2018 (10) TMI 438 - HC - Income Tax

Application for approval u/s 12AA denied - proof of charitable activities - CIT (E) held that if the objects of the applicant are for the benefit of a limited group of person then it is not a charitable organization. Held that - Upon perusal of the objects incorporated in the order it cannot be said that any error has been committed by the learned I.T.A.T. in allowing the appeal filed by the respondent/assessee because it is evident from the objects that few objects are meant for the benefit of the members and their establishment but at the same time the benefits also extends to other associations, women, children, old persons, education and social health and other objects in the interests of public at large.

Summary

Issues:
Challenge to order under Section 260-A of the Income Tax Act regarding registration under Section 12AA.

Analysis:
The appellant, the Income Tax Department, challenged the order of the Income Tax Appellate Tribunal regarding the registration of the respondent/assessee under Section 12AA of the Income Tax Act. The respondent had applied for approval under Section 12AA, but the Commissioner observed that the activities of the society were not charitable as they primarily benefited a limited group of persons, i.e., members and their business establishments. The ITAT, however, allowed the appeal, stating that while some benefits were for members and their establishments, others extended to the public at large, such as associations, women, children, and the elderly. The ITAT directed the registration under Section 12AA and Section 80G (5) (6) of the Act.

The appellant's counsel argued that the ITAT's decision was not in accordance with the law as it was passed without proper consideration. The main question was whether the ITAT was correct in allowing the registration under Section 12AA. The High Court examined the aims and objects of the society as per the order of the Commissioner and found that while some benefits were for members and their establishments, others extended to various groups and the public at large. The Court concluded that there was no error in the ITAT's decision based on the objects listed and that no substantial question of law arose for consideration.

Therefore, the High Court dismissed the appeal, upholding the ITAT's decision to grant registration under Section 12AA and Section 80G (5) (6) of the Income Tax Act.