Ranpariya Solanki Sukhadiya Parivar Trust, Surendranagar V. The CIT (Exemp.), Ahmedabad

ITA 467/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94620 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-11-2015
• Assessment Year: 2014-2015
• Appeal Filed On: 04-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH
• Assessee Lawyers: PRANALI V THAKORE
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE S/SHRI KUL BHARAT, JM, & MANISH BORAD, AM . ITA NO.467/AHD/2015 ASST. YEAR: 20014-15 RANPARIYA SOLANKI SUKHADIYA PARIVAR TRUST, C/O KAMLESH A. SHETH, SHETH ASSOCIATES, 27, MEDICARE COMPLEX, NR. A-ONE AUTOGARAGE, SURENDRANAGAR. VS CIT(EXEMPTION), AHMEDABAD. (APPELLANT) (RESPONDENT) PA NO.AACTR1519F APPELLANT BY PRANALI V. THAKORE, AR RESPONDENT BY SHRI JAGDISH, CIT, DR DATE OF HEARING: 3/11/2015 DATE OF PRONOUNCEMENT: 05/11//2015 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(EXEMPTION), AHMEDABAD DATED 21.1.2015 PASSED UN DER SECTION 12AA OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) . SOLITARY ISSUE INVOLVED IN THIS APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(EXEMPTION) ERRED IN REJECTING THE APPLICATION OF THE ASSESSEE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS A RELIGIOUS TRUST NEWLY CREATED FOR THE PURPOSE OF CA RRYING ON SOCIAL ITA NO. 467/AHD/2015 ASST. YEAR 2014-15 2 CHARITY, RELIGIOUS AND EDUCATIONAL ACTIVITIES. THE APPELLANT HAD MADE APPLICATION FOR REGISTRATION OF THE TRUST U/S 12AA OF THE ACT IN PRESCRIBED FORM NO.10A ON 24 TH JULY, 2014 ALONG WITH ALL NECESSARY DOCUMENTS INCLUDING REGISTRATION CERTIFICATE, TRUST DEED, PAN CARD, COPY OF CHARITY COMMISSIONERS CERTIFICATE, AUDIT R EPORT AND ALL NECESSARY UNDERTAKINGS AND DECLARATIONS AS PER THE REQUIREMENT OF PROVISIONS LAID DOWN U/S 12AA OF THE ACT. HOWEVER, LD. CIT(EXEMPTION) REJECTED THE APPLICATION FILED BY TH E APPELLANT FOR THE VERY REASON THAT THE TRUST IS ESTABLISHED FOR THE B ENEFIT OF A PARTICULAR COMMUNITY NAMELY RANPARIYA SOLANKI SUKHADIYA PARIVAR TRUST AND NOT F OR GENERAL PUBLIC. 3. AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE MAIN OBJECTS OF THE TRUST ARE WELFARE OF SHRI RANPARIYA SOLANKI SUKHADIYA PARIVAR TRUST, SOCIAL CHARITY AND RELIGIOUS WORKS, TO CONDUCT EDUC ATIONAL ACTIVITIES BY ESTABLISHING SCHOOL AND COLLEGES TO MOTIVATE STUDEN TS BY GIVING SCHOLARSHIPS, WELFARE ACTIVITIES IN THE VILLAGES AN D OTHER ACTIVITIES FOR THE BENEFIT OF GENERAL PUBLIC. THE DETAILED OBJECTS OF THE TRUST ARE MENTIONED IN THE TRUST DEED AVAILABLE FROM PAGES 19 TO 30 OF THE PAPER BOOK. THE LD. AR FURTHER SUBMITTED THAT ALL T HE REQUIREMENTS NECESSARY FOR FILING THE APPLICATION FOR REGISTRATI ON U/S 12AA OF THE ACT ALONG WITH SUPPORTING DOCUMENTS MAINLY INCLUDING PA N, CERTIFICATE OF REGISTRATION, TRUST DEED, AUDITED ACCOUNTS, UNDERTA KING AND DECLARATION, COPY OF CHARITY COMMISSIONERS CERTIFI CATE AND NOTHING CONTRARY TO THE DOCUMENTS SUBMITTED HAS BEEN OBJECT ED BY THE LD. CIT(EXEMPTION). ITA NO. 467/AHD/2015 ASST. YEAR 2014-15 3 4. AS REGARDS THE OBJECTION RAISED BY THE LD. CIT(E XEMPTION) THAT THE TRUST IS ESTABLISHED ONLY FOR THE BENEFIT OF A PARTICULAR COMMUNITY AND NOT FOR GENERAL PUBLIC, THE LD. AR SUBMITTED TH AT THE OBJECTS ENUMERATED IN THE TRUST DEED ARE NOT ONLY FOR THE S PECIFIC COMMUNITY BUT THE OBJECTS OF THE TRUST ARE ALSO TO PROVIDE BE NEFIT TO GENERAL PUBLIC AND THE SAME CAN BE INFERRED FROM THE TRUST DEED. FURTHER IN SUPPORT OF THE CONTENTIONS MADE, LD. AR RELIED ON T HE DECISION OF HONBLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CAST ASSOCIATION VS. CIT (1971) 82 ITR 704, THE DECISION S OF THE CO- ORDINATE BENCH IN THE CASE OF SHREE VASUPUJYA SWAMI JAIN DERASAR TRUST VS. CIT, VALSAD, IN ITA NO.4470/AHD/2007 DAT ED 6.8.2010 AND IN THE CASE OF SHRI SAYLA SUKHADIYA PARIVAR TRUST V S.CIT(EXEMPTION) IN ITA NO.468/AHD/2015 DATED 12.6.2015. 5. ON THE OTHER HAND THE LD. DR SUPPORTED THE ORDER OF LD. CIT(EEXEMPTION) AND ALSO SUBMITTED THAT IN THE DECI SION OF CO- ORDINATE BENCH IN THE CASE OF SHREE VASUPUJYA SWAM JAIN DERASAR TRUST VS. CIT, VALSAD IN ITA NO.4470/AHD/2007, RELI ED BY THE ASSESSEE, THE MATTER WAS RESTORED TO THE FILE OF CI T(EXEMPTION) WITH THE DIRECTIONS TO EXAMINE, THE MATTER AND, THEREFOR E, THE MATTER IN THIS APPEAL MAY BE RESTORED TO THE FILE OF CIT(EXEMPTION ). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. AS PER THE PROVISIONS OF SECTION 12AA TH E CIT(EXEMPTION) HAS TO CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS THE THINGS NECESSARY IN ORDER TO SAT ISFY HIMSELF ABOUT THE ITA NO. 467/AHD/2015 ASST. YEAR 2014-15 4 GENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTI TUTION AND MAY ALSO MAKE SUCH INQUIRIES HE MAY DEEM NECESSARY IN THIS B EHALF AND AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST O R INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES SHALL PASS ORDER OF E ITHER REGISTERING THE TRUST OR INSTITUTION OR REFUSING TO REGISTER THE TR UST OR INSTITUTION. IN THE CASE UNDER APPEAL THE ASSESSEE HAS DULY SUBMITTED A PPLICATION IN FORM NO.10A FOR SEEKING REGISTRATION U/S 12AA OF TH E ACT WITH ALL THE NECESSARY ENCLOSURES AS MENTIONED IN FORM NO.10A. T HE ONLY REASON FOR WHICH CIT(EEXEMPTION) HAS DENIED THE REGISTRATI ON IS THAT AS PER HIS OBSERVATION THE APPLICANT TRUST IS ESTABLISHED ONLY FOR THE BENEFIT OF A PARTICULAR COMMUNITY AND NOT FOR THE BENEFIT OF G ENERAL PUBLIC. 7. HONBLE SUPREME COURT IN THE CASE OF AHMEDABAD RA NA CAST ASSOCIATION VS. CIT (SUPRA) HAS EXAMINED SIMILAR IS SUE AND THE THE OBSERVATION THEREOF IS REPRODUCED BELOW :- THE ASSESSEE, AN ASSOCIATION OF PERSONS, HELD PROP ERTIES FOR VARIOUS PURPOSES INCLUDING MANAGEMENT OF THE MOVABLE AND IMMOVABLE PROPERTIES OF THE RANA CASTE OR COMMUNITY OF THE CITY OF AHMEDABAD, DOING ACTS TO IMPROVE THE EDUCATION OF THE COMMUNITY, GIVING MEDICAL HELP TO THE COMMUNITY, ETC. UNDER THE CONST ITUTION OF THE ASSESSEE THE BENEFICIARIES WERE MEMBERS OF THE RANA CASTE OR COM MUNITY WHO WERE NATIVES OF AHMEDABAD AND OTHER MEMBERS OF THE COMMUNITY ACCEPT ED BY THE CASTE ACCORDING TO ITS OLD CUSTOM AND USAGE AND STAYING IN AHMEDABAD. THE QUESTION WHETHER FOR THE PURPOSES OF THE EXEMPTION UNDER SECTION4(3)(I) OF T HE INDIAN INCOME-TAX ACT, 1922, AND SECTION 11(1)(A) OF THE INCOME-TAX ACT, 1961, THE B ENEFICIARIES CONSTITUTED A SECTION OF THE PUBLIC. HELD, THAT BETWEEN THE MEMBERS OF THE RANA CASTE OR COMMUNITY OF AHMEDABAD AND THSE WHO HAD TO GET ADMITTED TO THAT COMMUNITY ACCO RDING TO CUSTOM AND USAGE THERE WAS COMMON QUALITY WHICH UNITED THEM, NAMELY, OF BE ING MEMBERS OF THE RANA CASTE OR COMMUNITY. THE MERE FACT THAT A PERSON OF THE RANA COMMUNITY WHO WAS NOT AN ORIGINAL NATIVE OF AHMEDABAD HAD TO PROVE HIS CREDENTIALS AC CORDING TO THE CUSTOM AND USAGE OF THAT COMMUNITY TO GET ADMITTED INTO THAT COMMUNITY DID NOT INTRODUCE A PERSONAL ELEMENT WHICH WOULD DETRACT FROM THE IMPERSONAL NATURE OF T HE COMMON QUALITY. IT IS WELL SETTLED THAT AN OBJECT BENEFICIAL TO A S ECTION OF THE PUBLIC IS AN OBJECT OF GENERAL PUBLIC UTILITY. TO SERVE A CHARITABLE PURPOSE IT IS NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE WHOLE OF MANKIND OR ALL PERSONS IN A PARTICULAR COUNTRY OR STATE. IT IS ITA NO. 467/AHD/2015 ASST. YEAR 2014-15 5 SUFFICIENT IF THE INTENTION TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM A SPECIFIED INDIVIDUAL IS PRESENT. THE SECTION OF TH E COMMUNITY SOUGHT TO BE BENEFITTED MUST BE SUFFICIENTLY DEFINITE AND IDENTIFIABLE BY S OME COMMON QUALITY OF A PUBLIC OR IMPERSONAL NATURE. 8. SIMILAR ISSUE CAME UP BEFORE THE CO-ORDINATE BEN CH IN THE CASE OF SHREE VASUPUJYA SWAM JAIN DERASAR TRUST VS. CIT, VALSAD IN ITA NO.4470/AHD/2007(SUPRE) WHEREIN THE TRUST WAS FORME D FOR A PARTICULAR COMMUNITY I.E. JAIN SWETAMBAR AND THE CO -ORDINATE BENCH RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CAST ASSOCIATION VS. CIT (SUPRA) HAS HELD AS UNDER :- 4. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. IN TERMS OF PROVISIONS OF SEC. 12AA OF THE ACT, WHILE EXAMINING THE APPLICATION OF THE ASSESSEE FILED UNDER S. 12A OF THE ACT, THE CIT HAS TO SATISFY HIMSELF REGARDING OBJECTS OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES AFTER MAKING NECESSARY ENQUIRIES ,IF CONSIDERED NECESSARY. IN TH E INSTANT CASE, THE LD. CIT DECLINED REGISTRATION ON THE GROUND THAT OBJECTS OF THE TRUST ARE NOT CHARITABLE. THE LD. CIT HAS NOT SPECIFIED AS TO WHICH PARTICULA R OBJECT IS NOT CHARITABLE OR IS FOR A PARTICULAR COMMUNITY OR CASTE.. THE MAIN OBJE CTS OF THE TRUST ,AS PLACED BEFORE US ON PAGE 4 OF THE PAPERBOOK, ARE UNDISPUTE DLY RELIGIOUS IN NATURE. RELIGIOUS ACTIVITIES ARE ALSO CONSTRUED TO BE CHARI TABLE ACTIVITIES AS PER THE DECISIONS IN CIT VS. RADHASWAMI SATSANG (1993 ) 201 ITR 493 ( ALL) AND HAZARAT PIRMAHOMED SHAH SAHEB ROZA COMMITTEE VS. CIT (1967) 63 ITR (SC) 490 . . MOREOVER, HONBLE SUPREME COURT IN THE CASE OF AHME DABAD RANA CASTE ASSOCIATION V. CIT [1971] 82 ITR 704 HELD THAT FOR SERVING A CHARITABLE PURPOSE, IT IS NOT NECESSARY THAT THE OBJECT SHOULD BE FOR THE BENEFIT OF THE WHOLE MANKIND OR ALL PERSONS IN A COUNTRY OR A STATE AND IT IS SUFFI CIENT IF THE INTENTION IS TO BENEFIT, A SECTION OF THE PUBLIC AS DISTINGUISHED FROM A SPECI FIC INDIVIDUAL OR PERSON. IT WAS ALSO HELD THAT THE SECTION OF THE COMMUNITY SOUGHT TO BE BENEFITED MUST BE ITA NO. 467/AHD/2015 ASST. YEAR 2014-15 6 SUFFICIENTLY DEFINED AND IDENTIFIABLE BY SOME COMMO N QUALITY OF A PUBLIC OR IMPERSONAL NATURE. IN VIEW OF THE FOREGOING, WE FIN D MERIT IN THE UNDISPUTED CONTENTIONS OF THE LD. AR ON BEHALF OF THE TRUST AN D ACCORDINGLY, RESTORE THE MATTER TO THE FILE OF THE LD. CIT WITH THE DIRECTIO NS TO RE-EXAMINE THE MATTER IN THE LIGHT OF VARIOUS OBJECTS OF THE TRUST STIPULATED IN THE TRUST DEED AND AFTER SATISFYING HIMSELF ABOUT THE GENUINENESS OF OBJECTS OF THE TRU ST AND ITS ACTIVITIES, PASS APPROPRIATE ORDERS IN ACCORDANCE WITH LAW AFTER ALL OWING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TRUST. WITH THESE DIRECTIONS GROUND NO S. 1 TO 4 IN THE APPEAL ARE DISPOSED OF. 8. IN THE CASE OF SHRI SAYLA SUKHADIYA PARIVAR TRU ST VS.CIT(EXEMPTION) (SUPRA), SIMILAR ISSUE CAME UP BE FORE THE TRIBUNAL, WHEREIN COMMISSIONER OF INCOME-TAX (EXEMPTION) HELD THAT THE TRUST WAS CONSTITUTED FOR THE BENEFIT OF A PARTICULAR COM MUNITY AND NOT FOR GENERAL PUBLIC, THE CO-ORDINATE BENCH, HELD AS UNDE R :- 13. IN THE CIRCUMSTANCES, IN OUR CONSIDERED VIEW I T SHALL BE JUST AND IN THE INTEREST OF JUSTICE TO RESTORE THE MATTER BACK TO THE CIT)E) FOR DECIDING THE ISSUE AFTER TAKING INTO CONSIDERATION THE ABOVE STATED DECISIONS. CIT(E) SHALL ALLOW REAS ONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE BEFOR E ADJUDICATING THE ISSUE. THUS THE APPEAL OF THE ASSE SSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. APPLYING THE RATIO OF HONBLE SUPREME COURT AHM EDABAD RANA CAST ASSOCIATION VS. CIT (SUPRA), THE DECISION OF T HE CO-ORDINATE BENCH IN THE CASE OF SHREE VASUPUJYA SWAM JAIN DER ASAR TRUST VS. CIT, VALSAD (SUPRA) AND THE DECISION OF CO-ORDINAT E BENCH IN THE ITA NO. 467/AHD/2015 ASST. YEAR 2014-15 7 CASE OF SHRI SAYLA SUKHADIYA PARIVAR TRUST VS.CIT(E XEMPTION) (SUPRA), TO THE FACTS OF THE CASE OF ASSESSEE, WHER EIN THE TRUST IS FORMED MAINLY FOR THE BENEFIT OF A PARTICULAR COMMU NITY I.E. SHRI RANPARIYA SOLANKI SUKHADIYA PARIVAR TRUST BUT THE T YPE OF ACTIVITIES WHICH THE TRUST IS RUNNING ARE FOR GENERAL PUBLIC A LSO I.E. FOR CHARITY, MEDICAL RELIEF AND PROMOTION OF EDUCATIONAL ACTIVIT IES, WE ARE OF THE VIEW THAT THE TRUST IS SERVING CHARITABLE ACTIVITIE S. ACCORDINGLY IN OUR CONSIDERED VIEW IT WILL BE JUST AND IN THE INTEREST OF JUSTICE TO RESTORE THE MATTER BACK TO THE LD. CIT(E) WITH THE DIRECTIO NS TO RE-EXAMINE THE MATTER IN THE LIGHT OF VARIOUS DECISIONS MENTIONED ABOVE AS WELL AS THE OBJECTS OF THE TRUST STIPULATED IN THE TRUST DEED SO AS TO SATISFY HIMSELF ABOUT THE GENUINENESS OF OBJECTS OF THE TRU ST AND ITS ACTIVITIES AND PASS APPROPRIATE ORDERS IN ACCORDANCE WITH LAW AFTER ALLOWING REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE ADJUDICATING THE ISSUE. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH NOV 2015 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 5/11/2015 MAHATA/- ITA NO. 467/AHD/2015 ASST. YEAR 2014-15 8 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 3/11/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 4//11/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 5/11/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: