Case Law Details
Kolkata Police Pre-Paid Taxi Booth Society Vs CIT (ITAT Kolkata)
The issue under consideration is whether the CIT(E) is correct in rejecting the Application for grant of registration u/s 12AA for mere non-filing of Income Tax Return?
In the present case, the assessee-society earns income by way of a collection of subscriptions from the operation of pre-paid taxi services at Sealdah and Kolkata railway stations. The objectives of the society are to establish, operate, and manage pre-paid taxi booth and providing the facility to passengers at designated stations. The Commissioner of Income Tax (Exemptions) has denied the request for granting registration to the society by observing that they have not filed IT returns for last 2-3 years irrespective of earning income.
ITAT states that, the CIT(Exemption) herein has nowhere recorded a specific finding as to whether the assessee’s dominant activity of providing prepaid taxi booths to railway passengers prima facie involves any profit making or not. In view of the facts and circumstances involved in the instant list that such an establishment of prepaid taxi booths is collaboration with local taxi operators; and that too at the local police level, indeed brings the sense of security amongst the general public. ITAT find no reason to sustain the Revenue’s foregoing objections. ITAT holds that it is the concerned predominant activity that has to be considered as to whether it was in the nature of trade or commerce regarding general public utility limb u/s 2(15) of the Act. Commencement of charitable activities is not a mandatory condition for claiming 12AA registration. ITAT states that the CIT(Exemption) has declined the assessee’s impugned registration on the ground that it has not filed income tax return for four assessment years (Supra). ITAT thus are of the opinion that the CIT (Exemption) needs to examine the entire issue of assessee’s registration afresh as per law. Accordingly, they accept the assessee’s instant sole grievance for statistical purposes.
FULL TEXT OF THE ITAT JUDGEMENT
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