ENVIRONMENTAL MEDICAL ASSOCIATION,MUMBAI vs. DIRECTOR OF INCOME TAX (EXEMPTION), MUMBAI

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ITA 1095/MUM/2018Status: DisposedITAT Mumbai28 August 2020AY 2016-1710 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the rejection of the registration application was based on procedural grounds rather than the substantive requirements of assessing the trust's objects and genuineness. The circumstances surrounding the death of the key person were considered as a mitigating factor for the non-compliance.

What were the facts?

The assessee's application for registration under section 12A was rejected by the CIT(E) due to non-attendance and failure to furnish information. The rejection occurred after the key person managing the trust's affairs passed away, leading to a period of disarray and difficulty in compliance for the new trustees.

What were the issues?

Whether the rejection of registration under Section 12A/12AA solely on procedural grounds like non-attendance is justified, especially when there are extenuating circumstances. The scope of inquiry by the DIT(E) for registration under Section 12AA.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Hearing: 17/06/2020

O R D E R

PER RAJESH KUMAR- AM:

1.

The sole issue raised by the assessee in the various grounds of appeal

is against the order of CIT(E) rejecting the application of registration filed by the assessee under section 12A of the Act in form No. 10A dated 29.12.2015 on the ground of non . Environmental Medical Association, Mumbai. attendance and non furnishing of information/details. The assessee raised the following grounds of appeal

1. On the facts and in the circumstances of the case and in law, the CIT/DI (E) Mumbai erred in law in rejecting registration u/s 12AA rws 12A of the Income Tax Act, 1961.

2. On the facts and in the circumstances of the case and in law, the Id. CIT/DI (E), has erred in rejecting an application for Registration u/s 12AA of the Act, on the ground of non attendance and non-supply of documentary details called for and not on ground of objects of the objects of the Appellant trust being non charitable or Its activities being non genuine being pre-requisite for the rejection of the registration u/s. 12AA of the Act.

3. The Id. DIT(E) has erred in law that under the provisions of sec. 12AA(2) of the Income Tax Act scope of the enquiry is limited to the extent of verification of objects of the trust vis-a-vis genuineness of charitable activities. In this context apprehension expressed by DIT(E) is based on surmises, conjectures and doubts.

4. The appellant craves that order u/s 12AA r.w.s 12A passed by the DIT(E) be quashed and DIT(E) may be directed to grant registration as conditions laid down are fully complied with by the appellant.

5. The appellant craves leave to add,

2.

The facts in brief are that the trust was incorporated by an ardent nationalist and dedicated environmentalist, Late Dr. K. C. Mohanty. He was the key person and head of the Trust and was handling . Environmental Medical Association, Mumbai. the day-to-day affairs of the Trust, since its inception. The affairs of the Trust, including accounting and taxation, were handled by him, while other trustees were actively engaged in field activities like raising donations and organizing seminars etc to achieve the objects of the Trust. That because of his old age and suffering from the heart ailments he used to be hospitalized very often and hence, could not look after the affairs of the Trust the way it were required to be. Dr KC Mohanty ultimately passed away after a prolonged illness, due to cardiac arrest on 1st June, 2017, with the result the affairs of the Trust were not attended properly for quite sometime. After his untimely demise, the affairs of the Trust went chaotic vis-à-vis the taxation matters since other trustees were not at all aware of the taxation issues of the Trust. New committee of trustees was formed on 20th August, 2017, for managing the affairs of the Trust. Thereafter, the new team great difficulty connected and perused the matter regarding affairs of the Trust with Chartered Accountant Mr Sanjiv Jhaveri, and it took considerable time in understanding the present affairs of the Trust. That the Committee after being . Environmental Medical Association, Mumbai. appraised regarding the affairs of the Trust, from the month of December, 2017 made several compliances like filing of Report of Changes with the

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