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2018 (12) TMI 1465 - HC - Income TaxCharitable institution - exemption u/s 11 - delay in filing the application for registration under Section 12A - deemed registration under Section 12A for reason of the delay in consideration by virtue of Section 12AA(2) - Held that:- We are not convinced that the mere delay would have affected the registration being granted. Clause (a) of Section 12A provides an application to be filed in the prescribed form and in the prescribed manner to the Commissioner before the first day of July, 1973 or before the expiry of a period of one year from the date of creation of the trust or the establishment of the institution. The proviso also makes it clear that if there is a delay occasioned and the Commissioner is satisfied that there were sufficient reasons for not having filed an application within the time provided under clause (a), then the registration would be applicable from the date of creation of the trust or establishment of the institution. Even if the delay is not condoned for reason of no satisfactory explanation having been offered, the registration; if enabled, would be applicable from the first day of the financial year in which the application is made. What assumes relevance is the fact that the assessee herein was entitled to exemption under Section 10(20) by virtue of its registration as a local authority and the same was taken away by an amendment of 13.11.2002, which came into effect from 01.04.2003; when the exemption was withdrawn. We notice that there has been a delay of about 3 years. The need for registration as a trust carrying on activities of charitable purposes arose only for reason of the exemption having been withdrawn. The assessee which was enjoying exemption from income-tax from its inception was suddenly faced with the prospect of being made liable under the taxing statute. This would have required considerable research and as was rightly pointed out by the assessee, the Ports, all over the Country had been suddenly deprived of their exemption and had filed applications under Section 12AA with considerable delay. Taking all these aspects into account; we find that the explanation offered is satisfactory and the delay has to be necessarily condoned. We agree with the Tribunal on the condonation of delay. We answer the questions framed against the Revenue and in favour of the assessee upholding the order of the Tribunal, condoning the delay in filing the application under Section 12AA and directing the registration to be granted as a trust established for the purpose of charitable purpose, eligible for exemption under Section 11 & 12A of the Income Tax Act. We however, deem it fit not to answer the question framed with respect to the deemed grant of registration on the delay occasioned in passing a final order on the application under Section 12AA since we find the delay having been satisfactorily explained. We also answer the additional questions framed by us, though not arising from the order of the Tribunal following Berger Paints [2004 (2) TMI 4 - SUPREME COURT] in favour of the assessee and against the Revenue.
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