- (1.) BY this application under Section 256(2) of the Income-tax Act, 1961, the Revenue has prayed that the following questions of law arising out of the order of the Tribunal dated September 27, 1991, may be directed to be referred to this court : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that once the delay in the matter of filing application under Section 12A was condoned by the Commissioner of Income-tax, the application was as good as an application having been made within one year of creation of the trust or establishment of the institution ? 2. Whether, on the facts and in the circumstances of the case and on a proper construction of the provisions of Section 12A(a) of the Income-tax Act, 1961, the Tribunal was correct in holding that the Commissioner was not justified to put a rider on the effect of his order of granting registration to the institution and consequently holding that the company was entitled to the benefit of exemption under Section 12A of the Act for the assessment year 1988-89 ?"
(2.) THE brief facts of the case are that the assessee was incorporated on December 28, 1983, and applied under Section 12A of the Income-tax Act, 1961, for registration on January 12, 1988. In accordance with the provisions of Section 12A, the application for registration of the trust/institution was to be submitted in the prescribed form before the expiry of a period of one year from the date of the creation of the trust or institution. Under the proviso, the Commissioner has the discretion to admit an application for registration after the expiry of the said period. THE registration was granted on September 7, 1988, with effect from January 12, 1988. THE assessee was maintaining the books of account according to the calendar year and in respect of the accounting year ending on December 31, 1987, the benefit under Section 11/12 of the Act was refused on the ground that the claim could not be allowed for the period before the grant of registration. THE appeal before the Commissioner of Income-tax (Appeals) was dismissed. THE Tribunal in its order dated September 27, 1991, came to the conclusion that, if a belated application is admitted by the Commissioner in exercise of his discretion under the proviso to Section 12A(a), it would be as good as an application moved before July 1, 1973, or before the expiry of one year from the date of the creation of the trust or the establishment of the institution, whichever is later. If the Commissioner decides to exercise his discretion for granting registration, he cannot put a rider on the effect of his order that it would be effective from a particular date. If the delay is condoned it would amount to the discretion vested in the Commissioner having been exercised to grant the registration from the very beginning. THE Tribunal came to the conclusion that such grant of registration implied that the delay of about three years was condoned by the Commissioner. Once the delay is considered to have been so condoned, the application was as good as having been made within one year of the establishment of the assessee-company. It was further observed that the Commissioner could not have controlled or restricted the order of granting registration by making the same effective from January 12, 1988. Without going into the merits of the case, we are of the view that the questions posed by the Revenue do arise out of the order of the Tribunal. The question of condonation of delay or the effect of the order of the Commissioner is to be interpreted on the basis of the language of the Section. Since, it is a matter of construction of the provisions of the Act, it is a pure question of law. Accordingly, we direct that the Tribunal may refer the questions of law along with the statement of the case to this court. The application is, accordingly, allowed. ;