2023 (1) TMI 491 - HC - Income Tax
Registration u/s 12A - whether such registration allows the Assessee automatic exemption from income tax on all types of income? - HELD THAT:- There was no claim for automatic exemption from income tax on the basis of the registration u/s 12A. Consequently, the Court declines to frame such a question for consideration.
Whether there ought to have been a valid resolution of the Assessee Trust in terms of Rule 17 of the Income Tax Rules, 1962 (Rules) read with Section 11 (2) of the Act? - A perusal of Form No.10 reveals that the requirement of the resolution, referred to in the statement therein, having to be enclosed with the said Form, has not been indicated. In other words, there is nothing in either Section 11(2) of the Act or Rule 17(2) of the Rules that mandates the furnishing of such resolution by the Assessee in order for the statement in Form No.10 to be acted upon by the AO. Consequently, the Revenue cannot insist on a copy of the resolution being furnished. The Court therefore concurs with the view expressed by the ITAT in the impugned order and declines to frame the question in this regard.
Whether the declaration filed by the Assessee regarding correctness of its accounts for the purposes of claiming exemption under Section 11 ought not to have been accepted in view of the accounting irregularities pointed out by the CAG? - HELD THAT:- The Court is unable to agree. The very text of the Finance Act, 2008 and in particular Section 3 thereof which inserts the amended Section 2(15) clearly states that “the following clause shall be substituted with effect from the 1st day of April, 2009.” Clearly, therefore, the amendment is prospective. Consequently, the Court declines to frame this question either.
On the issue whether the Assessee ought to have resorted to the cash system of accounting and not the accrual basis, it has been pointed out on behalf of the Assessee that it is bound by the guidance note of the Ministry of Shipping and Transport, Government of India and the requirement under the Companies Act as regards maintaining its accounts on accrual basis. Consequently, this Court finds no reason to take a view different from what the ITAT has taken in the matter.
Whether absolutely similar activities carried on by the Assessee from 1963 considered as charitable till AY 2008-09 can cease to be charitable from AY 2009-10 onwards? - As pointed out by the Assessee, the change occurred as a result of the prospective amendment to Section 2(15) validity of which obviously cannot be questioned by the Revenue. Consequently, this question also does not arise for consideration.