G.S. Pannu, A.M.: All aforesaid six appeals have been preferred by assessee against respective orders of CIT(A) dt. 14th March, 2000, in respect of asst. yr. 1989-90 and dt. 5th Sept., 2003 pertaining to asst. yrs. 1991-92 to 1996-97. Since appeals relate to single assessee and involve certain common issues, they have been clubbed and heard together and consolidated order is being passed for sake of convenience and brevity. Shri Ashwani Kumar appeared on behalf of appellant assessee and Smt. Preeti Garg, learned Departmental Representative, appeared on behalf of t h e respondent Revenue. Both counsel have been heard and their submissions considered with respect to issues involved in said appeals. ITA No. 634/Chd/2000 (asst. yr. 1989-90) In this appeal, assessee has raised following grounds: That order of learned CIT(A) is defective both in law and facts of case. That income of club is exempt under s. 10(23) of IT Act and applications for exemption were duly submitted in time. That learned CIT(A) is not justified in upholding findings of AO simply on ground that exemption has not been granted and income of club would stand exempted with effect from date exemption is granted. That s. 10(23) of IT Act is fully applicable in our case as main object of golf club is promotion of game, i.e. golf and is fully covered by language of s. 10(23) of IT Act which reads as under: "Any income of association of institution established in India which may be notified by Central Government in Office Gazette having regard to fact that association or institution has as its object control, supervision, regulation or encouragement in India of games of cricket, hockey, football tennis or such other games or sports as Central Government may, by notification in Official Gazette, specify in this behalf." That learned CIT(A) has not given any finding on grounds of appeal that principle of mutuality is applicable to income of club in light of Supreme Court s decision and she has confirmed findings of learned AO that doctrine of mutuality is not applicable to income under following heads: (i) Interest income from banks. (ii) Guest charges. (iii) Green fee. (iv) Surplus on tournaments. Whereas all these incomes are being spent for mutual benefit of members of club. In alternative, appellant asked for allowing of expenses claimed in P&L a/c as accounts of club are audited by chartered accountant and complete account books have been maintained; such as cash book, ledger, vouchers, etc., and no defect has either been pointed out by AO or by learned CIT(A) so far as maintenance of accounts is concerned. That learned CIT(A) is not justified in restricting expenses to extent of 50 per cent of total receipts from guest charges, interest on bank deposits and green fee and learned CIT(A) is not justified in not allowing any expenses against surplus on tournaments as administrative expenses detailed in P&L a/c have also been spent for arranging tournaments, etc. Only direct expenses have been debited to tournament income which can be said to be only expenses in that trading account as separate trading account has been maintained against tournament income whereas expenses debited i n P&L a/c also consist of certain amounts of expenses which have been spent for arranging tournaments, etc. as no separate P&L a/c or balance sheet has been prepared for tournaments. So claim in P&L a/c also includes administrative expenses, etc. for arranging tournaments. Any other ground, which may be taken up at time of hearing of appeal with kind permission. At outset, learned counsel submitted that grounds in this appeal are squarely covered by earlier decision of Tribunal in case of assessee vide order dt. 28th Feb., 2005 in ITA Nos. 635, 636 and 637/Chd/2000 pertaining to asst. yrs. 1990-91, 1993-94 and 1997-98 respectively. learned Departmental Representative did not controvert aforesaid factual matrix brought out by learned counsel for assessee. Therefore, we dispose of impugned appeal by setting aside order of CIT(A) and direct AO to follow order of Tribunal, passed in case of assessee for asst. yrs. 1990-91, 1993-94 and 1997-98 (supra). AO shall re-work income of assessee by following directions and basis propounded by of Tribunal in its order dt. 28th Feb., 2005 (supra). As result, appeal for asst. yr. 1989-90 is treated as partly allowed. ITA Nos. 678 to 672/Chd/2003 (asst. yrs. 1991-92 to 1993-94 & 1994-95 to 1996-97) These five appeals pertain to asst. yrs. 1991-92, 1992-93, 1994-95, 1995-96 and 1996-97. In all these appeals, apart from grounds dealt with by us in relation to asst. yr. 1989-90 above, assessee has preferred a new ground titled as Ground No. 5 in its memo of appeal which reads as under: "That learned CIT(A) is not justified in holding that it is not possible for him to consider this income as income of trust since registration was allowed to club under s. 12A of IT Act w.e.f. 1st April, 1997 whereas assessee had duly applied for registration under said section and appellant had specifically requested CIT for condonation of delay." This ground is common to all aforesaid five appeals. We take up for consideration said ground at outset. In order to understand controversy involved in aforesaid ground, following discussion is expedient. assessee before us was created on 25th Aug., 1966 and filed its return of income for respective assessment years declaring nil income. Since facts are identical in all years, we take up for discussion facts emerging for asst. yr. 1991-92 to facilitate understanding of background leading to impugned controversy. assessee claimed in its return that it has been set up for and is carrying on activity involving promotion of sport of golf and thus, its income was exempt under s. 10(23) of Act. While finalizing assessment under s. 143(3), AO denied exemption on ground that although application seeking grant of exemption was filed by assessee, however, no approval was forthcoming from prescribed authority. In appeal before CIT(A), assessee claimed that its income was exempt from tax on principle of mutuality following decision of apex Court in case of CIT vs. Bankipur Club Ltd. (1997) 140 CTR (SC) 102: (1997) 226 ITR 97 (SC). CIT(A) partly upheld plea of assessee and set aside assessment and remanded it to AO for fresh decision in accordance with law. AO accordingly made fresh assessment wherein income derived from permanent members of club was held not liable to be taxed on principle of mutuality. However, following incomes were held as liable to tax as same did not fall within principles of mutuality: (1) Interest income from banks. (2) Guest charges. (3) Green fee. (4) Surplus on tournaments. (5) Coupons unused. (6) Advertisement. AO allowed 50 per cent of aforesaid receipts as expenditure incurred to earn same and thereafter taxed balance income. aspect relating to application of principle of mutuality and basis of computing relating to application of principle of mutuality and basis of computing other incomes not falling within principle of mutuality has been adjudicated by Tribunal for asst. yrs. 1990-91, 1993-94 and 1997-98 vide its order dt. 28th Feb., 2005 (supra). Ground No. 5 preferred in these years is with regard to claim of assessee that it be allowed exemption in terms of ss. 11 and 12 as club has been granted registration by CIT under s. 12AA of Act vide its order dt. 19th Dec., 2000. assessee contends that registration has been granted by CIT w.e.f. 1st April, 1989 in terms of its application made. AO held otherwise. stand of AO was that registration granted by CIT on 19th Dec., 2000 would be applicable from 1st April, 1997 and, therefore, plea of assessee for grant of exemption under ss. 11 and 12 could not be considered in impugned assessment years. This stand of AO has been sustained by CIT(A) and therefore assessee is in appeal before us. learned counsel appearing on behalf of appellant has however contended that registration granted by CIT is to operate from date from which it has been applied for by assessee. According to him delay in filing of application was considered favourably by CIT and for reasons stated in application and subsequent correspondence of assessee, CIT deemed it fit to condone same. registration has been allowed to assessee after considering explanations and information furnished by assessee. learned counsel referred to paper book, especially pp. 4 to 7, wherein are placed copies of application and subsequent communication with CIT, to point out that registration was sought w.e.f. 1st April, 1989. That order of CIT clearly contains specific observation that delay in filing application was condoned. learned counsel relied on judgment of Calcutta High Court in case of Anand Marga Pracharaka Sangha vs. CIT (1997) 139 CTR (Cal) 524: (1996) 218 ITR 254 (Cal) to point out that where application for registration was admitted belatedly and registration has been granted by condoning delay, registration is to be understood as granted with retrospective effect from date of creation of trust. That in any case assessee did not seek registration from its inception but only w.e.f. 1st April, 1989 for reason that in earlier years it was enjoying exemption under s. 10(23) of Act. It is noticed as in course of assessment proceedings for asst. yr. 1991-92, AO has not discussed claim of assessee for exemption under ss. 11 and 12. order of CIT(A), however, deals with claim of assessee in this regard. In relation to asst. yrs. 1992-93, 1994-95 and 1995-96 and 1996-97, claim of assessee has been considered by AO himself. Be that as it may, ground No. 5, reproduced above, which portraits grievance of assessee against denial of exemption under ss. 11 and 12 arises out of orders of lower authorities and is, therefore, liable to be considered by us. stand of Revenue is that registration under s. 12A granted by t h e CIT vide his order dt. 19th Dec., 2000 is to be understood as granting registration w.e.f. 1st April, 1997. learned Departmental Representative contends that in case of delayed application made seeking registration under s. 12A, two situations prevail. Firstly, provision of ss. 11 and 12 would apply from date of creation of trust provided CIT granting registration records in writing that person in receipt of income was prevented from making application in time for sufficient reasons. In alternate, provision would apply from first day of financial year in which application is made. According to Revenue, assessee made application for registration on 31st March, 1998. That CIT while granting registration vide his order dt. 19th Dec., 2000 did not record any reasons for condoning delay and therefore it was to be presumed that registration would be operative from 1st April, 1997. order dt. 19th Dec., 2000, which reads as under: "Chandigarh Golf Club", Sector 6 Chandigarh, registered with Registrar o f Firms and Societies, Punjab on 25th Aug., 1966 has filed registration application under s. 12A(a) of IT Act, 1961, in prescribed form on 31st March, 1998. application is not in time. delay in filing application for registration is condoned. Registration is allowed to trust. application has been entered at No. 73-C in register of application under s. 12AA maintained in this office." learned Departmental Representative has also submitted copy of entries in record of CIT while processing application seeking registration. We reproduce same as under: Ordersheet of CIT-I, Chandigarh "Sir, submissions made by Chandigarh Golf Club and other documents furnished by club have been examined Brief facts are that Chandigarh Golf Club was registered with Registrar of Firms and Societies on 25th Aug., 1966 with object of promoting game of golf and to provide and maintain courses at Chandigarh and elsewhere. club has also submitted copy of memorandum of association of Delhi Golf Club which is stated to have been registered under s. 12A at Delhi. It is seen that objects of Delhi Golf Club are same as of Chandigarh Golf Club. Though application for registration under s. 12A has not been preferred within prescribed time but petitioner club has stated that it was not aware of relevant provisions of IT Act and that delay may be condoned. club has also furnished copies of audited accounts. From accounts it is seen that expenses are predominantly for promotion of game i.e. golf and it can therefore be concluded that club is engaged in furthering object of general public utility which is charitable actively as per s. 2(15) of IT Act. In view of facts stated above and submissions made by club, if approved, registration under s. 12AA of IT Act, 1961, may be allowed to club and delay in submitting application may be condoned. Submitted for perusal and approval. Sir. Sd/- ITO (Tech) Sd/- CIT Sir, As approved D/order allowing registration under s. 12A and allowing delay in submitting application is placed opposite for approval/sign. Sd/- ITO (T)" learned Departmental Representative also drew our attention to clarification issued by CIT, Chandigarh, on this issue on 19th/24th Jan., 2005 which reads as under: "On perusal of ordersheet, as well as order granting registration, it is obvious that while delay in filing application for registration has been condoned, registration has not been allowed with retrospective effect or from date of inception of trust. In case registration had been allowed with retrospective effect it would have been per law, application for registration under s. 12A is required to be filed within period of one year from date of creation of trust or establishment of institution. CIT(A) is empowered to entertain belated application. If CIT(A) is satisfied, he is required to record reasons in writing on basis of which he is satisfied. If CIT(A) grants registration without recording reasons in writing, then registration is deemed to have been granted to trust or institution from 1st day of financial year in which application is made. CIT(A) has also power to grant registration from date of creation of trust or institution. If he grants registration retrospectively, he has to record reasons in writing for assessee. relevant section being s. 12A is reproduced herewith. A. provisions of s. 11 and s. 12 shall not apply in relation to income of any trust or institution unless following conditions are fulfilled, namely: (a) person in receipt of income has made application for registration of trust or institution in prescribed form and in prescribed manner to CIT before 1st day of July, 1973, or before expiry of period of one year from date of creation of trust or establishment of institution, (whichever is later and such trust or institution is registered under s. 12AA): Provided that where application for registration of trust or institution is made after expiry of period aforesaid, provisions of ss. 11 and 12 shall apply in relation to income of such trust or institution, (i) from date of creation of trust or establishment of institution if CIT is, for reasons to be recorded in writing, satisfied that person in receipt of income was prevented from making application before expiry of period aforesaid for sufficient reasons; (ii) from 1st day of financial year in which application is made, if CIT is not so satisfied; It may also be pertinent to mention that exemption under s. 11/12 is not automatically allowable to any trust or institution if it is registered under s. 12A. Registration under s. 12A is one of conditions required for grant of exemption under ss. 11 and 12 of IT Act, 1961. assessee had not claimed exemption under s. 11 in any of assessment year involved before us. As already pointed out, claim of exemption was not claimed even before CIT(A) or before us in original grounds of appeal. Now by raising additional ground of appeal, assessee requires Tribunal to investigate facts which are not on record and then consider claim of assessee under ss. 11 and 12 of IT Act. Since Revenue has made categorical statement that as per records available with them, registration to club under s. 12A has not been granted retrospectively, we consider it appropriate not to entertain additional ground of appeal raised before us. It may be pertinent to mention that assessment years involved before us are prior to asst. yr. 1998-99. In case registration has been granted to assessee prospectively, it would be effective only from 1st April, 1997 relevant to asst. yr. 1998-99. We, therefore, do not entertain additional ground of appeal raised by assessee." Replying to pleas of learned Departmental Representative, learned counsel further submitted that Tribunal vide its order dt. 11th May, 2006 has clarified that views expressed in paras 10 of its order would not come in way of assessee with regard to merits of case in subsequent years. learned counsel submitted that in assessment years before Tribunal in ITA Nos. 635, 636 and 637/Chd/2005 (supra), assessee has raised additional ground regarding exemption under ss. 11 and 12 and that Tribunal did not deem it fit to entertain same. Therefore, discussion in order of Tribunal, seemingly on merits of issue is to be understood only in that light. Our attention was invited to para 3 of order of Tribunal in miscellaneous application preferred by assessee in this regard as follows: "After hearing parties, we are of view that in para 10 of order, we have only explained as to how issue is dependent on findings of fact and our decision cannot be considered to be decision on merits in light of decision of Tribunal that additional ground raised by assessee is not entertainable as it involved investigation of facts not on record. We clarify that assessee shall be at liberty to argue matter on merits in regular appeal if such ground is taken in main grounds of appeal and in any case our decision in para 10 should not be considered as decision on merits in regard to additional ground of appeal." (Emphasis, italicised in print, supplied by us) Therefore, it was contended that plea of learned Departmental Representative that issue regarding effective date of grant of registration has been held by Tribunal to be w.e.f. 1st April, 1997, cannot be considered as precedent. We have considered rival submissions carefully on this issue. first and foremost issue to be decided is date from which assessee has been granted registration by CIT under s. 12AA of Act. registration has been granted by CIT vide his order dt. 19th Dec., 2000, which we have already extracted in earlier part of our order. Normally, it is explicit wording in order passed by authority, which depicts mind of authority passing such order. Before we proceed to examine order passed by CIT granting registration, it would be appropriate to understand mechanics of s. 12AA which provides procedure for registration under Act. Sec. 12A of Act which deals with conditions as to registration of trusts, etc. provides that provisions of ss. 11 and 12 shall not apply in relation to income of any person unless conditions mentioned therein are fulfilled. condition, which is relevant for our consideration, prescribed therein, is with respect to requirement of registration of trust or institution with CIT. Provisions of s. 12A r/w s. 12A(a) authorize CIT for reasons to be recorded in writing to pass order registering trust or institution. period within which trust or institution is required to apply for registration has also been prescribed. proviso to cl. (a) to s. 12A reads as under: Provided that where application for registration of trust or institution is made after expiry of period aforesaid, provisions of ss. 11 and 12 shall apply in relation to income of such trust or institution, (i) from date of creation of trust or establishment of institution if CIT is, for reasons to be recorded in writing, satisfied that person in receipt of income was prevented from making application before expiry of period aforesaid for sufficient reasons; (ii) from 1st day of financial year in which application is made, if CIT is not so satisfied; (Underlined for emphasis, italicised in print, by us) For our purposes, it is sufficient to deduce from reading of above proviso that it provides that in case where application for registration of trust or institution is made after expiry of period mentioned in cl. (a) of s. 12A, provisions of ss. 11 and 12 shall apply from date of creation of trust or establishment of institution only in case CIT, for reasons to be recorded in writing, is satisfied that person in receipt of income was prevented from making application before expiry of period aforesaid for sufficient reasons. If CIT is not satisfied about sufficiency of reasons, registration shall be granted from first day of financial year in which application is made. It is in this background now we examine fact situation in instant case. assessee has been incorporated as society in year 1966. It applied for registration vide its application dt. 18th March, 1998, submitted before CIT on 31st March, 1998, copy of same placed at pp. 4 and 5 of paper book. Subsequently, vide its communication dt. 3rd March, 2000, assessee submitted further explanation and sought registration with effect from financial year 1989-90. It also filed following: (a) Balance sheets for financial years 1989-90 to 1998-99. (b) Audit report under s. 12(b) of IT Act, 1961, in Form 10B for financial years. 1989-90 to 1998-99. (c) Three copies of accounts for financial years 1989-90 to 1998-99. (d) Three copies of Form 10B from 1989-90 to 1998-99. (e) Three copies of Form 10A from 1989-90 to 1998-99. (f) Three copies of certificate of incorporation of club. (g) Three copies of memorandum of association. (h) Notes of activities. aforesaid is clear from documents placed at pp. 6 and 7 of paper book. Considering aforesaid, CIT granted registration under s. 12A of Act in terms of his order dt. 19th Dec., 2000, which we have extracted in earlier part of order. CIT noticed that application of assessee is belated and holds that delay in filing application for registration is condoned. moot question is can it be understood to mean that CIT was satisfied with reasons for delay in filing application or not. order of CIT, although not quite happily worded, yet it clearly brings out that delay in filing application for registration stood condoned. Therefore, logical inference is that registration is deemed to have been granted in accordance with provisions of proviso (i) below cl. (a) of s. 12A. There is nothing in order or on record to deduce, on facts, that registration was understood to have been granted prospectively w.e.f. 1st April, 1997, as contended by AO. scheme of Act, prescribing procedure for registration, itself provides that once CIT is satisfied, for reasons to be recorded in writing, that person in receipt of income was prevented from making application for registration before expiry of period stated therein for sufficient reasons, registration would have effect of being granted since inception. In fact, this view is supported by judgment of Hon ble High Court of Calcutta in case of Ananda Marga Pracharaka Sangha vs. CIT (supra). following observations of Hon ble Court are worthy of notice: "We are inclined to accept submission that where application for registration is admitted belatedly and registration has been granted by condoning delay, registration shall be with retrospective effect from date of creation of trust. Otherwise, very purpose of condoning delay become nugatory. Therefore, in order to save provision from absurdity of self-negation, we construe that provision inserted below s. 12(a) impliedly requires that condonation of delay will relate back effect of registration to very date of creation of trust or institution. As matter of fact, by amendment of proviso below cl. (a) of s. 12A by Finance (No. 2) Act, 1991, w.e.f. 1st Oct., 1991, it is not made clear by legislature itself that where condonation is granted and trust is registered upon condonation, registration shall have effect from date of creation of trust." relevant provisions which have been discussed by us in earlier paragraphs clearly empower CIT to condone delay where assessee m k e s belated application for registration. Condonation itself implies acceptance of explanation for delay sought to be condoned. resultant benefits of registration, even for period covered in delay, cannot be denied to assessee. Therefore, we do not find any justification in stand of AO that registration granted by CIT vide his order dt. 19th Dec., 2000 was to be understood as being effective from 1st April, 1997. Now, coming to clarifications submitted by learned Departmental Representative as obtained from CIT(A)-I, Chandigarh, on this aspect, which have been reproduced by us in earlier part of order, at threshold we find, that CIT has no locus standi to issue such clarification inasmuch as once having passed his order granting registration to assessee he was rendered functus officio. We may notice that registration of institution or trust under s. 12A is not idle or empty formality. procedure itself connotes aforesaid. registration procedure not only requires application to be made in prescribed form setting out details of creation of trust but also names and addresses of its office bearers, etc. form further requires certified copy of instrument of its creation as well as copy of latest accounts of applicant to accompany such application. Such requirements have been complied with by assessee in this case and there is no dispute to same. correspondence filed by assessee in its paper book and also emerging from papers filed by learned Departmental Representative, clearly bring out that same culminated in order of CIT dt. 19th Dec., 2000 granting registration to assessee. Having passed his order and in absence of any specific power vested in CIT to withdraw or review its order, CIT thereafter becomes functus officio. Therefore, impugned clarification sought to be issued by CIT is beyond his jurisdiction. same, in our view, deserves to be rejected at threshold itself. Inspite of aforesaid, we have perused said clarification and find that same runs contrary to earlier order. We find that CIT seeks to clarify that registration has not been allowed to assessee either with retrospective effect or/and from date of inception of assessee. clarification seeks to support same for reason that: "The assessee in its application never applied for registration with retrospective effect. Hence, inference is clear, registration has been allowed prospectively from date of issuing of order under s. 12A." In our view, perusal of assessee s application in prescribed Form No. 10A and its accompanying correspondence dt. 3rd March, 2000 to CIT reveals that assessee applied for registration on 31st March, 1998 w.e.f. financial year 1989-90. Furthermore, ordersheet of CIT, copy of which is placed by learned Departmental Representative shows noting that "though application for registration under s. 12A is not preferred within prescribed time ..". Similarly, noting also contains observation that delay in submission of application may be condoned. All this clearly goes to show that CIT while granting registration was well aware that assessee had filed its application belatedly and that assessee had also applied for condonation of delay in filing such application. On face of such facts, averments presently found made in clarification dt. 19th/24th Jan., 2005 issued by CIT which have been noted by us in earlier part, are inexplicable and are de hors material on record. We also notice that clarification seeks to make out that registration has to be considered as having been allowed from date of issuing of order under s. 12A of Act. Quite clearly, this is contrary to understanding of AO itself. AO has taken stand that registration is effective from 1st April, 1997 being first day of financial year during which assessee applied for registration. In fact ,the learned counsel for assessee has made statement, which has not been controverted by Department, that it has been allowed exemption w.e.f. asst. yr. 1998-99. Be that as it may, we deem it fit and proper to disregard clarification dt. 19th/24th Jan., 2005 issued by CIT. Hence, we are unable to persuade ourselves to agree with stand of Department that registration granted by CIT dt. 19th Dec., 2000, has to apply prospectively w.e.f. 1st April, 1997. Similarly, order of Tribunal dt. 28th Feb., 2005 (supra) would not come into way of aforesaid, inasmuch as same does not deal with issue on merit. Tribunal was considering assessee s application for admission of additional ground in relation to exemption under ss. 11 and 12. Tribunal, after considering issue in detail, found that additional ground was not admissible as it involved investigation of facts not on record. However, Tribunal vide its order dt. 11th May, 2006 has clarified that its discussion should not be considered as decision on merits with regard to additional ground preferred by assessee. Therefore, reliance by learned Departmental Representative on aforesaid decision does not help stand of Revenue. Therefore, in our view, assessee having been granted registration under s. 12A w.e.f. 1st April, 1989 is entitled to stake its claim for exemption under ss. 11 and 12 of Act. lower authorities have disallowed claim merely on ground that registration was not granted under s. 12A for years involved. That position has since been altered by our decision and thus we are of view that issue is required to be reexamined by AO. We, therefore, set aside order of CIT(A) and restore assessment back to file of AO to be done afresh in accordance with law. Insofar as other grounds preferred by assessee are concerned, same are on issues which have been considered by Tribunal earlier in its order dt. 28th Feb., 2005 in ITA Nos. 635, 636 and 637/Chd/2000 (supra). decision of Tribunal in aforesaid order is squarely applicable on these grounds also. Nevertheless, since issue pertaining to claim of assessee for exemption under ss. 11 and 12 of Act goes to root of matter and which has not been considered by AO earlier, we, therefore, consider it appropriate to set aside orders of lower authorities and restore entire assessment back to file of AO to be done afresh. Since fact situation and disputes raised by assessee in asst. yrs. 1992-93, 1993-94, 1994-95 and 1996-97 are identical to those of asst. yr. 1991-92, which have been decided by us in preceding paragraphs, our decision therein applies mutatis mutandis in these four years also. Accordingly, orders of CIT(A) for all these years are set aside and assessment is restored to file of AO to be done afresh in accordance with law. As result, appeals of assessee are treated as allowed. *** CHANDIGARH GOLF CLUB v. INCOME TAX OFFICER