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Issues involved: Appeal against refusal of registration u/s 12A of the Act by the Director of Income Tax (Exemption), Mumbai.
Summary: 1. The assessee, incorporated as a company under section 25 of the Companies Act, aimed to promote biomedical education and research in India. The application for registration u/s 12A was rejected by the DIT (Exemption) on the grounds of premature application and non-compliance with necessary requirements. 2. The assessee contended that immediate charitable activities were not expected upon formation, citing legal precedents. The Tribunal directed the DIT (E) to grant registration if other conditions were met, disagreeing with the rejection of the application. 3. The Tribunal considered the conditions for granting registration u/s 12AA, emphasizing the genuineness of activities and the charitable nature of the institution. The association being formed for charitable purposes under sec 25(1) of the Companies Act, prima facie qualified for registration under section 12A. 4. Legal precedents highlighted that registration u/s 12A is a pre-condition for availing benefits under sections 11 and 12, focusing on the charitable nature of the trust's objects rather than immediate charitable activities. 5. In light of legal decisions and the reasons provided by the DIT (Exemptions), the Tribunal held that the refusal of registration u/s 12A was unjustified. The DIT was directed to grant registration, with a reminder that lack of genuine charitable activities could lead to cancellation of registration. 6. The appeal by the assessee was allowed, and registration under section 12A of the Act was directed to be granted by the DIT (Exemption). Judges: B. R. Mittal (Judicial Member) and Rajendra (Accountant Member) Date: 10th October, 2012
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