2012 (6) TMI 829 - AT - Income Tax

Summary

Issues involved: Appeal against refusal of registration u/s 12AA of the Income-tax Act, 1961.

The appellant, a State Highways Authority, sought registration u/s 12A(a) of the Act, which was denied by the ld. Commissioner of Income-tax. The Commissioner observed that the authority was largely independent of Government funding and engaged in activities with commercial aspects, leading to the rejection of the application.

The appellant contended before the Tribunal that the registration refusal was based on proposed Rules not approved by the Government. They highlighted the U.P. State Highways Rules, 2011, which mandated remittance of collected fees to the State Government, indicating non-profit nature. The Tribunal noted that the issue of commercial activities was not adequately examined by the Commissioner and directed a re-adjudication based on the relevant Rules.

The ld. D.R. argued that the Commissioner's decision was based on available Rules, while the appellant emphasized the approved U.P. State Highways Rules, 2011. The Tribunal found that the Commissioner's assessment relied on proposed Rules, leading to the decision to set aside the order and remand for fresh adjudication considering the approved Rules.

The Tribunal allowed the appeal for statistical purposes, directing the Commissioner to re-examine the registration issue in light of the U.P. State Highways Rules, 2011, after providing the appellant with a hearing opportunity.