Engaging in activity of “object of general public utility”, is entitled to registration under Section 12A of the IT Act

The Madras High Court has ruled that an entity engaged in activities for the "object of general public utility" is entitled to registration under Section 12A of the Income Tax Act. The court overturned the Commissioner of Income Tax's rejection of an application, agreeing with the Income Tax Appellate Tribunal that the assessee met all requirements for charitable status. This decision follows precedent set by the Gujarat High Court.

IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 03.02.2021
CORAM:

THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE T.V.THAMILSELVI

T.C.A.No.799 of 2010

The Commissioner of Income Tax,
Madurai. ... Appellant

Vs.

Tuticorin Port Trust,
Harbour Estate, Tuticorin. ... Respondent

Appeal preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal, Madras,Bench "B" Chennai, dated 30.10.2009 in I.T.A.No.238/Mds/2008.

For Appellant : Mr.J.Narayanasamy, Senior Standing Counsel
For Respondent : Mr.Devanathan

JUDGMENT

(Judgment was delivered by M.DURAISWAMY, J.)

Challenging the order passed in I.T.A.No.238/Mds/2008 on the file of the Income Tax Appellate Tribunal, Madras, Bench "B" Chennai,the Department has filed the above appeal.

2.It is the case of the assessee that they filed an application for registration under Section 12AA of the Income Tax Act, 1961 on
02.04.2007 claiming it as a Charitable Institution on the ground that the object and service rendered by the assessee are in the nature of general public utility. The Commissioner of Income Tax rejected the applicationon 22.10.2007 on the ground that the assessee is not involved in any charitable activity to qualify for registration under Section 12AA of the Income Tax. Aggrieved over the same, the assessee preferred an appeal before the Income Tax Appellate Tribunal and the Tribunal held that all the requisite conditions are satisfied and directed the Commissioner togrant registration under Section 12AA to the assessee following thedecision of the Gujarat High Court and allowed the assessee's appeal.Aggrieved over the order passed by the Tribunal, the Department has filed the above appeal.

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