No bar for Registration of Society merely on ground of receiving Fund from Foreign Entity: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT) Hyderabad held that there is no bar for registration of a society even though it receives fund from foreign entity. The Bench consisted of K. Narsimha Chary, Judicial Member and Bhagirath Mal Biyani, Accountant Member.

The judgment was passed ex parte taking into consideration the absence of representation from the side of the assessee . Relevant material documents and the contentions of the department was taken into consideration in the judgment.

The assessee ( Share India) is a society and filed an application for registration. The assessee submitted its contentions before the Commissioner of Income Tax and it was rejected by the authority and aggrieved by the said order the appellants have filed an appeal before the ITAT.

departmentThedepartment points out that  (i) the assessee receives considerable  funds from a USA based entity called “Share USA”; (ii) the assessee’s office is  situated in the premise of a Medical College located which is run by “Share Medical Care”, but the assessee has not produced any document to demonstrate that the said Medical College has granted a permission to the assessee for utilization of premise; (iii) that the office bearer of the assessee, is receiving salary from “Share Medical Care” and therefore genuiness of the activity is in doubt (iv) the assessee has received grants from “Share USA”, “Centre for disease Control USA” and “Other entities” in terms of agreements entered with them which shows that the assessee is engaged in execution of work-contract. The department contends that these points cast reasonable doubt on the activities of the society hence the registration should not be granted.

Whereas the ITAT opined that even though  theassessee receives grant from foreign country that itself cannot be considered a factor for not granting registration and that the office bearer even though a US citizen has taken necessary steps to clear the registration procedure.

The department was represented by Rajendra Kumar.

To Read the full text of the Order CLICK HERE

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