Shri Sayla Sukhadiya Parivar Trust, Surendranagar V. The CIT (Exemp.), Ahmedabad

ITA 468/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89511 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-06-2015
• Assessment Year: 2014-2015
• Appeal Filed On: 04-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T P KRISHNA KUMAR
• Assessee Lawyers: PRANALI THAKORE
• Keywords: Gift; Charitable institution
• Section: 12AA; 12; 11

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO. 468/AHD/2015 / ASSESSMENT YEAR: 2014-15 SHRI SAYLA SUKAHADIYA PARIVAR TRUST C/O. SHETH RAMNIKLAL JAYANTILAL NR. CHHATRI MAIN BAZAR AT: SAYLA 363 430 DIST: SURENDRANAGAR. VS CIT(EXEMPTION) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE(S) BY : PRANALI THAKORE REVENUE BY : SHRI T.P. KRISHNAKUMAR, CIT-DR / DATE OF HEARING : 04/06/2015 / DATE OF PRONOUNCEMENT: 12/06/2015 $%/ O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME- TAX (EXEMPTIONS), AHMEDABAD DATED 12.1.2015. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL OF THE AS SESSEE THAT THE CIT(EXEMPTIONS) WAS NOT JUSTIFIED IN DENYING THE RE GISTRATION UNDER SECTION 12AA OF THE I.T. ACT ON THE GROUND THAT THE TRUST IS CREATED FOR THE BENEFIT OF A PARTICULAR COMMUNITY, WHICH DOES N OT ENURE FOR THE BENEFIT OF THE PUBLIC, AND THUS, HIT BY SECTION 13( 1)(B) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PUBLIC TRUST REGISTERED UNDER THE BOMBAY REGISTRATION ACT, 1950 VIDE REGISTRATION NO.A/1374/SURENDRANAGAR DATED 6.5.2014 ISSUED BY AS SISTANT CHARITY COMMISSIONER, SURENDRANAGAR. THE ASSESSEE-TRUST F ILED APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE I.T. ACT ON 24.7.2014 IN FORM ITA NO.468/AHD/2015 2 NO.10A. THE CIT(EXEMPTIONS), AHMEDABAD VIDE ORDER DATED 12.1.2015 DENIED REGISTRATION TO THE TRUST BY OBSERVING THAT THE OBJECTS OF THE TRUST SHOWS THAT THE TRUST IS ESTABLISHED FOR THE B ENEFIT OF A PARTICULAR COMMUNITY AND NOT FOR GENERAL PUBLIC. THEREFORE, I T IS CONCLUDED THAT THE TRUST IS CREATED FOR THE BENEFIT OF A PARTICULA R COMMUNITY WHICH DOES NOT ENURE FOR THE BENEFIT OF THE PUBLIC, AND THUS, HIT BY SECTION 13(1)(B) OF THE ACT. 4. THE AR OF THE ASSESSEE RELIED ON THE DECISION O F THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. BARKATE S AIFIYAH SOCIETY, 213 ITR 492 (GUJ) WHEREIN THE HONBLE HIGH COURT HELD T HAT SECTION 13(1)(B) APPLIES ONLY TO TRUST WHICH WERE PURELY FOR CHARITA BLE PURPOSES AND THE ASSESSEE TRUST WAS CHARITABLE AS WELL AS RELIGIOUS IN NATURE, AND THE ASSESSEE WAS ENTITLED TO EXEMPTION UNDER SECTION 11 . IT WAS SUBMITTED THAT SIMILARLY IN THE CASE OF THE ASSESSEE, THE ASS ESSEE-TRUST WAS FORMED FOR DOING THE WORK OF RELIGIOUS AND CHARITAB LE ACTIVITIES, AND THEREFORE, IN VIEW OF THE DECISION OF THE HONBLE G UJARAT HIGH COURT, DENIAL OF REGISTRATION TO THE ASSESSEE WAS NOT JUST IFIED. 5. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE OR DER OF THE COMMISSIONER OF INCOME TAX (EXEMPTION). 6. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED O RDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FOLLOWING ARE THE OBJECTS OF THE TRUST:- (1) THIS TRUST MAIN AIMS AND OBJECTS TO WORK FOR WELFAR E OF SHREE SAYLA SUKHADIYA PARIVAR, CHARITY WORK AND REL IGIOUS WORK FOR SOCIETIES. (2) THIS TRUST WILLING TO WORK FOR EDUCATIONAL ACTIVITI ES AND FOR THAT TO ESTABLISH SHISUMANDIR, PRIMARY SCHOOL, SECO NDARY SCHOOL, HIGHER SECONDARY SCHOOL, COLLEGE, TECHNICAL COLLEGE, HOSTEL, GURUKUL ETC. ITA NO.468/AHD/2015 3 (3) TRUST WILLING TO INSPIRING SMART STUDENTS AND HONOU R THEM WITH GIFT, MEDAL, SCHOLARSHIP, BOOKS, AND ARRANGE F ACILITIES FOR THEIR FURTHER STUDIES. (4) TRUST WILLING TO START COMMERCIAL INSTITUTIONS AND MAINTAIN PROPERLY AND HELP TO OTHER INSTITUTE RUNNING SAME A CTIVITIES. (5) TRUST WILLING TO START ACTIVITIES FOR VILLAGE WELFA RE AND PROGRESS BY TECHNICALLY AND SMALL SCALE INDUSTRIES WITH GIVING NECESSARY KNOWLEDGE AND TRAINING TO THE VILL AGE PEOPLES. (6) TRUST WILLING TO START ACTIVITIES FOR BENEFIT OF GE NERAL PUBLIC AND START WORK FOR RELIGIOUS AND CHARITABLE ACTIVIT IES AND HELP TO OTHER INSTITUTIONS. (7) TRUST WILLING TO DISTRIBUTE NOTE-BOOKS TO SUKHADIYA PARIVARS SCHOOL-COLLEGE STUDENTS AND ARRANGE TO DISTRIBUTE M EDICINES FREE OF CHARGES TO NEEDED PATIENTS. (8) TRUST WILLING TO ARRANGE FREE RELIGIOUS YATRA PRAVA S FOR SUKHADIYA PARIVAR AND ARRANGE TO GIVE NECESSARY LOA N TO PARIVARS STUDENTS FOR THEIR HIGHER EDUCATIONAL STU DY. (9) TRUST WILLING TO TRY FOR UPLIFT HIDDEN ABILITIES OF PEOPLE AND INSPIRE THEM TO TAKE PART IN SPORTS, CULTURAL PROGR AMME, MUSIC, DRAMA AND DANCING ACTIVITIES AND ARRANGE COMPETITION PROGRAMME FOR THESE ACTIVITIES. (10) TRUST WILLING TO ACTIVITIES FOR EKTA BROTHERHOOD BETWEEN ALL PARIVAR MEMBERS AND ARRANGE MELAVADA, SANMELAN, SIB IR, SAMUHLAGNA AND FOR THAT WILLING TO ESTABLISH COMMUN ITY HALL, BHOJAN SHALA, GNATI-WADI AND MAINTAIN AND REN OVATE WADI AND ARRANGE RELIGIOUS PROGRAMME FOR SUKHADIYA PARIVAR GNATI. (11) TRUST WILLING TO START ACTIVITIES HELPLESS PEOPLES AND DO NECESSARY WORK FOR WELFARE OF COMMON PEOPLES. ITA NO.468/AHD/2015 4 (12) TRUST WILLING TO WORK FOR ECONOMICALLY WEAKER PERSO N AND ARRANGE FOR SOCIETYS BANK AND ARRANGE ECONOMICALLY HELP TO THE NEEDED PERSON AND ARRANGE TO ESTABLISH DHARMSHA LA. (13) TRUST WILLING TO WORK FOR ECONOMICALLY WEAKER WOMEN BY STARTING TRAINING OF HANDICRAFT CENTRE, GALICHA VAN AT, RASAM VANAT, HOZIARY, KUTIR UDYOG, SMALL SCALE UDYOG FOR THEIR BETTER LIVELIHOOD. (14) TRUST WILLING TO PROVIDE NECESSARY HELP AT THE TIME OF NATURAL CALAMITY AS LIKE EARTHQUAKE, FLOOD, FIRE, TSUNAMI, ETC. AND PROVIDE FOOD, GARMENTS, WATER ETC., AND PROVIDE CAT TLE FOOD AND CHAN TO THE EFFECTED ANIMALS AND BIRDS. (15) TRUST WILLING TO GIVE SHELTER TO HELPLESS OLD AGE P EOPLE, WOMEN HANDICAPE, BLIND, DEAF, PEOPLE AND ARRANGE FO R VRUDHASHRAM, ANATHASHRAM AND ARRANGE FOR NECESS ARY ACTIVITIES TO MAINTAIN THEIR LIVELIHOOD. (16) TRUST WILLING TO PROVIDE NECESSARY MEDICAL HELP TO POOR PERSONS BY STARTING MEDICAL CAMPS, LABORATORIES, ME DICINES AND AMBULANCE FACILITIES AND FOR BETTER TREATMENT T RUST WILL TAKE HELP FROM GOVERNMENT MEDICAL SCHEME. (17) TRUST WILLING TO ARRANGE NECESSARY WORK TO PROVIDE BANKABLE SCHEME, VRUDH PENSION SCHEME, MAHARSHI ASTVARDHAK SCHEME, MANREGA SCHEME AND REFORM POSITION OF COMMO N POOR PERSONS. (18) TRUSTY WILLING TO INSPIRE YOUTH FOR ARRANGE NECESSA RY ACTIVITIES AS LIKE YOG-CENTRE, OUTDOOR, INDOOR GAME S, AND TO GIVE PROPER UNDERSTANDING REGARDING WELFARE FOR SUK HADIYA PARIVAR, AND ARRANGE PARICHAYA MELA, SEMINAR, MAGAZ INE, PATRIKA, AND OTHER PUBLICATION FOR BETTER PROSPECT OF SOCIETY. 7. THE COMMISSIONER OF INCOME TAX (EXEMPTION) HAS A FTER CONSIDERING THE FOLLOWING 3 OBJECTS HAS HELD THAT T HE TRUST WAS ITA NO.468/AHD/2015 5 CONSTITUTED FOR THE BENEFIT OF A PARTICULAR COMMUNI TY AND NOT FOR GENERAL PUBLIC. (1) THIS TRUST MAIN AIMS AND OBJECTS TO WORK FOR W ELFARE OF SHREE SAYLA SUKHADIYA PARIVAR, CHARITY WORK, AND RELIGIOUS WORK FOR SOCIETIES. (1) TRUST WILLING TO DISTRIBUTE NOTE-BOOKS TO SUKHADIYA PARIVARS SCHOOL-COLLEGE STUDENTS AND ARRANGE TO DISTRIBUTE M EDICINES FREE OF CHARGES TO NEEDED PATIENTS. (2) TRUST WILLING TO ARRANGE FREE RELIGIOUS YATRA PRAVA S FOR SUKHADIYA PARIVAR AND ARRANGE TO GIVE NECESSARY LOA N TO PARIVARS STUDENTS FOR THEIR HIGHER EDUCATION SOCIE TY. 8. WE FIND THAT BEFORE US THE A.R. OF THE ASSESSEE HAS RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN T HE CASE OF C.I.T. VS. BARKATE SAIFIYAH SOCIETY 213 ITR 492 (GUJ.) (SUPRA) , WHEREIN IT WAS HELD AS UNDER:- THE TRIBUNAL HAS RIGHTLY HELD THAT SECTION 13(1)(B ) APPLIES ONLY TO TRUSTS WHICH WERE PURELY FOR CHARITABLE PURPOSES AN D THE ASSESSEE TRUST WAS CHARITABLE AS WELL AS RELIGIOUS IN NATURE AND THE ASSESSEE WAS ENTITLED TO EXEMPTION UNDER SECTION 11 . HENCE, QUESTION NO.1 IS ANSWERED IN THE AFFIRMATIVE IN FAV OUR OF THE ASSESSEE AND AGAINST THE REVENUE. 9. FURTHER, WE OBSERVE THAT THE AHMEDABAD BENCH OF THE TRIBUNAL VIDE ORDER DATED 6-8-2010 IN ITA NO.4470/AHD/2007 I N THE CASE OF SHREE VASUPUJYA SWAMI JAIN DERASAR TRUST VS. CIT VA LSAD HAS HELD AS UNDER:- HONBLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION VS. CIT (1971) 82 ITR 704 HELD TH AT FOR SERVING A CHARTABLE PURPOSE, IT IS NOT NECESSARY THAT THE O BJECT SHOULD BE FOR THE BENEFIT OF THE WHOLE MANKIND OR ALL PERSONS IN A COUNTRY OR ITA NO.468/AHD/2015 6 A STATE AND IT IS SUFFICIENT IF THE INTENTION IS TO BENEFIT, A SECTION OF THE PUBLIC AS DISTINGUISHED FROM A SPECIFIC INDIVID UAL OR PERSON. IT WAS ALSO HELD THAT THE SECTION OF THE COMMUNITY SOU GHT TO BE BENEFITED MUST BE SUFFICIENTLY DEFINED AND IDENTIFI ABLE BY SOME COMMON QUALITY OF A PUBLIC OR IMPERSONAL NATURE. 10. FURTHER THE AHMEDABAD BENCH-C OF THE TRIBUNAL I N THE CASE OF SHIYA DAWOODI BOHRA JAMAT VS. CIT [2011 133 ITD 271 (AHD), IN ITA NO.2767/AHD/2009 VIDE ORDER DATED 8-7-2011 HAS HELD AS UNDER: 6. THAT SEC. 13(1)(B)READS AS UNDER: 13 SEC. 11 N OT TO APPLY IN CERTAIN CASES (1) NOTHING IN S. 11 OR S. 12 SH ALL OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVIOUS YE AR OF THE PERSON IN RECEIPT THEREOF (A)(B) IN THE CASE OF A TRUST FOR CHARITABLE PURPOSES OR A CHARITABLE INSTITUTION CRE ATED OR ESTABLISHED AFTER THE COMMENCEMENT OF THIS ACT, ANY INCOME THEREOF IF THE TRUST OR INSTITUTION IS CREATED OR E STABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CA STE; 7. FROM THE ABOVE, IT IS EVIDENT THAT THE S. 13(1)( B) IS APPLICABLE FOR A TRUST WHICH IS ESTABLISHED FOR CHA RITABLE PURPOSE. THEREFORE, S. 13(1)(B) IS NOT APPLICABLE FOR RELIGI OUS TRUST. THIS ISSUE IS CONSIDERED BY THE HONBLE JURISDICTIONAL H IGH COURT IN THE CASE OF BARKATE SAIFIYAH SOCIETY (SUPRA) WHEREIN TH EIR LORDSHIPS HELD AS UNDER. THAT THE TRIBUNAL HAS RIGHTLY HELD THAT S. 13(1)(B ) APPLIES ONLY TO TRUSTS WHICH WERE PURELY FOR CHARITABLE PUR POSES AND THE ASSESSEE-TRUST WAS CHARITABLE AS WELL AS RELIGI OUS IN NATURE AND THE ASSESSEE WAS ENTITLED TO EXEMPTION U NDER S. 11 OF THE ACT. 8. SIMILAR VIEW IS TAKEN BY HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF DAWOODI BOHRA JAMAT(SUPRA) WHEREIN T HEIR LORDSHIPS HELD AS UNDER : THAT S. 13(1)(B) IS ATTRACTED IN THE CASE OF INCOM E OF THE TRUST FOR CHARITABLE PURPOSE OF A COMMUNITY OR CAST E, WHICH WAS NOT THE CASE HERE. THUS, THE TRIBUNAL RIGHTLY D ECIDED THE ISSUE OF APPLICABILITY OF S. 13 (1)(B) HOLDING THAT SINCE THE ASSESSEE WAS A RELIGIOUS TRUST, THE PROVISIONS OF S. ITA NO.468/AHD/2015 7 13(1)(B) WERE NOT APPLICABLE BECAUSE THEY WERE APPL ICABLE IN THE CASE OF THE TRUST ESTABLISHED FOR CHARITABLE PURPOSES. 11. FURTHER, AGRA BENCH OF THE TRIBUNAL IN THE CASE OF DAWOODI BOHRA JAMAT VS. CIT IN ITA NO.425/AGRA/2011 ORDER DATED 3 -5-2012 HAS HELD AS UNDER:- THAT SECTION 13(1)(B) IS ATTRACTED IN THE CASE OF INCOME OF THE TRUST FOR CHARITABLE PURPOSE OF A COMMUNITY OR CASTE, WHICH WAS NOT THE CASE HERE. THUS, THE TRIBUNAL RIGHTLY D ECIDED THE ISSUE OF APPLICABILITY OF SECTION 13(1)(B) HOLDING THAT SINCE THE ASSESSEE WAS A RELIGIOUS TRUST, THE PROVISIONS OF S ECTION 13 (1)(B) WERE NOT APPLICABLE BECAUSE THEY WERE APPLICABLE IN THE CASE OF THE TRUST ESTABLISHED FOR CHARITABLE PURPOSES. 12. WE FIND THAT THE ABOVE DECISIONS WERE NOT CITED BY THE ASSESSEE BEFORE THE CIT (E) AND THE CIT (E) HAS NOT TAKEN IN TO CONSIDERATION THE AFORESAID DECISIONS FOR DECIDING THE ISSUE UNDER AP PEAL. 13. IN THE CIRCUMSTANCES, IN OUR CONSIDERED VIEW IT 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. C.I.T. (E) SHALL ALLOW REASONABLE AND P ROPER OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE ADJUDICATING THE ISS UE. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 14. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 12 TH DAY OF JUNE, 2015 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 12/06/2015 PATKI. ITA NO.468/AHD/2015 8 $% & ''() *$)' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! () / THE CIT(E) 5. $%& '', / DR, ITAT, 6. &)* + / GUARD FILE. $% + / BY ORDER, ,/ - ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION- 10.6.2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10.6.2015 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. -10-6-2015 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 12-6-2015.. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .12- 6-2015 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER