INCOME TAX ACT, 1961

Section 12A read with section 12AA

Charitable trust - Registration under section 12A - Rejection of application relying on irrelevant considerations -

Assessee filed application for registration under section 12A read with section 12AA. CIT rejected the said application alleging that the assessee had paid salary partly by cheque and partly in cash, but had not deducted tax at source in case of any of the employees. CIT further alleged that the said application filed by the assessee was a change of mind because for three preceding years before that, the assessee had filed return as a purely business entity. Held: There was no reference in the order of the CIT, whatsoever, to any facts and circumstances, which could be said to be violative of provision of section 12A read with section 12AA. Further, it was of no relevance, for the purposes of registration under section 12A read with section 12AA, whether or not tax was deducted at source from salary of the staff. It was also not relevant that whether salary was paid partly in cash and partly by cheque. Further, there is nothing in law to prevent the assessee from applying for registration under section 12A read with section 12AA at a later stage, if such registration was not sought for by the assessee in earlier years. Hence, the CIT was not justified in rejecting the assessee's application for registration under section 12A read with section 12AA relying on irrelevant considerations.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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