Ramnathpara Sandhi Samaj Sunni Muslim Jamat, RAJKOT-GUJARAT V. The Commissioner of Income Tax, Rajkot-II, RAJKOT-GUJARAT

ITA 393/RJT/2011

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0157 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-10-2012
• Assessment Year: misc
• Appeal Filed On: 18-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG
• Assessee Lawyers: DM RINDANI
• Section: 12AA

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBUNAL: RAJKOT BENCH: RAJKOT . .. . . . . . . .. . . . . . # # # # BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTA VA AM ITA NO.393/RJT/2011 RAMNATHPARA SANDHI SUNNI MUSLIM JAMAT V. CIT-II GAMETI HALL, LAKHAJIRAJ RAJKOT SHRAMJIVI HOUSING SOCIETY ST. NO.1, RAJKOT PAN: AAATR6992A DATE OF HEARING: 16.10.2012 DATE OF PRONOUNCEMENT: 30.10.2012 FOR THE ASSESSEE: D M RINDANI, FCA FOR THE REVENUE: ANKUR GARG, DR / // / ORDER . .. . . . . . /D. K. SRIVASTAVA: THE APPEAL FILED BY THE APPELLANT-TRUST IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSION ER OF INCOME-TAX ON 28-09- 2011 U/S.12AA OF THE INCOME-TAX ACT, READ WITH RULE -17A OF THE INCOME-TAX RULES, ON THE FOLLOWING GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX - II, RAJ KOT HAS ERRED IN REJECTING THE APPLICATION FOR REGISTRATION U/S.12AA MADE BY THE APPELLANT-TRUST. 2. THE LEARNED COMMISSIONER OF INCOME TAX - II, RAJ KOT HAS ERRED IN HOLDING THAT THE APPELLANT-TRUST HAD VIOLATED THE P ROVISIONS OF SEC.13(1) (B) OF THE ACT. 2. THE APPELLANT-TRUST WAS ESTABLISHED ON 01-07-196 9 AND SUBSEQUENTLY REGISTERED WITH THE CHARITY COMMISSIONER ON 22-09-1 969. THE TRUST APPLIED FOR REGISTRATION U/S 12AA OF THE INCOME-TAX ACT ON 11-0 3-2011 AND ACCORDINGLY SUBMITTED ITS APPLICATION IN FORM NO.10A BEFORE THE COMMISSIONER OF INCOME-TAX. THE COMMISSIONER OF INCOME-TAX EXAMINED THE APPLICA TION FILED BY THE ASSESSEE. HE HOWEVER, REFUSED TO REGISTER THE TRUST U/S.12AA, WITH THE FOLLOWING OBSERVATIONS:- 4. THE SUBMISSION OF THE TRUST HAS BEEN DULY CONSI DERED. IT IS GENERAL IN NATURE. THE TRUST HAS BEEN REGISTERED WITH THE CHA RITY COMMISSIONER ON 22.09.1969 AND AFTER A LAPSE OF ABOUT 41 YEARS THE TRUST HAS APPLIED FOR REGISTRATION U/S.12AA OF THE ACT. IT IS REPORTED B Y THE AO THAT THE TRUST HAS NOT APPLIED 85 PERCENT OF HIS INCOME FOR THE CHARIT ABLE PURPOSE. AS THE TRUST HAS BEEN CREATED FOR A PARTICULAR RELIGIOUS COMMUNI TY/CASTE I. E. SANDHI SUNNY MUSLIM, THERE IS VIOLATION OF SECTION 13(1)( B) OF THE ACT. THIS HAS 2 ITA 393/RJT/2011 BEEN ACCEPTED BY THE TRUST IN THE SUBMISSION DATED 16.09.2011. AS SUCH THE TRUST CAN NOT BE GRANTED REGISTRATION U/S.12AA. 5. FURTHER, IT IS SUBMITTED BY THE TRUST THAT THE S UNNY MUSLIM CAST HAS BEEN CONSIDERED AS SOCIALLY AND EDUCATIONALLY BACKW ARD CLASS. HOWEVER, NO CERTIFICATE FROM THE GOVERNMENT OF INDIA IN THIS RE GARD IS SUBMITTED. 6. IN VIEW OF THE ABOVE FACTS OF THE CASE, I AM SAT ISFIED THAT THE APPLICATION MADE BY THE TRUST ON 11.09.2011 FOR REG ISTRATION U/S.12AA OF THE INCOME TAX ACT, 1961 HAS NO MERITS. ACCORDINGLY, T HE SAME IS HEREBY REJECTED. 3. AGGRIEVED BY THE ORDER PASSED BY THE LD. COMMISS IONER OF INCOME-TAX, THE APPELLANT-TRUST IS NOW IN APPEAL BEFORE THIS TRIBUN AL. 4. IN SUPPORT OF APPEAL, THE LD. AUTHORIZED REPRESE NTATIVE FOR THE TRUST FAIRLY SUBMITTED THAT ONLY THOSE PERSONS, AND NONE ELSE, W HO ARE MEMBERS OF SANDHI SUNNI MUSLIM COMMUNITY AND HAVING FAITH IN SUNNI MU SLIM CULT WERE ELIGIBLE TO BECOME A MEMBER OF THE TRUST. HE FURTHER SUBMITTED THAT ONLY MEMBERS OF SANDHI SUNNI MUSLIM CULT, AND NONE ELSE, COULD BE ASSOCIAT ED WITH THE MANAGEMENT OF THE TRUST. INVITING OUR ATTENTION TO THE OBJECTS OF THE TRUST, HE FAIRLY SUBMITTED THAT THE OBJECTS OF THE TRUST INCLUDED BUILDING AND MAINTAIN ING MOSQUES AND CELEBRATING RELIGIOUS FESTIVALS. HE HOWEVER SUBMITTED THAT THE PROHIBITION OF SEC.13(1) WOULD NOT APPLY TO TRUSTS CREATED OR ESTABLISHED FOR THE BENE FIT OF SCHEDULED CASTES, BACKWARD CLASSES, SCHEDULED TRIBES OR WOMEN AND CHILDREN IN VIEW OF EXPLANATION 2 TO SECTION 13 OF THE INCOME-TAX ACT. HE FURTHER SUBMIT TED THAT SANDHI SUNNI MUSLIMS HAVE BEEN DECLARED AS SCHEDULED CASTES/BACKWARD CLA SSES AND THEREFORE THE APPELLANT-TRUST WAS LIABLE TO BE TREATED AS ONE EST ABLISHED OR CREATED FOR THE BENEFIT OF SCHEDULED CASTES OR BACKWARD CLASSES AND RESULTA NTLY THE PROHIBITION OF SECTION 13(1) WOULD NOT APPLY TO IT. ON HIS ATTENTION BEING DRAWN TO THE OBSERVATIONS MADE BY THE LD. COMMISSIONER OF INCOME-TAX IN PARA-5 OF HIS ORDER, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT HE W AS PREPARED TO GO BACK BEFORE THE LD. COMMISSIONER OF INCOME-TAX AND SUBMIT RELEV ANT EVIDENCE TO ESTABLISH THAT SANDHI SUNNI MUSLIMS HAVE BEEN DECLARED BY THE GOVE RNMENT AS SCHEDULED CASTES/BACKWARD CLASSES. 5. IN REPLY, THE LD. DR SUPPORTED THE ORDER PASSED BY THE LD. COMMISSIONER. 6. WE HAVE HEARD BOTH THE PARTIES. IT IS QUITE EVID ENT THAT THE TRUST HAS BEEN CREATED FOR RELIGIOUS PURPOSES AND THEREFORE HIT BY THE PROVISIONS OF SUB-SECTION (1) OF SECTION 13 OF THE I-T ACT. THE LD. COMMISSIONER IS THEREFORE JUSTIFIED IN REJECTING TO REGISTER THE TRUST U/S 12AA ON THE GROUND THAT IT W AS CREATED OR ESTABLISHED FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY. HIS OR DER TO THE AFORESAID EXTENT IS CONFIRMED. 3 ITA 393/RJT/2011 7. THE ALTERNATIVE SUBMISSION OF THE TRUST THAT EXP LANATION 2 TO SECTION 13 OF THE INCOME-TAX ACT ADEQUATELY PROTECTS THE ASSESSEE FRO M THE RIGOURS OF SUB-SECTION (1) OF SECTION 13 DESERVES CONSIDERATION. IT IS TRUE TH AT THE APPELLANT-TRUST HAS NOT BEEN ABLE TO FILE RELEVANT EVIDENCE BEFORE THE LD. COMMI SSIONER OF INCOME-TAX TO SUBSTANTIATE ITS CLAIM THAT SANDHI SUNNI MUSLIMS HA VE BEEN NOTIFIED BY THE GOVERNMENT AS SCHEDULED CASTES/BACKWARD CLASSES. TH E LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HOWEVER SUBMITS THA T THE TRUST WOULD FILE RELEVANT EVIDENCE IN SUPPORT OF ITS CLAIM BEFORE THE LD. COM MISSIONER OF INCOME-TAX IF IT IS GIVEN AN OPPORTUNITY TO DO SO. IN THE LARGER INTERE ST OF JUSTICE, WE CONSIDER IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. COMMISSIONER OF INCOME-TAX AND RESTORE THE MATTER TO HIS FILE TO EX AMINE THE MATTER AFRESH IN THE LIGHT OF EXPLANATION 2 TO SECTION 13 OF THE I-T ACT. WE ORDER ACCORDINGLY. IT IS CLARIFIED THAT THE BURDEN SHALL BE ON THE ASSESSEE TO PROVE A ND ESTABLISH THAT ITS CASE IS SQUARELY COVERED BY THE PROVISIONS OF EXPLANATION 2 TO SEC.13 OF THE INCOME-TAX ACT. 8. APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOW ED FOR STATISTICAL PURPOSES. & ) 30.10.2012 & ORDER PRONOUNCED ON 30.10-2012 SD/- SD/- ( . . / T. K. SHARMA) ( .. / D. K. SRIVASTAVA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER /RAJKOT: 30-10-2012 NVA/- & && & -. -. -. -. /. /. /. /. / COPY OF ORDER FORWARDED TO:- 1.2 / APPELLANT-RAMNATHPARA SANDHI SUNNI MUSLIM JAMAT, RAJKOT 2 -42 / RESPONDENT- THE COMMISSIONER OF INCOME-TAX-II, R AJKOT 3. 8 / CONCERNED CIT-I, RAJKOT 4. 8- / CIT (A)-II, RAJKOT 5. . -, , / DR, ITAT, RAJKOT 6. / GUARD FILE / BY ORDER TRUE COPY. SENIOR PRIVATE SECRETARY, ITAT , RAJKOT