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TMI Blog2013 (8) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... e Respondent : Shubham Agarwal ORDER (Delivered by Hon'ble Surya Prakash Kesarwani,J ) 1. In this appeal the following substantial question of law has been made in the memorandum of appeal : - "(1) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in directing the Assessing Authority to assess the assessee Development Authority as having been registered u/s 12-A of the Act in light of the judgement of the Special Bench of the I.T.A.T., Delhi in the case of Bhagwad Swarup Shri Shri Devraha Baba Memorial Sh. Hari Parmarth Dham Trust Vs. C.I.T. Dehradun reported in (2007) 17 SOT 281 (Del) (SB) ? (2) Whether any exemption could be allowed to the assessee u/s 11, 12 and 13 of the Act in view of the omission of Section 10(20-A) of the Act w.e.f. 01-04-03 from the statute by the Finance Act, 2002 ? (3) Whether the Assessing Authority was justified in assessing the assessee Development Authority as Artificial Juridical Person instead of a Local Authority ? " 2. Briefly stated the facts of the present case are that the assessee, Muzaffarnagar Development Authority (hereinafter referred to as 'MDA') was created by an enactment of Utt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions laid down in these section. Aggrieved with the aforesaid decision of the ITAT dated 19.2.2008 the Revenue has preferred the present appeal. 3. We have heard Sri Dhanajnay Awasthi, learned Standing Counsel for the Income Tax Department and Sri Subham Agarwal, Advocate appearing for the Respondent-Assessee. Submission on behalf of Appellant Income Tax Department 4. Sri Sri Dhanajnay Awasthi, learned counsel for the appellant submits that Section 12AA of the Act provides for procedure for registration so as to avail the benefits of exemption under Sections 11 and 12 of the Act. Section 12A of the Act provides the condition for applicability of Sections 11 and 12 of the Act. Section 12A provides that the person in receipt of income has to make an application for registration in the prescribed form and manner to the Commissioner. He submits that Section 12AA(2) of the Act merely provides that order granting or refusing to registration shall be passed before the expiry of six month from the end of the month in which the application was received but it does not mean that if the order granting or refusing to grant registration could not be passed then the registration shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh and others) (xii)(2003) 5 SCC 531 para 16 ( Sukanya Holdings (P) Ltd. Vs. Jayesh H. Pandya and another). (xiii)AIR 1967 SC 135 para 18( Yashwant Rao Ghorpade Vs. Commissioner of Wealth Tax Bangalore). (xiv)AIR 1975 SC 1871 para 26 ( State of Tamil Nadu Vs. M.K. Kandaswami). (xv)(1998) 3 SCC 234 para 4( State of Gujarat and others VS. Dilipbhai Nathjibhai Patel and another). Submission on behalf of Respondent 5. Sri Subham Agarwal, learned counsel for the Respondent-Assessee submits that the question of deemed grant of registration after expiry of the period provided in sub-section 2 of Section 12AA of the Act is concluded by the Division Bench of this Court in the case of Society for the Promotion of Education, Adventure Sport Conservation of Environment (supra). He referred to paragraph Nos. 9, 10, 13 and 18 of this judgment. He further submits that in these circumstances the substantial question of law as framed in the memorandum of appeal is squarely covered by aforesaid Division Bench judgment of this Court and therefore this question deserves to be answered in favour of the assessee and against the revenue. Discussion 6. We have considered the submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income furnishes alongwith the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.] (c) [.....] [(2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made.]. Section 12AA:- (1) The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) [ or clause (aa) of sub-Section (1)] of section 12A, shall- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquires as he may deem necessary in this behalf ; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he- (i) shall pass an order in writing registering the trust or institution ; (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p its officers under check and control, so as to take timely decisions in such simple matters such as consideration of applications for registration even within the large six month period provided by section 12AA(2) of the Act." 8. Respectfully we do not agree with the law laid down by the Division Bench of this Court in the case of Society for the Promotion of Education, Adventure Sport Conservation of Environment (supra) for the following reasons : - (i)There is nothing in Section 12AA(2) of the Act which provides for deemed grant of registration, if the application for registration is not decided within six months. (ii)This sub-Section provides that every order granting or refusing registration shall be passed before expiry of six months from the end of the month in which the application was received. Thus, this provision prescribes the period of six months to pass an order either granting or refusing registration. Therefore, if an order is not passed within the period of six months, the grant cannot be deemed leaving the words 'refusing registration'. (iii)One of the most important condition for availing the exemption under section 11 and 12 of the Act is the grant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity. 11. Moreso, creating a fiction by judicial interpretation may amount to legislation, a field exclusively within the domain of the legislature. ( Vide State of Jammu Kashmir Vs. Triloki Nath Khosa and Ajaib Singh V. Sirhind Coop. Marketing-cum-processing Service Society Ltd. 13. Even if the statute provides for a legal fiction / deeming provision, it must be limited to the purposes indicted by the context and can not be given a larger effect. ( Vide Radhakissen Chamria and others V. Durga Prasad Chamria and another, State of Travencore-Cochin V. S.V. Cashewnut factory Quilon, and Bengal Immunity Co. Ltd. V. State of Bihar and others. In Modi Cement Ltd. V. Kuchil Kumar Nandi, the Hon'ble Apex Court explained the distinction between the deeming provisions, and presumption and held that the distinction was well discernible. 14. Similar view has been taken by the Hon'ble Apex Court in State of Kerala and others Vs. Dr. S.G. Sarvothama Prabhu, Commissioner of Income Tax V. Mysodet (P) Ltd. and Garden Silk Mills Ltd. and another V. Union of India and others. 15. Rule 165 of the Explosive Rules, 1983, provide that if an application for renewal has been filed within time and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of each particular case." (viii)The provision fixing a time in which a public officer or authority has to act in performance of a duty considers it reasonable for the officer or the authority to act within the said period. The expiry of the period without more confers no right unless the statute by legal fixation or otherwise confers a right. Thus Section 12AA(2) of the Act providing for grant or refusing registration within a period of six months does not mean that the application must have been granted after expiry of the said period, unless there is a provision to the said effect made in the Act itself. The above points supported by the law laid down by Hon'ble Supreme Court in the case of Chet Ram Vashist Versus Municipal Corporation of Delhi an other (1980) 4 SCC 647 Paras 6, 7, 8 and 9. (ix)The performance of duty required to be done by the competent authority under Section 12AA (2) of the Act within the period specified therein and related to a right which may accrue to a person on grant of registration, the provision of time will be directory and not passing the order within the period specified shall not automatically result in deemed grant of registration. (x)In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is stated as follows : "As a corollary of the rule outlined above, the fact that no consequences of non-compliance are stated in the statute, has been considered as a factor tending towards a directory construction. But this is only an element to be considered, and is by no means conclusive." 44.In Dattatrays v. State of Bombay [AIR 1952 SC 181], it was held as under :- "Generally speaking the provisions of a statute creating public duties are directory and those conferring private rights are imperative. When the provisions of statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty and at the same time would not promote the main object of the Legislature, it has been the practice of the courts to hold such provisions to be directory only, the neglect of them not affecting the validity of the acts done." 45. In Craies on Statute Law VIII Edn. at page 262, it is stated thus :- "It is the duty of courts of justice to try to get at the real intention of the Legislature by careful ..... X X X X Extracts X X X X X X X X Extracts X X X X
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