TMI Blog2005 (3) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred by not allowing the appellant-trust registration under s. 12AA of the IT Act when that said trust fulfils the criteria laid down under s. 12A(a) of the IT Act and it was validly created and its objects are charitable in nature. 4. That there is no violation of the conditions as laid under s. 12A of the IT Act." 2. The assessee filed an application for registration under s. 12A of the IT Act. Copies of this application are placed at p. 5 of the assessee's paper book. As per this application, the trust was created on 1st Feb., 2001. A certified copy of the instrument under which the trust was created, was filed. A certified copy of the document evidencing the creation of the trust, was also filed. Copies of accounts of the trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide education, food and clothing to them. (g) To run and maintain hospitals, schools, etc. irrespective of caste and creed anywhere in India. (h) To encourage handicraft, music and dance irrespective of caste and creed anywhere in India. (i) To donate to similar institutions having similar objects. 3. The learned CIT(A) has passed the following impugned order: "The assessee has applied for registration under s. 12A of the IT Act. Perusal of the documents placed on file reveals that the assessee's declared aims are to provide medical assistance to the poor in the form of medical aid, food, clothes, etc. in India, to give donations to the hospitals, nursing homes, educational institutes, blind institutes, etc. The trust has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication such as the one under consideration here. As per the section, such limitation is 6 months from the end of the month in which the application was received. In the present case, the application was filed on 29th Oct., 2001. Hence, the limitation available for passing the order was upto 30th April, 2002. The order under challenge is dt. 24th July, 2002. Hence, ipso facto, the order is belated and is barred by limitation. 6. Recently, the Bangalore Bench of the Tribunal in Karnataka Golf Association vs. Director of IT (Exemption) (2004) 84 TTJ (Bang) 855 : (2005) 272 ITR 123 (Bang)(AT) held, inter alia, that wherever an application is made, the authorities must act within the timeframe. If they failed to act within the time frame, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts own latches. Hence, registration was deemed to have been granted on the expiry of limitation period prescribed under s. 12AA(2) of the Act. The analogy is equally applicable to the facts of the present case also. Once the period of limitation had expired, the subsequent impugned order refusing registration, stands reduced to nothing but a nullity. The expression used in the section is "shall". This "shall" cannot be expressed to mean "may". The unequivocal purport of the section is mandatory. There is no escape for the Department. Once the limitation period has expired, the Department becomes functus officio, so far as regards the application under consideration before them. At the very moment of expiry of limitation, the application is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rust consists of the carrying on of a business and there are no restrictions on its making profit, the Court would be well justified in assuming, in the absence of some indication to the contrary, that the object of the trust involves the carrying on of an activity for profit. 8.1 Thus, evidently, the facts before us are inconsistent with those before the Hon'ble Supreme Court. The learned CIT(A) has merely remarked that "....... The judgment of the Hon'ble Supreme Court in the case of Sole Trustee, Loka Shikshana Trust vs. CIT 1975 CTR (SC) 281 : (1975) 101 ITR 234 (SC) is applicable on the facts of this case.....". However, it has not been explained, nor is it comprehensible, in view of the foregoing, as to how it is so. The facts being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that s. 12AA(1)(a) is very clear. As per this provision, the CIT shall call for such documents or information from the trust as he thinks necessary, in order to satisfy himself about the genuineness of the activity of the trust and may also make such enquiry as he may deem necessary in this behalf. As per s. 12AA(1)(b), the CIT has to satisfy himself about both the objects of the trust and the genuineness of its activities. Therefore, the learned Departmental Representative contends that in the present case, the learned CIT(A) was correct in passing the impugned order, since no activity was carried out by the assessee. 10. At first glance, the arguments of learned Departmental Representative appear to be correct. However, when one goes a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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