The case ITA No. 433/Del/2021 involves Population Services International, a society registered under the Societies Registration Act, challenging the revocation of the approval granted under Section 10(23C)(iv) of the Income-tax Act by the CIT (E), New Delhi. This revocation was based on alleged discrepancies in financial reporting and failure to comply with statutory requirements for maintaining separate books for charitable and commercial activities.
The appellant, Population Services International, established in 1980, focuses on health services, nutrition, and other related fields to address malnutrition problems in India. Previously granted approvals under various sections of the Income Tax Act, including Section 12A and Section 80G, the society faced scrutiny regarding the utilization of foreign contributions and the adherence to conditions set forth under Section 10(23C)(iv).
The main issues addressed during the tribunal were:
In the final judgment, the tribunal, led by Hon’ble President Shri G.S. Pannu and Judicial Member Shri Saktijit Dey, addressed the concerns raised by the appellant regarding the revocation of the approval. The tribunal scrutinized the evidence presented, including audit reports and financial statements, and evaluated the submissions made by both parties.
The decision to revoke the approval was ultimately found to be based on insufficient grounds. The tribunal highlighted that the activities undertaken by the society were in accordance with its charitable objectives and that the discrepancies noted by the CIT (E) were not sufficient to warrant the revocation of the tax exemption.
The tribunal’s decision underscores the importance of accurate financial reporting and compliance with regulatory requirements for charitable organizations. It also sets a precedent on the handling of cases where the line between charitable and commercial activities may appear blurred.
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