The Income Tax Appellate Tribunal (ITAT), Chandigarh grants registration to society under Section 12AA of the Income Tax Act, 1961 as Primary object is advancement of general public utility.
The appeal is preferred by the assessee, The District Bar Association against order passed by the Commissioner of Income Tax wherein, the assessee’s application for Registration u/s 12AA of the Income Tax Act, 1961 has been rejected. The society provides legal assistance to the public and to promote legal aid for helping those who were unable to pay for such legal aid either wholly or partly.
On the assessee society filing the application for Registration u/s 12A of the Act before the CIT(E), observed that the provisions of the Act required that not only the objects of the Society required examination but even the genuineness of activities was to be inquired into at the time of grant of registration. Accordingly, the CIT(E) required the assessee to file comprehensive details along with supporting evidences in order to take a view on the assessee’s application.
The CIT(E) has rejected the application for registration by observing that the objects of the society were aimed at benefitting only the members of the assessee society and not the general public. The Ld. CIT(E) has also observed that the genuineness of the activities could not be verified as no expenditure had been incurred so far by the assessee society. The CIT(E) proceeded to reject the assessee’s application for registration and the assessee has approached the Tribunal challenging the rejection of its application
The Bench consisting of Sudhanshu Srivastava, Judicial Member and Vikram Singh Yadav, Accountant Member observed that “the CIT(E) has misdirected himself in reaching the conclusion that the activities of the assessee society were not for the purpose of general public but were only directed and benefitting only the members of the assessee society. We have also perused the objects and it is clear that the primary objects are aimed at the advancement of the object of general public utility within the meaning of section 2(15) of the Act and as such, the assessee society would be entitled to registration u/s 12AA of the Act.”
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