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2007 (8) TMI 380 - AT - Income TaxCharitable And Religious Trust - Exemption u/s 11 - Deemed registration u/s 12AA - No order passed "granting or refusing" registration of Trust with the period laid down in section 12AA(2) registration would be deemed to have been granted? - no order was passed within 6 months from the date of application u/s 12A - HELD THAT:- If the application for registration is to abate because the CIT did not pass an order thereon and the assessee is asked to file another application again, that would be putting the assessee to the grind all over again for no fault of his. That consequence should be avoided. If the application is to be treated as pending, then again the CIT would be getting an extended period of limitation which the section does not allow. Further, it would be uncertain as to how long the period can be extended. The assessee cannot be kept waiting to the end of time. If we hold that the application must be deemed to have been refused, obviously the assessee must be in a position to file an appeal against the refusal to the Tribunal but it will not be able to do so in the absence of a written order containing the reasons for refusal; the appeal remedy would be rendered illusory. That consequence cannot be countenanced. Therefore, by a process of exclusion, we are inclined to accept the conclusion that the CIT must be deemed to have allowed the registration if he has not passed any order within the time prescribed. That way, the rights of the department are also protected in the sense that it would be open to the CIT to cancel the deemed registration by invoking sub-section (3) to section 12AA, if it is otherwise permitted and the procedure prescribed therefor is followed. The assessee, if aggrieved by the cancellation of registration, has a right to appeal to the Tribunal u/s 253(1)(c). We find that DLF Universal Ltd.'s case [2000 (5) TMI 2 - SUPREME COURT], helps the assessee the most. In that case the provisions of section 269UD of the Act, appearing in Chapter XXC of the Act, providing for pre-emptive purchase of a property by the Government came up for consideration. A statement in Form No. 37-I was filed before the appropriate authority. It was found to be in order. It was filed within the time prescribed. Under the section the appropriate authority had to pass an order within three months from the receipt of the statement purchasing the property or to give a "no objection" certificate. The petitioner before the Court had complied with all the conditions imposed on it. But the appropriate authority did not pass any order within the period of three months mentioned above for purchase of the property by the Central Government. The Supreme Court held that in these circumstances "the appropriate authority is duty bound to issue no objection certificate to the transfer of the property". The only difference, without any substantial distinction, is that while the time-limit of three months was prescribed in the first and second provisos to section 269UD, the time-limit of 6 months from the month in which the application for registration was filed is prescribed in the sub-section (2) itself of section 12AA. Another difference, again without any distinction, is that the provisos to section 269UD are couched in negative language ("no such order shall be passed... after the expiration of...") while sub-section (2) of section 12AA is couched in positive language ("every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of..."). The effect or the result is in our opinion the same, viz., the orders have to be passed within the time-limit prescribed and if not the application should be deemed to have been granted. In the ultimate analysis, it seems to us that we must agree with the conclusion which the Bangalore Bench reached in Karnataka Golf Association v. Director of Income-tax [2003 (3) TMI 260 - ITAT BANGALORE-C], the Delhi Bench in Sardari Lal Oberoi Memorial Charitable Trust v. ITO [2005 (3) TMI 401 - ITAT DELHI-F] and Chennai Bench in People Education & Economic Development Society (PEEDS) v. ITO [2006 (1) TMI 215 - ITAT MADRAS-C]. We accordingly answer the question referred to us in the affirmative. The order of the CIT refusing registration is a nullity and is quashed. Registration is deemed to have been granted as applied for by the assessee. The appeal is allowed. In the light of this, we do not propose to examine the merits of the claim for registration.
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