2003 (7) TMI 261 - AT - Income Tax

Charitable Or Religious Trust - seeking registration u/s 12A - due to limitation - HELD THAT - If the assessee files a return and the Department docs not pass an order, the return of income is deemed to have been accepted. While dealing with the provisions of section 139, where assessee applied for extension of time and the officer did not reply. The Hon'ble Supreme Court has dismissed Special Leave Petition by the Department against the judgment in the case of CIT v. Surinder Kumar Parmod Kumar 1991 (8) TMI 72 - PUNJAB AND HARYANA HIGH COURT . Applying these principles and in the interests of justice, we observe that the assessee had done what is expected of him under the law i.e., to seek registration by making an application. The Department should have acted vigilantly in refusing to register, if it is so satisfied, within the period of limitation prescribed by the provisions of section 12AA(2) of the Act. Having not done, it loses the benefit of legally refusing to grant registration. The department, by its latches cannot be said to have taken the same position by not acting within the time limit prescribed. We, therefore, grant registration to the assessee on the basis of its application dated 23-1-1998 and to that extent, the assessee should be taken to have satisfied the conditions as to registration of the trust/institution etc., required u/s 12A of the Act. The Assessing Officer is directed to proceed as if registration has been granted by the DIT(Ex.) u/s 12A of the Act. Thus, we feel that it is not necessary to go into the merits of the claim of the assessee. The impugned order of the DIT(Ex.) is quashed and for the purpose of assessment, registration is deemed to have been granted u/s 12A of the Act. The Assessing Officer is directed to revise the assessments framed in the case of the assessee to fall in line with this order. The appeal is to be treated as allowed.

Summary

Issues Involved:
1. Validity of the impugned order due to limitation.
2. Defects in the appeal filed.
3. Entitlement to registration u/s 12A of the Income-tax Act, 1961.

Summary:

1. Validity of the Impugned Order Due to Limitation:
The assessee, M/s. Karnataka Golf Association, applied for registration u/s 12A of the Income-tax Act, 1961 on 23-1-1998. The DIT (Ex.), Bangalore, passed the impugned order on 17-12-2002, which is beyond the six-month period prescribed u/s 12AA(2). The Tribunal held that the order is "non est in law" and liable to be vacated as it was passed after the expiry of the limitation period, rendering the DIT(Ex.) functus officio.

2. Defects in the Appeal Filed:
The Departmental Representative argued that the appeal was defective as it was not signed in accordance with section 140 of the Act. However, the Tribunal noted that the defect was rectified within the granted time, and the appeal papers were signed by the Honorary Secretary. Referring to the ITAT decision in the case of Wipro Information Technology Ltd., the Tribunal accepted the rectified appeal and proceeded to entertain it on merits.

3. Entitlement to Registration u/s 12A:
The Tribunal observed that the Department failed to act within the prescribed time limit, and thus, the application for registration should be deemed granted. The Tribunal emphasized that the Department cannot refuse registration by not acting within the statutory period. The Tribunal directed that the assessee be granted registration based on its application dated 23-1-1998, and the Assessing Officer was instructed to proceed as if registration had been granted by the DIT(Ex.) u/s 12A of the Act. Consequently, the impugned order was quashed, and the appeal was allowed.