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of <h1>Tribunal grants retrospective registration for Tamil society under section 12AA, promoting unity in diversity.</h1> <h3>Karandhai Tamil Sangam Versus Commissioner of Income-tax-II</h3> Karandhai Tamil Sangam Versus Commissioner of Income-tax-II - [2011] 11 ITR 430 Issues:- Registration under section 12AA of the Income-tax Act, 1961 for a society formed in 1911 promoting the interests of Tamilians.- Rejection of application by the Commissioner of Income-tax-II based on various grounds including accounting lapses and promoting regionalism.- Legal analysis of whether promoting Tamil interests is against national integration and if it affects the charitable nature of the society's objectives.- Examination of the charitable activities undertaken by the society, including running educational institutions and an orphanage.- Determination of whether the society is entitled to registration under section 12AA and the directive for retrospective registration.Analysis:The appeal before the Appellate Tribunal ITAT Chennai involved the registration of a society formed in 1911 under section 12AA of the Income-tax Act, 1961. The Commissioner of Income-tax-II rejected the society's application citing various reasons, including the failure to provide audited accounts and detailed accounts of its institutions. Additionally, the Commissioner raised concerns about the society's focus on promoting Tamil interests, alleging it goes against national integration and is not charitable in nature. The Commissioner highlighted accounting defects and objected to the acceptance of donations for student admissions, questioning the charitable nature of these activities.The Tribunal analyzed the objections raised by the Commissioner regarding the society's objectives. It emphasized that the law does not prohibit institutions from working for the upliftment of a particular linguistic group. The Tribunal refuted the Commissioner's view that promoting Tamil interests is against national integration, stating that being Tamilian is not anti-national and falls within the concept of 'Unity in Diversity.' The Tribunal concluded that activities benefiting Tamilians as a group constitute charitable activities, especially in the context of educational and orphanage services provided by the society.Further, the Tribunal examined the charitable nature of the society's activities, highlighting that educational services and running an orphanage are considered charitable. It addressed concerns about donations collected during student admissions, clarifying that voluntary contributions are treated as income of a charitable society. The Tribunal found no evidence of funds being used for non-charitable purposes, supporting the society's eligibility for registration under section 12AA.Ultimately, the Tribunal ruled in favor of the society, directing the Commissioner of Income-tax to grant retrospective registration under section 12AA. The Tribunal acknowledged the society's longstanding educational activities and provided an opportunity for compliance with procedural requirements. The appeal filed by the society was allowed, affirming its entitlement to registration as a charitable institution under the Income-tax Act.
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