Section 12AA time limit excluded for section 12A(1)(ac)(iii) applications, but matter remanded for fresh hearing.

The six-month limit in section 12AA(2) was held to apply only to applications under section 12A(1)(a), (aa) or (ab), and not to an application under section 12A(1)(ac)(iii); the assessee therefore could not rely on that provision to contend that the rejection order was non-est for limitation. However, the assessee had not given a satisfactory response to the authority's queries, and the matter was nevertheless sent back for fresh adjudication after granting adequate opportunity of hearing.

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Issues: Whether the rejection of the assessee's application for regular registration and cancellation of provisional registration was sustainable, and whether the six-month limit in section 12AA(2) applied to an application made under section 12A(1)(ac)(iii).

Analysis: The Tribunal held that the six-month period under section 12AA(2) applies to applications received under clause (a), clause (aa) or clause (ab) of section 12A(1), and not to an application under section 12A(1)(ac)(iii). Accordingly, the assessee could not succeed on the plea that the order was non-est for breach of the six-month limit. At the same time, it was found that the assessee had not furnished a convincing reply to the queries raised by the authority below. In view of the overall circumstances and in the interest of justice, the matter required reconsideration after giving adequate opportunity of hearing.

Conclusion: The plea based on limitation was rejected, but the impugned order was set aside and the matter was restored to the file of the CIT(E) for fresh adjudication after granting adequate opportunity of being heard.

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