Shree Maliya Kadva Patel Seva Samaj, JUNAGADH V. The Income Tax Officer, Ward-1(3), Veraval

ITA 187/RJT/2016

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1891 (ITAT-RAJKOT)
• Duration Of Justice: 6 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 26-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: DEEPAK RINDANI
• Keywords: Capital asset; Charitable institution; Capital receipt; Benefit of exemption
• Section: 131; 2; 11; 12A; 195; 64; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) Before: Ms. Annapurna Gupta, Accountant Member And Shri TR Senthil Kumar, Judicial Member Shree Maliya Kadva Patel Seva Samaj Maliya Hatina, Dist. Junagadh PAN No: AAETS6716P (Appellant) Vs The Income Tax Officer, Ward-1(3), Veraval (Respondent) Appellant by : Shri Deepak Rindani, A.R. Respondent by : Shri S. S. Rathi, Sr. D.R. Date of hearing : 30-03-2022 Date of pronouncement : 29 -06-2022 आदेश/ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:- The present appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-3, Ahmedabad, (in short referred to as CIT(A)), dated 01-03-2016, u/s. 250(6) of the Income Tax Act, 1961(hereinafter referred to as the “Act”) pertaining to Assessment Year (A.Y) 2011-12 2. The solitary issue in the present appeal relates to denial of exemption u/s. 11 of the Act, as a charitable trust, to the assessee. And the ground raised by the assessee in this regard reads as under: ITA No. 187/Rjt/2016 Assessment Year 2011-12 I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 2 1. The Learned Commissioner of Income - tax (Appeals) - 3, Rajkot erred in upholding action of the assessing officer in denying claim for deduction u/s 11 of the Act. 2. The Learned Commissioner of Income - tax (Appeals) - 3, Rajkot erred in upholding action of the assessing officer in disallowing deduction of Rs. 15,51,780/- claimed as application of income on objects of the Trust u/s 11 of the Act and thereby treating the same as income of the appellant. 3. As transpires from the orders of the authorities below,the denial of exemption was for the reason that the assessee trust was found to be created for the benefit of a particular religious community or caste, i.e Kadva Patidar, trigerring Section 13(1)(b) of the Act, which denies exemption u/s. 11 of the Act to such Trusts. Accordingly assesee’s claim of deduction of Rs. 15,51,780/- as expenses incurred for charitable purposes u/s. 11 of the Act, was denied by the AO and upheld by the Ld.CIT(A). 3.1 Contentions by the Ld.Counsel for the assessee against the denial of exemption were made in writing, dated 22-12-2020, and which were reiterated vide oral submissions made during the course of hearing before us. Briefly put the arguments against invocation of section 13(1)(b) of the Act for denial of exemption were to the following effect: 1. The assessee trust being created for all people of the society, it does not fulfil the requirement of Section 13(1)(b) of the Act of being created or established for the benefit of any particular religious community . 2. Trust created for the benefit of a section of the society can be termed as benefitting Public at large, establishing its charitable character. 3.That in any case, Kadva Patidars ,for whose benefit the Revenue has alleged the Trust to have been created, cannot be termed a religious community or caste. I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 3 4. Alternatively, arguments were also made against assessment of income made after denying benefit of exemption, which were to the following effect: a) That only income computed as per normal provisions of the Act could be assessed to tax on denial of benefit of exemption and not the gross receipts. b) That Corpus donations received by the assessee towards Building Construction Fund, being capital in nature, needed to be excluded for the purposes of computing income assessable to tax as per normal provisions of the Act. Various case laws were relied upon. 5. Written submissions filed by the Ld.Counsel for the assessee is being reproduced hereunder: NOTE Appeal is filed against order of the Learned CIT(Appeals) sustaining the assessment order in which it is held that as the appellant-trust is created and established for the benefit of a particular caste of Kadva Patidar, it is hit by provisions of sec. 13(1)(b) and therefore it is not entitled to benefit of sec. 11 of the Act. Consequently, the amount of Rs. 15,51,780/- expended and applied by the trust during the year and claimed as a deduction has been disallowed and total income is computed at Rs. 15,51,780/-. Propositions against the addition in appeal may be stated in nutshell as under: I. TRUST IS NOT CREATED OR ESTBALISHED ONLY FOR KADVA PATIDARS BUT FOR ALL PEOPLE OF SOCIETY ALSO: 1. The appellant-trust submitted before lower authorities and reiterates that it is not created or established for any particular community or caste but it is open for all sections of the society and hence it is not covered under section 13(1)(b). The objects of the trust are not restricted to kadva patidars but out of six objects listed in its constitution, four objects (Sr. Nos. 3 to 6) do not even refer to any caste and refer to ‘people of the society’ (Paperbook pages 1-2). Thus, it is patent on plain reading of the objects clause of the Trust that it is not ‘created or established’ for the benefit of any particular religious community or caste. Its objects also encompass charitable objects for general public (people of the society). Thus, it cannot be said that the trust is ‘created or established’ for the benefit of any particular religious community or caste. On this ground itself, sec. 13(1)(b) becomes inapplicable. I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 4 2. When the objects are not confined to any particular religious community or caste, but are meant for all, provisions of sec. 13(1)(b) are not attracted. In support, reliance is placed on several decisions which pertain to several different ‘communities or castes’ Please refer to, Gujarat High Court in Bayath Kutchi Dasha Oswal Jain Mahajan Trust (2016) 96 CCH 0375 Page 111-113. (more caselaw compilation page nos. 15-16, 24-26, 45, 48-49 on this very point. 3. When apart from objects relating to Jainism, other goals are also set out in trust deed, then the trust would become a charitable trust and sec. 13(1)(b) would not be applicable (Chandra Charitable Trust 294 ITR 086 (GUJ.)). (Case Law Compilation Page nos. 114-116) 4. Reliance also placed on Rajkot Tribunal decision in Shree Kadva Patidar Sanatan Parvadiyu ITA No. 400/Rjt/2014 dated 5/12/2014 (Case Law Compilation Page nos. 117-119) having similar facts. 5. Parallel may be drawn with the provisions of Sec. 80G(5) for deductibility of donations from gross total income, which provides one of the conditions in clause (iii) thereof that ‘the institution or fund is not expressed to be for the benefit of a particular religious community or caste’ (emphasis supplied). The word ‘expressed’ means a declaration or expression in writing or orally; so long as trustees have not expressed or restricted benefits to a particular community, one cannot say that the institution was expressed to be for the benefit of a particular community or caste; even a preference to a particular community would make no difference in this context (National Association of Muslims Foundation 136 TTJ 066 - 51 DTR 90 Hyd.). (Case Law compilation no. Page 19-21) II. A SECTION OF PUBLIC IS AS GOOD AS PUBLIC AT LARGE, HENCE SEC. 11 CANNOT BE DENIED: 6. Even when a trust is created for any particular community or caste, it is held by Apex Court that a section of public is as good as public at large and therefore benefit of sec. 11 cannot be denied. Case law Citation Case Law Compilation Page o. Dawoodi Bohra Jamat 364 ITR 031 SC 120-125 Ahmedabad Rana Caste Association 140 ITR 01 SC 126 Rajkot Visha Shrimali Jain Samaj 111 ITD 238 RAJKOT Trib. 1-4 Shia Dawoodi Bohra Jamat Waqf 64 SOT 173 Kol Trib. 22-27 I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 5 7. In present case, not only the objects are charitable in nature and also meant for all sections of the society (as good as public at large), its premises were being allowed to be used by all, not only to kadva patidars, as borne out from sample rent receipts (Paperbook Page 26-30). III. KADVA PATIDARS CANNOT BE DUBBED AS A RELIGIOUS COMMUNITY OR CASTE: 8. Patels are historically agriculturists and cannot be termed as a religious community or a caste and hence sec. 13(1)(b) does not apply to a trust meant for Patels. It was so held in Leuva Patel Nutan Kelawani Mandal 12 ITD 276 (Ahd. Trib.) (Case Law Compilation Page 5-12) Leuva and Kadva are also Patels or Patidars and hence the ratio of said order applies to all Patels and need not be restricted to Leuvas only. The CIT(Appeals) has sought to draw a distinction between the two which is unreal, illogical and without basis. IV. CORPUS DONATIONS RECEIVED ARE CAPITAL RECEIPTS HENCE NOT INCOME: 9. Appellant-trust received donations of Rs. 12,68,271/- during the year towards Building Construction Fund, which amount has been utilised in same year for building construction (as reflected in audited Balance sheet filed) (Page 1-6 annexed herewith). Being on capital account and for capital asset and forming part of corpus of trust, such receipts have been held to be capital receipts not being income at all under the Act and hence cannot be considered as part of total income, more so if benefit of sec. 11 is to be denied. If this amount is excluded, the disallowance of expenditure made by the AO shall have no relevance and cannot result into positive income at all. 10. Corpus donations are capital receipts, irrespective of whether a trust enjoys benefit of sec. 11 and 12 or not. Case Law Citation Case Law Compilation Page No. Hamdard National Foundation India (2020) 82 ITR (Trib) 164 Delhi 127-133 Prakash Education Society & Anr. (2018) 52 CCH 406 134-146 Serum Institute of India Research Foundation (2018) 195 TTJ 820 Pune 28-36 V. EVEN IF BENEFIT OF SEC. 11 IS DENIED, GROSS RECEIPTS OF TRUST CANNOT BE TREATED AS TOTAL INCOME UNDER THE ACT: 11. If benefit of sec. 11 is to be denied, it follows that income has to be computed on net basis after deducting the payments from receipts. Gross receipts do not constitute income. If so, in this case, the net result is negative as shown in audited accounts (Nirmal Agricultural Society (1998) 17 CCH 0358 (Hyd Trib) (Case Law Compilation Page nos. 147-148) What is received by the trust has been applied. If a receipt of capital nature is to be treated as income, expenditure though on an asset should also be deducted therefrom on matching principle as also on real income theory. The AO cannot blow both hot and cold at the same time. I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 6 VI. WRITTEN SUBMISSIONS MADE BEFORE CIT(A) MAY ALSO BE CONSIDERED (Paper-book pages 31-36). 6. Ld DR however vehemently supported the order of the Ld.CIT(A) contending that the objects of the assessee trust clearly showed that it was created for the benefit of a particular caste i.e Kadva Patels, and was therefore clearly ousted from enjoying the benefits of exemption u/s 11 of the Act, as per section 13(1)(b) of the Act. The relevant findings of the Ld.CIT(A) at para 5.1 of the order is as under: 5.1 “The case law cited by the Ld. A.R. of Leuva Patel Nutan Kelwani Mandal vs. ITO (supra) does not help the case of the appellant because the Hon’ble ITAT, Ahd in that case had opined that – (1) Section 13(1)(b) could not be invoked because the beneficiaries were the children who are covered under Explanation (2) to the section 13, and (2) the Leuva Patel community consist mainly of agriculturists and cannot be dubbed as religious community or caste, while arriving at the second component of their judgment, the Hon’ble ITAT has agreed with the basic contention of the Leuva Patel community that they are different from Kadva Patel in a sense that they (Leuva in contrast to Kadva) are heterogeneous community including persons of different religions induldged basically in agriculture and thus they do not constitute a caste. It was pointed out by the ITO in that case that Leuva Patel are so different from kadva patel that generally inter-group marriage is not allowed and therefore both are considered as different castes. In my opinion the understanding arrived at while considering the category of leuva patel cannot be extended to the Kadva Patel community. There is nothing to suggest that this community does not constitute a caste in its general socio-political context. Thus, I find no fault in the ITO’s action of treating the object of the appellant trust as towards benefit for the caste Kadva Patel. The first ground is therefore dismissed. “ 7. We have heard both the parties. The controversy to be resolved is whether the assessee trust is a trust for the benefit of particular religious community or caste, so as to be hit by the provisions of section 13(1)(b) of the Act denying claim of I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 7 exemption u/s 11 of the Act. That the assessee trust is registered u/s to 12A of the Act is an undisputed fact. 8. For adjudicating the issue it is imperative to interpret and apply the law on the issue in the context of the facts of the case before us. 9. For interpreting section 13(1)(b) of the Act, which has been invoked ,and its scope, it is relevant to reproduce the section , 13. (1) Nothing contained in section 11 or section 12 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof— (a) ........ (b) in the case of a trust for charitable purposes or a charitable institution created or established after the commencement of this Act, any income thereof if the trust or institution is created or established for the benefit of any particular religious community or caste; 10. As is evident from a bare reading of the above, Section 13 makes an exception to the exemption granted u/s 11 r.w.s 12 of the Act to incomes of charitable trusts, denying exemption to religious or charitable trusts in certain situations. Clause(b), with which we are seized, relates to one such situation, being a charitable trust for the benefit of a particular religious community /caste, i.e a communal trust. 11. This denial of exemption to communal trusts was not there in the Income Tax Act ,1922,.The Hon’ble apex court had the occasion to examine the eligibility to exemption of charitable trusts created for the benefit of a particular caste or community ,under the old Act, i.e. 1922 Act. The issue before it was whether such Trusts catering to a particular community created prior to 1 st of April 1961, I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 8 when the new Act came into force, could be termed as public charitable trusts to be eligible to exemption u/s 11 of the Act, In the case of Ahmedabad Rana Caste Association vs Commissioner of Income Tax (1971) 82 ITR 704(SC). The Hon’ble apex court held that such trusts though benefitting only a section of the society, could still be termed as for the benefit of public at large, as long as the community it served was united by an impersonal character and not a personal character. The Hon’ble Court further noted that in the 1961 Act this benefit of exemption, vis a vis a trust created for the benefit of a particular community or caste, was done away with by introduction of section 13(1)(b) in the Act. Thus this denial of exemption to communal trusts was brought on the statute in the Income Tax Act, 1961, in alignment with the secular character of the nation as enshrined in the Constitution of India. 12. Having said so, for understanding who exactly have been excluded from the benefit of exemption, it is imperative to determine the import of the words”religious community” and “caste”, trusts created for whose benefit have been denied exemption. The word religious community implies a community which owes its origins to a religion;it is a community /group of people who practice the same religion. 13. Caste on the other hand has been defined in Wikepedia to mean “a form of social stratification characterised by endogamy, hereditary transmission of a style of life which often includes an occupation, ritual status in a hierarchy, and customary social interaction and exclusion based on cultural notions of purity and pollution.” The Merriam Websters Dictionary defines it as I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 9 “ one of the hereditary social classes in Hinduism that restrict the occupation of their members and their association with the members of other castes” The Brittanica Distionary defines it as [count] : one of the classes into which the Hindu people of India were traditionally divided 2 : a division of society based upon differences of wealth, rank, or occupation 14. Basically caste is a division of society based on occupation, wealth etc, with each such strata having its well defined customs and rituals and practicing endogamy ,which is prohibiting interaction with other castes. It is thus a rigid stratification of society. 15. Proceeding from here we shall examine the objects of the assessee trust whether they are for the benefit of a particular religious community or caste. The copy of the trust deed placed before us at paper book page no. 1 to 20 lists the objects as under: 1. this trust shall provide lodging and board facility to the brothers and sisters of Kadva Patel Patidar Samaj and for that, there shall be purchased necessary lands, construct a building or keep on rent. 2.That, this trust shall provide facilities of building, vessels, movable and immovable properties, beds, etc. in an marriage ceremony of the brothers and sisters of our caste Kadva Patidar Sarnaj either on rent or in any other manner. 3. That, this trust shall provide medical facility to the necessary people of the society i.e. hospitals, dispensary, resident centres, medical centres, nursing homes, Anath Ashrams, etc, and also shall make medical assistance to such institutions and shall maintain the same. 4. That, for the publication and development, this institute shall establish Schools, Colleges, Research Centres, etc. and shall maintain it and shall also other educational activities and shall make help to such other institutes and maintain. 5. That, shall make economic and other helps to the peoples of the societies who are affected in earthquake, draughts or in any natural calamity as well as also shall provide grass, water, shelter etc. to the affected cattle, birds, etc, and shall also do other necessary activities. 6. That, there shall be make assistance to the required peoples of the society either by economically or by doing other works and shall make assistance to such I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 10 other such type of institutes by collecting funds, donations, loans, etc. and shall do such other activities. 16. A bare perusal of the objects reveals that the first two objects clearly are solely for the benefit of Kadva Patels only, arranging accommodation facilities for them and helping the community members during marriages. The rest appear to be for the benefit of all members of society and thus not restricted to a particular community. 17. Going further whether Kedva Patels could be termed as a religious community, we find that the answer is in the negative. The aspect, relating to the origin to Kadva Patel community and the Leuva Patel community was examined in detail by the ITAT, Ahmedabad B Bench in the case of Leuva Patel Nutan Kelwani Mandal vs. ITO reported in (1985) 12 ITD 0276 and it was categorically held that these communities owe their origin to the fact that they were agriculturist and not to any particular religion and therefore cannot be treated as a religious community for invoking section 13(1)(b) of the Act. In the said case the ITO had examined the President of the Leuva Patel Nutan Kelwani Mandal to determine whether they belonged to a particular religious community or caste. The entire statement of the President is reproduced in the order of the ITAT as under: "I, the undersigned, Dr. C. R. Baldha, the President of Shri Leuva Patel Nutan ared before the ITO, Ward-I, Rajkoy, in response to Notice under s. 131 of the IT Act, state on oath that I shall give true replies to the questions asked to me: Q. No. 1. Has constitution of Leuva Patel Nutan Kelwani manda, Rajkot, been framed ? When and what are its aims ? A. No. 1. Its constitution has been framed. That "Mendal" as come into existence in 1936. Its Public Trust Registration No. is R/1897 dt. 1st March, 1966. Its aim is the development of the children of the community through education and all round development of community. Q. No. 2. Who are included in the children of the community ? A. No. 2. The children of the agriculturists are included. I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 11 Q. No. 3. In the name of your Mandal, mention of Leuva Patel Community (Gnyati) is made. Is this correct ? A. No. 3. The name of Leuva Patel is there. It is correct. But it includes the persons engaged in agriculture, Q. No. 4. Is the Leuva Patel Community a Community following a particular religion ? A. No. 4. No Sir. It is not a community following a particular religion. But in Leuva Patel Community, are included person who follow different religions. For instance, Swami Narayan religion, Vaishnav religion, Jain religion, Shiv Puja religion etc. Thus, the benefit of Kelwani Mandal is given to the Children of the agriculturists who follow different religions. Q. No. 5. Can you say about any Special Custom or Usage in the Leuva Patel Community ? A. No. 5. In the said community about 90 per cent are agriculturists. Different customs are being followed differently, in different parts, according to the prevailing usage. Q. No. 6. Will you state the names of the present office bearers or workers of your Mandal ? A. No. 6. Dr. C. R. Baldha, President Shri Laljibhai Karamsibhai Vekaria, Jt. Secreatary Shri Kantilal Jethabhai Dholaria, Treasurer Shri Shivlal Nagjibhai Vekaria, Secretary Shri Raghavji Ramjibhai Patel, Vice-President Q. No. 7. Can you say what religion is being followed by the present workers and office bearers, whose names are given ? A. No. 7. I myself follow Vaishnav religion, Shri Laljibhai follows Hindu religion, Shri Kantilal Dholaria follows Vaishnav religion, Shri Raghavjibhai fofllows Swaminarayan religion, Shri Shivlalbhai follows Khijda Panthi “Shivshkate” Panth. 18. The AO thereafter traced the historical background of the said community along with the Kedva Patel community which is reproduced at para 8 of the order as under: 8. In his assessment order passed afresh, the IJO has traced the historical background, which reads as under : "2. So far as historical back-ground of the Leuva Patel Caste is concerned, on an extensive inquiry, it is revealed that— As per one Legend Lord Ramchandraji had two sons namely Lava and Kush. They took over the rule. Lava established a city namely Lavapur, now known as Lahore in Punjab district. Similarly, Kush established Kushavati, now known as Patna. They made a plan for the development of the city and the profession of class of farmers living in those cities. Such farmers residing in those cities were known as Leuva and Kadva. As per another Legend the persons engaged in agriculture in those olden days, were known as 'Kurmi' now popularly known as 'Kanabi'. The Kanabis residing in Gujarat are of two main division, know as Leuva Kanbi and Kadva Kanbi. In present days these two types of Knabis do not maintain themselves only on agriculture but are also engaged in other activities, i.e., industries, profession, vacation etc. The 'Kurmis' had love and affection for the native place i.e., several areas of Punjab district and in order to have remembrance for the native areas the ‘kurmis' who have migrated from Leva section of Punjab are known as 'Leuva Kurmi', and from kadya section of Punjab are known as 'Kadva Kurmi'. I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 12 3.Historically Kanbi Patels i.e Leuva Patel and Kadva Patels had thus origin in Punjab .For some political reasons,they migrated from North India to the South India and also to Gujarat and Saurashtra. Though Kadva Patel and Leuva Patel living in Gujarat have similar customs they have no relations to each other in the matter of marriage and ‘dinners’.The Leuva Patel would not generally marry a person of Kedva Patel and vice versa. And therefore, both are considered as different castes.” 19. Taking note of the same the ITAT held that the Leuva Patel community did not qualify as a religious community at para 14 of its order as under: 14. Now the constitution of the assessee-trust (the relevant portion which is reproduced above) states that the assessee-trust is mainly created for benefit of the children of the Leuva Patel Community. Under the said constitution, the assessee-trust is required to start institutions, hostels, etc., for the benefit of the children of the Leuva Patel Community. Therefore, in our opinion, the assessee's case could not be brought within the provisions of s. 13(l)(b) of the Act, in view of the Explanation 2 to the said section. It appears that this aspect of the matter has escaped the attention of the lower authorities. Apart from this, on going through the historical background and the material already brought on record, we are of the view that the assessee's contention that the provisions of s. 13(l)(b) of the Act are not applicable in its case is well founded and should be accepted. We have come to this conclusion as it is quite apparent from the material already brought on record that the Leuva Patel Community consists mainly of agriculturists. Such community cannot be dubbed as religious community or caste as has been held by the IT authorities. In this view of the matter, the order of the Tribunal in the case of Shri Rajkot Viswakarma Kelwani Mandal (to which one of us was a party) squarely supports the stand taken on behalf of the assessee. Even though the decision of the case of Ahmedabad Rana Caste Association (supra) considered the provisions of s. 11(1)(a) of the Act, in our opinion the that case, the Hon'ble Supreme Court has clearly indicated as to how an association of a particular caste has to be considered while applying the provisions of s. 11 of the Act. In other words, the reliance placed by the assessee on the said decisions of the Hon'ble Supreme Court and Hon'ble Gujarat High Court is quite apt. For all these reasons, we hold that the provisions of s. 13(1)(b) of the Act are not applicable to the assessee-trust and that the assessee-trust was entitled to exemption under s. 11 of the Act. The ITO is, therefore, directed to modify the assessment accordingly. 20. Whether it constitutes a caste, in our view, the answer is in the affirmative. There can be no doubt that the Kedva Patels are a caste. Owing their origins to agriculturists, this community clearly represents social stratification with defined occupation, lifestyle and customs, though the same over period of time may have faded. But their cultural characteristics are still defined and have an inherited social lifestyle. The AO, in the case of Leuva Patel Nutan (supra), while tracing the I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 13 historical background of Leuvas, stated that Leuvas and Kedva Patels were agriculturists originating from different sections of Punjab who had migrated to Gujarat and are closed communities having no relations with each other in marriage and dinner. It is but obvious that Kedva Patel is undoubtedly a caste. Even the AO in the case of Leuva Patel Nutan (supra) states so in para 8 of his order, reproduced above mentioning that both Leuva and Kedva Patels are different castes. 21. Thus what emerges from the above deliberation is that two objects of the assessee trust are for the benefit of a particular caste, i.e Kedva Patel, providing boarding and lodging facility and enabling marriages of the members of this caste only. The rest of the objects are clearly for the benefit of public at large, providing medical benefit, assistance to the needy and those in distress during natural calamities, to the public at large without any discrimination in caste or creed. 22. The question whether section 13(1)(b) would apply only to charitable trusts established solely for communal purposes or to those for mixed purposes also, has been considered by the apex court in the case of CIT vs Dawoodi Bohra Jammat (2014) 364 ITR 31(SC), in which case the Hon’ble apex court found that the trust had both religious and charitable flavor and on the question of applicability of section 13(1)(b) to such trusts went on to hold that it would apply to such mixed trusts also. Relevant portion of the order of the Hon’ble apex court is as under: 43.Thus, the second issue which arises for our consideration and decision is, whether the respondent-trust is a charitable and religious trust only for the purposes of a particular community and therefore, not eligible for exemption under Section 11 of the Act in view of provisions of Section 13(1)(b) of the Act. I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 14 44. In the instant case, the Tribunal has found on facts after analysing the objects of the trust that the respondent- trust is a public religious trust and its objects are solely religious in nature and being of the opinion that Section 13(1)(b) is solely meant for charitable trust for particular community, negated the possibility of applicability of Section 13(1)(b) of the Act at the outset. The High Court has also confirmed the aforesaid view in appeal and observed that Section 13(1)(b) would only be applicable in case of income of the trust for charitable purpose established for benefit of a particular religious community. In our considered view, the said view may not be the correct interpretation of the provision. 45. From the phraseology in clause (b) of section 13(1), it could be inferred that the Legislature intended to include only the trusts established for charitable purposes. That however does not mean that if a trust is a composite one, that is one for both religious and charitable purposes, then it would not be covered by clause (b). What is intended to be excluded from being eligible for exemption under Section 11 is a trust for charitable purpose which is established for the benefit of any particular religious community or caste. 46. Such trusts with composite objects would not be expelled out of the purview of Section 13(1)(b) per se. The Section requires it to be established that such charitable purpose is not for the benefit of a particular religious community or caste. That is to say, it needs to be examined whether such religious-charitable activity carried on by the trust only benefits a certain particular religious community or class or serves across the communities and for society at large. (Sole Trustee, Loka Shikshana Trust v. CIT, (1975) 101 ITR 234 (SC)). The section of community sought to be benefited must be either sufficiently defined or identifiable by a common quality of a public or impersonal nature. “ 23. Thus, in the present case also the provisions of section 13(1)(b) will apply, the trust being of charitable character with two of its objects exclusively for the benefit of the Kedva Patel Caste. The assessee trust we hold therefore is not entitled to exemption u/s 11 of the Act on incomes applied for the benefit of the Kedva Patel community ,as per section 13(1)(b) of the Act.The AO is directed to determine the incomes so applied,after verifying all facts giving the assessee a due opportunity of hearing, and deny application of the same for charitable I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 15 purposes. The AO is directed accordingly to compute the taxable income of the assessee in accordance with law. 24. The contentions of the Ld.Counsel have all been dealt with by us above. The argument that the trust has been created for public at large is negated by the contents of the objects in the trust deed which clearly point two of them as for benefitting the Kedva Patel Community only. In this regard the reliance placed by the Ld.Counsel for the assessee on the decision of the Hon’ble apex court in the case of Rana Caste(supra) we find is misplaced ,since as noted above the said judgment was rendered in the backdrop of the Income Tax Act ,1922 ,when there was no such provision para materia to section 13(1)(b) of the 1961,Act.This dinstinction ,as pointed out above by us, was noted even by the Hon’ble apex court. The contention of the Ld.Counsel for the assessee that section 13(1)(b) does not apply to composite trusts ,we have noted above is contrary to the decision of the Hon’ble apex court in Dawoodi Bohra Jamaat (supra). All decisions relied upon by the Ld.Counsel for the assessee are either distinguishable for the reason that they were rendered on the issue of grant of registration u/s 12A of the Act, which is a totally different proposition, where the provisions of section 13(1)(b) in any case do not get invoked at all. We have also dealt with the issue of nature of the Kedva Patels and found them to be a caste. The decision of the ITAT in the case of Leuva Patel Nutan Kelwani Mandal 12 ITD 276(Ahd), which the assessee has relied upon stating that it was established in the said case that both the Leuva and Kedva Patel Community were neither religious communities nor caste, we have noted examined the issue only from the aspect of the community having any connection with a particular religion. Therefore it cannot be said that there was any finding relating to the group of people representing a caste. I.T.A No. 187/Rjt/2016 A.Y. 2011-12 Page No Shree Maliya Kadva Patel Seva Samaj vs. ITO 16 25. In view of the above, appeal of the assessee is dismissed in above terms. Order pronounced in the open court on 29-06-2022 Sd/- Sd/- (TR SENTHIL KUMAR) (ANNAPURNA GUPTA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER Ahmedabad: Dated 29/06/2022 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, राजकोट