2008 (11) TMI 51 - HC - Income Tax

Society - registration u/s 12A - held that the society s motive of promotion of trade and commerce and industry between India and Japan would undoubtedly also benefit the Indian public at large tribunal was justified in directing the revenue to accord registration to the assessee society - question of exemption under Section 11 and 12 is to be dealt with separately by the Assessing Officer at the time of assessment for each year - No substantial question of law arises - appeal is dismissed

Summary

Issues Involved:
1. Registration under Section 12A of the Income Tax Act, 1961 for a society and the charitable nature of its objects.

Detailed Analysis:

Issue 1: Registration under Section 12A of the Income Tax Act:
The appeal under Section 260-A of the Income Tax Act challenged the order refusing registration to the society under Section 12A. The society, registered under the Societies Registration Act, aimed to promote trade, industry, and commerce between India and Japan without profit. The Memorandum of Association strictly prohibited profit distribution to members and ensured all income was utilized for the society's objectives. The Director of Income Tax (Exemptions) initially refused registration, deeming some objects non-charitable. The Tribunal, however, found the main objects charitable and ancillary objects linked to them. Notably, educational, environmental, and trade promotion activities were considered charitable. The Tribunal disagreed with the Director's view that the society's activities only benefited Japanese entities, asserting benefits to the Indian public from trade promotion.

Issue 2: Charitable Nature of Objects:
The Tribunal emphasized that the society's dissolution would not benefit members individually, aligning with the Societies Registration Act. Referring to legal precedents, including the Supreme Court's observations on public utility, the Tribunal concluded that benefiting a section of the public sufficed for charitable purposes. The Tribunal highlighted the benefits to the Indian public from the society's activities, supporting its charitable nature. The judgment clarified that while the society's charity registration was in India, the actual benefit to the Indian public would be a factual consideration during assessments. The Tribunal upheld the Tribunal's decision to grant registration, subject to compliance with tax exemption conditions.

In conclusion, the High Court upheld the Tribunal's decision, finding no substantial legal questions for consideration. The judgment dismissed the appeal, affirming the registration granted to the society under Section 12A of the Income Tax Act, 1961.