INCOME TAX ACT, 1961

Section 12AA

Charitable trust - Registration under section 12AA - Denial on the ground of non-commencement of charitable activity and non-filing of tax return despite having taxable income -

Assessee-society having object to establish, operate and manage pre-paid taxi booths opened or to be opened at various places filed application for registration under section 12AA. CIT(E) declined section 12AA registration to assessee on the ground that sole income of society was by way of collection of subscription from operation of pre-paid taxi services at Sealdah and Kolkata Railway Stations and despite having taxable income in financial years 20123-14, 2014-15, 2015-16 and 2016-17, Society had neither filed IT Return nor has paid due taxes. Held: Commencement of charitable activities is not a mandatory condition for claiming 12AA registration. Establishment of prepaid taxi booths in collaboration with local taxi operators, and that too at the local police level, indeed brought the sense of security amongs general public. CIT(E) had nowhere recorded a specific finding as to whether assessee's dominant activity of providing prepaid taxi booths to railway passengers prima facie involved any profit making or not. Further, CIT(E) had declined registration on the ground that it had not filed income-tax return for four assessment years. Accordingly, matter was remanded to CIT(E) to examine entire issue of assessee's registration afresh as per law.

Relied:Ananda Social and Educational Trust v. CIT Civil appeal No. 5437 and 5438 of 2012, dt. 19-2-2020 : 2020 TaxPub(DT) 1340 (SC) and DIT(E) v. Subarmati Ashram Gaushala Trust Tax Appeal No. 1162 of 2013, dt. 15-1-2014 : 2014 TaxPub(DT) 1964 (Guj-HC).

REFERRED :

FAVOUR : Matter remanded.

A.Y. :

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