TMI Blog2019 (10) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... mination by Commissioner. It would be a different matter where the Appellate Tribunal records such satisfaction on the basis of material or documentary evidence which was not available before the Commissioner while exercising his powers under Section 12 (AA) of the Act, 1961, which is our opinion would require remand. Remand to the Commissioner can also be affected in a case where the Commissioner rejects the application on a technical ground without recording its opinion on facts or genuineness of the activities and object of the Trust but the Tribunal finds ground for rejection on such technical ground thereby reopening the issue of recording satisfaction in terms of Section 12 (AA) of the Act, 1961. It is clear that the power and jurisdiction of the Appellate Tribunal under Section 254(1) of the Act, 1961 is unfettered thereby enabling the Appellate Tribunal to direct registration of the Trust at its level itself but the same is not open as a matter of course and such power is to be exercised only in circumstances indicated herein above. Onus on the Appellate Tribunal to remand the matter in cases indicated herein above is also in view of the strict interpretation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andhari Lane, Behind Islamia College, Lal Bagh, Lucknow vide order dated 18.01.2019. The questions referred are as folllows:- (i) Whether Income Tax Appellate Tribunal while hearing Appeal in a matter where registration under Section 12AA has been denied by Commissioner Income Tax can itself pass an order directing Commissioner to grant registration or should leave the matter to be considered by Commissioner Income Tax to consider matter afresh giving rise to further litigation in the matter; (ii) Whether co-extensive Appellate jurisdiction conferred upon Income Tax Appellate Tribunal being a last court of fact can be read to confer upon it similar powers as been exercised by authorities below whose orders are considered in Appeals by Tribunal. 2. It was on an Appeal preferred by the Revenue under Section 260 (A) of Income Tax Act, 1961 (hereinafter referred to as the Act of 1961 ). The Appeal was preferred to challenge the order of the Income Tax Appellate Tribunal, which directed registration of the Trust under Section 12AA (1)(b) of the Act of 1961 within a period of sixty days, failing which it would deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an application for registration of a Trust under Section 12AA of the Act of 1961, if refusal is without considering any material, then on Appeal, after considering the issue and recording satisfaction, the Tribunal can direct for registration of the Trust. It is not only for the reason that such power exists with the Tribunal pursuant to Section 254 of the Act of 1961 but even to take the order of the Tribunal to its logical conclusions. 6. It is stated that if application for registration is rejected by the Commissioner after recording a perverse finding then on an Appeal, it can be corrected after taking a proper view and recording satisfaction, as required under Section 12AA of the Act of 1961, to direct for registration of the Trust. If the required satisfaction is recorded by the Appellate Tribunal, then remand of the matter would be nothing but an empty formality, as the Commissioner cannot take a view different then taken by the Appellate Tribunal. The registration of the Trust needs to be granted if the Appeal is allowed by the Tribunal after recording its satisfaction, as required under Section 12AA of the Act of 1961. In view of above, the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Principal Commissioner or Commissioner, on receipt of an application for registration of a Trust or institution made under clause (a) or clause (aa) or clause (ab) of sub-section (1) of Section 12A, shall- (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 (b) after satisfying himself about the objects of the Trust or institution and the genuineness of its activities, he- (i) shall pass an order in writing registering the Trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the Trust or institution, and a copy of such order shall be sent to the applicant: Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. (1A) All applications, pending before the Principal Chief Commissioner or Chief Commissioner on whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 10. A perusal of Section 12AA of the Income Tax Act shows that the Principal Commissioner or the Commissioner, on receipt of an application for registration of a Trust or an institution, may call for such document or information as he thinks necessary to satisfy himself about the genuineness of the activities of the Trust or the Institution, as it deems necessary. After calling for such an information and satisfying himself about the object and genuineness of the activities of the Trust, he shall pass an order for registering the Trust or the Institution or in the alternate, refuse such registration. In view of the aforesaid provision, the registration of the Trust is subject to satisfaction of the Commissioner, not only over the genuineness of the activities of the Trust, but also about the objects of the Trust or the Institution. In view of above, the registration of the Trust requires satisfaction of the Commissioner. In case the Commissioner is satisfied with the genuineness of the activities and even the objects, he can register the Trust under Section 12AA of the Act of 1961 and in case the Commissioner is not satisfied or refuses registration, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (Per Lord Westbury, See: Attorney General v. Sillem [33 LJ Ex 209 : 10 LT 434 : 10 HLC 704, 724 : 11 ER 1200] , ER p. 1209.) The Appeal, strictly so called, is one in which the question is, whether the order of the court from which the Appeal is brought was right on the materials which that court had before it (Per Lord Devuil Ponnammal v. Arumogam [1905 AC 383, 390] . The right of Appeal, where it exists, is a matter of substance and not of procedure (Colonial Sugar Refining Co. v. Irving [1905 AC 369 : (1904-07) All ER Rep Ext 1620 : 92 LT 738 (PC)] ). 17. Right of Appeal is statutory. Right of Appeal inhered in no one. When conferred by statute it becomes a vested right. In this regard there is essential distinction between right of Appeal and right of suit. Where there is inherent right in every person to file a suit and for its maintainability it requires no authority of law, Appeal requires so. As was observed in State of Kerala v. K.M. Charia Abdulla and Co. [AIR 1965 SC 1585] the distinction between right of Appeal and revision is based on differences implicit in the two expressions. An Appeal is continuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also rightly pointed out the observations made by Lord Diplock in Duport Steels Ltd. [(1980) 1 WLR 142 : (1980) 1 All ER 529 (HL)] In the aforesaid judgment, the House of Lords disapproved the approach adopted by the Court of Appeal in discerning the intention of the legislature; it is observed that: (WLR p. 157 C-D) the role of the judiciary is confined to ascertaining from the words that Parliament has approved as expressing its intention what that intention was, and to giving effect to it. Where the meaning of the statutory words is plain and unambiguous it is not for the Judges to invent fancied ambiguities as an excuse for failing to give effect to its plain meaning because they themselves consider that the consequences of doing so would be inexpedient, or even unjust or immoral. In controversial matters such as are involved in industrial relations there is room for differences of opinion as to what is expedient, what is just and what is morally justifiable. Under our Constitution it is Parliament's opinion on these matters that is paramount. (emphasis supplied) In the same judgment, it is further observed: (WLR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd unambiguous rule with respect to tax law. The plain meaning rule suggests that when the language in the statute is plain and unambiguous, the court has to read and understand the plain language as such, and there is no scope for any interpretation. This salutary maxim flows from the phrase cum inverbis nulla ambiguitas est, non debet admitti voluntatis quaestio . Following such maxim, the courts sometimes have made strict interpretation subordinate to the plain meaning rule [Mangalore Chemicals and Fertilisers Ltd. v. CCT, 1992 Supp (1) SCC 21] , though strict interpretation is used in the precise sense. To say that strict interpretation involves plain reading of the statute and to say that one has to utilise strict interpretation in the event of ambiguity is self-contradictory. 16 . The principles with regard to 'casus omissus' and its implementation have also been dealt with by Hon'ble the Supreme Court in the case of Shiv Shakti Cooperative Housing Society (supra) in which the relevant paragraphs are as follows:- 19. It is a well-settled principle in law that the court cannot read anything int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the legislature. An intention to produce an unreasonable result , said Danckwerts, L.J. in Artemiou v. Procopiou [(1966) 1 QB 878 : (1965) 3 All ER 539 : (1965) 3 WLR 1011 (CA)] (All ER p. 544 I), is not to be imputed to a statute if there is some other construction available . Where to apply words literally would defeat the obvious intention of the legislation and produce a wholly unreasonable result , we must do some violence to the words and so achieve that obvious intention and produce a rational construction. Per Lord Reid in Luke v. IRC [1963 AC 557 : (1963) 1 All ER 655 : (1963) 2 WLR 559 (HL)] where at AC p. 577 (All ER p. 664 I) he also observed: This is not a new problem, though our standard of drafting is such that it rarely emerges. 17 . A conspectus of the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke an entirely different view on the same set of facts. The expression as it thinks fit has the same connotation, unless context otherwise indicates, as he deems fit and the latter expression was interpreted by this Court in Raja Ram Mahadev Paranjype v. Aba Maruti Mali [AIR 1962 SC 753 : 1962 Supp (1) SCR 739] to mean to make an order in terms of the statute, an order which would give effect to a right which the Act has elsewhere conferred. Is this jurisdiction so circumscribed as to bring it on par with Section 115 of the Code of Civil Procedure? Proviso does cut down the ambit of the main provision but it cannot be interpreted to denude the main provision of any efficacy and reduce it to a paper provision. Both must be so interpreted as to permit interference which if not undertaken there would be miscarriage of justice. Subclause (c) of the first proviso to Section 66(1) will permit the Industrial Court to interfere with the order made by the Labour Court, if the Labour Court has acted with material irregularity in disposal of the dispute before it. If the finding recorded by the Labour Court is such to which no reasonable man can arrive, obviously, the Industrial Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of the Act. Section 12AA of the Act of 1961 requires satisfaction about the genuineness of the activities and the objects of a Trust before its registration by the Commissioner. The arguments of learned counsel for Revenue in reference to the requirement of satisfaction on the genuineness of activities of a Trust is to be exercised by the Commissioner and that the Tribunal should not direct registration of Trust unless satisfaction, as envisaged under Section 12 (AA) of the Act, 1961 is recorded, is only partly correct. 24 . Upon consideration of the judgments referred to herein above, we are of the considered opinion that in case where the Commissioner has refused to accept the application for registration of Trust after recording its finding on the basis of material on record before him holding that the activities and object of the Trust are not genuine and the Appellate Tribunal on the basis of the same material on record comes to the conclusion that the order of the Commissioner is perverse since it has been passed ignoring, misconstruing or misinterpreting such evidence, then it can direct registration of the Trust without remanding the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Trust in all or any circumstances, it would render the provisions of Section 12(AA) otiose, which again can not be the intention of legislature. 31 . In view of the above the answer to questions referred are answered as under:- (i) The income tax Appellate Tribunal while hearing an Appeal under Section 254(1) in a matter where registration under Section 12(AA) has been denied by Commissioner income tax can itself pass an order directing commissioner to grant registration in case the income tax Appellate Tribunal disagrees with the satisfaction of the Commissioner on the basis of material already on record before the Commissioner. However the said power is not to be exercised as a matter of course and that remand to the Commissioner income tax is to be made where the income tax Appellate Tribunal records a divergent view on the basis of material which has been filed before the Appellate Tribunal for the first time. Remand for determination of question regarding grant of registration to a Trust would also be necessitated in cases where the registration application has been rejected by the Commissioner in ..... 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