Recently Chennal Income Tax Tribunal has given a judgement reversing the Income Tax Dept.’s order of cancelling an NGO’s (SAE India) section 12A registration because it has crossed the threshold limit of income (currently Rs 25 lakhs) under S. 2(15).
As many of you would know that under S.2(15) of Income Tax, an NGO whose objects falls under ‘the public utility clause’ income is currently limited to Rs 25 lakhs. Several Inocme Tax officers interpret this as that S.12A should be cancelled once this limit is crossed. This as per the judgement is a wrong interpretation.
The Honourable ITAT observed that assessee’s objects and activities (to serve as a forum where Engineers, Scientists, Technologists and Innovators in mobility engineering field can exchange ideas and learn from each other experience) are genuine and registration cannot be cancelled merely because receipts are exceeding the threshold limit.
It further opined that the IT Officer in case the limit u/s 2(15) exceeds the threshold amount than s/he has a right to levy tax in respect of these receipts but not to cancel the 12A Registration, which can be done only if the activities are not for general public utility.
We have provided the details of the above case, it may be possible that a number. of NGOs may be facing similar situation they can rely on this case to get the necessary benefit.
Citation :SAE India v/s DIT(E) (ITAT Chennai), I.T.A. No.386/Mds/2012, 17th October, 2014
Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: firstname.lastname@example.org; website: http://www.srr-foundation.org