The Pune bench of the Income Tax Appellate Tribunal (ITAT) grants another opportunity to the assessee in order to provide evidence in relation to the registration of trust under Section 12AB of the Income Tax Act, 1961.
Despite service of notice none appeared on behalf of the assessee nor was there placed any application for adjournment; therefore, in the larger interest of justice, the issue was proceeded ex-parte with the able assistance of the Departmental Representative.
The appellant made an application to the respondent under clause (iii) of Section 12(1)(ac) of the Income Tax Act thereby seeking regular/final registration under Section 12AB of the Income Tax Act. The application by the impugned order was rejected by the registering authority Commissioner of Income Tax (Exemption) [CIT(E)] for his failure to arrive at positive satisfaction about the genuineness of activities of the assessee in the absence of evidence.
The purpose of the provisions for registration of trust under Section 12AB of the Income Tax Act and granting of recognition under Section 80G of the Income Tax Act, derives their spirit from the Directive Principles of State Policy enshrined in the Constitution of India.
The Government of India makes every endeavor to provide welfare to one and all in the society at large, and in view thereof, the registration for public charitable trusts are given in order to ensure that through these charitable trusts, benefits flow to the entire society, thus the Directive Principles of State Policy are achieved.
The Two-member bench comprising of S.S. Godara (Judicial member) and G.D. Padmahshali (Accountant member) held that these provisions for the trust registration under Section 12AB of the Income Tax Act and granting of recognition under Section 80G of the Income Tax Act enhance the socio-economic-welfare in society. The Income Tax laws are welfare legislations and not penal in nature.
Therefore, the appellant deserves one more opportunity to make good the defects/shortcomings. The appellant shall ensure necessary compliance in accordance with the law and shall adhere to timeless strictly without seeking any unreasoned adjournment. Thus, the appeal of the assessee was allowed.
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