SUPREME COURT: EVEN IF THE REGISTRATION APPLICATION IS NOT DECIDED WITHIN SIX MONTHS U/SEC 12AA OF THE INCOME TAX ACT NO DEEMED REGISTRATION WILL BE THERE

The Supreme Court in the case Harshit Foundation Sehmalpur Jalalpur Jaunpur vs Commissioner of Income Tax Faizabad, the court observed that where the registration application under Section 12AA of the Income Tax Act, 1961, is not decided within six months than there shall not be any deemed registration even if in a case.

the Apex Court bench noted that the Full Bench of the Allahabad High Court in Commissioner of Income Tax vs. Muzafar Nagar Development Authority has considered this issue in detail, while considering the plea by assessee, the Special Leave Petition filled.

The High Court had held to introduce a provision which advisedly the legislature has not adopted, would be to rewrite the law 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. the High Court had rejected the plea of the assessee 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, In the Muzafar Nagar.

the Full Bench of the High Court has rightly held that even if in a case where the registration application under Section 12AA is not decided within six months, there shall not be any deemed registration. We are in complete agreement with the view taken by the Full Bench of the High Court. “, the bench said while dismissing the Special leave petition, after considering in detail the provisions of Section 12AA (2) of the Act and having found that there is no specific provision in the Act by which it provides that on non-deciding the registration application under Section 12AA (2) within a period of six months there shall be deemed registration.

The Commissioner is empowered upon receipt of an application for registration of a trust or institution, shall call for documents or information in order to satisfy himself about the genuineness of the activities of the trust or institution and further the commissioner is also empowered if he deems necessary to make such inquiry.

Section 12AA of the Income Tax Act deals with following the procedure for registration of a trust or institution within a period of six month.

The bench comprising of justice MR Shah and justice BV Nagarathna challenging a judgment of Allahabad High Court in which the issue raised was whether on non-deciding the application for registration under Section 12AA (2) of the Income Tax Act within a period of six months, there shall be deemed registration or not? While considering a Special leave petition.

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