Commissioner of Income-tax, Exemption v. Reham Foundation
[Citation -2019-LL-0926-51]

Citation 2019-LL-0926-51
Appellant Name Commissioner of Income-tax, Exemption
Respondent Name Reham Foundation
Court HIGH COURT OF ALLAHABAD AT LUCKNOW
Relevant Act Income-tax
Date of Order 26/09/2019
Judgment View Judgment
Keyword Tags genuineness of the activities • application for registration • requirement of satisfaction • genuineness of activities • recording of satisfaction • registration of trust • grant of registration • documentary evidence • material on record • empty formality
Bot Summary: The questions referred are as folllows:- Whether Income Tax Appellate Tribunal while hearing Appeal in a matter where registration under Section 12AA has been denied by Commissioner Income Tax can itself pass an order directing Commissioner to grant registration or should leave the matter to be considered by Commissioner Income Tax to consider matter afresh giving rise to further litigation in the matter; Whether co-extensive Appellate jurisdiction conferred upon Income Tax Appellate Tribunal being a last court of fact can be read to confer upon it similar powers as been exercised by authorities below whose orders are considered in Appeals by Tribunal. All applications, pending before the Principal Chief Commissioner or Chief Commissioner on which no order has been passed under clause of sub- section before the 1st day of June, 1999, shall stand transferred on that day to the Principal Commissioner or Commissioner and the Principal Commissioner or Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day. In case the Commissioner is satisfied with the genuineness of the activities and even the objects, he can register the Trust under Section 12AA of the Act of 1961 and in case the Commissioner is not satisfied or refuses registration, then the Appeal lies to the Tribunal to challenge such order under Section 254 of the Act, 1961. In view of the unfettered power of the Appellate Tribunal in terms of section 254 of the Act, 1961 the Tribunal can very well record its satisfaction on the genuineness of the activities and object of the Trust and can very well direct registration of the Trust without remand of case to the Commissioner in case such satisfaction is recorded on the basis of documents and material already available on record at the stage of examination by Commissioner. Remand to the Commissioner can also be affected in a case where the Commissioner rejects the application on a technical ground without recording its opinion on facts or genuineness of the activities and object of the Trust but the Tribunal finds ground for rejection on such technical ground thereby reopening the issue of recording satisfaction in terms of Section 12 of the Act, 1961. The said onus on the Appellate Tribunal to remand the matter in cases indicated herein above is also in view of the strict interpretation of the powers of the Commissioner under Section 12 of the Act, 1961 because if the Appellate Tribunal is given such wide powers to direct registration of Trust in all or any circumstances, it would render the provisions of Section 12(AA) otiose, which again can not be the intention of legislature. In view of the above the answer to questions referred are answered as under:- The income tax Appellate Tribunal while hearing an Appeal under Section 254(1) in a matter where registration under Section 12(AA) has been denied by Commissioner income tax can itself pass an order directing commissioner to grant registration in case the income tax Appellate Tribunal disagrees with the satisfaction of the Commissioner on the basis of material already on record before the Commissioner.


INCOME TAX Appeal No. - 37 of 2017 Appellant :- Commissioner Of Income Tax Exemption U.P State Cons.& Infra. Respondent :- M/S Reham Foundation Kandhari Lane Lal Bagh Lucknow Counsel for Appellant:- Mr. Manish Mishra Counsel for Respondent :- Mr. Sidharth Dhaon Hon'ble Munishwar Nath Bhandari,J. Hon ble Mrs. Sangeeta Chandra, J. Hon'ble Manish Mathur,J. (Per Manish Mathur,J.) 1. This Full Bench has been constituted in terms of reference order dated 18.01.2019 passed by Division Bench in case of Commissioner of Income Tax Exemption U.P. State Construction and Infrastructure vs. M/s. Reham Foundation Kandhari Lane, Behind Islamia College, Lal Bagh, Lucknow vide order dated 18.01.2019. questions referred are as folllows:- (i) Whether Income Tax Appellate Tribunal while hearing Appeal in matter where registration under Section 12AA has been denied by Commissioner Income Tax can itself pass order directing Commissioner to grant registration or should leave matter to be considered by Commissioner Income Tax to consider matter afresh giving rise to further litigation in matter; (ii) Whether co-extensive Appellate jurisdiction conferred upon Income Tax Appellate Tribunal being last court of fact can be read to confer upon it similar powers as been exercised by authorities below whose orders are considered in Appeals by Tribunal. 2. It was on Appeal preferred by Revenue under Section 260 (A) of Income Tax Act, 1961 (hereinafter referred to as Act of 1961 ). Appeal was preferred to challenge order of Income Tax Appellate Tribunal, which directed registration of Trust under [2] Section 12AA (1)(b) of Act of 1961 within period of sixty days, failing which it would deemed to have been registered. challenge to said direction was made by Revenue in reference to judgment of Division Bench in Income Tax Appeal No. 112 of 2013: Commissioner of Income Tax, Meerut vs. M/S. A.R. Trust Meerut decided on 04.09.2017 wherein it was held that Income Tax Appellate Tribunal itself cannot direct for registration of Trust, without recording satisfaction, as contemplated under Section 12AA of Act of 1961. 3. Learned counsel for Revenue submits that power for registration of Trust or Institution under Section 12AA of Act of 1961 has been given to Commissioner. Those powers cannot be exercised by Tribunal. If at all on scrutiny of case in Appeal, case is made out for registration of Trust, it needs to be remanded back to Commissioner. direction for registration of Trust under Section 12AA of Act of 1961 cannot be given by Tribunal itself. It is for reason that registration of Trust under Section 12AA of Act of 1961 is subject to satisfaction of Commissioner about genuineness of activities of Trust. In absence of recording of satisfaction of Commissioner about object and activities of Trust, direction for registration would be illegal. It is for that reason alone, Division Bench of this Court in case of M/s. A.R. Trust Meerut (supra) caused interference in order of Tribunal, where direction was given for registration of Trust within period of sixty days. 4. In subsequent judgment in case of M/s. Yamuna Expressway Industrial Development Autority (supra), divergent view was taken by Court. If direction for registration of Trust is given without recording satisfaction, it would be opposed to Section 12AA of Act of 1961. prayer is accordingly to answer Reference against assessee and in favour of [3] Revenue. It is after holding that Appellate Tribunal is not competent to direct for registration of Trust under Section 12AA of Act of 1961, rather it should remand case to Commissioner for aforesaid. 5. argument raised by learned counsel for Revenue has been opposed by learned counsel appearing for assessee. It is submitted that after rejection of application for registration of Trust under Section 12AA of Act of 1961, if refusal is without considering any material, then on Appeal, after considering issue and recording satisfaction, Tribunal can direct for registration of Trust. It is not only for reason that such power exists with Tribunal pursuant to Section 254 of Act of 1961 but even to take order of Tribunal to its logical conclusions. 6. It is stated that if application for registration is rejected by Commissioner after recording perverse finding then on Appeal, it can be corrected after taking proper view and recording satisfaction, as required under Section 12AA of Act of 1961, to direct for registration of Trust. If required satisfaction is recorded by Appellate Tribunal, then remand of matter would be nothing but empty formality, as Commissioner cannot take view different then taken by Appellate Tribunal. registration of Trust needs to be granted if Appeal is allowed by Tribunal after recording its satisfaction, as required under Section 12AA of Act of 1961. In view of above, Tribunal can itself issue direction for registration of Trust. Tribunal can even remand case in given circumstance when Commissioner has rejected application on hyper technical grounds and interference therein is made. matter can be remanded back to Commissioner to record its satisfaction, as required under Section 12AA of Act of 1961. In view of above, adjudication of issue before Tribunal can be with direction to register [4] Trust under Section 12AA of Act of 1961 or remand of case. prayer is to answer Reference holding that Tribunal is having powers to direct for registration of Trust under Section 12AA of Act of 1961 or to remand case to Commissioner to record its satisfaction, as required under Act. direction of Tribunal for registration of Trust would however to be on recording such satisfaction and not otherwise. prayer is accordingly to answer Reference by holding that Appellate Tribunal is having power to direct for registration of Trust or alternatively to remand case to commissioner. 7. In counter, counsel for assessee has relied upon judgment of Division Bench in case of Income Tax Appeal No. 107 of 2016: Commissioner of Income Tax (Exemption), Lucknow vs. M/s. Yamuna Expressway Industrial Development Authority, decided on 21.04.2017. In said case, Division Bench held that powers of Tribunal are co-extensive to that of Commissioner under Section 12AA of Act of 1961. Thus, it can direct for registration of Trust/Institution. reference of Section 254 of Act of 1961 was given to show power of Tribunal. Division Bench therein found Tribunal to be competent to direct for registration of Trust. Taking into consideration conflicting view, now we need to decide questions raised before us and otherwise quoted herein above. 8. We have considered rival submission of parties and perused record. 9. issue before larger Bench is in reference to Section 12AA of Act of 1961, thus, it would be gainful to refer provisions aforesaid. It is quoted hereunder for ready reference:- Procedure for registration. 12AA. (1) Principal Commissioner or Commissioner, on receipt of application for [5] registration of Trust or institution made under clause (a) or clause (aa) or clause (ab) of sub-section (1) of Section 12A, shall (a) call for such documents or information from Trust or institution as he thinks necessary in order to satisfy himself about genuineness of activities of Trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about objects of Trust or institution and genuineness of its activities, he (i) shall pass order in writing registering Trust or institution; (ii) shall, if he is not so satisfied, pass order in writing refusing to register Trust or institution, and copy of such order shall be sent to applicant: Provided that no order under sub-clause (ii) shall be passed unless applicant has been given reasonable opportunity of being heard. (1A) All applications, pending before Principal Chief Commissioner or Chief Commissioner on which no order has been passed under clause (b) of sub- section (1) before 1st day of June, 1999, shall stand transferred on that day to Principal Commissioner or Commissioner and Principal Commissioner or Commissioner may proceed with such applications under that sub-section from stage at which they were on that day. (2) Every order granting or refusing 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) or clause (aa) or clause (ab) of sub-section (1) of section 12A. (3) Where Trust or institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A [as it stood before its amendment by Finance (No. 2) Act, 1996 (33 of 1996)] and subsequently Principal Commissioner or Commissioner is satisfied that activities of such Trust or institution are not genuine or are not being carried out in accordance with objects of Trust or institution, as case may be, he shall pass order in writing cancelling registration of such Trust or institution: Provided that no order under this sub-section shall be passed unless such Trust or institution has been given reasonable opportunity of being heard. (4) Without prejudice to provisions of sub-section (3), where Trust or institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A [as it stood before its amendment by Finance (No. 2) Act, 1996 (33 of 1996)] and subsequently it is noticed that activities of Trust or institution are being carried out in manner that provisions of sections 11 and and 12 do not apply to exclude either whole or any part of income of [6] such Trust or institution due to operation of sub- section (1) of section 13; then Principal Commissioner or Commissioner may, by order in writing, cancel registration of such Trust or institution: Provided that registration shall not be cancelled under this sub-section, if Trust or institution proves that there was reasonable cause for activities to be carried out in said manner. 10. perusal of Section 12AA of Income Tax Act shows that Principal Commissioner or Commissioner, on receipt of application for registration of Trust or institution, may call for such document or information as he thinks necessary to satisfy himself about genuineness of activities of Trust or Institution, as it deems necessary. After calling for such information and satisfying himself about object and genuineness of activities of Trust, he shall pass order for registering Trust or Institution or in alternate, refuse such registration. In view of aforesaid provision, registration of Trust is subject to satisfaction of Commissioner, not only over genuineness of activities of Trust, but also about objects of Trust or Institution. In view of above, registration of Trust requires satisfaction of Commissioner. In case Commissioner is satisfied with genuineness of activities and even objects, he can register Trust under Section 12AA of Act of 1961 and in case Commissioner is not satisfied or refuses registration, then Appeal lies to Tribunal to challenge such order under Section 254 of Act, 1961. 11. In such case, Appellate Tribunal needs to adjudicate issue raised before it because it is last court of facts. exemption under Sections 11 & 12 of Act of 1961 can be sought only after registration of Trust, thus satisfaction of Commissioner before registration has been given importance. In view of above, argument of learned counsel for Revenue is that unless such satisfaction, as envisaged under Section [7] 12AA of Act of 1961 is recorded by Commissioner, direction for its registration should not be given by Tribunal. As against aforesaid, argument of learned counsel for assessee is that if Tribunal is satisfied about genuineness of activities and object then it can direct for registration. 12. Hon'ble Supreme Court in case of Shiv Shakti Cooperative Housing Society versus Swaraj Developers and others reported in (2003) 6 SCC 659 has considered scope of Appeal although in terms of Sections 96 and 100 of Code of Civil Procedure, 1908 but basic premise culled out from pronouncement of Hon'ble Supreme Court is that Appeal is essentially continuation of original proceedings which is provided for only by statute and is not necessary part of procedure in action. relevant paragraphs of judgment is as follows:- 16. Appeal is essentially continuation of original proceedings and provisions applied at time of institution of suit are to be operative even in respect of Appeals. That is because there is vested right in litigant to avail remedy of Appeal. As was observed in K. Kapen Chako v. Provident Investment Co. (P) Ltd. [(1977) 1 SCC 593 : AIR 1976 SC 2610] only in cases where vested rights are involved, legislation has to be interpreted to mean as one affecting such right to be prospectively operative. right of Appeal is only by statute. It is (sic not a) necessary part of procedure in action, but right of entering superior court and invoking its aid and interposition to redress error of court below. It seems absurd to denominate this paramount right part of practice of inferior Tribunal . (Per Lord Westbury, See: Attorney General v. Sillem [33 LJ Ex 209 : 10 LT 434 : 10 HLC 704, 724 : 11 ER 1200] , ER p. 1209.) Appeal, strictly so called, is one in which question is, whether order of court from which Appeal is brought was right on materials which that court had before it (Per Lord Devuil Ponnammal v. Arumogam [1905 AC 383, 390] . right of Appeal, where it exists, is matter of substance and not of procedure (Colonial Sugar Refining Co. v. Irving [1905 AC 369 : (1904-07) All ER Rep Ext 1620 : 92 LT 738 (PC)] ). 17. Right of Appeal is statutory. Right of Appeal inhered in no one. When conferred by statute it becomes vested right. In this regard there is essential distinction between right of Appeal and right of suit. Where there is inherent right in every person to file suit and for its maintainability it requires no authority of law, Appeal requires so. As was observed in State of Kerala v. K.M. Charia Abdulla and Co. [AIR 1965 SC 1585] distinction between right of Appeal and revision is based on differences implicit in two expressions. Appeal is continuation of proceedings; in effect entire proceedings are before Appellate Authority and it has power to review evidence subject to statutory limitations prescribed. But in case of revision, whatever powers revisional authority may or may not have, it has no power to review evidence, unless statute expressly confers on it that power. It was noted by four Judge Bench in Hari Shankar v. Rao Girdhari Lal Chowdhury [AIR 1963 SC 698] that distinction between Appeal and revision is real one. right of Appeal carries with it right of rehearing on law as well as fact, unless statute conferring right of Appeal limits rehearing in some way, as has been done in second Appeals [8] arising under Code. power of hearing revision is generally given to superior court so that it may satisfy itself that particular case has been decided according to law. Reference was made to Section 115 of Code to hold that High Court's powers under said provision are limited to certain particular categories of cases. right there is confined to jurisdiction and jurisdiction alone. 13. With regard to interpretation of statute, it is settled law that statute is edict of legislature and where words of statute are clear without any ambiguity and intention of legislature is clearly conveyed, there is no scope for court to innovate or take upon itself task of altering statutory provisions by breathing into provisions, words which have not been expressly incorporated by legislature. 14. It is only in case where words of statute are ambiguous or reading of which clearly indicates that it is case of 'casus omissus' that court can interpret provisions incorporated in statute. Hon'ble Supreme court referring to various pronouncements in case of Bharat Aluminium Company versus Kaiser Aluminium Technical Services Inc. reported in (2012) 9 SCC 552 has held that court must proceed on footing that legislature intended what it has said. Even where there is 'casus omissus' it is for others than courts to remedy defect. relevant paragraph in case of Bharat Aluminium Company (supra) is as follows:- 65. Mr Sorabjee has also rightly pointed out observations made by Lord Diplock in Duport Steels Ltd. [(1980) 1 WLR 142 : (1980) 1 All ER 529 (HL)] In aforesaid judgment, House of Lords disapproved approach adopted by Court of Appeal in discerning intention of legislature; it is observed that: (WLR p. 157 C-D) role of judiciary is confined to ascertaining from words that Parliament has approved as expressing its intention what that intention was, and to giving effect to it. Where meaning of statutory words is plain and unambiguous it is not for Judges to invent fancied ambiguities as excuse for failing to give effect to its plain meaning because they themselves consider that consequences of doing so would be inexpedient, or even unjust or immoral. In controversial matters such as are involved in industrial relations there is room for differences of opinion as to what is expedient, what is just and what is morally justifiable. Under our Constitution it is Parliament's opinion on these matters that is paramount. (emphasis supplied) In same judgment, it is further observed: (WLR p. 157 F) But if this be case it is for Parliament, not for judiciary, to decide whether any changes should be made to law as stated in Acts . (emphasis supplied) [9] 15. With regard to taxing statute, it has been held that courts have to apply strict rule of interpretation. When competent legislature mandates taxing certain person/certain objects in certain circumstances, it can not be expanded/interpreted to include those, which were not intended by legislature. aforesaid has been held by Hon'ble Supreme Court in case of Commissioner of Customs (Import) Mumbai versus Dilip Kumar and Company and others reported in (2018) 9 SCC 1. relevant paragraphs in aforesaid judgment of Dilip Kumar and Company and others(supra) is as follows:- 21. well-settled principle is that when words in statute are clear, plain and unambiguous and only one meaning can be inferred, courts are bound to give effect to said meaning irrespective of consequences. If words in statute are plain and unambiguous, it becomes necessary to expound those words in their natural and ordinary sense. words used declare intention of legislature. 24. In construing penal statutes and taxation statutes, Court has to apply strict rule of interpretation. penal statute which tends to deprive person of right to life and liberty has to be given strict interpretation or else many innocents might become victims of discretionary decision-making. Insofar as taxation statutes are concerned, Article 265 of Constitution [ 265. Taxes not to be imposed save by authority of law. No tax shall be levied or collected except by authority of law. ] prohibits State from extracting tax from citizens without authority of law. It is axiomatic that taxation statute has to be interpreted strictly because State cannot at their whims and fancies burden citizens without authority of law. In other words, when competent Legislature mandates taxing certain persons/certain objects in certain circumstances, it cannot be expanded/interpreted to include those, which were not intended by legislature. 25. At outset, we must clarify position of plain meaning rule or clear and unambiguous rule with respect to tax law. plain meaning rule suggests that when language in statute is plain and unambiguous, court has to read and understand plain language as such, and there is no scope for any interpretation. This salutary maxim flows from phrase cum inverbis nulla ambiguitas est, non debet admitti voluntatis quaestio . Following such maxim, courts sometimes have made strict interpretation subordinate to plain meaning rule [Mangalore Chemicals and Fertilisers Ltd. v. CCT, 1992 Supp (1) SCC 21] , though strict interpretation is used in precise sense. To say that strict interpretation involves plain reading of statute and to say that one has to utilise strict interpretation in event of ambiguity is self-contradictory. 16. principles with regard to 'casus omissus' and its implementation have also been dealt with by Hon'ble Supreme Court in case of Shiv Shakti Cooperative Housing Society (supra) in which relevant paragraphs are as follows:- 19. It is well-settled principle in law that court cannot read anything into statutory provision which is plain and unambiguous. statute is edict of legislature. language employed in statute is determinative factor of legislative intent. Words and [10] phrases are symbols that stimulate mental references to referents. object of interpreting statute is to ascertain intention of legislature enacting it. (See Institute of Chartered Accountants of India v. Price Waterhouse [(1997) 6 SCC 312 : AIR 1998 SC 74] .) intention of legislature is primarily to be gathered from language used, which means that attention should be paid to what has been said as also to what has not been said. As consequence, construction which requires for its support, addition or substitution of words or which results in rejection of words as meaningless has to be avoided. As observed in Crawford v. Spooner [(1846) 6 Moo PCC 1 : 4 MIA 179] courts cannot aid legislatures' defective phrasing of Act, we cannot add or mend, and by construction make up deficiencies which are left there. (See State of Gujarat v. Dilipbhai Nathjibhai Patel [(1998) 3 SCC 234 : 1998 SCC (Cri) 737 : JT (1998) 2 SC 253] .) It is contrary to all rules of construction to read words into Act unless it is absolutely necessary to do so. [See Stock v. Frank Jones (Tipton) Ltd. [(1978) 1 All ER 948 : (1978) 1 WLR 231 (HL)] ] Rules of interpretation do not permit courts to do so, unless provision as it stands is meaningless or of doubtful meaning. Courts are not entitled to read words into Act of Parliament unless clear reason for it is to be found within four corners of Act itself. (Per Lord Loreburn, L.C. in Vickers Sons and Maxim Ltd. v. Evans [1910 AC 444 : 1910 WN 161 (HL)] , quoted in Jumma Masjid v. Kodimaniandra Deviah [AIR 1962 SC 847] .) 23. Two principles of construction one relating to casus omissus and other in regard to reading statute as whole appear to be well settled. Under first principle casus omissus cannot be supplied by court except in case of clear necessity and when reason for it is found in four corners of statute itself but at same time casus omissus should not be readily inferred and for that purpose all parts of statute or section must be construed together and every clause of section should be construed with reference to context and other clauses thereof so that construction to be put on particular provision makes consistent enactment of whole statute. This would be more so if literal construction of particular clause leads to manifestly absurd or anomalous results which could not have been intended by legislature. intention to produce unreasonable result , said Danckwerts, L.J. in Artemiou v. Procopiou [(1966) 1 QB 878 : (1965) 3 All ER 539 : (1965) 3 WLR 1011 (CA)] (All ER p. 544 I), is not to be imputed to statute if there is some other construction available . Where to apply words literally would defeat obvious intention of legislation and produce wholly unreasonable result , we must do some violence to words and so achieve that obvious intention and produce rational construction. Per Lord Reid in Luke v. IRC [1963 AC 557 : (1963) 1 All ER 655 : (1963) 2 WLR 559 (HL)] where at AC p. 577 (All ER p. 664 I) he also observed: This is not new problem, though our standard of drafting is such that it rarely emerges. 17. conspectus of aforesaid judgments make it amply clear that statutory interpretation particularly with regard to taxing statutes has to be strict and only in accordance with unambiguous words used in statute. intention of legislature in incorporating or leaving out certain words is necessarily required to be seen. 18. words 'as it thinks fit' used in relation to powers of Appellate Tribunal exercisable under Section 254(1) of Act, 1961 is of widest amplitude. said expression confers very wide jurisdiction enabling [11] Appellate authority to take entirely different view on same set of facts. 19. terminology ' as it thinks fit' in relation to powers of Appellate authority have been considered by Hon'ble Supreme Court in case of Babu Lal Nagar versus Shree Synthetics Limited and others reported in 1984 (supp) SCC 128. relevant paragraph of judgment is as follows: 16. Section 66(1) of Act provides that Industrial Court omitting portion not relevant for present purpose, may call for and examine record of such case and pass order in reference thereto as it thinks fit. If Industrial Court has jurisdiction to pass any order in reference to case called for by it as it thinks fit, obviously it can come to conclusion on same set of facts different from one to which Labour Court had arrived. It was however urged that this jurisdiction of wide amplitude has been cut down by proviso which provides that Industrial Court shall not vary or reverse any order of Labour Court under Section 66(1) unless (i) it is satisfied that Labour Court has (a) exercised jurisdiction not vested in it by law; or (b) failed to exercise jurisdiction so vested; or (c) acted in exercise of its jurisdiction illegally or with material irregularity. It was urged that these clauses so circumscribe and cut down jurisdiction of Industrial Court under Section 66 as to be on par with Section 115 of Code of Civil Procedure. main part of Section 61 (sic 66) clearly spells out jurisdiction of Industrial Court to pass any order in reference to case brought before it as it thinks fit. expression as it thinks fit confers very wide jurisdiction enabling it to take entirely different view on same set of facts. expression as it thinks fit has same connotation, unless context otherwise indicates, as he deems fit and latter expression was interpreted by this Court in Raja Ram Mahadev Paranjype v. Aba Maruti Mali [AIR 1962 SC 753 : 1962 Supp (1) SCR 739] to mean to make order in terms of statute, order which would give effect to right which Act has elsewhere conferred. Is this jurisdiction so circumscribed as to bring it on par with Section 115 of Code of Civil Procedure? Proviso does cut down ambit of main provision but it cannot be interpreted to denude main provision of any efficacy and reduce it to paper provision. Both must be so interpreted as to permit interference which if not undertaken there would be miscarriage of justice. Sub- clause (c) of first proviso to Section 66(1) will permit Industrial Court to interfere with order made by Labour Court, if Labour Court has acted with material irregularity in disposal of dispute before it. If finding recorded by Labour Court is such to which no reasonable man can arrive, obviously, Industrial Court in exercise of its revisional jurisdiction would be entitled to interfere with same even if patent jurisdictional error is not pointed out. 20. Upon perusal of powers of Appellate authority as indicated in section 254(1) of Act, 1961, it can be seen that widest jurisdiction has been conferred upon Appellate authority in wisdom of legislature. said power has not been proscribed in any manner whatsoever. [12] 21. Hon'ble Supreme Court in case of Clariant International Limited and another versus Securities and Exchange Board of India reported in (2004) 8 SCC 524 has held that once jurisdiction of Appellate authority is not fettered by statute, it exercises all jurisdiction. It has also been held that limits to jurisdiction of Appellate authority would have been stated explicitly in statute had that been intention of legislature. relevant paragraphs of judgment in case of Clariant International Limited (supra) are as follows;- 73. Had intention of Parliament been to limit jurisdiction of Tribunal, it could say so explicitly as it has been done in terms of Section 15-Z of Act whereby jurisdiction of this Court to hear Appeal is limited to question of law. 74. jurisdiction of Appellate Authority under Act is not in any way fettered by statute and, thus, it exercises all jurisdiction as that of Board. It can exercise its discretionary jurisdiction in same manner as Board. 22. In view of aforesaid judgments of Hon'ble Supreme Court, it is clearly evident that provisions of Act 1961 have to be interpreted strictly in accordance with what it explicitly states. Once legislature in its wisdom has not fettered jurisdiction of Appellate Tribunal, it would not be appropriate for courts to put fetters upon such jurisdiction since doing so would amount to doing violence to specific provisions of statute. 23. perusal of Section 254 of Act of 1961 shows that Appellate Tribunal is given power to pass such orders, as it thinks fit. powers given under Section 254 of Act of 1961 is to be read along with other provisions of Act. Section 12AA of Act of 1961 requires satisfaction about genuineness of activities and objects of Trust before its registration by Commissioner. arguments of learned counsel for Revenue in reference to requirement of satisfaction on genuineness of activities of Trust is to be exercised by Commissioner and that Tribunal should not direct registration of Trust unless satisfaction, as envisaged [13] under Section 12 (AA) of Act, 1961 is recorded, is only partly correct. 24. Upon consideration of judgments referred to herein above, we are of considered opinion that in case where Commissioner has refused to accept application for registration of Trust after recording its finding on basis of material on record before him holding that activities and object of Trust are not genuine and Appellate Tribunal on basis of same material on record comes to conclusion that order of Commissioner is perverse since it has been passed ignoring, misconstruing or misinterpreting such evidence, then it can direct registration of Trust without remanding matter to Commissioner. 25. Remand of case to Commissioner in said circumstance after recording of satisfaction by Appellate Tribunal about genuineness of objects and activities of Trust, on basis of material on record, would be empty formality because Commissioner in such case can not go against specific finding recorded by Appellate Tribunal. 26. In view of unfettered power of Appellate Tribunal in terms of section 254 (1) of Act, 1961 Tribunal can very well record its satisfaction on genuineness of activities and object of Trust and can very well direct registration of Trust without remand of case to Commissioner in case such satisfaction is recorded on basis of documents and material already available on record at stage of examination by Commissioner. 27. However it would be different matter where Appellate Tribunal records such satisfaction on basis of material or documentary evidence which was not available before Commissioner while exercising his powers [14] under Section 12 (AA) of Act, 1961, which is our opinion would require remand. 28. Remand to Commissioner can also be affected in case where Commissioner rejects application on technical ground without recording its opinion on facts or genuineness of activities and object of Trust but Tribunal finds ground for rejection on such technical ground thereby reopening issue of recording satisfaction in terms of Section 12 (AA) of Act, 1961. 29. In view of aforesaid discussion, it is clear that power and jurisdiction of Appellate Tribunal under Section 254(1) of Act, 1961 is unfettered thereby enabling Appellate Tribunal to direct registration of Trust at its level itself but same is not open as matter of course and such power is to be exercised only in circumstances indicated herein above. 30. said onus on Appellate Tribunal to remand matter in cases indicated herein above is also in view of strict interpretation of powers of Commissioner under Section 12 (AA) of Act, 1961 because if Appellate Tribunal is given such wide powers to direct registration of Trust in all or any circumstances, it would render provisions of Section 12(AA) otiose, which again can not be intention of legislature. 31. In view of above answer to questions referred are answered as under:- (i) income tax Appellate Tribunal while hearing Appeal under Section 254(1) in matter where registration under Section 12(AA) has been denied by Commissioner income tax can itself pass order directing commissioner to grant registration in case income tax Appellate Tribunal disagrees with satisfaction of Commissioner on basis of material already on record before Commissioner. [15] However said power is not to be exercised as matter of course and that remand to Commissioner income tax is to be made where income tax Appellate Tribunal records divergent view on basis of material which has been filed before Appellate Tribunal for first time. Remand for determination of question regarding grant of registration to Trust would also be necessitated in cases where registration application has been rejected by Commissioner income tax on technical grounds without recording his satisfaction as contemplated under Section 12 (AA) of Act, 1961 and such decision is overturned by income tax Appellate Tribunal. (ii) power of Appellate Tribunal are co-extensive with power of Commissioner under Section 12 (AA) of Act, 1961 subject to what has been indicated herein 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) of Act, 1961. 32. In view of aforesaid reference is answered. 33. Registry is directed to place Appeals before appropriate court dealing with matter. Order Date :- 26.09.2019 prabhat Commissioner of Income-tax, Exemption v. Reham Foundation
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