Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2013 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (3) TMI 268 - HC - Income TaxRegistration granted to trust - Whether ITAT was right in holding that registration had been granted to the Trust if the application was not either accepted or rejected within a period of six months from the end of the month in which such application was filed by the applicant Trust? - Held that:- Period of six months as provided in Sub-section (2) of Section 12AA is not mandatory. Though the word shall has been used but it is well known that to ascertain whether a provision is mandatory or not, the expression 'shall' is not always decisive. It is also well known that whether a statutory provision is mandatory or directory has to be ascertained not only from the wording of the statute but also from nature and design of the Statute and the purpose which it seeks to achieve. Herein the time frame under Sub-section (2) of Section 12AA of the Act has been so provided to exclude any delay or lethargic approach in the matter of dealing with such application. Since the consequence for non-compliance with the said time frame has not been spelt out in the statute, this Court cannot hold that the said time limit is mandatory in nature nor the period of six months has been couched in negative words. When public duty is to be performed by the public authorities, the time-limit which is granted by the Statue is normally not mandatory but is directory in the absence of any clear statutory intent to the contrary. As decided in irector of Income Tax (Exemption) v. Anjuman-E-Khyrkhah-E-Aam [2010 (12) TMI 957 - MADRAS HIGH COURT] Section 12AA (1)(b)(i) and (ii) of Income Tax Act makes it clear that there is a statutory mandate imposed on the Department to pass an order in writing either registering the Trust/Institution or refusing to register the Trust/Institution. Thus the conclusion of the Tribunal in holding that registration was deemed to have been granted on not passing order in the application within the stipulated period of six months cannot be sustained and remitted the matter back to the Director of Income Tax (Exemption) to afford an opportunity of hearing to the assessee-Trust and hearing the matter afresh.
|