S E T U. vs. COMMISSIONER OF INCOME-TAX -1,

PER D. KARUNAKARA RAO, AM :

This appeal is filed by the assessee against the order of CIT-1, Pune, dated 10-07-2014.

Form 10A for registration u/s.12A of the Act on 31-08-2009. The request

for registration was rejected by the CIT on finding that the objects and

activities are not charitable in nature. Matter reached to the Tribunal in

the first round of the proceedings. In the appeal, the Tribunal allowed the

appeal of the assessee with the observation that the assessee trust came

into existence in pursuant to the decision of Govt. of Maharashtra to

provide certain assistance to the public at large in the matters relating to

the administration in various Govt. offices at a nominal price. The charges

collected by the trust cannot be considered as a commercial transactions/

activity in order to deny the benefit of registration u/s.12A of the Act. The

Tribunal observed that, with similar objects, the registration u/s.12A of the

Act was granted to the District Setu Centre, Nashik. The Tribunal relied on

the jurisdictional High Court in the case of CIT Vs. Agricultural Produce

and Market Committee 291 ITR 419 too. Accordingly, the Tribunal granted

registration u/s.12A of the Act. Registration was granted prospectively with

effect from the date of filing of application for registration, i.e. for the A.Y.

2010-11 onwards. Further, in connection with the alternate ground of the

assessee, in the context of earlier application dated 04-05-2006, regarding

granting of deemed registration, CIT observed that the said alternate

ground becomes redundant. The Tribunal relied on the order of ITAT, Pune

Bench in the case of Auto Cluster Development & Research Institute Ltd. in

ITA Nos. 20/PN/2012 and 265/PN/2012 order dated 27-11-2013, which is

relevant for the proposition that there is no automatic or deemed

registration if application filed u/s.12A of the Act when the same is not

disposed of within a period of six months. On these facts, before us,

assessee raised the above grounds seeking registration in response to the

earlier application dated 04-05-2006.

that this aspect of granting registration w.e.f. 04-05-2006 was not

adjudicated by the CIT by passing a speaking order. The fact of considering

this issue as ‘redundant’ speaks about the absence of speaking order on

the issue. As per Ld. Counsel, the finding of ‘redundancy’ does not explain

the absence of registration from 04-05-2006 to 31-08-2009. Requesting

for remanding this issue to the file of CIT, raised in the grounds, Ld.

Counsel brought our attention to the order of Pune Bench of the Tribunal

in ITA No.123/PN/2011 dated 29-06-2012 and the Judgment of Hon’ble

Supreme Court in the case of CIT Vs. Society for the Promotion of

Education in Civil Appeal No.1478 of 2016 and submitted that the

assumption of deemed registration when the application u/s.12A of the Act

was not adjudicated within a period of six months, was decided in favour of

the assessee. Similarly, relying on the decision of the Pune Bench of the

Tribunal in the case of Sutika Seva Mandir Vs. ITO in ITA Nos.

136/PN/2015 and 1060/PN/2015 dated 23-09-2016, Ld. Counsel for the

assessee mentioned that the said decision of the Tribunal is relevant for the

proposition for granting of deemed registration with effect from the date of

application when the CIT failed to attend to the application within a period

of six months. Ld. Counsel requested for directing the CIT for considering

the Application dated 04-05-2006 and condone the delay if any, and grant

deemed registration status to the assessee for the said period.

the date of application for registration u/s.12A of the Act. It is the finding

of the Tribunal that the assessee in principle, is entitled for registration and

accordingly, the Tribunal directed the CIT to grant registration

w.e.f. 31-08-2009. CIT granted the same in compliance of the order of the

Tribunal and, however, he treated the issue of granting registration based

on the original application dated 04-05-2006 as redundant. In the process,

he ignored the fact that the assessee lost the registration benefits with

effect from 04-05-2006 to 31-08-2009. Further, the fact of filing of original

application for registration and consequent benefits to the assessee are left

unattended or un-adjudicated.

As such, it is not the case of the Revenue that the said application for

registration was not filed at all or filed belatedly and therefore, the delay is

not condonable.

Further, before us, it is the request of the Ld. Counsel for the

assessee to remand this particular issue to the file of CIT for fresh

adjudication for want of a speaking order on this issue. On the issue of

deemed registration, we also perused the decisions cited before us by the

Ld. Counsel for the assessee. It is a fact that the assessee never received

any correspondence from CIT on the said original application dated

04-05-2006. Therefore, we find it relevant to direct the CIT-1, Pune to

consider the said judgment of Hon’ble Supreme Court in the case of CIT Vs.

Society for the Promotion of Education (supra) as well as the decisions of

the Tribunal and adjudicate the issue after granting reasonable opportunity

of being heard to the assessee. It is a settled legal issue that the CIT is

under obligation to pass an order within six months rejecting or accepting

the request of registration. Non-action of the CIT on such application

permits the assessee to have the benefit of deemed registration. In the

remand proceedings, the CIT shall pass speaking order after considering

the relevant facts and law. Accordingly, all the grounds raised by the

assessee are allowed for statistical purposes.

purposes.

Order pronounced on this 25th day of April, 2018.

Sd/- Sd/- (SUSHMA CHOWLA) (D.KARUNAKARA RAO) �ाियक सद� / JUDICIAL MEMBER लेखा सद� / ACCOUNTANT MEMBER

पुणे / Pune; �दनांक Dated : 25th April, 2018. Satish

आदेश क� आदेश क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to : आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत

अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / The CIT-1, Pune 3.

िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “ए” / 4. DR ‘A’, ITAT, Pune; गाड� फाईल / Guard file. 5.

आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार

स�यािपत �ित //True Copy// //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune