TaxTMI 
TaxTMI 
2013 (4) TMI 490
X X X X Extracts X X X X
X X X X Extracts X X X X
....s right in setting aside the order of the Commissioner of Income Tax rejecting the assessee's application for registration u/s 12AA on the grounds that the order was not passed within six months from the date of filing without appreciating the said time limit prescribed was only directory and not mandatory, considering the nature and design of the relevant statutory provisions? 2. Assessee - Karimanglaam Onriya Pengal Semipu Amaipu is a company registered under Companies Act and the objects of the Assessee Company is to carry on micro-finance activities in the form of grant or repayable financial assistance to cater to the needs of marginalised community and empower them into bankable community through formation of Sanghas in each areas, c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2006 i.e. six years after obtaining the Certificate of Commencement of Business. The Commissioner of Income Tax also pointed out that the earlier order rejecting the application filed on 17.3.2006 is still in force and the matter being subjudiced before the Tribunal. On merits, the Commissioner of Income Tax held that the Assessee Company borrows from the banks and other financial institutions at the rate of 8% to 9% interest per annum and further lends at 12% interest per annum. Borrowing and lending activity of Assessee Company is on organised lines and there are around 2700 Self Help Groups. The Commissioner of Income Tax further held that there is no element of charity involved in the entire process of money lending and similarly, ther....
X X X X Extracts X X X X
X X X X Extracts X X X X
....had filed application on 17.3.2006 along with request for condonation of delay and the said application had not been disposed of within the limitation period of six months. Tribunal accepted the plea of the Assessee Company that registration ought to have been granted from the date of inception and Tribunal held that when the order was not passed within the stipulated period of six months, the Assessee Company is entitled to deemed registration under Section 12AA of the Act and directed the Commissioner of Income Tax to grant Assessee's registration under Section 12AA of the Act from the date of inception as claimed in its application filed on 17.3.2006. Being aggrieved by the order of the Tribunal in I.T.A.No.2448 of 2006, the Revenue has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k the view that period of six months as provided under sub-section (2) of Section 12AA of Income Tax Act is not mandatory and held as follows:- 5. We are unable to uphold such contention. In our view the period of six months as provided in Sub-section (2) of Section 12AA is not mandatory. Though the word shall has been used but it is well known that to ascertain whether a provision is mandatory or not, the expression 'shall' is not always decisive. It is also well known that whether a statutory provision is mandatory or directory has to be ascertained not only from the wording of the statute but also from nature and design of the Statute and the purpose which it seeks to achieve. Herein the time frame under Sub-section (2) of Section 12A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....clear that there is a statutory mandate imposed on the Department to pass an order in writing either registering the Trust/Institution or refusing to register the Trust/Institution. This Court further held that the conclusion of the Tribunal in holding that registration was deemed to have been granted cannot be sustained and remitted the matter back to the Director of Income Tax (Exemption) to afford an opportunity of hearing to the assessee-Trust and hearing the matter afresh. 12. Learned counsel for Assessee Company fairly submitted that there is no question of "deemed registration" and that the matter be remitted back to the Commissioner of Income Tax, Salem for consideration of the matter afresh. Non-consideration of the registration a....