special Bench of Tribunal, Delhi in the case of Bhagwad Swarup Shri Shri Devraha Baba Memorial Shri Hari Parmarth Dham Trust v. CIT [2007] 17 SOT 281 (Delhi) (SB), which held that if the order is not passed within six months, the application is deemed to have been allowed.

Issue 2: Deemed registration date of the charitable trust

The appellant argued that the registration should be deemed to have been granted from the date of its inception, i.e., 9th Nov 1985, as the CIT did not consider the condonation petition and passed the order without giving reasons for rejection. The Tribunal found that the CIT's order, which granted registration w.e.f. 1st April 2005, was incorrect and illegal under the deeming provision. The Tribunal directed the CIT to grant registration to the appellant w.e.f. 9th Nov 1985, as it is deemed to have been granted from the date of its inception.

Condonation of Delay:

The appeal filed before the Tribunal was time-barred by 1660 days. However, the Tribunal condoned the delay, considering the reasons provided by the appellant, including ignorance of law and wrong advice from the tax consultant. The Tribunal cited the Hon'ble Supreme Court's decisions in Collector, Land Acquisition v. Mst Katiji [1987] 167 ITR 471 (SC) and Vedabai alias Vijayanatabai Baburao Patil v. Shantaram Baburao Patil [2002] 253 ITR 798/122 Taxman 114 (SC), which emphasized a liberal approach in condoning delays to advance substantial justice.

Conclusion:

The Tribunal allowed both appeals, directing the CIT to grant registration to the appellant w.e.f. 9th Nov 1985, and deemed the registration application as allowed due to the delay in passing the order by the CIT. The order was pronounced in the open court on 19.12.2012.