Permanent registration under section 12AB cannot be rejected as premature merely because provisional registration remains valid for later years.

An application for permanent registration under section 12AB(1)(b)(ii) of the Income-tax Act was wrongly treated as premature and non-maintainable because an earlier provisional registration was still stated to be valid for a later assessment year. The statutory scheme requires the authority to examine the application, call for the necessary documents and record satisfaction before deciding registration, rather than rejecting it on an incorrect maintainability premise. On these facts, the rejection as premature was held unsustainable and the matter was remanded for fresh consideration.

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Issues: Whether the application for permanent registration under section 12AB(1)(b)(ii) of the Income-tax Act, 1961 could be rejected as premature and non-maintainable when the existing provisional registration was stated to be valid up to a later assessment year.

Analysis: The application was for permanent registration for a period of five years, whereas the earlier provisional registration operated for a limited period. The rejection was not on merits but on the premise that the application was premature and infructuous. The statutory scheme envisages consideration of the application, calling for requisite documents and recording satisfaction before granting registration. On the facts, the authority had not properly appreciated the nature of the application and had wrongly treated it as non-maintainable. The issue was restored for fresh consideration.

Conclusion: The rejection of the application as premature was not sustainable, and the matter was remanded to the Commissioner (Exemption) for fresh adjudication.

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