M/s Sri Visa Vadnagar Vanik Samaj, Hyderabad V. DIT(Exemptions), Hyderabad, Hyderabad

ITA 1699/HYD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2449 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 05-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: S RAMA RAO
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1699/HYD/2014 M/S. SRI VISA VADNAGAR VANIK SAMAJ, HYDERABAD [PAN: AAATV3946J] VS DIRECTOR OF INCOME TAX (EXEMPTIONS), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI P. SOMA SEKHAR REDDY, DR DATE OF HEARING : 07-02-2018 DATE OF PRONOUNCEMENT : 28-02-2018 O R D E R PER B. RAMAKOTAIAH, A.M. : THE PRESENT APPEAL IS BY ASSESSEE AGAINST THE ORDER O F THE DIRECTOR OF INCOME TAX (EXEMPTIONS), DATED 28-08-2014 NOT GRANTING THE REGISTRATION U/S. 12A OF THE INCOME TAX A CT [ACT]. 2. THE APPEAL WAS DISMISSED ON 18-04-2016 FOR WANT OF PROSECUTION BY ASSESSEE AND WAS RECALLED BY THE OR DER IN M.A. NO. 41/HYD/2016, DT. 05-08-2016. I.T.A.NO. 1699/HYD/2014 :- 2 -: 3. BRIEFLY STATED, THE INSTITUTION, SRI VISA VADNAGAR VANIK SAMAJ, HAS EARLIER STATED TO HAVE FILED AN APPL ICATION ON 07-10-1988, SEEKING REGISTRATION U/S.12A OF THE INCOME TAX ACT, 1961 [ACT]. IT SEEMS THE SAID APPLICATION HAS NOT B EEN ACCEPTED/REJECTED BY THE DEPARTMENT. FOR THE A.Y.2003-0 4 THE AO HAS REJECTED THE CLAIM OF ASSESSEE FOR EXEMPTION U /S.11(2) OF THE ACT AND HAS ADDED AN ENTIRE AMOUNT OF RS. 2,53,1 46/- TO THE INCOME OF ASSESSEE. ON APPEAL FILED BY ASSESSEE AGAINST THE SAID ADDITION, THE CIT(A) HAS DISMISSED SUCH APPEAL ON THE GROUND THAT ASSESSEE WAS NOT REGISTERED WITH REGISTRAR O F SOCIETIES BEFORE 2004 AND FURTHER ASSESSEE COULD NOT P RODUCE ANY EVIDENCE BEFORE THE AO REGARDING FILING OF APPLI CATION IN FORM NO. 10A IN THE YEAR 1988. ON APPEAL FILED BY ASSESSEE AGAINST THE SAID ORDER OF CIT(A) BEFORE THE ITAT, THE CO- ORDINATE BENCH OF ITAT IN ITA NO. 767/HYD/2010 DT. 28 -06- 2010, HOWEVER, HAS REMITTED THE MATTER TO THE FILE OF THE DIT(E) FOR FRESH CONSIDERATION WITH THE FOLLOWING OBSERVATIO N MADE IN PARA 3 & 4 OF THE ORDER BY STATING AS UNDER: 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LEA RNED COUNSEL FOR ASSESSEE HAS FILED A COPY OF THE ORDER OF THE TRIBU NAL IN ITA NO.1232/HYD/05 DATED 7-9-2007 WHEREIN THE BENCH OF THIS TRIBUNAL, ON SIMILAR AND IDENTICAL ISSUE, REMITTED THE MATTER BACK TO THE FILE OF THE DIT(E) FOR FRESH CONSIDERATION. UNDER THE CIRCU MSTANCES, WE ARE REMITTING THIS MATTER ALSO TO THE FILE OF THE DIT(E ) WITH THE DIRECTION TO CONSIDER THE ISSUE AFRESH IN ACCORDANCE WITH LAW AF TER PROVIDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSE.' I.T.A.NO. 1699/HYD/2014 :- 3 -: 3.1. FOLLOWING THE SAID ORDER OF THE ITAT, PROCEEDIN GS WERE INITIATED AFRESH FOR DECIDING THE MATTER. HOWEVER, AS ASSESSEE, DURING SUCH PROCEEDINGS, COULD NOT MAKE THE DESIRED COMPLIANCE, VIDE ORDER PASSED BY THE DIT(E) IN F.NO . DIT(E)/HYD/SVVVS/12A/12-13 DATED 31-01-2013 REFUSED REGISTRATION U/S.12A OF THE ACT, WHILE STATING THAT THE OBJECTS AND ACTIVITIES OF THE ABOVE ASSESSEE COULD NOT BE VERIF IED, AND UNDER THAT CIRCUMSTANCE, IT WAS NOT POSSIBLE TO GRANT REGISTRATION U/S. 12A. 3.2. AGGRIEVED BY THE SAID ORDER OF THE DIT(E), ASSE SSEE HAS FILED FURTHER APPEAL. ON SUCH APPEAL, THE CO-ORDI NATE BENCH OF ITAT VIDE ITS ORDER IN ITA NO.476/HYD/2013 DT.16- 07-2013 HAVE REMITTED THE ENTIRE MATTER TO THE FILE OF THE DIT(E) DIRECTING TO GIVE ONE MORE OPPORTUNITY TO ASSESSEE TO PR ESENT ITS CASE. THE OBSERVATIONS MADE BY CO-ORDINATE BENCH O F ITAT AT PARA 5 OF THE SAID ORDER ARE AS UNDER: '5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE HAVE GONE THROUGH PARA 3 OF THE DIT(E) O RDER. IN OUR OPINION, IT IS APPROPRIATE TO GIVE ONE MORE OPPORTU NITY TO THE ASSESSEE TO PUT FORTH ITS CASE. ACCORDINGLY, THE ENTIRE ISSU E IS REMITTED BACK TO THE FILE OF THE DIT(E) TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE BEFORE HIM. 4. IN THE CONSEQUENTIAL PROCEEDINGS, THE DIT(E) CONSIDERED THE ISSUE AND DID NOT GRANT REGISTRATION MAIN LY ON THE REASON THAT (A) THE ORIGINAL APPLICATION IN 1988 COULD HAVE BEEN DISPOSED-OFF; (B) THE TRUST IS MEANT FOR ACHIEV ING OVERALL PROSPERITY OF THE MEMBERS OF SAMAJ; (C) THE TRUST IS F OR BOTH CHARITABLE AND RELIGIOUS PURPOSES AND; (D) THE PROVI SIONS OF I.T.A.NO. 1699/HYD/2014 :- 4 -: REGISTRATION AND CASE LAW SUPPORT EITHER THE SAME SHOULD BE CHARITABLE OR RELIGIOUS TRUST, THE TRUST BEING BOTH, IS NOT ELIGIBLE FOR REGISTRATION. 5. DURING THE PROCEEDINGS, THE LD. COUNSEL WAS ASKED TO FURNISH THE COPIES OF ACCOUNTS TO EXAMINE WHETHER AN Y CHARITABLE ACTIVITY FOR GENERAL PUBLIC WAS EXTENDED BY THE TRUST. 6. ASSESSEE FILED THE ACCOUNTS AS FILED BEFORE THE DEPARTMENT FROM AYS. 2008-09 TO 2013-14 IN PAPER BOOK 1986-1991 AND NAMES OF PERSONS RECEIVING THE EDUCATIO NAL AND MEDICAL AID. 7. IT WAS THE SUBMISSION OF LD. COUNSEL THAT THE TRUS T IS HAVING BOTH CHARITABLE AND RELIGIOUS PROJECTS AND I S FOR GENERAL PUBLIC. RELYING ON THE ORDERS OF THE ITAT IN CO-ORDINATE BENCH DECISION, IT WAS SUBMITTED THAT THE TRUST IS ELIGIB LE FOR REGISTRATION. LD DR HOWEVER RELIED ON ORDER OF CIT(E) . 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE PAPERS AND CASE LAW PLACED ON RECORD. BE FORE CONSIDERING WHETHER ASSESSEE IS ELIGIBLE FOR REGISTRA TION U/S. 12A, IT IS TO BE NOTED THAT THE PROVISIONS OF SECTION 11 (1)(A) OF THE INCOME TAX ACT, 1961, REQUIRES THAT TO BE A PUBLIC CHARITABLE TRUST OR RELIGIOUS TRUST, THE TRUST SHOULD HAV E BEEN CREATED EITHER WHOLLY FOR CHARITABLE OR RELIGIOUS PUR POSES. SECTION 11(1)(B) MAKES AN EXCEPTION FOR MIXED TRUST WHI CH ARE FOR PARTLY RELIGIOUS AND PARTLY FOR OTHER PURPOSES, I F THEY WERE I.T.A.NO. 1699/HYD/2014 :- 5 -: CREATED BEFORE THE COMMENCEMENT OF THE INCOME TAX ACT, 1961. IN THE IMPUGNED CASE, SAMAJ WAS CREATED BY A DEED WH ICH STATED THAT SAMAJ WAS ESTABLISHED ON SUNDAY DT. 11-02-196 8. THUS, THERE IS NO DISPUTE THAT THE TRUST WAS CREATED AFTER THE COMMENCEMENT OF THE ACT, 1961 AND THEREFORE, SHOULD HAV E BEEN CREATED EITHER FOR RELIGIOUS PURPOSES OR FOR CH ARITABLE PURPOSES. EVEN THOUGH REGISTRATIONS ARE BEING GRANTED FOR MIXED TRUST, CONSIDERING THE OBJECTIVES WHICH ARE MOSTL Y IN CHARITABLE IN NATURE FOR THE GENERAL PUBLIC, THE AIMS AND OBJECTS OF SRI VISA VADNAGAR VANIK SAMAJ IS NOT FOR G ENERAL PUBLIC. AS CAN BE SEEN FROM THE AIMS AND OBJECTS IN PARA 5 OF THE CONSTITUTION OF THE TRUST ORIGINALLY CONSTITUTED IT W AS STATED THAT THE PURPOSE OF ESTABLISHING THE SAMAJ IS TO ACHIEV E ALROUND WELFARE AND UNITY AMONG SHRI VISA VAD NAGER SAMAJ FAMILIES RESIDING IN HYDERABAD . I. THE FAMILY DEITY OF THE SAMAJ THE HATKESHWER MAHA DEV TEMPLE WHICH IS EXISTING AT THE OLD SAHUKARI KARWAN ; THE SAMAJ WILL MANAGE THE AFFAIRS OF THE TEMPLE SO THAT THE WORSHIP/POOJA ETCETERA IN ALL RESPECTS CONTINUES FO REVER . II. TO DO ALL ACTS IN ORDER TO ACHIEVE OVERALL PROSPERI TY OF THE STRIVE [MEMBERS OF THE SHRI VISA VAD NAGER VANIK SA MAJ FAMILIES]. III. TO PROVIDE FOR THE EDUCATION OF CITIZENS AND T O UNDERTAKE ALL SUCH ACTIVITIES SO AS TO IMBIBE IN THEM; IRRESP ECTIVE OF CASTE, CREED THE SPIRIT OF SERVICE AND DEDICATION A ND I.T.A.NO. 1699/HYD/2014 :- 6 -: THEREBY PROVIDE FOR UPLIFTMENT OF THEIR INTELLECTUA L CULTURAL, MORAL PHYSICAL AND ALROUND WELFARE . III. TO HELP, AID, ASSIST AND CONTRIBUTE TOWARDS EDUCATI ONAL, MEDICAL AND PROVIDE FOR COMPASSIONATE ALLOWANCE TO THE NEEDY MEMBERS OF THE COMMUNITY. IV. TO CELEBRATE SEL {FEAST} OF THE SHREEJI . V. TO OBTAIN AND ACQUIRE SUCH MOVEABLE AND IMMOVABLE PROPERTIES AS MAY BE USEFUL FOR PURPOSE OF THE SAMA J AND ACCEPT UNCONDITIONAL DONATIONS. ASSESSEE CLAIMS THAT THIS TRUST HAS SUBMITTED FOR REGISTRA TION U/S. 12A VIDE APPLICATION DT. 05-09-1988, THE FATE OF WHICH EITHER THE DEPARTMENT OR ASSESSEE IS NOT IN A POSITION TO EXPLAIN, EXCEPT, AS THE LD.DIT(E) OPINES, THAT APPLICATI ON COULD HAVE BEEN REJECTED. HAD IT BEEN ACCEPTED, ASSESSEE W OULD HAVE CERTAINLY HAVE GOT THE BENEFIT OF CLAIMING EXEMPTION AND CERTAINLY WOULD HAVE PLACED IT ON RECORD. 8.1. BE THAT AS IT MAY, VIDE THE GENERAL BODY MEETING HELD ON 03-11-2005, THE AIMS AND OBJECTS ARE STATED TO HAVE BEEN AMENDED AS UNDER: A. TO PURPOSE OF ESTABLISHING THE SAMAJ IS TO ACHIEVE ALROUND WELFARE & UNITY AMONG SHRI VISA VAD NAGAR SAMAJ FAMILIES RESIDING IN HYDERABAD; B. THE FAMILY DEITY OF THE SAMAJ THE HATKESHWAR MAHADEV TEMPLE WHICH IS EXISTING AT THE OLD SAHUKARI KARWAN, THE I.T.A.NO. 1699/HYD/2014 :- 7 -: SAMAJ WILL MANAGE THE AFFAIRS OF THE TEMPLE SO THAT THE WORSHIP/POOJA ETCETERA IN ALL RESPECT CONTINUES FOREV ER; C. TO ALL ALL ACTS IN ORDER TO ACHIEVE OVERALL PROSPERIT Y OF THE STRIVE {MEMBERS OF THE SHRI VISA VAD NAGAR VANIK SAMA J FAMILIES}; D. TO PROVIDE FOR THE EDUCATION OF CITIZENS AND TO UNDER TAKE ALL SUCH ACTIVITIES SO AS TO IMBIBE IN THEM; IRRESPECTI VE OF CASTE, CREED THE SPIRIT OF SERVICE AND DEDICATION AND THEREBY PROVIDE FOR UPLIFTMENT OF THEIR INTELLECTUAL, CULTURAL, MORAL, PHYSICAL AND ALROUND WELFARE; E. TO HELP, AID, ASSIST AND CONTRIBUTE TOWARDS EDUCATIONAL MEDICAL AND PROVIDE FOR COMPASSIONATE ALLOWANCES TO THE NEEDY MEMBERS OF THE COMMUNITY; F. TO CELEBRATE SEL (FEAST) OF THE SHREEJI; G. TO OBTAIN AND ACQUIRE SUCH MOVEABLE AND IMMOVEABLE PROPERTIES AS MAY BE USEFUL FOR PURPOSE OF SAMAJ AND ACCEPT UNCONDITIONAL DONATIONS; 8.2. AS CAN BE SEEN FROM THE ABOVE, THERE IS DIFFERE NCE ONLY RE NUMBERING THE AIMS AND OBJECTS ORIGINALLY FOR MED. THE MAIN AIM OF ACHIEVING ALROUND WELFARE AND UNITY AMO NG THE FAMILIES RESIDING IN HYDERABAD HAD BEEN RENUMBERED AS A) SO AS TO MAKE IT ONLY AS ONE OF THE OBJECTS BY THE REVISED DRAFT. HOWEVER, AS APPROVED BY THE HONBLE SUPREME COURT IN THE CASE OF GANGABAI CHARITIES VS. COMMISSIONER OF WEALTH TAX [250 ITR 666] THE GENERAL BODY CANNOT MODIFY THE TRUS T DEED I.T.A.NO. 1699/HYD/2014 :- 8 -: SO AS TO MAKE A VARIATION IN THE TRUST OBJECTS. IN THESE CIRCUMSTANCES, IT IS TO BE CONSIDERED THAT THERE IS NO CHANGE IN THE AIMS AND OBJECTS OF ASSESSEE-TRUST WHICH IS MAINLY ESTABLISHED FOR THE PURPOSE OF ESTABLISHING THE SAMAJ TO ACHIEVE ALL ROUND WELFARE AND UNITY AMONG VISA VADN AGAR VANIK FAMILIES RESIDING IN HYDERABAD. THIS CLEARLY INDICATES THAT THE TRUST WAS CREATED FOR THE PURPOSE OF A SECLUDED GROUP OF PERSONS WHO HAS THEIR LOYALTY TO A PARTICULAR GOD I .E., HATKESHWER MAHADEV TEMPLE AND NOT GENERAL PUBLIC. 8.3. IT IS INTERESTING TO NOTE THAT RULES CONTAIN APART FROM VARIOUS POWERS, THE CONSTITUTION OF COMMITTEES FOR KULDEVATA MANDIR, THE RULES SPECIFY THE EVALUATION OF FAMILY A S UNDER: EVALUATION OF FAMILY 1. ANY MEMBERS WHOSE KITCHEN IS SEPARATED HIS FAMILY SH ALL BE TREATED AS A SEPARATE FAMILY. 2. AFTER SEPARATION OF KITCHEN THE SAME SHALL BE INFORMED TO THE COMMITTEE SO THAT INVITATIONS ETCETERA CAN BE GIVEN SEPARATELY. 3. GIST OR LIST OF FAMILIES APPEARS ON THE LAST PAGE. 8.4. THERE ARE RULES FOR REGARDING WEDDING OR MARR IAGES. 1. FAMILY HEADS WILL INVITE ALL MEMBERS FOR BETROTHAL CEREMONY. I.T.A.NO. 1699/HYD/2014 :- 9 -: 2. AT THE TIME OF BETROTHAL CEREMONY SHREEJI BAIT SHALL BE PAID AS PER THE WISH OF BOTH {BRIDEGROOM AND BRIDE} THE PARTIES. THEY SHALL SIGN IN THE BOOKS OF SAMAJ. 3. BOTH THE PARTIES SHALL PAY RS.101 {RUPEES ONE HUNDRED AND ONE} EACH TOWARDS SAMAJ FUND AND {RUPEES ONE HUNDRED AND ONE} EACH TOWARDS OFFERING AS HATKESHWAR MANDIR BAIT. 4. WEDDING/MARRIAGE INVITATIONS WILL BE GIVEN WHEREIN DETAILS OF GRUHA SHANTI AND LUNCH AND DINNER TIMINGS WILL BE MENTIONED. IN FUNCTIONS OTHER THAN WEDDINGS VIDELICET MUNDAN/SAPATVASI THE INVITATIONS BY TELEPHONE WILL BE SUFFICIENT. 5. WHILE PERFORMANCE OF WEDDING OR MARRIAGE THE BRIDES PARTY SHALL OFFER LUNCH OR DINNER. 6. NANI SHAKKAR {OFFERINGS TO BRIDE} CAN BE ALONE BE D ONE AS PER INDIVIDUALS DESIRE. 7. BEFORE START OF THE WEDDING OR MARRIAGE FUNCTION; THE MANAGING COMMITTEE SHALL BE INVITED AND PERMISSION OBTAINED AFTER PAYMENT OF SAMAJ FUND. SER. NO. SAMAJ FUND BRIDES PARTY BRIDEGROOMS PARTY AS PER INDIV IDUAL DESIRE 1 SHREEJIT BAIT RS.101 RS. 101 2 HATKESHWARJI BAIT RS. 251 RS. 100 8. GRUH SHANTI SHALL BE PERFORMED BEFORE SUNSET. 9. PRESENTATION NOT MORE THAN RS. 51 {RUPEES FIFTY ONE} TO BE GIVEN AT THE TIME GRAH SHANTI BY THE MEMBERS. 10. ANY DISPUTE REGARDING WEDDINGS OR MARRIAGES SHALL BE MADE IN WRITING TO THE MANAGING COMMITTEE SEVEN {7} DAYS BEFORE THE DATE OF THE WEDDING OR MARRIAGE. THE I.T.A.NO. 1699/HYD/2014 :- 10 -: MANAGING COMMITTEE WILL GIVE ITS RULINGS WITHIN FOUR {4} DAYS. 11. ALL THE MEMBERS SHOULD BE PRESENT DURING WEDDING OR MARRIAGE FUNCTIONS. 12. WEDDING OR MARRIAGE FUNCTIONS SHALL BE PERFORMED AS PER THE CUSTOMS IN ANY EVENT IF ANY PERSON DESIRES TO PERFO RM WEDDING/MARRIAGE {GHAR MAYLE} HE OR SHE SHOULD PAY THE SAMAJ FUND AS SPECIFIED IN CLAUSE 7 SUPRA AND OBTAI N PERMISSION OF THE MANAGING COMMITTEE. 13. IN THE EVENT OF PERFORMING WEDDINGS OR MARRIAGES OTHER THAN OUR COMMUNITY; IN THAT EVENT THE MEMBER HAS TO PAY AN AMOUNT RS. 1,251 {RUPEES ONE THOUSAND TWO HUNDRED AND FIFTY-ONE ONLY} TOWARDS SAMAJ FUND. 14. MEMBERS SHOULD NOT PERFORM WEDDINGS OR MARRIAGES OF THEIR DAUGHTERS IN OTHER TOWNS; IN CASE IT IS NECESSARY ; PERMISSION SHOULD BE OBTAINED FROM SAMAJ. 15. BRIDES PERMISSION HAS BEEN BANNED. FEAST TIMINGS LUNCT AT 1 P.M. {13.00 HOURS}; DINNER AT 8 P.M. {20.00 HOURS}. REGARDING DINNER LADIES/WOMEN AND CHILDREN SHOULD BE GIVEN FIRST PREFERENCE. 8.5. EVEN THOUGH LD. COUNSEL DREW OUR ATTENTION TO THE CLAUSE-3 OF PROVIDING EDUCATION OF CITIZENS AND TO UN DERTAKE OFF SUCH ACTIVITIES SO AS TO IMBIBE IN THEM IRRESPECTIV E OF CASTE, CREED, THE SPIRIT OF SERVICE AND DEDICATION AS FOR THE PURPOSE OF GENERAL PUBLIC, AS SEEN FROM THE ACCOUNTS PLACED ON RECORD, THERE IS NO SUCH EXPENDITURE TO FULFIL THIS OBJECT. THE EDUCATIONAL AID AND MEDICAL AID BEING GIVEN EVERY YE AR AND CLAIMED IN THE P&L A/C SEEMS TO HAVE BEEN LIMITED TO TH E I.T.A.NO. 1699/HYD/2014 :- 11 -: MEMBERS OF THE FAMILY OF SAMAJ, NO EVIDENCE OF ANY CHARITABLE NATURE FOR GENERAL PUBLIC HAS BEEN PLACED ON RECORD. 8.6. THE COPIES OF THE RETURNS PLACED ON RECORD FRO M 2008-09 TO 2013-14 DO INDICATE THAT THERE IS INCOME FRO M SHRI HATKESHWAR MAHADEV MANDIR AND INCOME FOR OTHER ACTIVITIES WHICH WAS CLAIMED EXEMPTION TO A SMALL EXTENT U/S. 11 (A) AND CLAIMED BELOW TAXABLE LIMITS. AS SEEN FROM THE P&L A/ C ALSO THE RECEIPTS ARE TOWARDS UTENSIL MAINTENANCE AND INTER EST FROM BANK BUT DONATIONS/VOLUNTARY CONTRIBUTIONS ARE AL L VERY SMALL NATURE. THE EXPENDITURE INCLUDES EXPENDITURE TOW ARDS RELIGIOUS DISCOURSE (RS. 55,000/- FOR THE YEAR ENDIN G 31-03- 2010 AND RS. 26,850/- FOR THE YEAR ENDING 31-03-2013 ) ETC. EVEN THOUGH THERE ARE ANNA DANAM EXPENSES AND OTHER EXPENDITURE AS CAN BE SEEN FROM THE RULES, THESE ARE M EANT FOR FAMILY MEMBERS ONLY IN VARIOUS BAITAKS WHICH CANNOT BE CONSIDERED AS PUBLIC CHARITABLE IN NATURE. SINCE THE TRUST IS CREATED SOLELY FOR THE PURPOSE OF LIMITED MEMBERS OF A PARTICULAR COMMUNITY OR BELIEF AND NOT FOR THE PURPOS E OF GENERAL PUBLIC, WE ARE OF THE OPINION THAT THE TRUST CANN OT BE CONSIDERED AS A TRUST FOR PUBLIC CHARITABLE PURPOSES A ND ACCORDINGLY, THE DIT(E) IS CORRECT IN REJECTING THE REG ISTRATION. 8.7. COMING TO VARIOUS CASE LAW RELIED UPON, IN THE CASE OF CIT VS. AHMEDABAD RANA CASTE ASSOCIATION [140 ITR 1] (SC) THE HON'BLE SUPREME COURT HAS ACCEPTED THE DECISION OF HON'BLE GUJARAT HIGH COURT, WHEREIN THE BENEFIT U/S. 4( 3)(I) OF 1922 ACT WAS CONSIDERED AND THE ORDERS INVOLVED YEARS 1960- 61, 1961-62 AND 1962-63. AS ALREADY STATED EARLIER, THAT TRUST I.T.A.NO. 1699/HYD/2014 :- 12 -: WAS CREATED BEFORE 1961, THEREFORE THE MIXED TRUST WAS ALSO ENTITLED FOR THE BENEFIT U/S. 11(1)(B) OF THE ACT. IN TH OSE CIRCUMSTANCES, THE HON'BLE SUPREME COURT HAS AGREED. BUT IN THE PRESENT CASE, THIS TRUST WAS CREATED AFTER 1961. THEREFORE, THE PRINCIPLES LAID DOWN IN THAT JUDGMENT DOES NOT APPLY . LD. COUNSEL RELIED ON THE DECISION OF CIT VS. ANDHRA PRA DESH POLICE WELFARE SOCIETY [148 ITR 287] (AP). THE FAC TS IN THE ABOVE SAID CASE ARE THAT THE TRUST WAS CREATED FOR THE P URPOSE OF POLICE PERSONNEL, WHEREIN THE HON'BLE HIGH COURT H AS HELD AS UNDER: A GROUP OF PERSONS MAY BE NUMEROUS, BUT, IF THE NE XUS BETWEEN THEM IS THEIR PERSONAL RELATIONSHIP TO A SI NGLE PROPOSITUS OR TO SEVERAL PROPOSITUS, THEY ARE NEITHER THE COMMUNITY NOR A SECTION OF THE COMMUNITY FOR CHARITABLE PRUPOSES. HOWEVER, THE ABOVE PRINCIPLE IS NOT APPLICABLE IN T HE CASE OF PUBLIC EMPLOYMENT, I.E., EMPLOYMENT OF GOVERNMENT, SINCE I N THAT CASE IT IS THE PUBLIC THAT IT IS THE EMPLOYER; QUI FACIT PER A LIUM FACIT PER SE AND SO, TO THE SERVICES RENDERED BY THE EMPLOYEES IN TH E PUBLIC EMPLOYMENT, THE BENEFICIARIES ARE THE PUBLIC. SECT ION 10(23C) FURTHER SUPPORTS THEIR VIEW. 8.8. IN THE PRESENT CASE, THE FAMILIES OF SAMAJ CAN NOT BE CONSIDERED AS SECTION OF GENERAL PUBLIC AND THEY ARE LIMITED TO PARTICULAR GROUP AND NOT FOR GENERAL PUBLIC. THE P RINCIPLES LAID DOWN IN THE ABOVE SAID CASE FOR A PARTICULAR GR OUP OF POLICE IRRESPECTIVE OF THEIR CASTE, CREED OR RELIGIOUS BELI EFS AND ARE IN GENERAL PUBLIC EMPLOYMENT ARE CONSIDERED AS PUBLIC F OR THE PURPOSE OF GRANTING REGISTRATION, WHEREAS IN THE PRESEN T CASE, THE MEMBERS OF THE SAMAJ HAS A SINGLE PERSONAL RELA TIONSHIP EITHER TO THE DEITY OR TO THE SAMAJ AS CAN BE SEEN FRO M THE CLAUSES IN THE TRUST DEED. LIKEWISE, THE DECISION OF TAX I.T.A.NO. 1699/HYD/2014 :- 13 -: PRACTITIONERS BENEVOLENT FUND, A PUBLIC CHARITABLE TRUS T VS. CIT [266 ITR 561] (BOMBAY) DOES NOT APPLY. 8.9. IN THE CASE OF CIT VS. PALGHAT SHADI MAHAL TRUS T [254 ITR 212] THE HON'BLE SUPREME COURT HAS HELD THAT THERE WAS NO LIMITATION IN THE TRUST DEED IN REGARD TO WHICH M USLIMS COULD AVAIL THE BENEFIT OF THE TRUST. THE BENEFIT WAS A VAILABLE TO MUSLIMS ALL OVER THE WORLD, NONE OF WHOM EXCEPT IN KE RALA WERE OF BACKWARD CLASSES. THE TRUST WAS NOT COVERED B Y SECTION 13(1)(B) AND THEREFORE HELD NOT ENTITLED TO EXEMPTION FROM TAX. SIMILAR FACTS APPLY IN THIS CASE ALSO AS MO ST OF THE EXPENDITURE IS HELD FOR THE BENEFIT OF A PARTICULAR COM MUNITY OR A RELIGIOUS GROUP CALLED SAMAJ FAMILIES AND SO, W E ARE OF THE OPINION THAT THE TRUST IS NOT CREATED FOR CHARITABLE OR R ELIGIOUS PURPOSES FOR GENERAL PUBLIC. ACCORDINGLY, IT IS NO T ENTITLED FOR REGISTRATION. IN THE CASE OF CIT VS. SURJI DEVI KUNJI LAL JAIPURIA CHARITABLE TRUST [186 ITR 728] (ALL), A COMMUNITY OF A PUBLIC WAS HELD TO BE FOR RELIGIOUS OR CHARITABLE PURPOSES A ND WAS ENTITLED FOR EXEMPTION, WHEREAS IT WAS CLEARLY HELD THAT THE SECTION OF THE COMMUNITY SOUGHT TO BE BENEFITTED MUST BE SUFFICIENTLY DEFINED AND IDENTIFIABLE BY SOME COMMON QUALITY OF A PUBLIC OR IMPERSONAL NATURE, WHEREAS IN THIS CASE, THE COMMUNITY IS IDENTIFIED WITH A RELIGIOUS BELIEF AND R OYALTY TO A PARTICULAR DEITY AND THAT TOO FOR FAMILIES RESIDING IN HYDERABAD. EVEN THE RECEIPTS ARE FROM THE MEMBERS [VERY FEW AMOUN TS OF DONATION AND EXCEPT THE OTHER RECEIPTS AND THE EXPENDITUR E IS ALSO SEEMS TO BE WITHIN THE COMMUNITY]. IN VIEW OF TH IS, WE ARE OF THE OPINION THAT LD.DIT(E) HAS TAKEN A CORRECT DECIS ION IN REJECTING THE REGISTRATION. WE FIND NO MERIT IN THE GROUN DS I.T.A.NO. 1699/HYD/2014 :- 14 -: RAISED BY ASSESSEE AND ACCORDINGLY, THE ORDER OF DIT (E) IS UPHELD. 9. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2018 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 28 TH FEBRUARY, 2018 TNMM I.T.A.NO. 1699/HYD/2014 :- 15 -: COPY TO : 1. M/S. SRI VISA VADNAGAR VANIK SAMAJ, C/O. M/S. SA RANG SHAH & COMPANY, CHARTERED ACCOUNTANTS, 3-5-1090/A2, OPP: YMCA, NARAYANAGUDA, HYDERABAD. 2. DIRECTOR OF INCOME TAX (EXEMPTIONS), AAYAKAR BHA VAN, HYDERABAD. 3. ADIT(E)-1, HYDERABAD 4. D.R. ITAT, HYDERABAD. 5. GUARD FILE.