1. Heard Sri Manish Misra, learned counsel for the appellant. However, no one appears for the opposite party.

2. This is an appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act, 1961') by the Revenue.

3. Notices were issued to the respondent herein vide order dated 07.02.2014. By the same order, the appeal was admitted on the substantial questions of law as framed in the appeal which read as under:-

"(1) Whether in the facts and circumstances of the case the Income Tax Appellate Tribunal was justified in applying the time limit of 6 months provided in section 12AA(2) in a case where the order u/s 12AA is to be passed in second round to ITAT'S directions.

(2) Whether non disposal of application for registration by granting or refusing registration before the expiry of six months as provided u/s 12AA(2) of the Income Tax Act, 1961 would result in deemed grant of registration.

(3) Whether in the facts and circumstances of the case and the Hon'ble Income Tax Appellate Tribunal was correct in granting deemed registration u/s 12AA without appreciating the facts that the power to grant or refuse registration is statutory power of the commissioner u/s 12AA.

(4) Whether in the facts and circumstances of the case the Income Tax Appellate Tribunal has erred in substituting its own satisfaction in place of the satisfaction of the commissioner of the income tax as provided u/s 12AA of the Income Tax Act, 1961, thereby exceeding its jurisdiction."

4. On 07.02.2014 itself, this Court had stayed the operation of impugned order dated 20.09.2013 passed in I.T.A. No.145 and 146/Lkw/2012 by Income Tax Appellate Tribunal, Lucknow. The order sheet reveals that as per report of the process server, notices had been served personally upon opposite party no.1 on 10.04.2014. However, no one is present on behalf of the respondent to contest the matter nor any objections/ counter affidavit has been filed on its behalf.

5. The facts of the case in brief are that the respondent had applied for being registered under Section 12AA of the Act, 1961 on 05.02.2010 in Form No.10A. Along with the said application, another application was filed by the respondent under Section 80G of the Act, 1961. The said application came to be rejected by the Commissioner of Income Tax, Faizabad on 26.08.2010 on the ground that on an examination of evidence on record, it is not possible to arrive at a satisfaction that the appellant/ applicant is genuinely engaged in charitable activities. By a separate order, the application under Section 80G of the Act, 1961 was also rejected. Being aggrieved, the respondent filed an appeal before the Income Tax Appellate Tribunal bearing I.T.A. No.613 & 593/Luc/10. The said appeal was allowed on 12.01.2011 and the matter was remanded back to the Commissioner for reconsideration. The Commissioner of Income Tax, Faizabad reconsidered the applications of the respondent but again rejected the same vide his order dated 23.01.2012. The ground of rejection were the same but they were more detailed keeping in mind judgment of the Tribunal. Again being aggrieved, the respondent herein preferred an appeal bearing ITA No. 145 and 146/Lkw/2012 challenging the aforesaid order of the Commissioner dated 23.01.2012. The appeals were allowed on 20.09.2013. The appeal against the order passed under Section 12AA of the Act, 1961 was allowed on the ground that the order of rejection dated 23.01.2012 had been passed more than six months since the passing of the order dated 12.01.2011 in the earlier appeal by the Income Tax Appellate Tribunal.

6. We may for convenience quote relevant extract of the judgment of Income Tax Appellate Tribunal dated 20.09.2013 which is impugned before us:-

"7. Now we examine the present case on the touchstone of legal provision. In this case the matter was remitted to the file of CIT by the ITAT vide order dated 12.01.2011. The CIT passed the order rejecting the registration vide order dated 23.01.2012. Admittedly the order was passed beyond the stipulated period of six months. Under the circumstances, we find that the plea of the ld. Counsel for the assessee is cogent that the assessee has become entitled for registration under Income section 12AA and also approval under section 80G of the Act. In this regard, we draw support from the Hon'ble jurisdictional High Court decision in the case of Society for the Promotion of Education, Adventure Sports & Conversation of Environment vs. CIT & Ors., 216 CTR (All) 167. In this case, following was expounded:- (Head notes only).

"Charitable trust - Registration under s. 12A-Effect of non-passing of order within the time-limit - Taking the view that non-consideration of the registration application within the time fixed by s. 12AA(2) would result in deemed registration, may at the worst cause loss of some revenue or income-tax payable by the individual assessee-On the other hand, if a contrary view is taken, it would leave the assessee totally at the mercy of the IT authorities inasmuch as the assessee has not been provided any remedy under the Act against non-decision-Moreover, the former view furthers the object and purpose of the statutory provision - Thus, the better interpretation would be to hold that the effect of non-consideration of the application for registration under s. 12A within the time fixed by s 12AA(2) would be a deemed grant of registration.

Respectfully following the precedent as above and also the legal provision discussed above, we are of the opinion that the order of ld. CIT in this case is liable to be set aside and the assessee be granted deemed registration and approval as applied.

9. In the result, these appeals filed by the assessee are allowed."

7. While allowing the appeal, the Tribunal held that once the application of the respondent herein was not decided within the period of six months stipulated under Section 12AA of the Act, 1961 after the judgment of the ITAT dated 12.01.2011 then, the assessee became entitled for registration under Section 12AA and also approval under Section 80G of the Act, 1961. In this regard, it drew support from a decision of this Court in the case of 'Society for the Promotion of Education, Adventure Sport & Conservation of Environment vs. Commissioner of Income Tax & Ors.' 216 CTR (All) 167.

8. We are constrained to comment that in doing so, the ITAT referred to the 'Head Notes' of the aforesaid report which reflects very poorly upon the functioning of the ITAT which is a statutory body comprising of a Judicial Member and a Member from Accounts Services. Judgments are to be referred, relied and quoted with regard to the opinion expressed in the body of the judgment and not in the 'Head Notes' which is prepared by the editor of the journal concerned.

9. But leaving the matter at that, we now proceed to consider the issue involved herein.

10. From the substantial questions of law on which the appeal was admitted, first and foremost, we are required to consider as to whether in the facts and circumstances of the case, Income Tax Appellate Tribunal was justified in applying the limit of six months provided in Section 12AA(2) of the Act, 1961 in a case where the order under Section 12AA of the Act, 1961 has been passed in the second round of litigation consequent to directions of the Income Tax Appellate Tribunal in the first appeal before it. In this context, we may, first of all, refer to the relevant provision contained in Section 12AA(2) of the Act, 1961 which reads as under:-

"(2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) [or clause (aa) [or clause (ab)] of sub-section (1)] of section 12A.]"

11. As is evident from the reading of the aforesaid provision every order granting or refusing registration under clause (b) of sub-Section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) or clause (aa) or clause (ab) of subSection (1) of Section-12A of the Act, 1961. The application in question in this case was filed on 05.02.2010, therefore, based on the language used in sub-Section (2) of Section 12AA of the Act, 1961, the period of six months referred therein was to expire on 28/29.08.2010. The record reveals that in this case, the application was rejected on 26.08.2010 and there is no factual dispute in this regard. Therefore, rejection mentioned in sub-Section (2) of Section 12A of the Act, 1961 was before expiry of six months from the end of the month in which the application of the respondent was received. At this stage, it is not out of place to mention here that Section 12AA of the Act, 1961 refers to the procedure of registration whereas the application itself is to be filed under Section 12A of the Act, 1961 that is why reference to Section 12A in sub-Section (2) of Section 12AA of the Act, 1961. The said application for registration is for the purposes of Section 11 and 12 of the Act, 1961. Therefore, purely on facts, we find that the initial rejection was within the period stipulated in sub-Section (2) of Section 12A of the Act, 1961. Now, the respondent preferred an appeal against the said order before the Income Tax Appellate Tribunal which was decided on 12.01.2011 and the matter was remanded back to the Commissioner for a decision afresh. This fresh decision was taken on 23.01.2012 and the application of the respondent was again rejected. When the matter went up in appeal for the second time before the Income Tax Appellate Tribunal, the Tribunal, vide its judgment, which is impugned herein and is dated 20.09.2013, has taken the view that this subsequent decision dated 23.01.2012 was taken after expiry of six months and accordingly, it has arrived at a conclusion that it being so, the respondent was entitled for registration under Section 12AA and also approval under Section 80G of the Act, 1961 relying upon a Division Bench judgment of this Court in the case of Society for the Promotion of Education, Adventure Sport & Conservation of Environment (supra) wherein it was held that such an eventuality would result in deemed registration.

12. First and foremost, we are of the opinion that in the facts of this case, the application was rejected for the first time on 26.08.2010 within the period of six months envisaged in subSection (2) of Section 12A of the Act, 1961. If the aggrieved party initiates proceedings in appeal thereafter and in pursuance to the orders passed in such an appeal, any decision is to be taken afresh then there is no question of such subsequent decision being hit on account of expiry of period of six months referred in Section 12AA of the Act, 1961 for the reason that the said period as is evident from the language used therein is to be calculated from the end of the month in which the 'application was received' which is indicative of the fact that legislature intended that the decision has to be taken before expiry of six months from the end of the month in which the application mentioned therein was received. It is not the intention that if, on an appeal filed against such an order, any directions are issued and thereafter any decision is taken which is taken beyond the period of six months then such a decision would be a nullity in view of sub-Section (2) of Section 12A of the Act, 1961. Any such understanding of the provision would be against the express language of the provision. Once a decision is taken on the application within the period of six months envisaged in Section 12AA(2) then subsequent events are irrelevant so far as application of Section 12AA(2) of the Act is concerned. The period of six months referred in Section 12AA(2) has to be calculated from the end of the months in which the application under Section 12A was received and not from any other date. Therefore, we are of the opinion that substantial questions of law framed at point no.(1) has to be answered in favour of the Revenue and against the Assessee. The Tribunal was not justified in applying Section 12AA(2) of the Act, 1961 in the facts of the present case and the order of Commissioner of Income Tax, Faizabad could not have been set aside on this ground. The decision of the Tribunal is based on a misreading and misunderstanding of Section 12AA(2) of the Act, 1961, its purport and scope.

13. As regards the substantial questions of law framed at point nos.(2) and (3), learned counsel for the appellant has placed before us a Full Bench decision of this Court rendered in Income Tax Appeal No.348 of 2008 Commissioner Income Tax vs. Muzafar Nagar Development Authority' wherein the questions considered by the Full Bench were as under:-

"(i) Whether the non disposal of an application for registration, by granting or refusing registration, before the expiry of six months as provided under Section 12AA(2) of the Income Tax Act, 1961 would result in deemed grant of registration; and

(ii) Whether the Division Bench judgment of this Court in the case of Society for the Promotion of Education, Adventure Sport & Conservation of Environment vs. Commissioner of Income Tax holding that the effect of non consideration of the application for registration within the time fixed by Section 12AA(2) would be deemed grant of registration, is legally correct."

14. The said questions after a detailed discussion of law on the subject were answered as under:-

"In the circumstances, we answer the questions referred to the Full Bench for reference in the following terms:

(i) Non disposal of an application for registration, by granting or refusing registration, before the expiry of six months as provided under Section 12AA (2) of the Income Tax Act 1961 would not result in a deemed grant of registration; and

(ii) the judgment of the Division Bench of this Court in Society for the Promotion of Education Adventure Sport & Conservation of Environment (supra) does not lay down the correct position of law.

The reference is, accordingly, answered. The appeal shall now be placed before the regular bench in accordance with the roster for final disposal in terms of the questions so answered."

15. In this context, we may also mention that the decision in Society for the Promotion of Education, Adventure Sport & Conservation of Environment (supra) which was declared as not laying down the correct position of law, was challenged by the Revenue before Hon'ble the Supreme Court by means of Special Leave Petition (C) No.9705 of 2009 which after being converted into Civil Appeal No.1478 of 2016 was decided on 16.02.2016 in the following terms:-

"1. Leave granted.

2. There is no appearance on behalf of the sole respondent despite service of notice and adjournment sought for on a couple of occasions earlier.

3. The short issue is with regard to the deemed registration of an application under Section 12AA of the Income Tax Act. The High Court has taken the view that once an application is made under the said provision and in case the same is not responded to within six months, it would be taken that the application is registered under the provision.

4. The learned Additional Solicitor General appearing for the appellants, has raised an apprehension that in the case of the respondent, since the date of application was of 24.02.2003, at the worst, the same would operate only after six months from the date of the application.

5. We see no basis for such an an apprehension since that is the only logical sense in which the Judgment could be understood. Therefore, in order to disabuse any apprehension, we make it clear that registration of the application under Section 12AA of the Income Tax Act in the case of the respondent shall take effect from 24.08.2003.

6. Subject to the above clarification and leaving all other questions of law open, the appeal is disposed of with no order as to costs."

16. From a bare perusal of the said judgment, specifically para no.6 thereof, it is evident that Hon'ble the Supreme Court clarified the matter as to the date from which the period of six months referred in Section 12AA of the Act, 1961 was to be counted but it left all other questions of law open. Therefore, on the question of deemed registration, in our humble opinion, the Full Bench decision of this Court still holds the ground as Hon'ble the Supreme Court did not express any opinion on the said question.

17. We may in this context refer to a recent decision of Hon'ble the Supreme Court dated 22.04.2022 passed in Special Leave to Appeal (C) No(s).26978/2017 'Harshit Foundation Sehmalpur Jalalpur Jaunpur vs. Commissioner of Income Tax' wherein this very question of 'deemed registration' arose and their Lordships of Hon'ble the Supreme Court after considering the Full Bench decision in the case of CIT vs. Muzafar Nagar Development Authority (supra) approved the same and dismissed the Special Leave Petition against the judgment of a Division Bench of this Court dated 31.01.2017 rendered in Income Tax Appeal Defective No.24 of 2013 'Commissioner of Income Tax Faizabad vs. Harshit Foundation Sehmalpur Jalalpur Jaunpur'. The judgment of Hon'ble the Supreme Court reads as under:-

"We have heard Mr. Abhinav Mehrotra, learned counsel appearing on behalf of the petitioner and Mr. N. Venkataraman, learned ASG appearing on behalf of the respondent.

The only question which is posed for consideration before the High Court was whether on non-deciding the application for registration under Section 12AA (2) of the Income Tax Act, 1961 (for short the Act') within a period of six months, there shall be deemed registration or not.

The aforesaid aspect has been dealt with and considered in detail by the Full Bench of the Allahabad High Court in its decision in the case of Commissioner of Income Tax vs. Muzafar Nagar Development Authority [ITA 348 of 2008].

After considering in detail the provisions of Section 12AA (2) of the Act and having found that there is no specific provision in the Act by which it provides that on non-deciding the registration application under Section 12AA (2) within a period of six months there shall be deemed registration, the Full Bench of the High Court has rightly held that even if in a case where the registration application under Section 12AA is not decided within six months, there shall not be any deemed registration.

We are in complete agreement with the view taken by the Full Bench of the High Court.

The Special Leave Petition stands dismissed."

18. In view of this pronouncement, the law on the question of 'deemed registration' which had already been clarified and declared by the Full Bench of this Court referred hereinabove stands further crystallized and approved by Hon'ble the Supreme Court by the aforesaid decision. In view of the aforesaid declaration of law, decision of the Division Bench of this Court in the case of Society for the Promotion of Education, Adventure Sport & Conservation of Environment (supra) is not good law as held by the Full Bench though it may be binding between the parties in view of the order passed in the civil appeal arising therefrom as already discussed.

19. In view of the above, substantial question no.(2) is answered in terms of the Full Bench decision in the case of CIT vs. Muzafar Nagar Development Authority (supra) and decision of Hon'ble the Supreme Court in the case of Harshit Foundation Sehmalpur Jalalpur Jaunpur (supra) in favour of the Revenue as there is no question of deemed registration merely because the application is not decided within the period of six months referred in Section 12AA(2) of the Act, 1961.

20. In view of the discussion already made in the context of substantial question nos.1 and 2 and for the reasons mentioned hereinabove, we hold that the Tribunal erred in granting deemed registration to the Assessee under Section 12AA of the Act, 1961. We, accordingly, answer question no.(3) in favour of the Revenue and against the Assessee.

21. As regards substantial question no.(4), in view of our discussion of substantial question nos.(1), (2) and (3) and for the reasons already given hereinabove, we hold that the Tribunal has erred in passing the impugned judgment and order. We answer this question in favour of the Revenue and against the Assessee.

22. In view of the above discussion, the order of Income Tax Appellate Tribunal dated 20.09.2013 cannot be sustained. It is accordingly quashed. The order of Commissioner of Income Tax, Faizabad dated 23.01.2012 stands revived.

23. The appeal is allowed in the aforesaid terms.