This case involves the denial of registration under section 12AA of the Income Tax Act to the appellant, Pryas Ek Pahel, by the CIT(E), Chandigarh. The case highlights issues related to the non-filing of income tax returns and non-payment of tax which led to the denial of the registration application.
The appellant, Pryas Ek Pahel, a society registered in Gurgaon, applied for 12AA registration, which was denied by the CIT(E), Chandigarh. The denial was based on the non-filing of the income tax return for the fiscal year 2017-18, where the appellant did not declare income against a corpus fund which should have been taxed. The CIT(E) argued that the failure to file the tax return and pay tax disqualified the society from being granted the registration.
The appeal was heard through video conferencing by the ITAT Delhi, which set aside the CIT(E)’s decision. The tribunal argued that while the CIT(E) should assess the objects and genuineness of the society’s activities, it could not impose additional conditions not provided for by the law. The tribunal also noted that there was no limitation period for filing an application under section 12AA, thus the application could not be deemed late.
The tribunal concluded that the CIT(E) had erred in its decision by focusing unduly on the non-payment of tax related to the corpus funds. It directed the CIT(E) to grant the 12AA registration to Pryas Ek Pahel, emphasizing that the society should not be penalized for the delay in applying since there is no prescribed limitation period for such applications.
This case underscores the importance of adhering to tax filing requirements while also highlighting the boundaries of authority that tax officials have in denying applications for benefits such as the 12AA registration. The decision is a reminder of the legal requirements and procedural justice owed to applicants.
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform