BOMMASANDRA INDUSTRIES ASSOCIATION ,BANGALORE vs. INCOME TAX OFFICER, EXEMPTIONS WARD-1, BANGALORE

The brief facts of the case shows that Assessee is registered u/s. 12AA of the Act as per certificate dated 12.11.2013 issued by the Director of Income Tax (Exemptions), Bengaluru and based on this it was claiming exemption u/s. 11 and 12 of the Act. Due to the change in the procedure of registration of the trust, the Assessee was required to make an application within 3 months from 01.06.2020. Further, the deadline was extended upto 30.06.2024. However, the Assessee could file such application only on 28.03.2021 based on which a

The Appeal of the Assessee is late by 293 days. The Assessee filed an application for condonation of delay stating the reason that the Assessee was under the impression that the Assessee is required to pay only the tax in absence of registration u/s. 12AB of the Act and thus it was under an inadvertent belief that same was not required to be challenged. Later on, the provisions of section 115TD came to the notice of the Assessee wherein it found that the Assessee is also required to pay exit tax and on consideration of the views of an expert, the Assessee challenged the same. This has caused a delay. The Affidavit and condonation petition states that the delay is for sufficient cause. The Ld. Authorized Representative also reiterated the same facts.

The Ld. Departmental Representative submitted that the delay is not for sufficient case and therefore it cannot be condoned.

We have carefully considered the rival contentions and find that the delay in filing of the Appeal is by 293 days which was for the reason that Assessee was under a belief earlier that the rejection of registration u/s. 12AB would result into payment of tax of excess on income over expenditure. The Assessee was not aware about the exit tax payable u/s. 115TD of the Income Tax Act. Therefore, there is sufficient cause for delay in filing of the Appeal and we condone the delay of 293 days and admit the Appeal of the Assessee.

As before the Ld. CIT(Exemptions), the Assessee filed an application for registration on 30.06.2024. In the application, the main object of the Association was to promote the interest of the members of the association

On careful perusal of the provisions of section 12AB of the Act, it is mandatory that if the registration is required to be refused, an opportunity of hearing needs to be given to the Assessee stating the reason why the Assessee is not entitled to registration.

In fact, in this case we find that Assessee is carrying on an object of general public utilityand therefore it falls u/s. 2(15) of the Income Tax Act carrying on charitable purposes. Thus, the Assessee deserves registration. Further, the objects of the Assessee are also for the benefit general public such as members of the association as well as the general public utilizing the facilities of the association which should not be very large also. The industrial associations are like chamber of commerce and are carrying on the activities of the object of general public utility and deserves registration. As per the paper book filed before us, it is apparent that income and expenditure incurred by the Assessee are with respect to general public utility. At page no. 89-99 of the paper book submitted before us also speaks about the various activities carried out by the Assessee. The formation of the industries association is for the special purpose of maintenance and safeguarding the interest of people setting up industries in that area and also on the larger issues of trade and industry. Thus, it cannot be stated that Assessee is not carrying on any charitable activities.

In view of the above facts, we restore the Appeal back to file of the Ld. CIT (Exemptions) with a direction to the Assessee to demonstrate the charitable purpose of the Assessee and the Ld. CIT(Exemptions) is also directed to examine the same and then decide the issue on the merits of the case as per

In the result, Appeal filed by the Assessee is allowed for statistical purposes.