The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the registration under section 12 of the Income Tax Act, 1961 cannot be denied to International Centre for Research on Women Ltd. (‘ICRW’) merely because it is for the benefit of a restricted group of employees.
ICRW is a non-profit organization with the object of promoting social and economic development with women’s full participation and is incorporated as a limited company under section 25 of the Companies Act, 1956.
Relying on a catena of decisions, Judicial Member Kuldip Singh and Accountant Member O P Kant held that the registration of the assessee trust cannot be rejected merely on the ground that it is for the benefit of a restricted group of employees of the company ‘ICRW’. With a direction to the Assessing Officer to re-consider the claim on the basis of documents and other evidence, the Tribunal held that “However, we find some merit in the argument of the Ld. DR that trust has been engaged in discharging the statutory obligation of the company “ICRW’ of making gratuity payments to their employees. But in this regard the competent authority has not examined the activities actually carried out by the trust, sources of funds, and how the same are distributed to the employees, whether by way of creating the trust, the company is getting some benefit of saving of money, whether any activity of welfare of the employees other than making gratuity payment has been carried out by the trust, etc. The assessee has also not filed any information with regard to its activities before us.”
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