This appeal of assessee is directed against order dated 7-11-2003 passed by CIT, Dehradun under section 12AA(1)(b) of Income-tax Act, 1961. ground of appeal read as under: "1.The ld. CIT, Dehradun has erred in law and on facts in rejecting applications of assessee under section 12AA of Income-tax Act, 1961. 2.The order has been passed beyond time allowed as per provisions of section 12AA(2) of Income-tax Act, 1961. 3.The order passed is arbitrary and against facts of case. 4.Any other matter arising at time of hearing of appeal." 2. Briefly stated facts are that assessee filed application for grant of registration before Commissioner of Income-tax, Dehradum. Commissioner, on perusal of application found that assessee was registered with Registrar of Societies on 18-1-2000 and application for grant of registration was filed on 2-8-2001 which was late by one year, seven months and three days and no reliable reply had been submitted. Commissioner, after having mentioned main object of society in Hindi observed that copies of account enclosed for period ending 31-3- 2001 and 31-3-2002 would show that bulk of receipt of society was from IGSSS (Indo-German Social Services Society) but money was being utilized other than for stated object of society. According to Commissioner, taxation of income is rule and exemption is exception. onus to prove that it qualify for exemption lies on it. He mentioned that show-cause notice on 4-11-2003 was issued to society on above point as to why application may not be rejected. However, society miserably failed to discharge its onus. He was not satisfied about object and genuineness of activities of society. Therefore, he rejected application filed by assessee under section 12AA of Act. 3. Before us, Ld. Counsel for assessee has submitted that impugned order has been passed beyond time limit prescribed under section 12AA(2) of Income-tax Act, 1961. In this connection, he has referred to impugned order and submitted that application for grant of registration was filed on 2-8-2002 whereas impugned order has been passed on 7-11-2002. Thus, as per said provisions Commissioner of Income-tax ought to have disposed of application filed under section 12AA of Act by 28-2-2003 whereas same has been disposed of on 7-11-2003. Thus, impugned order has been passed beyond statutory period prescribed under Act. Therefore, in view of decision in case of Sardari Lal Oberoi Memorial Charitable Trust v. ITO [2005] (Delhi) application filed under section 12AA of Act is deemed to have been allowed. On other hand, ld. DR has submitted that assessee has failed to establish that it has satisfied conditions laid down under section 12AA of Act. Unless conditions laid down under section 12AA of Act are satisfied application filed under section 12AA of Act cannot be deemed to have been allowed merely on ground that impugned order has been passed beyond period prescribed u/s 12AA(2) of Act. Thus, he has supported order passed by CIT. 4. We have heard parties and perused record of case. It is seen that application u/s 12A of Act was filed before Commissioner of Income-tax on 2-8-2002 whereas impugned order has been passed on 7-11- 2003 and as per provisions of section 12AA(2) of Act every order granting registration under clause (b) of sub-section 1 shall be passed before expiry of six months from end of month in which application was received under clause (a) of section 12AA. Thus, it is clearly established that impugned order has been passed beyond statutory period prescribed. In case of Sardari Lal Oberoi Memorial Charitable Trust (supra) ITAT, New Delhi has held thus: "Provisions of section 12AA(2) lays down mandatory period of limitation for deciding application for registration under section 12A. As per section, such limitation is 6 months from end of month in which application was received. In instant case, application was filed on 29-10-2001. Hence, limitation available for passing order was upto 30-4-2002. order under challenge was dated 24-7-2002. Hence, ipso facto, order was belated and was barred by limitation. Recently, Bangalore Bench of Tribunal, in Karnataka Golf Association v. DIT (Exemption) [2005] 272 ITR (AT) 123 held, inter alia, that wherever application for registration under section 12A is made, authorities must act within timeframe. If they fail to act within timeframe, application should be treated as having been acted upon in favour of applicant. In instant case, assessee had done what was expected of it under law, i.e., to seek registration by making application. department should have acted vigilantly in refusing to register, if it was so satisfied, within period of limitation prescribed by provisions of section 12AA(2). Having not done so, it lost benefit of legally refusing to grant registration. department, by its latches, could not be said to have taken same position by not acting within time limit prescribed. Once period of limitation prescribed under section 12AA(2) expired, subsequent impugned order refusing registration is nothing but nullity. expression used in section is shall. This shall cannot be expressed to mean may. unequivocal purport of section is mandatory. There is no escape for department. Once limitation period has expired, Commissioner becomes functus officio as regards application under consideration before him. At very moment of expiry of limitation, application is deemed to have been accepted, in case no order thereon is passed by him. Hence, on that score, assessee was successful." 5. Respectfully following decision of Tribunal we hold that application filed by assessee is deemed to have been allowed. We, therefore, direct to allow application for grant of registration filed by assessee. 6. In result, appeal filed by assessee is allowed. 7. order is pronounced in open court on 21-7-2006. *** Sambandh Organisation v. Commissioner of Income-tax, Dehradun