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2020 (5) TMI 113 - AT - Income TaxExemption u/s 11 - registration u/s 12AA - whether such registration should be granted from the date of inception of the trust or from the first day of the financial year in which application seeking registration has been filed by the assessee trust - HELD THAT - Registration was originally denied by the ld. CIT, Kota vide order dated 28.11.2007, thereafter the matter travelled to the Tribunal and then to the Hon ble Rajasthan High Court which has remitted the matter back to the Tribunal to decide the same on merits. Coordinate Bench vide its order dated 13.09.2017 has directed the CIT(E) to allow the application of the assessee for registration u/s 12AA and in pursuance of directions of the Tribunal CIT(E) vide impugned order dated 28.08.2019 has granted registration to the assessee-trust. Directions of the Coordinate Bench were limited to grant of registration of the assessee trust u/s 12AA - The directions of the Coordinate Bench are silent in terms of condonation of delay in filing the application seeking the registration. On perusal of the order so passed by the Coordinate Bench, we find that there is nothing on record to suggest that any such pleadings were taken by the assessee trust before the Coordinate Bench requesting for condonation of delay and seeking registration from inception of the trust or the application seeking condonation of delay was brought to the notice of the Coordinate Bench. Where the Coordinate Bench has directed registration of the assessee trust and has not passed any specific directions regarding condonation of delay, the contention of the ld AR that since the condonation application was filed along with application seeking registration before ld CIT(Kota), the directions so passed by the Coordinate Bench should be read as if the delay has been condoned cannot be accepted. It is also not clear whether the ld CIT(E) has considered the law as applicable for application seeking registration filed before 1.06.2007 wherein the powers have been conferred on the ld CIT(E) for condonation of delay, or the amended law for application seeking registration filed on or after before 1.06.2007 wherein no such powers for condonation of delay have been conferred on the ld CIT(E). Even where it is assumed that the CIT(E) has taken cognizance of the assessee s application and has applied the applicable law, the aforesaid communication doesn t reflect the precise reasons as to why the explanation of the assessee seeking condonation of delay was not accepted. Such communication reflects the conclusion and not the reasoning and thus, doesn t satisfy the requirement of law which mandate the CIT(E) to specify the reasons in writing which helped him reach a conclusion that the explanation of the assessee seeking condonation is not acceptable. Appeal filed by the assessee is allowed for statistical purposes. Therefore, in absence of findings of the ld CIT(E), we are constrained in deciding the matter and deem it appropriate that the matter is remanded back to the file of the ld CIT(E) to examine and expeditiously adjudicate the matter relating to delay in filing the application seeking registration u/s 12AA and pass a speaking order as per law after providing reasonable opportunity to the assessee trust.
Issues Involved:
1. Whether the order dated 28.08.2019 passed by the CIT(E) is perverse, non-speaking, arbitrary, and bad in law. 2. Whether the CIT(E) erred in passing the order by going against the directions of the ITAT, Jaipur provided in the order dated 13.09.2017. 3. Whether the CIT(E) erred in granting registration with retrospective effect from 01.04.2007 instead of from the inception of the trust. Issue-wise Detailed Analysis: 1. Perverse, Non-speaking, Arbitrary, and Bad in Law: The appellant contended that the order dated 28.08.2019 by the CIT(E) was perverse, non-speaking, arbitrary, and bad in law. The Tribunal noted that the CIT(E) granted registration to the assessee trust as a general public utility trust, applying the provisions of Sections 11 & 12 of the IT Act with retrospective effect from 01.04.2007. However, the Tribunal found that the CIT(E) did not address the condonation application filed by the assessee trust along with Form 10A, nor did the CIT(E) provide reasons for rejecting the explanation for the delay in filing the application. The Tribunal emphasized that the law mandates the CIT(E) to specify reasons in writing for either condoning the delay or rejecting the application. Therefore, the Tribunal deemed the order non-speaking and remanded the matter back to the CIT(E) for a detailed examination and adjudication on the delay in filing the application. 2. Directions of ITAT, Jaipur: The appellant argued that the CIT(E) erred in passing the order by going against the directions of the ITAT, Jaipur provided in the order dated 13.09.2017. The Tribunal observed that the directions of the Coordinate Bench were limited to granting registration of the assessee trust under Section 12AA of the IT Act. The directions did not explicitly address the condonation of delay in filing the application. The Tribunal found no record suggesting that the assessee trust requested condonation of delay before the Coordinate Bench. Consequently, the Tribunal concluded that the CIT(E) did not go against the directions of the ITAT, Jaipur, as the matter of condonation of delay was not adjudicated by the Coordinate Bench. 3. Retrospective Effect of Registration: The appellant contended that the CIT(E) erred in granting registration with retrospective effect from 01.04.2007 instead of from the inception of the trust on 09.07.1970. The Tribunal referred to the relevant provisions of Section 12A, which allow the CIT(E) to condone the delay and grant registration from the date of creation of the trust if satisfied with the reasons for the delay. The Tribunal noted that the CIT(E) did not provide any reasoning for not accepting the explanation for the delay. The Tribunal found that the communication dated 14.02.2019 from the ITO (Hqrs) on behalf of the CIT(E) was unclear and did not reflect the precise reasons for rejecting the condonation application. The Tribunal emphasized that the CIT(E) must provide a detailed reasoning in writing for either condoning the delay or rejecting the application. Therefore, the Tribunal remanded the matter back to the CIT(E) to examine and adjudicate the matter relating to the delay in filing the application for registration under Section 12AA. Conclusion: The Tribunal allowed the appeal for statistical purposes and remanded the matter back to the CIT(E) to examine and expeditiously adjudicate the matter relating to the delay in filing the application seeking registration under Section 12AA. The CIT(E) was directed to pass a speaking order as per law after providing a reasonable opportunity to the assessee trust. The Tribunal emphasized the need for a detailed examination and reasoning in writing for either condoning the delay or rejecting the application.
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