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2014 (12) TMI 518 - AT - Income TaxRejection of application for registration u/s 12AA – Whether the assessees are eligible for registration u/s 12A of the I.T. Act in view of insertion of proviso to section 2 (15) w.e.f. 1.4.2009 - Held that:- As per situs of the AO is situated within the territorial jurisdiction of Hon’ble Allahabad High Court, hence decision of the jurisdictional High Court is binding upon it - the activities of the assessee as charitable in nature - for the applicability of proviso to section 2 (15) the activities of the trust should be carried out on commercial lines with intention to make profit - Where the trust is carrying out its activities on non-commercial lines with no motive to earn profits, for fulfillment of its aims and objectives, which are charitable in nature and in the process earn some profits, the same would not be hit by proviso to section 2 (15) - The aims and objects of the assessee-trust are charitable in nature - Mere selling some product at a profit will not ipso facto hit assessee by applying proviso to section 2(15) and deny exemption available u/s 11 - The intention of the trustees and the manner in which the activities of the charitable trust institution are undertaken are highly relevant to decide the issue of applicability of proviso to Section 2 (15). The CIT was not justified in rejecting the application of the assesee for registration u/s 12AA of the Act in the case of Khurja Development Authority even after the matter was set aside by the Tribunal with its finding in favour of the assessee – thus, the CIT is directed to grant the registration w.e.f. the requested date as per the provisions of the law in the case of Khurja Development Authority - So far as the appellant Bulandshahr – Khurja Development Authority is concerned, while setting aside the order, the CIT is directed to restore the registration w.e.f. 1.4.2008 – Decided in favour of assessee.
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