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TMI Blog2022 (9) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the opinion that substantial questions of law framed at point no.(1) has to be answered in favour of the Revenue and against the Assessee. Tribunal was not justified in applying Section 12AA(2) of the Act, 1961 in the facts of the present case and the order of Commissioner of Income Tax, Faizabad could not have been set aside on this ground. The decision of the Tribunal is based on a misreading and misunderstanding of Section 12AA(2) of the Act, 1961, its purport and scope. Deemed registration - Recent decision of Hon'ble the Supreme Court in 'Harshit Foundation Sehmalpur Jalalpur Jaunpur [ 2022 (5) TMI 179 - SC ORDER] wherein this very question of 'deemed registration' arose and their Lordships of Hon'ble the Supreme Court after considering the Full Bench decision in the case of CIT vs. Muzafar Nagar Development Authority [ 2022 (5) TMI 179 - SC ORDER] approved the same and dismissed the Special Leave Petition against the judgment of a Division Bench of this Court [ 2015 (3) TMI 99 - ALLAHABAD HIGH COURT (LB)] rendered in Income Tax Appeal Defective No.24 of 2013 'Commissioner of Income Tax Faizabad vs. Harshit Foundation Sehmalpur Jal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified in applying the time limit of 6 months provided in section 12AA(2) in a case where the order u/s 12AA is to be passed in second round to ITAT'S directions. (2) Whether non disposal of application for registration by granting or refusing registration before the expiry of six months as provided u/s 12AA(2) of the Income Tax Act, 1961 would result in deemed grant of registration. (3) Whether in the facts and circumstances of the case and the Hon'ble Income Tax Appellate Tribunal was correct in granting deemed registration u/s 12AA without appreciating the facts that the power to grant or refuse registration is statutory power of the commissioner u/s 12AA. (4) Whether in the facts and circumstances of the case the Income Tax Appellate Tribunal has erred in substituting its own satisfaction in place of the satisfaction of the commissioner of the income tax as provided u/s 12AA of the Income Tax Act, 1961, thereby exceeding its jurisdiction. On 07.02.2014 itself, this Court had stayed the operation of impugned order dated 20.09.2013 passed in I.T.A. No.145 and 146/Lkw/2012 by Income Tax Appellate Tribunal, Lucknow. The order sheet reveals that as per rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that the plea of the ld. Counsel for the assessee is cogent that the assessee has become entitled for registration under Income section 12AA and also approval under section 80G of the Act. In this regard, we draw support from the Hon'ble jurisdictional High Court decision in the case of Society for the Promotion of Education, Adventure Sports Conversation of Environment vs. CIT Ors., 216 CTR (All) 167. In this case, following was expounded:- (Head notes only) Charitable trust - Registration under s. 12A-Effect of non-passing of order within the time-limit - Taking the view that non-consideration of the registration application within the time fixed by s. 12AA(2) would result in deemed registration, may at the worst cause loss of some revenue or income-tax payable by the individual assessee-On the other hand, if a contrary view is taken, it would leave the assessee totally at the mercy of the IT authorities inasmuch as the assessee has not been provided any remedy under the Act against non-decision-Moreover, the former view furthers the object and purpose of the statutory provision - Thus, the better interpretation would be to hold that the effect of non-considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... piry of six months from the end of the month in which the application was received under clause (a) [or clause (aa) [or clause (ab)] of sub-section (1)] of section 12A.] As is evident from the reading of the aforesaid provision every order granting or refusing registration under clause (b) of sub-Section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) or clause (aa) or clause (ab) of sub- Section (1) of Section-12A of the Act, 1961. The application in question in this case was filed on 05.02.2010, therefore, based on the language used in sub-Section (2) of Section 12AA of the Act, 1961, the period of six months referred therein was to expire on 28/29.08.2010. The record reveals that in this case, the application was rejected on 26.08.2010 and there is no factual dispute in this regard. Therefore, rejection mentioned in sub-Section (2) of Section 12A of the Act, 1961 was before expiry of six months from the end of the month in which the application of the respondent was received. At this stage, it is not out of place to mention here that Section 12AA of the Act, 1961 refers to the procedure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t if, on an appeal filed against such an order, any directions are issued and thereafter any decision is taken which is taken beyond the period of six months then such a decision would be a nullity in view of sub-Section (2) of Section 12A of the Act, 1961. Any such understanding of the provision would be against the express language of the provision. Once a decision is taken on the application within the period of six months envisaged in Section 12AA(2) then subsequent events are irrelevant so far as application of Section 12AA(2) of the Act is concerned. The period of six months referred in Section 12AA(2) has to be calculated from the end of the months in which the application under Section 12A was received and not from any other date. Therefore, we are of the opinion that substantial questions of law framed at point no.(1) has to be answered in favour of the Revenue and against the Assessee. The Tribunal was not justified in applying Section 12AA(2) of the Act, 1961 in the facts of the present case and the order of Commissioner of Income Tax, Faizabad could not have been set aside on this ground. The decision of the Tribunal is based on a misreading and misunderstanding of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance on behalf of the sole respondent despite service of notice and adjournment sought for on a couple of occasions earlier. 3. The short issue is with regard to the deemed registration of an application under Section 12AA of the Income Tax Act. The High Court has taken the view that once an application is made under the said provision and in case the same is not responded to within six months, it would be taken that the application is registered under the provision. 4. The learned Additional Solicitor General appearing for the appellants, has raised an apprehension that in the case of the respondent, since the date of application was of 24.02.2003, at the worst, the same would operate only after six months from the date of the application. 5. We see no basis for such an an apprehension since that is the only logical sense in which the Judgment could be understood. Therefore, in order to disabuse any apprehension, we make it clear that registration of the application under Section 12AA of the Income Tax Act in the case of the respondent shall take effect from 24.08.2003. 6. Subject to the above clarification and leaving all other questions of law open, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court has rightly held that even if in a case where the registration application under Section 12AA is not decided within six months, there shall not be any deemed registration. We are in complete agreement with the view taken by the Full Bench of the High Court. The Special Leave Petition stands dismissed. In view of this pronouncement, the law on the question of 'deemed registration' which had already been clarified and declared by the Full Bench of this Court referred hereinabove stands further crystallized and approved by Hon'ble the Supreme Court by the aforesaid decision. In view of the aforesaid declaration of law, decision of the Division Bench of this Court in the case of Society for the Promotion of Education, Adventure Sport Conservation of Environment (supra) is not good law as held by the Full Bench though it may be binding between the parties in view of the order passed in the civil appeal arising therefrom as already discussed. In view of the above, substantial question no.(2) is answered in terms of the Full Bench decision in the case of CIT vs. Muzafar Nagar Development Authority (supra) and decision of Hon'ble the Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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