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Issues involved: Rejection of registration u/s 12A of the Act by DIT (E) Hyderabad based on the nature of activities of the trust and application of proviso to sec. 2(15).
The judgment by the Appellate Tribunal ITAT Hyderabad involved the appeal filed by the assessee against the order of the DIT (E) rejecting the registration u/s 12A of the Act. The DIT (E) concluded that the trust's activities were not charitable as they aimed at improving knowledge and competence of members rather than benefiting the public at large. Additionally, the DIT (E) found the trust's activities to be in the commercial line due to charging a fee, invoking the proviso to sec. 2(15). The assessee contended that the DIT (E) misconceived the facts and misapplied the proviso to sec. 2(15). The assessee argued that the trust's objective was to improve technical knowledge, not for commercial purposes. It was further argued that the DIT (E) did not properly examine the documents submitted, leading to the rejection of the registration u/s 12A. The assessee requested a re-examination by the DIT (E) considering all the documents. The Appellate Tribunal noted that the trust was registered under the Societies Registration Act, maintained regular audited accounts, and claimed its activities were for charitable purposes. The Tribunal found that the DIT (E) did not conduct a proper inquiry to satisfy himself about the trust's objectives and genuineness. Therefore, the Tribunal set aside the DIT (E)'s order and directed a reexamination of the issue, considering all documents and making necessary inquiries. The assessee was granted a reasonable opportunity to be heard during the reexamination. As a result, the appeal of the assessee was treated as allowed for statistical purposes, with the order pronounced on 24-8-2012.
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