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Society registered outside India not eligible for Income Tax Exemption: ITAT
December, 15th 2020

The Income Tax Appellate Tribunal (ITAT), Calcutta Bench held that the society registered outside India is not eligible for Income Tax Exemption.

The assessee, M/s. Evangelical Missionary Society Mission House is a missionary society that conducted its operation in the district of Mayurbhanj. It has filed applications under section 12AA and 80G of the Act for grant of registration, which was rejected.

The assessee society is registered in Australia and not in India. In the amended constitution, it is stated that the work of society is to run the leprosy home and leprosy rehabilitation farm. For the functioning of the society, funds came from Australia.

The assessee society has been denying registration under section 12A of the Act by observing that applicant society has been established and registered abroad under the religious educational and charitable institution Act of 1861 in Australia and has not been registered in India.


The CIT(E)https://www.taxscan.in/tag/cite/ observed that the applicant society is controlled by head office located abroad and thus, having regard to the provisions of section 11(1) read with section 12A(a) of the Income-tax Act, 1961 read with Rule 17A of the income tax Rules, 1962, the society is not eligible for the desired certificate of registration under section 12A(a) of the Act.

It was further observed that since the applicant society is governed not in Indian Regulation and is subject to regulations under that of foreign Act in Australia, therefore, it is not permissible to grant necessary certificate sought under section 12A(a) of the Act.

The counsel for the assessee society, J.M.Patnaik submitted that though the assessee trust is registered in Australia but the area of operation is in the Mayurbhanj district of Odisha and also nearby districts. He submitted that the assessee society is created for rehabilitation of the persons affected by leprosy and the downtrodden for charitable and holistic purposes. He submitted that the CIT(E) be directed to grant registration under section 12A(a) of the Act.


The Coram consisting of Laxmi Prasad Sahu and Chandra Mohan Garg while upholding the orders of the CIT(E) observed that the assessee failed to show any change in the objects of the society, any change in the source of the establishment of the society and also could not controvert that the activities of the society are still being controlled by the head office located at abroad in Australia.

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