9911796707
TMI Blog1999 (12) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... egistration was granted under section 12A(a) of the Income-tax Act, 1961. 3. The facts of the case lie in the narrow compass. The returns of income of the assessee were scrutinised under section 143(3) of the Act for both the assessment years granting benefit under section 11(1)(a) of the Act. The Director of Income-tax (Exemption), while exercising his power under section 263, held that the orders passed by the Assessing Officer were erroneous and prejudicial to the interests of the Revenue insofar as the latter had granted the benefit of exemption to which the assessee was not entitled because no registration under section 12A was granted by the CIT. 4. Ld. counsel for the assessee contended before us that the assessee had submitted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself registered. Whether the income of the institution can be regarded as being held for charitable purposes and whether the institution is entitled to registration under section 12A of the Income tax Act requires investigation of facts." 6. Ld. counsel for the assessee then submitted that the issue in that case was confined to the grant of blanket exemption under section 10(20) of I.T. Act and the High Court itself embarked upon examining the application of section 11(1) to the facts of the case without any contention in this regard having been raised before the Revenue Authorities. He further contended that the Hon'ble Supreme Court has not given any decision on the issue of provisions of section 11 vis-a-vis section 12A of the I.T. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue. It was submitted that the order passed by the Assessing Officer under section 143(3) was not erroneous insofar as there was no violation of any legal provision and the assessee had rightly applied for registration complying with all the conditions enumerated in section 12A and it was thus entitled to exemption under section 11. It was then submitted that the learned D.I. (Exemption) had passed a non-speaking order. It was contended that the D.I. (Exemption) had recorded the objections of the assessee to the show-cause notice served on it, but passed the order in a mechanical way without dealing with such objections or giving any reasons in support of his findings. It was therefore contended, placing reliance on the following ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the action of Director of Income-tax (Exemption) was justified in refusing registration to the assessee. It was contended that the benefit of section 11 could not be availed unless registration was granted under section 12A(a). It was further submitted that mere filing an application was not conclusive and the benefit of exemption could not be availed until the registration was specifically granted to the assessee. 12. We have carefully considered the rival contentions in the light of the precedents relied upon and material placed before us. The core of controversy is to the grant of registration under section 11 for which conditions as prescribed under section 12A are to be complied with. It may be necessary to reproduce the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 392. 15. It may be necessary to test the provisions of section 12A relevant to the issue under consideration on the touch-stone of Heydon's Mischief Rule. The Finance (No. 2) Act, 1996 substituted the words "whichever is later and such trust or institution is registered under section 12AA" for the words "whichever is later" in section 12A of the I.T. Act. The Memorandum explaining the provisions of Finance (No. 2) Bill,1996 in220 ITR 277 (St) states as follows :--- "Under the existing provisions of the income-tax Act, exemption from income-tax in respect of income of a charitable or religious trust or institution is available only if certain conditions are satisfied. One of these conditions is that the person in receipt of the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndition necessary to avail exemption under section 11. 17. The application in the present case seeking registration under section 12A(a) was made on23-6-1973. It is not the case of Revenue that the application was submitted beyond the stipulated time. Subsequent to the filing of application of registration, certain information was demanded by the CIT, which was duly furnished to him. Copies of the letters, exchanged between the assessee and the CIT in this regard were placed before us. 18. It is obvious that there is no default on the part of the assessee in making application for registration with the CIT in time. It is only due to inaction on the part of the CIT that the registration was granted after about 26 years of making applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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