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CIT vs. Muzafar Nagar Development Authority (Allahabad High Court – Full Bench)

COURT:
CORAM: , ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: February 5, 2015 (Date of pronouncement)
DATE: March 12, 2015 (Date of publication)
AY: -
FILE: Click here to download the file in pdf format
CITATION:
S. 12AA: Non disposal of an application for registration before the expiry of six months as provided u/s 12AA (2) would not result in deemed grant of registration. Assessee will have to file a Writ to compel CIT to consider application

The Full Bench had to consider the following two questions:

(i) Whether the non disposal of an application for registration, by granting or refusing registration, before the expiry of six months as provided under Section 12AA(2) of the Income Tax Act, 1961 would result in deemed grant of registration; and

(ii) Whether the Division Bench judgment of this Court in the case of Society for the Promotion of Education, Adventure Sport & Conservation of Environment vs. Commissioner of Income Tax (2008) 216 CTR (All) 167 holding that the effect of non consideration of the application for registration within the time fixed by Section 12AA(2) would be deemed grant of registration, is legally correct.

HELD by the Full Bench:

(i) Sub-section (2) of Section 12AA requires that every such order granting or refusing permission under clause (b) of sub-section(1) shall be passed before the expiry of six months from the end of the month in which the application was received. The use of the expression ‘shall’ in sub-section (2) is, by itself, not dispositive of whether the period of six months is mandatory. The legislature has not imposed a stipulation to the effect that after the expiry of a period of six months, the Commissioner would be rendered functus officio or that he would be disabled from exercising his powers. Similarly, the legislature has not made any provision to the effect that the application for registration should be deemed to have been granted, if it is not disposed of within a period of six months with an order in writing either allowing registration or refusing to grant it. The submission of the assessee essentially requires the Court to read into sub-section (2) a fiction by which an application for registration should be regarded as deemed to be granted, if it is not disposed of within six months. Providing that an application should be disposed of within a period of six months is distinct from stipulating the consequence of a failure to do so. Laying down a consequence that an application would be deemed to be granted upon the expiry of six months can only be by way of a legislative fiction or a deeming definition which the Court, in its interpretative capacity, cannot create. That would be to rewrite the law and to introduce a provision which advisedly the legislature has not adopted (Society for the Promotion of Education, Adventure Sport & Conservation of Environment vs. Commissioner of Income Tax (2008) 216 CTR (All) 167 reversed, CIT vs. Sheela Christian Charitable Trust [2013] 32 taxman.com 242 (Mad) and CIT vs. Karimangalam Onriya Pengal Semipu Amaipu Ltd [2013] 32 taxman.com 292 (Mad) referred)

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