2013 (6) TMI 221 - AT - Income Tax

Registration u/s 12AA and initial exemption u/s 80G denied - Held that - It was for the Commissioner to dispose of the application for registration, and the order thereon could not have been passed by any other authority to which such powers may have been delegated. The communication by the Income Tax Officer (Technical), therefore, does not have, any authority of law. A communication, or even an order, signed by the Income Tax Officer cannot be treated as disposal of application. No reasons whatsoever have been given in the ITO s letter but he mentions that the application was considered sympathetically and rejected. This kind of authoritarian approach, and unwillingness to give legal reasons, does not anyway befit conduct of any public authority in a democratic set up like ours, wherein rule of law is of paramount importance. As held in the case of Bhagwat Swarup Shri Shri Devraha Baba Memorial Shri Hari Pamarth Dham Trust v. CIT 2007 (8) TMI 380 - ITAT DELHI-B it is not open to the Commissioner to keep an application for registration under section 12A pending indefinitely, and when the application is not disposed of within a period of six months from the date of filing the application, the approval is deemed to have been granted. Clearly, in the present case, the period of six months of the date of application has passed and no order has been passed by the Commissioner. Therefore, the registration under section 12A should be deemed to have been granted. In favour of assessee.

Summary

Issues:
1. Delay in filing the appeal and condonation of delay.
2. Disposal of the application for registration under section 12AA.
3. Denial of initial exemption under section 80G.

Analysis:
1. The appeal was filed against an order declining registration under section 12AA and initial exemption under section 80G for the assessment year 2009-10. The delay in filing the appeal was 1,093 days, which the assessee attributed to difficulties in communication due to the remote location of the trust. The Tribunal considered the reasons for the delay, including the unavailability of the Commissioner at Asansol. After reviewing the petition seeking condonation of delay and supporting affidavit, the Tribunal admitted the appeal for consideration on merits.

2. The key issue was whether a communication from the Income Tax Officer (Technical) could be considered as the disposal of the assessee's application for registration under section 12AA. The Tribunal held that only the Commissioner had the authority to dispose of such applications and that delegation of this power was not permissible unless specifically provided for in the statute. The communication from the Income Tax Officer was deemed to lack legal authority, especially since it did not provide reasons for the rejection. The Tribunal emphasized the importance of providing legal reasons and upheld the assessee's grievance, directing the Commissioner to grant registration under section 12AA.

3. The Tribunal also addressed the denial of initial exemption under section 80G. Since the outcome of this issue was dependent on the decision regarding registration under section 12AA, the Tribunal upheld the grievance of the assessee on this issue as well. The Commissioner was directed to grant exemption under section 80G, providing relief to the assessee. Consequently, both appeals were allowed, granting the requested reliefs to the assessee.

This detailed analysis highlights the Tribunal's considerations regarding the delay in filing the appeal, the authority responsible for disposing of registration applications, and the denial of initial exemption under section 80G, ultimately leading to the favorable outcome for the assessee in both aspects.