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2018 (5) TMI 257 - ITAT MUMBAIDenying exemption claimed u/s 11 - trust was not registered u/s 12 AA - application for registration was not disposed off by the CIT-I - Deemed registration - Held that:- CIT neither rejected the application nor did he grant registration. It is also a fact that the assessee had filed reminders with the office of the CIT, Thane to issue the registration certificate. In our opinon, an assessee cannot and should not be penalised for inaction of an officer representing the Sovereign. The Act provides that if the CIT does not reject the application or does not grant registration, it would be deemed that the assessee was entitled to registration. The assessee cannot be penalised for the delay in disposing of the application filed by the assessee for registration, that the AO and the FAA were not justified in holding that in absence of the registration certificate the assessee could not claim the exemption u/s. 11 of the Act. The assessee was to be treated to be deemed to be registered trust from the sixth month of the lodging the registration application with the CIT-1 Thane. Case 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.
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