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S.12AA – Recent Judgment of The Supreme Court about registration needs a reconsideration to avoid miscarriage of justice - because for inaction of authorities, an applicant should not suffer. This was a fit case for help of an Amicus Curie

Income Tax - Direct Tax Code - DTC - By: - CA DEV KUMAR KOTHARI - Dated:- 7-4-2016 Last Replied Date:- 30-12-1899 - Commissioner of Income Tax, Kanpur & Others Versus Society For The Promn. of Edn., Allahabad 2016 (2) TMI 672 - SUPREME COURT Society for the Promotion of Education, Adventure Sport & Conservation of Environment Versus Commissioner of Income-tax, Central, Kanpur 2008 (4) TMI 700 - ALLAHABAD HIGH COURT Facts: The date of application was 24.02.2003, in fact of peculiar circum .....

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petitioner applied for registration under section 12A of the Act, with retrospective effect, that is since the inception of the petitioner-society, i.e., 11-1-1993. An application for the purpose was duly made on 24-6-2003under section 12A(a) (as it stood at the time. A petition for condonation of delay was also made. From these facts it is clear that the application was in order and there was reason beyond control of applicant to make an application earlier. Therefore the condonation of delay w .....

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f author, it must be deemed that application for registration was allowed, that means allowed in all respect - the registration and the effective date and other incidental matters, if any. Supreme Court approved judgment of High Court and upheld that in the given circumstances, the Registration must be considered as granted. However, on apprehension of the Counsel of revenue, honourable Supreme Court held that it must be deemed to have been allowed w.e.f. 24.08.2003, that is limitation for dispo .....

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all aspects. Unfortunately, even very senior counsels of revenue adopt approach like of junior officers of revenue. With due respect, the author feels that learned Additional Solicitor General raised apprehension which should not have been raised, rather it is expected from him that he will help the court in rendering justice, as per law, and in interest of justice and also public at large. His case is not like of an advocate of private party, who may at some time, not volunteer on some aspects .....

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provision, he could have allowed registration from a date earlier then the date of submission of application (from the date of creation of institution or from the first day of the previous year just preceding the FY in which application was made or from some other date, as may be applicable in view of facts and circumstances of the case).In fact, in case of new institutions, such registration is allowed from the date when institution was established or became eligible. Even authority has power t .....

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ns: Before section 12AA it is important to read and understand the provisions of S. 12A. This is because S.12A provides about conditions for applicability of section 11 and 12 and also when and how registration is to be applied for and obtained. From which date registration can be granted etc. Provisions of Section 12A are reproduced below in first column of table with high lights of relevant portions, and observations of author are given in column 2: Conditions for applicability of sections 11 .....

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r before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA : Benefits are conferred from an earlier date than the date of application. Application can be made within one year from creation of trust or institution. The registration can be from such date. [Provided that where an application for registration of the trust or institution is made after .....

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resaid for sufficient reasons; Delay in making application can be condoned and registration can be with effect from the date of creation of institution. (ii) from the 1st day of the financial year in which the application is made, if the 8[***]14[Principal Commissioner or Commissioner] is not so satisfied:] The registration shall be w.e.f. 1st day of the FY in which the application is made. Thus if an application is made say of 31.03.16 the registration will be w.e.f. 01.04.15, even if authority .....

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institutions created after the specified date and are much after the date relevant in case before the supreme Court. (b) where the total income of the trust or institution as computed under this Act without giving effect to 10[the provisions of section 11 and 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year], the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of sect .....

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isions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made.] This is in relation to period which is much after the period with which the case concerns. As per author there is no justification for allowing deductions from the FY next to the year in which application is made. [Provided that where registration has been granted to the trust or institution under sec .....

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f conditions laid down in the proviso are satisfied. Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year: This imposes a bar on re assessment , merely because of non-registration , for relevant years. Provided also that provisions contained in the first and second proviso shal .....

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rustees/ governing body etc. as the case may be. Therefore, all requisites for consideration of applications must be submitted with the application and eligibility for grant of registration should be explained in the application. It is advisable that application should be made ready simultaneously with creation of trust or institution and should be submitted as soon as possible to avoid any controversy. The practice of craves leave to submit at the time of hearing or if required, etc; should be .....

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y, in practice we find that concerned authority usually issue notice, without application of mind and ask for many documents and information which are already provided in the application or accompanied with application. Some irrelevant information are also called for like audited accounts, details of donations etc. for last several years, though the institution was not existing at that time. The authorities must have practical approach and must have open mind and not biased mind that such instit .....

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hall- This is a procedural provision. (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and As per prescribed forms for application, relevant information and documents are to be provided with application. In case any document or information is missing same can be called from applicant to .....

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ies can really be started only after registration is granted. In case authority do not call any more information, then it is clear that authority is satisfied with documents and information already on record with application and subsequent submissions of applicant, if any (i) shall pass an order in writing registering the trust or institution; Registration is mandatory, unless authority issues a show cause notice as to why registration should not be refused. (ii) shall, if he is not so satisfied .....

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y is not essential for granting of registration. 4[(1A) All applications, pending before the 9[Principal Chief Commissioner or Chief Commissioner] on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the 9[Principal Commissioner or Commissioner] and the 9[Principal Commissioner or Commissioner] may proceed with such applications under that sub-section from the stage at which they were on that day.] This is .....

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or not granting registration, then question of rejection of application does not arise at all. And Registration must be deemed to have been granted, from the date from which such registration is sought and is prima facie applicable. 6[(3) Where a trust or an institution has been granted registra­tion under clause (b) of sub-section (1) 7[or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996] and subsequently the 9[Princi .....

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