9911796707
TMI Blog2018 (5) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... of Promotion of Education Adventure Sport and Conservation of Environment (2008 (4) TMI 700 - ALLAHABAD HIGH COURT) has to be given preference over the judgment of Muzaffarnagar Development Authority(2015 (3) TMI 99 - ALLAHABAD HIGH COURT (LB) ), relied upon by the FAA, as the first judgment has been approved but the Hon’ble Supreme Court [2016 (2) TMI 672 - SUPREME COURT]- Decided in favour of the assessee. Not considering the capital expenditure for acquisition of fixed assets as application of income - Held that:- As we have held that the assessee was entitled to registration from the sixth month of making the application, so, in our opinion there was no justification in denying it the claim made about acquisition of fixed assets. Second ground is decided in favour of the assessee. - I.T.A./1111/Mum/2016, And I.T.A./1112/Mum/2016 - - - Dated:- 2-5-2018 - Shri Rajendra,Accountant Member And Ram Lal Negi,Judicial Member For The Revenue : Shri V. Justin -DR For The Assessee : Shri Sanjay Parikh ORDER PER RAJENDRA, AM Challenging the orders, dated 23/11/2015, of the CIT (A)-1, Thane, the assessee has filed appeals for the above-mentioned two AY. s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring to the judgment of the Hon ble allowable High Court delivered in the case of Muzaffarnagar Development Authority(275 CTR 233), he held that the assessee could not be said to have been granted him registration because the application filed by it for registration was not disposed off by the CIT, that the assessee trust did not have the requisite registration under section 12 A (1) (a) of the Act. Upholding the order of the AO he held that AO was fully justified in disallowing the exemption to the assessee u/s. 11 of the Act. 5 . During the course of hearing before us, the Authorised Representative (AR) stated that the assessee should not be penalised for not passing the order by the CIT, that it had filed the application within time, that the CIT was supposed to pass order within a period of six months, that in case of the failure by the CIT the assessee was entitled to deemed registration. He relied upon the cases of Society for the Promotion of Education Adventure Sport and Conservation of Environment(372ITR222)of Hon ble Allahabad High Court and the judgment of Hon ble Apex Court in the case of Society For The Promotion Of Education(382 ITR 6). The Departmental Representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would become functus officio and he cannot thereafter pass any order either allowing or rejecting the registration . It is obvious that the application cannot be allowed to be treated as perpetually undecided . Therefore, the key question arises whether upon lapse of the six - month period without any decision, the application for registration should be treated as rejected or it should be treated as allowed . 7 . The petitioner contends, relying upon a decision of the Income - tax Appellate Tribunal, Bangalore Bench, in the case of Karnataka Golf Association v . DIT ( Exemption ) [ 2004 ] 91 ITD 1 ( Bangalore ) ; [ 2005 ] 272 ITR ( AT ) 123 ( Bangalore ) , that the registration should be deemed to have been granted after the expiry of the period prescribed u / s . 12AA ( 2 ) , if no decision had been taken on the application for registration u / s . 12A / 12AA . Reliance has also been placed by the petitioner in the cases of Jan Daood and Co . v . ITO [ 1978 ] 113 ITR 772 ( All ) and CIT v . Rohit Organics ( P . ) Ltd . [ 2006 ] 281 ITR 194 ( All ) , both of which lay down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dealing with a different statute but one of the important aspects pointed out by the Supreme Court for taking that view is the purpose of the provision requiring sanction to lay - out plans . There was an element of public interest involved, namely, to prevent un - planned and haphazard development or construction to the detriment of the public . Besides sanction or deemed sanction to a lay - out plan would entail constructions being carried out, thereby creating an irreversible situation . 10 . In the present case, we find that there is no such public element or public interest . Taking the view that non - consideration of the registration application within the time fixed by section 12AA ( 2 ) would result in deemed registration, may at the worst cause loss of some revenue or Income - tax payable by that individual assessee . This would be similar to a situation where the assessing authority fails to make the assessment or reassessment within the limitation prescribed for the same . That also leads occasionally to loss of revenue from that individual assessee . 11 . On the other hand, taking the contrary view and holding that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called a purposiveand - strained construction ). 14 . Again, in paragraph 44 quoting the passage from Bennion, it said : . . . I am not reluctant to adopt a purposive construction where to apply the literal meaning of the legislative language used would lead to results which would clearly defeat the purposes of the Act. But in doing so the task on which a court of justice is engaged remains one of construction, even where this involves reading into the Act words which are not expressly included in it (Kammins Ballroom Co. Ltd. v. Zenith Investments (Torquay) Ltd. [1971] AC 850) provides an instance of this ; but in that case the three conditions that must be fulfilled in order to justify this course were satisfied. First, it was possible to determine from a consideration of the provisions of the Act read as a whole precisely what the mischief was that it was the purpose of the Act to remedy ; secondly, it was apparent that the draftsman and Parliament had by inadvertence overlooked, and so omitted to deal with, an eventuality that required to be dealt with if the purpose of the Act was to be achieved ; and, thirdly, it was possible to state with certainty what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 and Oriental Insurance Co . Ltd . v . Brij Mohan JT 2007 ( 7 ) SC 472, for taking recourse to the doctrine of purposive interpretation . 18 . The apex court has also applied the doctrine of purposive interpretation in fiscal statutes that would be evident from its decision in CIT v . Anjum M . H . Ghaswala [ 2001 ] 252 ITR 1 ( SC ) ; JT 2001 ( 9 ) SC 61 . 19 . Considering the pros and cons of the two views, we are of the opinion that by far the better interpretation would be to hold that the effect of non - consideration of the application for registration within the time fixed by section 12AA ( 2 ) would be a deemed grant of registration . We do not find any good reason to make the assessee suffer merely because the Income - tax Department is not able to keep 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 . ( emphasis by us ). 20 . We, accordingly, direct the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FAA held that the assessee was entitled to claim the capital expenditure for acquisition of fixed assets as application of income, that the issue was academic as the assessee was denied exemption of section 11 of the Act. 8 . During the course of hearing before us, the AR stated that the assessee was entitled to claim the sum of ₹ 45. 61 lakhs towards the capital expenditure for acquisition of fixed assets. The DR left the issue to the discretion of the Bench. 9 . As we have held that the assessee was entitled to registration from the sixth month of making the application, so, in our opinion there was no justification in denying it the claim made about acquisition of fixed assets. Second ground is decided in favour of the assessee. ITA / 11121 / Mum / 2016 - AY . 2012 - 13 : 10 . Solitary ground of appeal for the year under appeal is about denial of exemption u/s. 11 of the Act for want of registration certificate to be issued by the CIT-1, Thane. Following our order for the earlier year, we decide the issue in favour of the assessee. As a result, appeals filed by the assessee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
