Registration under Section 12A Cannot Be Denied to Trade Promotion Body Engaged in General Public Utility: ITAT

Case: Federation of European Business in India v. Commissioner of Income-tax (Exemptions)

Court: ITAT Delhi

ITA No.: 2446 (Delhi) of 2025

Date of Order: 3rd December, 2025

Brief Facts:

• The assessee was a non-profit company registered under section 8 of the Companies Act, 2013.

• It applied for regular registration under section 12A of the Income-tax Act, claiming that its activities fell within the ambit of “advancement of any other object of general public utility” under section 2(15).

• The assessee was engaged in promoting commerce between the European Union business community and Indian public authorities through policy advocacy relating to trade policy, ease of doing business, intellectual property protection and investment protection.

• The Commissioner (Exemptions) rejected the application for registration on the ground that the assessee was working primarily for the benefit of its members and had failed to demonstrate charitable activities for the public at large.

• The provisional registration earlier granted to the assessee was also cancelled without providing an opportunity of being heard.

Observations of the Tribunal:

The Tribunal observed that:

• The expression “advancement of any other object of general public utility” under section 2(15) is of the widest connotation and must be interpreted liberally.

  
  

  It noted that judicial precedents have consistently held that promotion and facilitation of trade and commerce, without a profit motive, constitute charitable activities.

• The Tribunal held that the assessee’s object was to create an overall environment securing the interests and wellbeing of the European Union business community to facilitate ease of doing business in India, which indirectly benefits the economy and public at large.

• It was further observed that there was no finding by the Commissioner that the assessee was engaged in trade, commerce or business for profit or that its receipts exceeded the monetary limits prescribed under the proviso to section 2(15).

  
  

  The Tribunal also noted that cancellation of provisional registration without assigning reasons and without granting an opportunity of hearing was in violation of the principles of natural justice.

Hence, the ITAT held that the activities of the assessee qualified as “advancement of any other object of general public utility” within the meaning of section 2(15) of the Income-tax Act. Accordingly, the rejection of registration under section 12A by the Commissioner (Exemptions) was held to be unjustified and unsustainable in law. The Tribunal directed the Commissioner to grant registration under section 12A and also set aside the cancellation of provisional registration. The appeal of the assessee was allowed.