Six trusts were found to violate the provisions of income tax rules
In large assistance with Tata Trust, the Income Tax Appellate Tribunal (ITAT), Mumbai Bench has allowed trust to voluntarily surrender their registration, with the effect of March 20, 2015.
In 2019, the Department of Income Tax observed that the act of surrender on registration was forced steps after six trusts were found to violate the provisions of income tax rules.
Parallel processes for registration cancellation obtained at under section 12a
Hearing the appeal by trust, the ITAT consisting of President of Justice PP Bhatt and Vice President Pramod Kumar observed that “we are the view that the registration to be canceled which is given to the assessee below section 12a must be considered effective from the date of hearing, The first show-cause notice was concluded and the notification of performances issued by the Commissioner was officially obtained by the assessor in the hearing, namely, March 20, 2015, because, without disposing of the material, commissioner, or replacement, could not start other parallel processes for registration cancellation (Surrender) obtained at under section 12a. “
Current registration cancellation below section 12a
The court further revoked its order in a similar case in the Navajbai Ratan Tata Trust, where it is observed that “registration has been” obtained “by section 12a is in the nature of benefits for assessors, and therefore, all in our view the appraisers who do not want to use “benefits” registration “obtained” below section 12a cannot, directly or indirectly and with action, forced by the revenue authority, to continue the “obtained ‘registration by an assessor, especially when it is related to Registration obtained in the period before insertion section 12a. Current registration cancellation (Surrender) on section 12a must be, therefore, it is considered effective starting March 20, 2015. “
