2022 (5) TMI 179 - SCH - Income Tax

Exemption u/s 11 - Deemed registration - consideration before the High Court was whether on non-deciding the application for registration under Section 12AA (2) within a period of six months, there shall be deemed registration or not? - HELD THAT - The aforesaid aspect has been dealt with and considered in detail by the Full Bench of the Allahabad High Court in its decision in the case of Commissioner of Income Tax vs. Muzafar Nagar Development Authority 2015 (3) TMI 99 - ALLAHABAD HIGH COURT (LB) After considering in detail the provisions of Section 12AA (2) of the Act and having found that there is no specific provision in the Act by which it provides that on non-deciding the registration application under Section 12AA (2) within a period of six months there shall be deemed registration, the Full Bench of the High Court has rightly held that even if in a case where the registration application under Section 12AA is not decided within six months, there shall not be any deemed registration. We are in complete agreement with the view taken by the Full Bench of the High Court. SLP dismissed.

Summary

Issues:
Interpretation of Section 12AA (2) of the Income Tax Act, 1961 regarding deemed registration upon non-decision within six months.

Analysis:
The Supreme Court, comprising HON'BLE MR. JUSTICE M.R. SHAH AND HON'BLE MRS. JUSTICE B.V. NAGARATHNA, addressed the issue of whether there would be deemed registration under Section 12AA (2) of the Income Tax Act, 1961 if the application for registration is not decided within six months. The Court referred to the decision of the Full Bench of the Allahabad High Court in the case of Commissioner of Income Tax vs. Muzafar Nagar Development Authority [ITA 348 of 2008], which extensively analyzed this aspect.

Upon thorough consideration of the provisions of Section 12AA (2) of the Act, the Supreme Court noted the absence of any specific provision deeming registration upon non-decision within the stipulated timeframe. Consequently, the Court affirmed the Full Bench's conclusion that there would be no deemed registration if the application is not decided within six months. The Court explicitly stated its complete agreement with the High Court's interpretation.

In conclusion, the Supreme Court dismissed the Special Leave Petition, thereby upholding the decision that there is no provision for deemed registration under Section 12AA (2) of the Income Tax Act, 1961 if the registration application is not decided within the prescribed six-month period.