2013 (10) TMI 115 - HC - Income Tax

Condoning the delay in filing the application or registration u/s 12 AA of the Act without assigning any reason for condoning the delay Held that - Reliance has been placed upon the judgment in the case of Commissioner of Income Tax Vs. Krishi Utpadan Mandi Samiti 2009 (12) TMI 13 - HIGH COURT OF ALLAHABAD , wherein it has been held that registration of mandi samities, established by notification in exercise of powers under Section 12 of the Krishi Utapadan Mandi Ahiniyam 1964, as statutory body, with the object to regulate the sale and purchase of the agricultural produce and also to develop the facilities for the farmers, are entitled for registration u/s 12-A of the Act as a trust, even if the application for registration was submitted belatedly In the instant case, delay in submitting application for registration has been condoned and the department has been directed to registration of the respondent Decided against the Revenue.

Summary

Issues:
1. Delay in filing application for registration under Section 12AA of the Income Tax Act.
2. Grant of registration under Section 12A of the Act with retrospective effect.
3. Reliance on previous tribunal decision while an appeal is pending.
4. Ignoring the decision of the Supreme Court in a related case.

Analysis:

1. The appellant-department challenged the condonation of delay in filing the application for registration under Section 12AA of the Income Tax Act. The Tribunal had directed the grant of registration under Section 12A w.e.f. 1.4.2003. The key issue was whether the condonation of delay was justified without proper reasoning.

2. The Tribunal's decision to grant registration to the respondent Mandi Samiti with retrospective effect from 1.4.2003 was questioned. The department argued against this decision, raising concerns about the validity and justification of such retrospective registration.

3. The department questioned the Tribunal's reliance on a previous decision involving Krishi Utpadan Mandi Samiti Mau, despite an appeal pending before the High Court against that order. The issue of whether the Tribunal was justified in considering the earlier decision while the matter was sub-judice was a significant point of contention.

4. Another crucial aspect was the Tribunal's alleged ignorance of a Supreme Court decision in the case of ACIT Vs. Thanti Trust, which was referred to by the Commissioner of Income Tax. The department argued that the Tribunal erred in disregarding the Supreme Court precedent, and this raised concerns about the proper application of legal principles in the case.

In the judgment, it was highlighted that the respondent Mandi Samiti was entitled to registration under Section 12-A of the Act as a trust, even if the application was submitted belatedly. The Court referred to a previous judgment that established the eligibility of mandi samities for registration, emphasizing their statutory nature and purpose. The Court upheld the Tribunal's decision to condone the delay and grant registration to the respondent, citing the dismissal of a Special Leave Petition against a similar judgment. Ultimately, the Court ruled in favor of the respondent assessee based on the precedent set by the earlier judgment involving Krishi Utpadan Mandi Samiti. The Income Tax Appeal was dismissed, affirming the decision in favor of the respondent.