2014 (1) TMI 924 - AT - Income Tax

Rejection in seeking registration u/s 12AA of the Act as society Held that - Advancement of animal welfare directed towards prevention or suppression of cruelty to animals or prevention or relief of suffering by animals are nothing but charity - The society engaged in such activity falls within the definition of general public utility as in section 2(15) of the Act - Associations promoting kindness and preventing or suppressing cruelty to animals, associations providing veterinary care and treatment, associations concerned with care and re-homing of animals that are abandoned or mistreated or lost, associations doing feline animal control, are extension of charities - This would fall within the object of general public utility - The DIT fell in error in refusing registration under Section 12A of the Act. Advancement of animal welfare directed towards prevention or suppression of cruelty to animals or prevention or relief of suffering by animals is nothing but charity - The society engaged in such activity falls within the definition of general public utility as stated in section 2(15) of the Act - on this reason rejection of application u/s. 12AA cannot be done also the assessee shall furnish correct address and to remain independent by making necessary amendment to the trust deed up the issued remitted back to the DIT(E) to reconsider the application of the assessee Decided in favour of Assessee.

Issues:
- Rejection of society's application for registration u/s. 12AA of the IT Act, 1961.
- Interpretation of "charitable purpose" under section 2(15) of the Act.
- Consideration of animal welfare activities as charitable purposes.
- Rejection of registration due to lack of premises.

Issue 1: Rejection of society's application for registration u/s. 12AA of the IT Act, 1961:
The appeal was against the order of the Director of Income-tax (Exemptions) rejecting the society's application for registration under section 12AA of the IT Act, 1961. The society's main objects included caring for abandoned/retired horses, utilizing funds for animal welfare, providing shelter, feed, and fodder, and training riders. The Director held that the objects were not charitable and that the society did not have its own premises, being part of the Hyderabad Race Club. The society failed to provide specific details and evidence regarding its activities, leading to the rejection of registration.

Issue 2: Interpretation of "charitable purpose" under section 2(15) of the Act:
The Appellate Tribunal analyzed the definition of "charitable purpose" under section 2(15) of the Act. The Tribunal considered the narrow interpretation by the Director and the argument that only charitable activities related to human beings were eligible for registration. However, the Tribunal emphasized that the definition of charitable purpose is inclusive and extends beyond specific items listed in the Act. It highlighted that charities must provide public benefit and fulfill aims for the general public utility. The Tribunal discussed various charitable activities recognized in law, including animal welfare, and concluded that promoting kindness and preventing cruelty to animals falls within the definition of general public utility.

Issue 3: Consideration of animal welfare activities as charitable purposes:
The Tribunal determined that activities directed towards preventing cruelty to animals or relieving their suffering constitute charity and fall under the category of general public utility as defined in section 2(15) of the Act. It stated that associations involved in animal welfare, such as providing veterinary care, re-homing mistreated animals, and controlling animal cruelty, are extensions of charities. The Tribunal found that the rejection of the society's registration based on its animal welfare activities was erroneous, as these activities aligned with charitable purposes.

Issue 4: Rejection of registration due to lack of premises:
Another reason for rejecting the society's registration was its lack of independent premises, relying on the Hyderabad Race Club. The Tribunal directed the society to provide a correct address and ensure independence by amending the trust deed to the satisfaction of the Director. Consequently, the Tribunal remitted the issue back to the Director for reconsideration based on the observations made.

In conclusion, the Appellate Tribunal allowed the appeal for statistical purposes, emphasizing that the rejection of the society's registration under section 12AA of the Act was unfounded due to the charitable nature of its animal welfare activities and the need for reconsideration regarding premises independence.

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