TMI Blog2007 (5) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... Registrar of Societies, a copy of constitution of the society and audit report in Form No. 10B alongwith income and expenditure account/balance sheet for the yrs. 1998-99, 1999-2000 and 2000-01. The learned CIT noted that the application was belated and thus did not satisfy the mandatory condition for registration prescribed under s. 12A of the Act. In the show-cause notice issued to the assessee in this regard attention of the applicant was drawn to the statutory provisions of s. 12A(a) as per which the application was required to be made before 1st July, 1973 or before the expiry of one year from the date of creation of the trust, whichever is later. He observed that in the present case the trust was created on 25th Nov., 1959 and hence the application under s. 12A was required to be filed before 1st July, 1973. The assessee showed cause for the delay that as a prudent citizen it was felt that since the main objective of the society was to impart education without motive of profit, the income is exempt under s. 10(23) of the IT Act, 1961. However, later on, it was gathered that IT law is amended almost every year and filing of application for registration under s. 12A(a) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be filed and sub-cl. (b) providing for the filing of audited accounts alongwith certificate of Form No. 10B. After a valid application has been filed under s. 12A, s. 12AA prescribes the procedure for registration. In sub-s. (1) of s. 12AA the CIT may call for documents or information from the applicant in order to satisfy about the genuineness of the activities of the trust and after making such inquiries as deemed necessary, may pass an order under s. 12AA(1)(b)(i) registering the trust or under s. 12AA(1) (b)(ii) refusing to register the trust. Sub-s. (2) of s. 12AA lays down that an order granting or refusing registration under cl. (b) of sub-s. (1) of s. 12AA shall be passed before the expiry of 6 months from the end of the month in which application was received. The learned CIT held that in the present case, the application dt. 30th May, 2002 is liable to dismissed in limine, being an invalid application and not meeting with the mandatory requirements of s. 12A(a). He was thus of the view that the limitation of s. 12AA(2) is not applicable in respect of such invalid application. The learned CIT vide order dt. 18th Nov., 2005 has accordingly rejected the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prescribed authority under s. 10(23C)(vi). However, at the same time, it could have also sought exemption of income under the regular provisions meant for a public charitable and religious trust under ss. 11 and 12 in absence of approval under s. 10(23C)(iv). The assessee therefore filed an application in Form 10A on 30th May, 2002 seeking registration under s. 12A(a) of the Act, a copy whereof has been placed at page Nos. 43 to 47 of the paper book. On the observation of the learned CIT that the applicant had not filed application for condonation of delay with the application for registration, the learned Authorised Representative submitted that the learned CIT has himself in para No. 3(b) of the order has entertained the oral prayer of the applicant in this regard and denied condonation. Thus, he has waived filing of written application in this regard while deciding the issue of delay. The learned Authorised Representative submitted that even otherwise oral prayer for condonation of delay can also be made in view of the decision of Hon'ble Supreme Court in the case of Lance Nayak Mahaveer Singh vs. Chief of Army Staff 1990 SCC 89 (1), wherein such an oral prayer was admitted an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made, were deleted. He also placed reliance on the following decisions: (a) Collector, Land Acquisition vs. Mst. Katiji Ors. (1987) 62 CTR (SC) 23 : (1987) 167 ITR 471 (SC); (b) Bharat Auto Center vs. CIT (2006) 200 CTR (All) 289 : (2006) 282 ITR 366 (All); (c) Krishi Upaj Mandl Samiti, Kuchaman City vs. CIT (ITA No. 261/Ju/2006, dt. 17th Nov., 2006); (d) All India Primary Teachers Federation vs. Director of IT (Exemption) (2005) 93 TTJ (Del) 155; (e) Society of Divine Providence vs. Union of India Anr. (1998) 146 CTR (MP) 417 : (1999) 235 ITR 339 (MP); (f) Kacchhi Hast Kala Maha Mandal vs. CIT (2006) 100 TTJ (Rajkot) 1112; (g) Ananda Marga Pracharaka Sangha vs. CIT (1997) 139 CTR (Cal) 524 : (1996) 218 ITR 254 (Cal). 2.5 The learned Departmental Representative, on the other hand, submitted that application under s. 12A(a) of the applicant was not accompanied with application for condonation of delay and keeping in view that the assessee was assisted by experts/chartered accountant firms, who were aware of the changed/amended law, there was no reason with the assessee for condonation of delay in filing the application for registration. The learned CIT has thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, 2002, the Department by their own conduct had been accepting that the applicant was existing solely for education and not for the purpose of profit as required under s. 10(22) of the Act. We are therefore of the view that there is substance in the explanation of the assessee that till 13th May, 2002, it was under a bona fide impression and belief that the society was not required to file an application for registration for having exemption. It is only because of s. 10(23C)(vi) introduced w.e.f. asst. yr. 1999-2000, it came to the light even of the ITO that some action is required in the case of all educational institutions and therefore, notice under appropriate provisions were issued. Hence, despite the availability of s. 12A it can be said that only 2-3 years lapse was there when new provision was inserted and applicant was made aware of making such compliance either under s. 12AA or under s. 10(23C)(vi) of the Act. The ratio of the decision of Hon'ble jurisdictional High Court in the case of Kantilal Purshottam Co. is fully applicable in the present case, wherein a new provision under s. 40A(3) prohibiting cash payment exceeding Rs. 2,500 was inserted for the first time w. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mad). 2.9 The learned Authorised Representative however pointed out that the assessee had filed such accounts before the AO as evident from page Nos. 79 to 135 of the paper book and the same were also filed before the learned CIT as evident from page Nos. 221 to 230 of the paper book vide letter dt. 16th Dec., 2004 i.e. before passing the impugned order. He pointed out further that such accounts for financial years. 1999-2000 and 2000-01 were otherwise also filed through the application under s. 10(23C)(vi) through the learned CIT and, hence, were available before him. The same learned CIT referred to these accounts in his. letter dt. 24th May, 2005, placed at page No. 234 of the paper book, addressed to learned CIT. In fact, the learned CIT was taking up both the matters of ss. 12A and 10(23C)(vi) at the same time. The learned Authorised Representative has also placed reliance in this regard on the decision of Hon'ble jurisdictional High Court in the case of CIT vs. Dr. L.M. Singhvi (2007) 207 CTR (Raj) 452 : (2007) 289 ITR 425 (Raj). The learned Departmental Representative, on the other hand, had placed reliance on the impugned order in this regard. We thus accept the submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst which, the learned CIT has passed the impugned order as late as on 18th Nov., 2005 i.e. with the delay of almost three years. The learned Departmental Representative, on the other hand, has supported the view of learned CIT in this regard. 2.12 After having gone through the impugned order, we find that the learned CIT has denied the above plea of the assessee on the basis that the application dt. 30th May, 2002 was an invalid application and not meeting with mandatory requirements of s. 12A(a), hence the limitation of s. 12AA(2) is not applicable in respect of such invalid application. We do not agree with such findings of the learned CIT on the issue because in all the circumstances either due to defect in the application or on merits of it the learned CIT under sub-cl. (2) of s. 12AA is supposed to grant or refuse registration before 6 months from the end of month in which application was received and in the present case since the application was filed on 30th May, 2002 the learned CIT should have disposed of the application on or before 30th Nov., 2002. The learned CIT has however disposed of the application on 18th Nov., 2005 i.e. with the delay of around three years. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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