The case ITA No. 964/DEL/2020 pertains to an appeal by the Distt. Red Cross Society, Faridabad against the decision of the Income Tax Officer (Exemption), Faridabad, for the assessment year 2015-16. The society contests the denial of exemptions under Sections 11 and 12 of the Income Tax Act, which are pivotal for charitable organizations.
The society’s challenge arises from two separate orders dated December 23, 2019, by the Commissioner of Income-tax (Appeals)-Faridabad for the 2014-15 and 2015-16 fiscal years. These orders address the disallowance of exemption claims under Sections 11 and 12 due to alleged procedural deficiencies and lack of evidence regarding the continuity of the society’s objectives and activities as required for exemption eligibility.
The tribunal, led by O.P. Kant and Suchitra Kamble, heard the case through video conferencing due to common legal grounds shared with a related appeal for the 2010-11 assessment year. The primary legal contention involved the applicability of the first and second provisos to Section 12A(2) of the Act, concerning the retrospective application of registration for tax exemptions.
The tribunal found that the society failed to substantiate the similarity of its objectives and activities across the relevant assessment years to qualify for the exemptions retrospectively. Consequently, the appeals were dismissed on these grounds, underscoring the importance of maintaining detailed and consistent records to support exemption claims. The decision, while upholding the lower authority’s findings, emphasizes the critical nature of compliance and documentation in obtaining fiscal benefits for charitable entities.
The outcome not only affects the financial standing of the Distt. Red Cross Society but also sets a precedent regarding the strict interpretation of exemption provisions under the Income Tax Act. It highlights the challenges faced by non-profits in navigating tax laws and the importance of precise adherence to statutory requirements for maintaining exemption status.
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