Case Law Details
Heart Foundation of India Vs CIT (ITAT Mumbai)
ITAT Mumbai held that cancellation of registration of trust retrospectively from AY 2016-17 under section 12AB(4) of the Income Tax Act is invalid.
Facts- The assesse is a charitable trust set up vide trust deed dated April 21, 1988. The Trust was granted registration under section 12A of the Act vide certificate dated July 21, 1889.
The assessee had been filing the return of income in the status of charitable trust upto the A.Y. 2020-21. The assessee for A.Y. 2021-22 filed a return of income on October 11,2022 in the status of Association of Persons (AOP). The return was filed in the status of AOP for the reason that the assessee had not applied for the registration of the trust under the new provision i.e. section 12AB of the Act due to Covid lockdown and its impact on the medical industry.
The case of the assessee was selected for scrutiny and AO made a reference under the Second Proviso to section 143(3) of the Act to PCIT (Central) Pune alleging that the assessee has made specific violation as per Explanation (e) and (f) to section 12AB(4) of the Act. It was alleged in the said reference that the assessee trust as provided freebies to doctors which are in violation of the Indian Medical Council (Professional Conduct & Ethics) Regulations, 2002. The PCIT did not accept the submissions of the assessee and proceeded to cancel the registration of the trust with effect from AY. 2016-17.
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