TaxTMI 
TaxTMI 
2026 (2) TMI 942
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....or the assessment year 2023-24. 2. Compendiously, the appellant obtained registration under Section 12AB of the Income Tax Act, 1961 ("Act" for short), for a period of three years; and they then preferred an application in Form 10AB, under the provisions of Section 12A(1)(ac)(iii) of the "Act", which was rejected by the Commissioner of Income Tax (Exemption), for the reason that their own disclosure showed that they had spent their income derived from the Trust for purposes other than those authorised. 3. The appellant moved the ITAT, but which Authority has also now confirmed the order of the Commissioner of Income Tax; consequently, constraining them to approach this Court. 4. The following substantial questions of law have been ....
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....Disclosure of Activities, before the Commissioner, in which, it was admitted that they had extended support to an entity called "Thiruvananthapuram Vikasana Munnettam" (TVM), and had used their resources for the election campaign of candidates promoted by it. He argued that the support given to the "TVM" by his client, was within the ambit of their declared objectives because, their intent was to obtain economic and social development for the Thiruvananthapuram city and to provide improved quality of life for its residents, by being able to have worthy representatives for them in the Corporation Council. He contended that this rhymes and travels fully with the Memorandum of Association of his client; and hence that the impugned order of the....
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....alia, included the "Notes of Activities" carried out by them for the last three years / since inception. It is in response to this, that the appellant filed Annexure D, disclosing, among others, that they had provided "requisite resources for the election campaign, including arranging Promotional materials, Vehicle Announcement services etc". They further declared that their purpose was "to support TVM and spread the message to the residents of Trivandrum to select Councillors who can think apolitical and contribute to the overall development of the Trivandrum city" (sic). 10. Pertinently, it is without contest - as is admitted - that the appellant also disclosed in their balance sheet that they have spent Rs. 21,42,330/-, under the head....
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....social development of the city and for providing improved quality of life for the residents of Thiruvananthapuram. iv) to secure for Thiruvananthapuram its true status as the Capital City. v) to interface with Central and State Governments and other authorities on issues concerning infrastructure development of Thiruvananthapuram. vi) to erect and maintain buildings and other structures or to take on lease building for conducting activities of the society. vii) to purchase, sell, lease, hire, exchange or otherwise acquire or dispose any movable or immovable property in Kerala for all or any of the above objects. ix) to solicit and receive subscriptions, donations, endowments and gifts, movable or....
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....moted candidates in elections and supported their campaigns, employing their resources. The learned ITAT has found this activity to be part of the political process; and we have no doubt that it has understood the position correctly. 17. It is not the manner of interpretation of the word 'political' or 'apolitical' by the appellant which is relevant, but the real nature of their activities. When they limpidly concede that they have promoted candidates in the elections to the Local Self Government Institutions and had financed their campaigns, the only deduction possible is that they had participated in the electoral process, which is essentially a political one. 18. That said, the corollary question is whether the above conceded activ....
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....tives in the Memorandum of Association. We, therefore, answer this, holding that no further show cause notice was necessary, when the entire proceedings were pursued by the competent Authorities based on the declaration of the appellant themselves, since they would have had nothing more to answer, or act upon, than what they had already voluntarily disclosed. 21. Quad Hoc questions (ii) and (iii), it is apposite that we answer them together, because the argument of the appellant is that the violations found against them are not "violations" as specified under Section 12AB (4) of the Act. 22. It is interesting that, explanation "a" to Section 12AB (4) of the Act, stipulates that specified violations will fall within its compass, in a s....