2016 (12) TMI 41 - AT - Income Tax

Eligibility to registration u/s 12AA - effective date of registration - Held that - According to the newly introduced provisions of section 12AA of the Act the person in receipt of the income should make an application in Form No. 10A for registration of the trust or institution to the Commissioner before the expiry of a period of one year from the date of the creation of the trust or the establishment of institution, whichever is later. However, where an application for registration is made after the expiry of the aforesaid period, the provisions of sections 11 and 12 will apply from the date of the creation of the trust or the establishment of the institution if the Commissioner is, for reasons to be recorded in writing, is satisfied that the person in receipt of the income was prevented from making the application within the aforesaid period for sufficient reasons. If the Commissioner is not so satisfied, the provisions of section 11 and 12 will apply from 1st day of the financial year in which the application is made. In the instant appeal, it is undisputed that the assessee has been granted registration. However, the registration has been granted w.e.f. from the last day of the financial year 2002-03 whereas the scheme of the Act envisages that the registration should be granted from the first day of the financial year. We find the approach of the Ld. CIT contrary to the provisions of the Income Tax Act and therefore we direct the Ld. CIT to make suitable amendment in the registration certificate granted to the assessee u/s 12AA so as to make the registration effective from 1st April, 2002.

Summary

Issues:
1. Delay in filing the appeal and condonation of the delay.
2. Correct date for granting registration under section 12AA of the Income Tax Act, 1961.

Detailed Analysis:

1. Delay in filing the appeal and condonation of the delay:
The appeal was filed by the assessee against the order granting registration under section 12AA of the Income Tax Act, 1961. The delay in filing the appeal was 1875 days. The assessee argued that the delay should be condoned as they acted in a bona fide manner and proceeded to seek redressal of grievances promptly. The legal representative emphasized that the delay should be condoned based on the provisions of Section 253 and Section 249 of the Income Tax Act, 1961. The argument was supported by citing relevant case laws such as State of West Bengal vs. Administrator, Howrah Municipality and N. Balakrishnan vs. M. Krishnamurthy. The Tribunal considered the arguments and observed that the delay was condonable as the assessee had not neglected the proceedings and had approached the Tribunal promptly. The Tribunal concluded that the delay of 1875 days should be condoned, and the appeal was admitted.

2. Correct date for granting registration under section 12AA:
The issue revolved around the correct date from which the registration under section 12AA should be effective. The assessee contended that the registration should have been granted from 01/04/2002 as per the first proviso to section 12A(1) of the Income Tax Act, 1961. The Tribunal examined the provisions of the Act and found that the registration had been granted w.e.f. 31/03/2003, contrary to the scheme of the Act which mandates the registration from the first day of the financial year. The Tribunal held that the approach of the Ld. CIT was against the provisions of the Income Tax Act and directed the Ld. CIT to make suitable amendments in the registration certificate to make it effective from 1st April, 2002. Consequently, the appeal of the assessee was allowed, and the correct date for granting registration was determined.

In conclusion, the Tribunal addressed the issues of delay in filing the appeal and the correct date for granting registration under section 12AA of the Income Tax Act, 1961. The delay of 1875 days in filing the appeal was condoned based on the assessee's prompt actions and the absence of negligence. Additionally, the Tribunal directed the Ld. CIT to amend the registration certificate to make it effective from 1st April, 2002, in accordance with the provisions of the Act.