Denial of Registration 12AA for not spending income by trust. CIT to consider issue u/s 12AA(3) if the facts justify Registration – Supreme Court
ABCAUS Case Law Citation:
ABCAUS 3276 (2020) (02) SC
In the instant case, a Special Leave Petition was filed by the Commissioner of Income Tax (Exemptions).
The respondent Trust had applied for registration under section 12AA of the Income Tax Act,1961 (the Act).
The Commissioner of Income Tax (CIT) found that the trust had not spent any part of its income on the charitable activities. The CIT, therefore, refused the registration of the Trust.
The Income Tax Appellate Tribunal reversed the decision of the Commissioner of income Tax on the basis of the judgment of the Delhi High Court.
The Hon’ble Supreme Court stated that as held by it the object of the provision of section 12AA is to ensure that the activities undertaken by the Trust are not contrary to its objects and that a Commissioner is entitled to refuse registration if the activities are found contrary to the objects of the Trust.
The Hon’ble Supreme Court noted that in the present case, it had been found that the Trust had not spent any amount of its income for charitable purposes.
The Apex Court stated that the case in hand was a case of not carrying out the objects of the Trust and not carrying on activities contrary to its object. These circumstances may arise for many reasons including not finding suitable circumstances for carrying on activities and undoubtedly the inaction in carrying out charitable purposes might also become actionable depending on other circumstances.
However, the Hon’ble Supreme Court left it upon the Commissioner of Income Tax to consider the issue by exercising his powers under sub-section (3) of section12AA and grant registration if the facts justify it.
The appeal was however, dismissed.
ITAT allowed increased exemption of Rs. 25 lakhs u/s 10(10A) to non-government employees in view of CBDT retrospective notification. In…
PCIT has revisionary jurisdiction u/s 263 over the cases irrespective of the fact that the relevant assessment was completed physical…
Appellate court interfering with Motor Accidents Claims Tribunal findings on assessment of disability and loss of earning capacity must undertake…
When period of delay is not very huge and involve huge monetary liability on the assessee, a lenient approach should…
Ratification by EoGM of the company can not give legality of the diversion of the fund raised by preferential issue.…
CBIC prescribes procedures for return of export cargo from international waters due to closure of the Strait of Hormuz where…