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2019 (10) TMI 257

..... is pending with the authorities, however, every year exemption u/sec. 11 was granted to the assessee u/sec. 143(3) - HELD THAT:- For the assessment year under consideration, the assessee has filed a return of income whereas the CPC, Bangalore processed the return u/sec. 143(1) and considered the entire gross receipts as income liable for tax on the ground that registration number of the Trust was not mentioned in the return form. We find that once the assessee is enjoying the benefit of section 11 by the Department, the subsequent years without scrutiny, it cannot simply reject on the ground that registration number of the Trust is not mentioned. The CPC Bangalore ought to have referred the matter to the Assessing Officer for examination of the entire issue. Without that, the CPC Bangalore added the entire gross receipts as income liable for tax. As in the case of Society for the Promotion of Education Adventure Sport & Conservation of Environment [2008 (4) TMI 700 - ALLAHABAD HIGH COURT] has held that non-consideration of the application for registration u/sec. 12A within the time fixed u/sec. 12AA(2) would be a deemed grant of registration. - Decided against revenue. - ITA No .....

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..... of the month in which the application was received under clause (a) [or clause (aa) of sub-section (1) of section 12A] It is settled law that once any Trust has submitted its application in Form No. 10A unless the appropriate Authority passed any order refusing registration categorically within the prescribed time of six months, it is deemed to be registered u/s 12AA of the Income Tax Act, 1961. 8. In view of the above decisions of the Hon'ble Apex Court and the Hon'ble ITAT, Ahmedabad and as per section 12AA(2) of the Income Tax Act, 1961, the issue is decided in favour of the appellant and accordingly, the Assessing Authority is directed to grant relief to the appellant. 9. In the result, the appeal of the appellant for the Asst. Year 2013-14 is ALLOWED. 4. On being aggrieved, Revenue carried the matter in appeal before this Tribunal. 5. Ld.AR has submitted that the assessee-trust applied for registration u/sec. 12A on 06/08/1990 and thereafter exemption u/sec.11 was allowed year after year till the impugned assessment year. He pointed out from the page Nos. 8 & 9 of the paper book to support his argument. He also further submitted that as per section 12AA(2), if the .....

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..... cords and there was no evidence to show that the registration applied for was rejected or cancelled, the intimation u/sec. 143(1) is beyond the scope of section 143(1) of the Act and set aside the order passed by the CPC (AO) u/sec. 143(1) and deleted the addition made by the Assessing Officer. For the sake of convenience, the relevant portion of the order is extracted as under:- 5. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The assessee is a society registered under the Societies Act. The society has applied for registration u/s 12AA of the Act, which was evident from the scrutiny assessment order passed by the A.O., for the assessment year 1996-97 vide order dated 29.12.1998. The A.O. has allowed the exemption u/s 11A of the Act. Further, the assessee placed evidences of having filed the returns of income for earlier years and the intimations were issued by the Income Tax Department u/s 143(1) and the exemption u/s 11 of the Act, was allowed by the revenue. Though assessee has not mentioned the registration number, equal responsibility casts up on the revenue to maintain proper records and to tra .....

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..... eclared in the return by the assessee is adjusted but no tax or interest is payable by, or no refund is due to, him: Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made. Explanation-For the purpose of this sub-section,- (a) an incorrect claim apparent from any information in the return shall mean a claim, on the basis of an entry, in the return,- (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; (b) the acknowledgement of the return shall be deemed to be the intimation in a case where no such is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a). 6. Since the adjustment made by the AO is debatable, which requires verification from the assessment rec .....

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..... e interpretation of a statute 'purposive construction' of the enactment which gives effect to the legislative purpose/intendment, if necessary must be followed and applied. Considering the pros and cons of the two views by far the better interpretation would be to hold that the effect of non-consideration of the application for registration within the time fixed by s.12AA(2) would be a deemed grant of registration. There is no good reason to make the assessee suffer merely because the IT Department is not able to keep its officers under check and control, so as to take timely decisions in such simple matters such as consideration of - applications for registration even within the large six month period provided by s. 12AA(2). Accordingly the respondents are directed, subject to any order which may be passed under s. 12AA(3), to treat the petitioner society as an institution duly approved and registered under s. 12AA and to recompute its income by applying the provision of s. 11. Accordingly, a formal certificate of approval will be issued forthwith to the petitioner by the respondent No. 2.-Chet Ram Vashist vs. Municipal Corporation AIR 1981 SC 653 distinguished; R. (Haw) v .....

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