S.254(1) – Denial of registration under section 12AA by the Commissioner – Powers of Appellate Tribunal to direct registration.

The Income-tax Appellate Tribunal while hearing an appeal under section 254(1) of the Act, in a matter where registration under section 12AA has been denied by the Commissioner of Income-tax, can itself pass an order directing the 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. However the order for registration can be issued only after recording satisfaction with regard to genuineness of activities of the trust as provided under section 12AA of the Act, 1961. However the said power is not to be exercised as a matter of course and that remand to the Commissioner of Income-tax is to be made where the Income-tax Appellate Tribunal records a divergent view on the basis of material which has been filed before the Appellate Tribunal for the first time. Remand for determination of question regarding grant of registration to a trust would also be necessitated in cases where the registration application has been rejected by the Commissioner of Income-tax on technical grounds without recording his satisfaction as contemplated under section 12AA of the Act, 1961 and such decision is overturned by the Income-tax Appellate Tribunal. CIT (Exemptions) v. Reham Foundation [2019] 418 ITR 205 (All) [FB].