AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 622
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....nd of the month in which application was received under clause (a) or clause (aa) of sub-section (1) of section 12A". 3. In the explanatory memorandum explaining clause of the finance (no.2) bill 1996, the portion regarding the timeline of six month has been explained thus sec [1996] 220 ITR (St) 248,278. 4. "The order granting or refusing registration has to be passed within 6 months from the end of the month in which the application for registration in received by the chief commissioner or commissioner and a copy of such order shall be sent to the applicant" 5. Sub-section (2) of section 12AA does not spell out consequences that are to follow, if the order granting or refusing registration is not passed within six months. These have to be seen with the assistance of the words "shall" in section 12AA and use of the words "has to be passed" in the explanatory memorandum. 6. Before considering the impact of these words, some decisions on the issue need to be considered. 7. Decisions supporting our view that limitation of 6 months is mandatory:- a) Sardarilal obrai Memorial charitable Trust Vs. ITO (2005) 3 SOT 229 (Delhi) b) Karnataka Gold Association Vs. DIT (Exemptio....
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....lier in para 3 (supra) also support the view that the legislative intent had been that the order refusing or granting registration had to be passed within 6 months from the end of the month in which the application is filed and if no order is passed, the assumption has to be in favour of the trust or institution claiming the exemption deeming the same to have been allowed - not against him that it has been rejected. The general rule of interpretation in tax matters is that when two views on a subject are possible, the view favourable to taxpayer has to be accepted. d) And finally the word "shall" used in section I2AA(2) also gives support to the view expressed earlier. Thus with this word legislative intent of passing of the order in six months is mandatory. The word "shall" is a enabling word conferring power with the Commissioner for the purpose being used for the benefit of charitable/religious institutions. Lord Blackburn, in one of his decisions, has said that enabling words are construed as compulsory whenever the object of the power is to effectuate a legal right. e) There has been considerable elucidation of the words "shall" and "may" in court decisions. It is true tha....
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....tion 12AA(2), the word shall implies an obligation to be discharged on application of quasi-judicial mind - not a discretion, which has to be discharged within the time prescribed and hence "shall" has to be interpreted in the provision as "must" - not "may". The power given to the Commissioner by the use of the word "shall" is coupled with a duty to pass the order and the time within which the duty is to be performed has been mentioned in section 12AA(2). If there is failure to perform the duty, benefit-not the adverse consequence, is to go to the applicant/ assessee. 9.2 Hence, in the case under question, a. Application u/s 12AA filed 10/07/2014 b. Due date for passing order 31/01/2015 c. Date on which order u/s 12AA was passed 17/06/2015 Hence, order u/s 12AA was not passed within the time fixed under 12AA (2), the Act and the order is non-est in law and result in deemed registration u/s.12AA to the applicant. 10. The only ground taken by the department to deny the registration u/s.12AA of the Act is that the appellant trust is meant for development of is kanchipuram traders community and hence, registration is denied based on the decision in Agarwal Sabha (Regd.) vs....
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....x and hence, the activities would be confined to its objects and bye-laws and its benefits would be available to public Chennai based traders community irrespective of caste, creed, religion or sex. We do further clarify that Section of the Public, as distinct from specified individuals, is also "the public", "C.AG.IT V.Abdul Sattar Hajee Moosa Sait (1971) 81 ITR 230 (Ker) at 239 and 240 wherein it was held and confirmed also in the case of "Abdul Sathar Haji Moosa Sait Dharmastapanam Vs. CAG IT(1973) 91 ITR 5 (SC)". Hence, trading community in Chennai is also public. 13. The appellant reserves the right to add, alter, amend or delete any of the grounds before or during the course of hearing. Clause 13(1)(b) does not apply to composite trusts. The assesse's objects are both religious and charitable and hence, composite trust. 14. Hence, under these facts and circumstances of the case, the appellant prays for directions to set aside the order u/s.12AA of the Act dated 17/06/2015 and to confirm the deemed registration u/s.12AA of the Act or to give directions to grant registration u/s.12A. 3. Briefly, the facts of the case are under: The assessee is a Society constituted under ....
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.... Adventure Sports & Conservation of Environment, wherein, the Hon'ble Supreme Court held that non-disposal of application for registration u/s.12AA amounts to be deemed grant of the registration. The decision of the Hon'ble Supreme Court in the case of CIT Vs. Society for the Promotion of Education Adventure Sports & Conservation of Environment, was considered by the Hon'ble Kerala High Court in the case of CIT, Cochin, Vs. TBI Education Trust, reported in [2018] 96 taxmann.com 356 (Kerala), wherein it was held as under: 9. On a reading of the order passed in Society for the Promotion of Education case (supra) we are not convinced that there was any concession made by the learned Additional Solicitor General who appeared in the matter for the Income-Tax Department. As we discern from the order, the Commissioner of Income-Tax, Kanpur had filed an appeal from the deemed registration granted under Section 12A for reason solely of an application under Section 12AA of the Act having not been acted upon for six months. The appeal arose from the judgment dated 03.04.2008 of the High Court of Judicature, Allahabad. When the matter was considered by the Hon'ble Supreme Court, the Full....