The Tax Publishers2019 TaxPub(DT) 6767 (All-HC) : (2019) 418 ITR 0205 : (2019) 311 CTR 0756 : (2020) 268 TAXMAN 0372

INCOME TAX ACT, 1961

Section 254(1)

If Tribunal is given wide powers to direct registration of Trust in all or any circumstances, it would render provisions of section 12(AA) otiose, which cannot be the intention of legislature. Accordingly, Tribunal while hearing an appeal under section 254(1) in a matter where registration under section 12(AA) has been denied by CIT can itself pass an order directing CIT to grant registration in case Tribunal disagrees with satisfaction of CIT on the basis of material already on record before the CIT. However, said power is not to be exercised as a matter of course and remand to Commissioner income tax was to be made where Tribunal records a divergent view on the basis of material which has been filed before it for the first time. Remand for determination of question regarding grant of registration to a Trust would also be necessitated in cases where registration application has been rejected by Commissioner on technical grounds without recording his satisfaction as contemplated under section 12(AA) and such decision is overturned by the Tribunal. The power of Tribunal are co-extensive with the power of Commissioner under section 12(AA) subject to what has been indicated above. However order for registration can be issued only after recording satisfaction with regard to genuineness of activities of Trust as provided under section 12 (AA).

Appeal (Tribunal) - Power to direct registration of trust in case same denied by CIT - Limitation -

Question arose for conisderation was whether ITAT while hearing appeal in a matter where registration under section 12Aa had been denied by CIT could itself pass an order directing CIT to grant registration.Held: If Tribunal is given wide powers to direct registration of Trust in all or any circumstances, it would render provisions of section 12(AA) otiose, which cannot be the intention of legislature. Accordingly, Tribunal while hearing an appeal under section 254(1) in a matter where registration under section 12(AA) has been denied by CIT can itself pass an order directing CIT to grant registration in case Tribunal disagrees with satisfaction of CIT on the basis of material already on record before the CIT. However, said power is not to be exercised as a matter of course and remand to Commissioner income tax was to be made where Tribunal records a divergent view on the basis of material which has been filed before it for the first time. Remand for determination of question regarding grant of registration to a Trust would also be necessitated in cases where registration application has been rejected by Commissioner on technical grounds without recording his satisfaction as contemplated under section 12(AA) and such decision is overturned by the Tribunal. The power of Tribunal are co-extensive with the power of Commissioner under section 12(AA) subject to what has been indicated above. However order for registration can be issued only after recording satisfaction with regard to genuineness of activities of Trust as provided under section 12 (AA).

REFERRED :

FAVOUR : Reference answered.

A.Y. :


INCOME TAX ACT, 1961

Section 254(1)

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