2015 (10) TMI 1012 - HC - Income Tax

Registration of appellant Trust u/s 12AA denied - Held that - In view of the provisions of 1922 Act, the matter is required to be remanded to the Tribunal to adjudicate whether the activities of the appellant were covered within the meaning of charitable in nature or not even after the insertion of the proviso to Section 2(15) of the Act w.e.f. 1.4.2009 i.e. in respect of the assessment years 2009-10 onwards. See Improvement Trust through Shri APS Virk s/o Late Shri Kartar Singh Virk, Chairman, Dr. Mela Ram Road, Bathinda, Punjab Versus Commissioner of Income Tax, Aayakar Bhawan, Amritsar 2015 (10) TMI 1061 - PUNJAB AND HARYANA HIGH COURT In view of the above, the order passed by the Tribunal is set aside and the matter is remanded back to the Tribunal for fresh adjudication keeping in view the proviso to Section 2(15) of the Act inserted w.e.f. April 1, 2009 with reference to the provisions of the 1922 Act after affording an opportunity of hearing to the parties in accordance with law.

Summary

Issues:
Delay in refiling the appeal condonation; Cancellation of registration under Section 12AA of the Income Tax Act, 1961; Interpretation of 'charitable' activities under the 1922 Act; Remand to Tribunal for fresh adjudication.

Delay Condonation:
The judgment begins by condoning the delay in refiling the appeal. This procedural aspect is addressed at the outset to ensure the appeal can proceed despite the delay.

Cancellation of Registration under Section 12AA:
The appeal was filed against the order of the Income Tax Appellate Tribunal, which confirmed the cancellation of registration of the appellant-Trust under Section 12AA of the Income Tax Act, 1961. The Tribunal held that the Trust was engaged in business activities and, therefore, its income was taxable. The Trust was initially granted registration under Section 12AA in 2003, but the registration was subsequently cancelled by the Commissioner of Income Tax in 2013. The Tribunal upheld this cancellation, leading to the appeal before the High Court.

Interpretation of 'Charitable' Activities under the 1922 Act:
The appellant argued that the activities of the Trust should be considered 'charitable' under the 1922 Act, even after the insertion of the proviso to Section 2(15) of the Income Tax Act in 2009. The High Court referenced a similar case where the matter was remanded to the Tribunal for fresh adjudication in light of the proviso to Section 2(15) inserted in 2009. The Court emphasized the need for the Tribunal to decide whether the Trust's activities were charitable, considering the relevant legal provisions.

Remand to Tribunal for Fresh Adjudication:
Ultimately, the High Court set aside the Tribunal's order and remanded the matter back to the Tribunal for fresh adjudication. The Tribunal was instructed to consider the proviso to Section 2(15) inserted in 2009 in conjunction with the provisions of the 1922 Act. The Court highlighted the importance of affording both parties an opportunity to present their case and urged the Tribunal to expedite the decision-making process. The judgment concluded by disposing of the appeal, emphasizing that the observations made should not be construed as an opinion on the merits of the case.