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I-T - 'Date of filing application' has no relevance for determining 'date of operation' of Registration u/s 12AA: HC

By TIOL News Service

ALLAHABAD, SEPT 18, 2017: THE ISSUE BEFORE THE COURT IS - Whether registration of a society would be operative from the commencement of financial year in which original application u/s 12AA was moved, if such application was rejected and proceedings has commenced de novo with the filing of another application for registration by the society. NO is the verdict.

Facts of the case:

The Assessee is a registered society, established for purpose of providing education to the children. It filed an application before the CIT, Agra seeking registration u/s 12AA, which was however rejected. The Assessee therefore appealed before ITAT and simultaneously on the date of filing appeal, also moved a representation before the CIT to reconsider the order by which the application for registration was rejected. This application was allowed and an order was passed for granting registration to the society w.e.f the date on which the representation was filed. This was done without setting aside or reviewing the order by which application for registration was rejected. The society not being satisfied with the grant of registration w.e.f. Sep 30, 2004 applied u/s 154 to rectify the order so as to grant registration w.e.f the date as was prayed in the original application for grant of registration. The aforesaid application for rectification came to be rejected. On appeal, the Tribunal ordered for setting aside the order rejecting the application filed u/s 154 and directed the CIT to consider the date from which the registration of the society under the Act would be operative by a speaking order in the light of the provisions of section 12AA of the Act. In pursuance to the above order of the Tribunal, the CIT passed an order holding that the application for grant of registration to the society would be one which was filed on Sep 30, 2004 and therefore the registration would be operative from April 01, 2004.

High Court held that,

++ there is no dispute to the fact that the initially application for registration was filed by the society on Nov 20, 2000 in the prescribed form. If this application is treated to be the application on which the registration has been granted, it may be operative from commencement of the said financial year, but we are afraid to say that the registration to the society has not been granted on this application. This application stood rejected vide order passed by the CIT. This order to our mind has not been set aside by any authority so far. The society moved another representation on Sep 30, 2004 to reconsider the earlier order. The CIT(A) without recalling or setting aside the previous order, directed for grant for registration to the society w.e.f. Sep 30, 2004. The aforesaid order granting registration to the society is clear and unequivocal. Once the registration has been made operative w.e.f. Sep 30, 2004 the benefits of applicability of sections 11 and 12 would be available to the society from the commencement of the Financial Year 2004 irrespective of the date of the application for registration of the society u/s 12AA of the Act;

++ it may be important to note that the Act does not specifically lays down the date from which the registration if any granted to any institution or society under the Act would be operative. It neither prescribes that it shall be operative from the date of the application nor that it should be from the date of the order. In such circumstances, ordinarily when registration is granted it will be operative from the date of the order and the benefit of sections 11 and 12 on the basis of registration would accrue from the date of the commencement of the financial year in which the said order is passed or the application is moved provided nothing contrary to it is prescribed in the order directing for registration of the society/institution. Thus in the present case, under the facts and circumstances, as the society was granted registration u/s 12AA specifically w.e.f. 30.09.2004, the benefit of sections 11 and 12 available on registration would be effective from 01.04.2004 the date of the commencement of the said financial year. The date of filing the original application for registration by the society has no relevance more particularly when the said application was rejected and the proceedings has commenced de novo with the filing of another application for the registration by the society.

(See 2017-TIOL-1910-HC-ALL-IT)


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