Panoli Industrial Infrastructure Project Ltd., Ankleshwar V. The CIT-II, Baroda

ITA 469/AHD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1545 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 18-05-2016
• Assessment Year: misc
• Appeal Filed On: 11-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R N PARBAT
• Keywords: Gift; Charitable institution
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI KUL BHARAT, JM, & SHRI MANISH BORAD, AM. ITA NO.469/AHD/2014 ASST. YEAR: PANOLI INDUSTRIAL INFRASTRUCTURE PROJECTS LTD., L/913-10, GIDC, PANOLI, NEAR INDIAN BANK, ANKLESHWAR. VS. CIT-III, BARODA. APPELLANT RESPONDENT PAN AAECT 3943J APPELLANT BY SHRI SUNIL TALATI, AR RESPONDENT BY SHRI R. N. PARBAT, CIT/DR DATE OF HEARING: 18/5/2016 DATE OF PRONOUNCEMENT: 23/5/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . ASSESSEE IS IN APPEAL AGAINST THE ORDER OF LD. CIT -III, BARODA DATED 16.12.2013 IN APPEAL NO.BRD / CIT-III / TECH /12(A)/110/A.E/ 2013-14 PASSED UNDER SECTION 12AA(1)(B)(II) READ WI TH SECTION 12A OF THE IT ACT, 1961 (IN SHORT THE ACT). 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT ASSESS EE COMPANY FORMED U/S 25 OF THE COMPANIES ACT, 1956 WAS INCORP ORATED ON 27.4.2007, FILED AN APPLICATION FOR REGISTRATION U/ S 12A OF THE ACT ON 29.9.2008. BEFORE LD. CIT-III, BARODA, THIS APPLICA TION U/S 12A WAS ITA NO. 469/AHD/2014 ASST. YEAR 2 REJECTED VIDE ORDER DATED 31.3.2009. AGAINST THE OR DER OF LD. CIT-III AN APPEAL WAS PREFERRED BEFORE THE TRIBUNAL AND THE TR IBUNAL IN ITA NO.1656/AHD/2009 VIDE ORDER DATED 6/7/2012 RESTORED THE MATTER BACK TO THE FILE OF LD. CIT WITH A SPECIFIC DIRECTI ON TO VERIFY THE OBJECT AND THE STATEMENTS OF THE FACTS AS THAT OF NANDESAR I WATER AND UTILITIES LTD. AS THE MATTER IS COVERED MATTER BY T HE DECISION OF THE TRIBUNAL IN ITA N.2506/AHD/2008 DATED 12.12.2008. T HEREAFTER LD. CIT VIDE HIS ORDER DATED 16.12.2013 REJECTED THE AP PLICATION U/S 12A OF THE ACT ONCE AGAIN NOT RELYING ON THE DECISION O F THE TRIBUNAL IN THE CASE OF NANDESARI WATER & UTILITIES LTD. SAYING THA T THE SAME HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE MATTER IS I N APPEAL BEFORE HON. GUJARAT HIGH COURT. 3. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 4. LD. AR SUBMITTED THAT, THE COMPANY WAS FORMED ON 27.04.2007 AND REGISTERED U/S 25 OF THE COMPANIES ACT, 1956. T HE MAIN OBJECTS OF THE COMPANY IS TO BUILD, CONSTRUCT, OPERATE AND MAINTAIN WATER SUPPLY SCHEME, DRAINAGE SCHEME, GAS UTILITY SERVIC ES, POWER UTILITY, ROAD NETWORK, RAIN WATER HARVESTING, ARTIFICIAL REC HARGING AND OTHER UTILITIES OF PANOLI G.I.D.C. INDUSTRIAL ESTAT E & SURROUNDING VILLAGE FOR THE BENEFIT OF MEMBER INDUSTRIES, AND T HE DOING OF ALL SUCH OTHER LAWFUL THINGS AS ARE INCIDENTAL OR CONDUCIVE TO THE ATTAINMENT OF THE ABOVE OBJECTS. ITA NO. 469/AHD/2014 ASST. YEAR 3 IT MAY BE APPRECIATED THAT, SECTION 2(15) DEFINES ' CHARITABLE PURPOSE' INCLUDES INTER ALIA THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. CIT HAS ONLY REFERRED TO CL AUSE 1 OF PART (A) OF THE OBJECT CLAUSE OF THE MOU OF THE CO. BUT THERE A RE UMPTEEN OBJECTS. THESE ARE ENUMERATED IN PART (B) RUNNING F ROM CLAUSE 2 TO CLAUSE 38 MANY OF WHICH DO NOT RESTRICT THE ACTIVIT Y TO THE MEMBERS ONLY. YOUR HONOR MAY PLEASE REFER PARTICULARLY CLAUSE 5,6,7,8,9,10......... TO CLAUSE 16,17,18,19,20 WHIC H DO NOT SPEAK OF THE MEMBERS OF THE COMPANY BUT VASTLY EXTEND TO BENEFIT THE MANKIND AND THEREFORE SATISFIES THE CONDITION OF GENERAL PU BLIC UTILITY AS ENVISAGED IN SECTION 2(15) OF THE INCOME TAX ACT. LD. AR FURTHER SUBMITTED THAT, IT SHOULD BE CONSTRU ED THAT IF A BENEFIT IS OBTAINED BY A SECTION OF PUBLIC EVEN THOUGH IT A MOUNTS TO BENEFIT TO GENERAL PUBLIC IN ORDER TO SERVE A CHARITABLE PURPO SE. IT IS NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE WHOLE MANKIND OR EVEN ALL PERSONS LIVING IN A PARTICULAR COUNTRY OR PROVINCE. IT IS SUFFICIENT IF THE INTENTION IS TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM SPECIFIED INDIVIDUAL [CIT VS. AN DHRA CHAMBER OF COMMERCE 1965] ACR 565. AN OBJECT OF GENERAL PUBLIC UTILITY MEANT THAT PUBLIC UTILITY WHICH IS AVAILABLE TO THE GENER AL PUBLIC AS DISTINCT FROM ANY SECTION WAS UPHELD BY THE SUPREME COURT. P UBLIC, IS MEANT NOT FOR HUMANITY AS A WHOLE BUT SOME INDEFINITE CLA SS OF PERSONS, ACROSS SECTION OF THE COMMUNITY. THE SUPREME COURT DECISION IN CASE OF AHMEDABAD RANA CAST WAS HELD TO BE A GENERA L PUBLIC CAUSE [AHMEDABAD RANA CAST ASSOCIATION VS. CIT AIR 1972 AC 273. ITA NO. 469/AHD/2014 ASST. YEAR 4 LD. AR FURTHER TO SUBSTANTIATE THE EXPRESSION 'OBJE CT OF GENERAL PUBLIC UTILITY' IN SECTION 2(15) WOULD INCLUDE ONLY THOSE OBJECTS WHICH PROMOTE WELFARE OF THE GENERAL PUBLIC AND NOT THE P ERSONAL AND INDIVIDUAL INTEREST OF SOMEONE. ACIT VS. AHMEDABAD MILL OWNER ASSOCIATION [1977] 106 ITR 725 [GUJ] MOREOVER THIS IS A COVERED MATTER BY THE HONORABLE MEMBERS OF IT AT BY IT AT N O. 2506/AHD/2008 DATED 12.12.2008 IN CASE OF NANDESARI WATER & UTILITIES LTD., A COMPANY REGISTERED U/S 25 OF THE COMPANIES ACT WHOSE MAIN OBJECTS ARE VERY MUCH SIMILAR TO OUR OBJ ECT, AND HON. TRIBUNAL HAD ALLOWED THE APPEAL OF ASSESSEE ON THE BASIS THAT THE OBJECTS FOR WHICH THE COMPANY IS ESTABLISHED READ T OGETHER WITH OTHER OBJECTS FOLLOWED THE BENEFIT OF WHICH DOES NOT ENSU RE TO ANY SECTION OF THE COMMUNITY BUT ENSURES TO THE PUBLIC AS DISTI NGUISHED FROM THE INDIVIDUALS. 5. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDERS O F LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. BY WAY OF THIS APPEAL ASSESSEE IS IN SEC OND ROUND BEING AGGRIEVED BY THE ORDER OF LD. CIT FOR REJECTING THE APPLICATION U/S 12A OF THE ACT FOR REGISTRATION AS A CHARITABLE COMPANY . MORE PRECISELY THE QUESTION BEFORE US IS WHETHER THE ACTIVITIES CARRIE D OUT BY THE ASSESSEE COMPANY IS CHARITABLE IN NATURE AS PER THE PROVISIONS OF SECTION 2(15) OF THE ACT OR NOT. IN THE FIRST ROUND WHEN THE ISSUE CAME UP BEFORE THE TRIBUNAL, THE SAME WAS SET ASIDE TO T HE FILE OF LD. CIT ITA NO. 469/AHD/2014 ASST. YEAR 5 FOR FRESH DECISION IN THE LIGHT OF DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF NANDESARI WATER & UTILITIES LTD. (SUPRA ) BY OBSERVING AS UNDER :- 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SECTION 2(15) DEFINES CHARITABLE PURPOSE INCLUDE INTER ALIA THE ADVANCEMENT OF ANY OTHER OBJECT OF PUBLIC UTILITY. HE SUBMITTED THAT THE CIT HAS ONLY REFERRED TO CLAUSE I OF PART (A) OF THE OBJECT CLAUSE OF THE MOU OF THE COMPANY. BUT THERE ARE UMPTEEN OB JECTS. THESE ARE ENUMERATED IN PART (B) RUNNING FROM CLAUSE 2 TO CLAUSE 38 MANY OF WHICH DO NOT RESTRICT THE ACTIVITY TO THE MEMBER S ONLY. HE ALSO REFERRED PARTICULARLY CLAUSE 5,6,7,8,10 TO CLAUSES 16,17,18,19 AND 20 AND SUBMITTED THAT THESE DO NOT SPEAK OF THE MEMBER S OF THE COMPANY BUT VASTLY EXTEND TO BENEFIT THE MAN KIND A ND THEREFORE SATISFIES THE CONDITION OF GENERAL PUBLIC UTILITY A S ENVISAGED IN SEC.2(15) OF THE I.T. ACT. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IT SHOULD NOT BE CONSTRUED THAT IF A BENEFIT IS OBTAINED BY A SECTION OF PUBLIC EVEN THOUGH IT AMOUNTS TO BE NEFIT OF GENERAL PUBLIC IN ORDER TO SERVE A CHARITABLE PURPOSE. IT I S NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE WHOLE MANKIND O R EVEN ALL PERSONS LEAVING IN A PARTICULAR COUNTRY OR PROVINCE. IT IS SUFFICIENT IF THE INTENTION IS TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM SPECIFIED INDIVIDUAL. ACCORDING TO HI, AN OBJECT OF GENERAL PUBLIC UTILITY MEANT THAT PUBLIC UTILITY WHICH AVAILABLE TO THE GE NERAL PUBLIC AS DISTINCT FROM ANY SECTION WAS APPROVED BY THE HON. SUPREME COURT. PUBLIC IS MEANT NOT A HUMANITY AS A WHOLE BUT SOME INDEFINITE CLASS OF PERSONS, A CROSS SECTION OF THE COMMUNITY. IN SU PPORT, HE RELIED ON THE DECISION OF THE ALLAHABAD HIGH COURT IN THE CAS E OF CIT VS. RADHA SWAMI SATSANG SABHA (1964) 25 ITR 472 (ALL). FURTHE R TO SUBSTANTIATE THE EXPRESSION OBJECT OF GENERAL PUBL IC UTILITY IN SECTION 2(15) WOULD INCLUDE ONLY THOSE OBJECTS WHICH PROMOT E WELFARE OF THE GENERAL PUBLIC AND NOT THE PERSONAL AND INDIVIDUAL INTEREST OF SOME ONE. IN THIS REGARD HE RELIED ON THE DECISION OF TH E GUJARAT HIGH COURT IN THE CASE OF ACIT VS. AHMEDABAD MILL OWNERSASSOC IATION (1977) 106 ITR 725 (GUJ). HE ALSO CONTENDED THAT GENERAL MEANS PERTAINING TO A WHOLE CLASS PUBLIC MEANS THE BODY OF PEOPLE AT LARGE INCLUDIN G ANY CLASS OF THE ITA NO. 469/AHD/2014 ASST. YEAR 6 PUBLIC AND UTILITYMEANS USEFULNESS. THEREFORE, TH E ADVANCEMENTS OF ANY OBJECT BENEFICIAL TO THE PUBLIC OR A SECTION OF THE PUBLIC AS DISTINGUISHED FROM AN INDIVIDUAL OR GROUP OF INDIVI DUAL WOULD BE A CHARITABLE PURPOSE. IN SUPPORT, HE RELIED ON THE DE CISION OF THE BOMBAY HIGH COURT IN THE CASE OF BAR COUNCIL OF MAH ARASHTRA VS. CIT (1980) 126 ITR 27 (BOM). THE LD. COUNSEL FOR THE ASSESSEE ACCORDINGLY SUBMIT TED THAT THE OBJECTS FOR WHICH THE COMPANY IS ESTABLISHED READ T OGETHER WITH OTHER OBJECTS FOLLOWED THE BENEFIT OF WHICH DOES NOT ENSU RE TO ANY SECTION OF THE COMMUNITY BUT ENSURES TO THE PUBLIC AS DISTI NGUISHED FROM THE INDIVIDUALS AND HENCE SATISFIES THE CONDITION MENTI ONED IN SECTION 2(15) IN ORDER TO BE ELIGIBLE TO BECOME A CHARITABL E ACTIVITY AND HENCE REGISTRATION U/S 12A IS ENTITLED FOR THE COMPANY. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDER S OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE DECISIONS AS R ELIED ON BY THE ASSESSEE BEFORE US. WE FIND FORCE IN THE SUBMISSION S OF THE LD. AR THAT THE ACTIVITIES CARRIED ON BY THE ASSESSEE COMP ANY WERE CHARITABLE IN NATURE AND THE OBJECT OF THE TRUST IS TO HELP THE OTHER MEMBER INDUSTRIES I.E. PUBLIC AT LARGE. WE THEREFOR E, QUASH THE ORDER OF THE CIT AND DIRECT THE REVENUE AUTHORITY TO CONS IDER THE APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT. 7. THEREAFTER, WHEN THE MATTER CAME UP BEFORE LD. C IT FOR FRESH DECISION WHEREBY THE FACTUAL POSITION OF THE CASE O F ASSESSEE WAS TO BE COMPARED WITH THAT OF NANDESWARI WATER AND UTILI TIES LTD. (SUPRA). THE CIT AGAIN REFUSED TO REGISTER THE ASSESSEE U/S 12A OF THE ACT BY OBSERVING THAT MAIN OBJECTS OF THE ASSESSEE CANNOT BE SAID TO BE FOR CHARITABLE PURPOSES WITHIN THE PURVIEW OF SECTION 2 (15) OF THE ACT. WHILE DECIDING SO THE LD. CIT OBSERVED AS UNDER :- 5. THUS, THOUGH THE FACTS IN ASSESSEES CASE MAY B E COMPARABLE TO THE CASE OF NANDESARI WATER & UTILITIES LTD. CAS E (SUPRA), IN VIEW OF ITA NO. 469/AHD/2014 ASST. YEAR 7 DISCUSSION AS ABOVE AND DECISION OF HIGH COURT OF G UJARAT/HIGH COURT OF PUNJAB & HARYANA THE MAIN OBJECT OF ASSESSEE CAN NOT BE SAID TO BE FOR CHARITABLE PURPOSE WITHIN THE PURVIEW OF SEC TION 2(15) OF IT ACT. ACCORDINGLY, REGISTRATION U/S 12AA OF THE ACT CANNO T BE GRANTED AND IS REFUSED. 8. NOW AS FAR AS COMPARISON OF THE OBJECTS OF THE A SSESSEE AND THAT OF NANDESWARI WATER & UTILITIES LTD. (SUPRA) L ET US EXAMINE THE MAIN OBJECTS OF BOTH THE COMPANIES REGISTERED U/S 2 5 OF THE COMPANIES ACT AS NON-PROFIT MAKING ORGANIZATION. MAIN OBJECT OF THE ASSESSEE COMPANY ARE AS UNDER :- 1. TO BUILD, CONSTRUCT, OPERATE AND MAINTAIN WATER SUPPLY SCHEME, DRAINAGE SCHEME, STORM WATER DRAINAGE SCHEME, GAS U TILITY SERVICES, POWER UTILITY, ROAD NETWORK, RAINWATER HA RVESTING, ARTIFICIAL RECHARGING AND OTHER UTILITIES OF PANOLI GIDC INDUSTRIAL ESTATE FOR THE BENEFIT OF MEMBER INDUSTRIES AND THE DOING OF ALL SUCH OTHER LAWFUL THINGS AS ARE INCIDENTAL OR CONDU CIVE TO THE ATTAINMENT OF THE ABOVE OBJECTS. MAIN OBJECT OF NANDESARI WATER & UTILITIES LTD . 1. TO BUILD, CONSTRUCT, OPERATE AND MAINTAIN WATER SUPPLY SCHEME, DRAINAGE SCHEME, STORM WATER DRAINAGE SCHEME, GAS U TILITY SERVICES, POWER UTILITY, ROAD NETWORK, RAIN WATER H ARVESTING, ARTIFICIAL RECHARGING, INSTALLING WATER TREATMENT P LANT AND OTHER UTILITIES OF NANDESARI GIDC INDUSTRIAL ESTATE FOR T HE BENEFIT OF MEMBER INDUSTRIES. 9. FROM GOING THROUGH THE OBJECTS OF BOTH THE ORGAN IZATIONS WE FIND THAT THEY ARE SIMILAR TO A GREAT EXTENT EXCEPT THE LAST TWO LINES MENTIONED IN THE CASE OF ASSESSEE I.E. AND THE DOING OF ALL SUCH OTHER LAWFUL THINGS AS ARE INCIDENTAL OR CONDUCIVE TO THE ATTAINMENT OF ITA NO. 469/AHD/2014 ASST. YEAR 8 THE ABOVE OBJECTS. HOWEVER, GOING THROUGH THESE TWO LINES MENTIONED ABOVE WE FIND THAT THEY ARE JUST SUPPORTI VE TO THE FIRST FOUR LINES OF THE MAIN OBJECTS AND, THEREFORE, TO THIS E XTENT WE OBSERVE THAT OBJECTS OF BOTH THE COMPANIES ARE SIMILAR. NOW FURT HER FROM GOING THROUGH THE DECISION OF CO-ORDINATE BENCH IN THE CA SE OF NADESARI WATER & UTILITIES LTD. VS. CIT-II, BARODA (SUPRA), WE FI ND THAT GROUND OF ASSESSEE RELATING TO REJECTION OF APPLICATION FO R REGISTRATION U/S 12 WAS ALLOWED BY OBSERVING AS UNDER :- 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SECTION 2(15) DEFINES CHARITABLE PURPOSE INCLUDE INTER ALIA THE ADVANCEMENT OF ANY OTHER OBJECT OF PUBLIC UTILITY. HE SUBMITTED THAT THE CIT HAS ONLY REFERRED TO CLAUSE I OF PART (A) OF THE OBJECT CLAUSE OF THE MOU OF THE COMPANY. BUT THERE ARE UMPTEEN OB JECTS. THESE ARE ENUMERATED IN PART (B) RUNNING FROM CLAUSE 2 TO CLAUSE 38 MANY OF WHICH DO NOT RESTRICT THE ACTIVITY TO THE MEMBER S ONLY. HE ALSO REFERRED PARTICULARLY CLAUSE 5,6,7,8,10 TO CLAUSES 16,17,18,19 AND 20 AND SUBMITTED THAT THESE DO NOT SPEAK OF THE MEMBER S OF THE COMPANY BUT VASTLY EXTEND TO BENEFIT THE MAN KIND A ND THEREFORE SATISFIES THE CONDITION OF GENERAL PUBLIC UTILITY A S ENVISAGED IN SEC.2(15) OF THE I.T. ACT. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IT SHOULD NOT BE CONSTRUED THAT IF A BENEFIT IS OBTAINED BY A SECTION OF PUBLIC EVEN THOUGH IT AMOUNTS TO BE NEFIT OF GENERAL PUBLIC IN ORDER TO SERVE A CHARITABLE PURPOSE. IT I S NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE WHOLE MANKIND O R EVEN ALL PERSONS LEAVING IN A PARTICULAR COUNTRY OR PROVINCE. IT IS SUFFICIENT IF THE INTENTION IS TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM SPECIFIED INDIVIDUAL. ACCORDING TO HI, AN OBJECT OF GENERAL PUBLIC UTILITY MEANT THAT PUBLIC UTILITY WHICH AVAILABLE TO THE GE NERAL PUBLIC AS DISTINCT FROM ANY SECTION WAS APPROVED BY THE HON. SUPREME COURT. PUBLIC IS MEANT NOT A HUMANITY AS A WHOLE BUT SOME INDEFINITE CLASS OF PERSONS, A CROSS SECTION OF THE COMMUNITY. IN SU PPORT, HE RELIED ON THE DECISION OF THE ALLAHABAD HIGH COURT IN THE CAS E OF CIT VS. RADHA SWAMI SATSANG SABHA (1964) 25 ITR 472 (ALL). FURTHE R TO SUBSTANTIATE THE EXPRESSION OBJECT OF GENERAL PUBL IC UTILITY IN SECTION ITA NO. 469/AHD/2014 ASST. YEAR 9 2(15) WOULD INCLUDE ONLY THOSE OBJECTS WHICH PROMOT E WELFARE OF THE GENERAL PUBLIC AND NOT THE PERSONAL AND INDIVIDUAL INTEREST OF SOME ONE. IN THIS REGARD HE RELIED ON THE DECISION OF TH E GUJARAT HIGH COURT IN THE CASE OF ACIT VS. AHMEDABAD MILL OWNERSASSOC IATION (1977) 106 ITR 725 (GUJ). HE ALSO CONTENDED THAT GENERAL MEANS PERTAINING TO A WHOLE CLASS PUBLIC MEANS THE BODY OF PEOPLE AT LARGE INCLUDIN G ANY CLASS OF THE PUBLIC AND UTILITYMEANS USEFULNESS. THEREFORE, TH E ADVANCEMENTS OF ANY OBJECT BENEFICIAL TO THE PUBLIC OR A SECTION OF THE PUBLIC AS DISTINGUISHED FROM AN INDIVIDUAL OR GROUP OF INDIVI DUAL WOULD BE A CHARITABLE PURPOSE. IN SUPPORT, HE RELIED ON THE DE CISION OF THE BOMBAY HIGH COURT IN THE CASE OF BAR COUNCIL OF MAH ARASHTRA VS. CIT (1980) 126 ITR 27 (BOM). THE LD. COUNSEL FOR THE ASSESSEE ACCORDINGLY SUBMIT TED THAT THE OBJECTS FOR WHICH THE COMPANY IS ESTABLISHED READ T OGETHER WITH OTHER OBJECTS FOLLOWED THE BENEFIT OF WHICH DOES NOT ENSU RE TO ANY SECTION OF THE COMMUNITY BUT ENSURES TO THE PUBLIC AS DISTI NGUISHED FROM THE INDIVIDUALS AND HENCE SATISFIES THE CONDITION MENTI ONED IN SECTION 2(15) IN ORDER TO BE ELIGIBLE TO BECOME A CHARITABL E ACTIVITY AND HENCE REGISTRATION U/S 12A IS ENTITLED FOR THE COMPANY. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDER S OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE DECISIONS AS R ELIED ON BY THE ASSESSEE BEFORE US. WE FIND FORCE IN THE SUBMISSION S OF THE LD. AR THAT THE ACTIVITIES CARRIED ON BY THE ASSESSEE COMP ANY WERE CHARITABLE IN NATURE AND THE OBJECT OF THE TRUST IS TO HELP THE OTHER MEMBER INDUSTRIES I.E. PUBLIC AT LARGE. WE THEREFOR E, QUASH THE ORDER OF THE CIT AND DIRECT THE REVENUE AUTHORITY TO CONS IDER THE APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT. 10. FURTHER DURING THE COURSE OF HEARING LD. AR ALS O REFERRED AND RELIED ON THE DECISION OF HON. GUJARAT HIGH COURT I N THE CASE OF AHMEDABAD MILL OWNERS ASSOCIATION (SUPRA) AND AFTE R GOING THROUGH THE SAME WE OBSERVE THAT HON. GUJARAT HIGH COURT HA S DEALT THE ITA NO. 469/AHD/2014 ASST. YEAR 10 ISSUE IN DETAIL AS TO WHETHER THE OBJECTS WHICH SER VE PERSONAL INTEREST WOULD FALL WITHIN THE SCOPE OF SECTION 2(15) OF THE ACT BECAUSE MAIN OBJECT OF THE ASSESSEE COMPANY IS TO WORK SPECIFICA LLY FOR THE MEMBER INDUSTRIES OF GIDC INDUSTRIAL ESTATE. WE FIN D THAT HON. HIGH COURT HAS HELD AS UNDER :- 15. WE NOW PROCEED TO CONSIDER WHETHER AN OBJECT W HICH SERVES PERSONAL INTEREST WOULD FALL WITHIN THE SCOPE OF S. 2(15) OF THE ACT. THERE IS NO DISPUTE THAT THE CHARITABLE PURPOSES OF RELIEF TO POOR AND EDUCATIONAL AND MEDI CAL RELIEF HAVE NO RELEVANCE TO THE FACTS OF THE PRESENT CASE. IT IS, THEREFORE, THE FO URTH CATEGORY OF THE CHARITABLE PURPOSE, NAMELY, THE OBJECT OF GENERAL PUBLIC UTILITY, WITH WHICH WE ARE CONCERNED IN THIS CASE. THE EXPRESSION 'OBJECT OF GENERAL PUBLIC UTILITY' APPEA RING IN S. 2(15) WOULD INCLUDE ONLY THOSE OBJECTS WHICH PROMOTE THE WELFARE OF GENERAL PUBLIC AND NOT THE PERSONAL AND INDIVIDUAL INTERESTS OF SOME PERSONS. IT IS NOT UNC OMMON TO FIND THE OBJECTS OF GENERAL PUBLIC UTILITY BEING IN CONFLICT WITH THE OBJECTS O F PERSONAL WELFARE OF SOME SPECIFIED INDIVIDUALS. IT IS TRUE, AS HELD BY THE SUPREME COU RT IN THE CASE OF ANDHRA CHAMBER OF COMMERCE (1965) 55 ITR 722 (SC), THAT PERSONAL WELF ARE OF SPECIFIED INDIVIDUALS WOULD BE INCIDENTAL OR CONSEQUENTIAL TO THE MAIN PURPOSE OF GENERAL PUBLIC UTILITY, BUT A CONVERSE OF THIS PROPOSITION IS NOT ALWAYS TRUE. NO W, IF WE EXAMINE THE OBJECTS CONTAINED IN ELS. (A), (B) AND (E) FROM THIS POINT OF VIEW, IT WILL B E AT ONCE NOTICED THAT THESE OBJECTS SEEK TO PROTECT THE INTERESTS OF 'MILLOWERS AND USERS OF MO TIVE POWER' AND ALSO OF THOSE CONCERNED WITH THEM. CLAUSE (B) CONTEMPLATES THE PR OMOTION OF GOOD RELATIONS BETWEEN THE PERSONS AND BODIES USING SUCH POWERS AND CL. (C ), WHICH IS CONSEQUENTIAL TO ELS. (A) AND (B), CONTEMPLATES DOING OF THOSE AETS AND THING S BY WHICH THE OBJECTS COVERED BY CL. (A) AND (B) MAY BE ATTAINED. THUS, ALL THESE THREE CLAUSES AIM AT PROTECTING PERSONAL INTERESTS AND NOT PUBLIC INTERESTS. IF THIS IS SO, THE RESPONDENT-ASSOCIATION IS BOUND TO CARRY ON ITS ACTIVITY KEEPING IN MIND THE NARROWER CONCEP T OF PROMOTING THE PERSONAL MUD SELL- SERVING INTERESTS OF INDIVIDUALS WHO ARE CONSIDERED 'MILLOWNERS AND USERS OF MOTIVE POWER' EVEN WHEN THEIR INTERESTS ARE IN CONFLICT WI TH THE INTERESTS OF THEIR OWN TRADE OR INDUSTRY. IF AND WHEN THIS HAPPENS, HOW CAN IT BE S AID THAT THE RESPONDENT-ASSOCIATION HAS CARRIED OUT AN OBJECT OF GENERAL PUBLIC UTILITY ? G ENERAL PUBLIC IS UNDOUBTEDLY INTERESTED IN TRADE, COMMERCE OR INDUSTRY CONDUCTED BY INDIVID UALS, BUT IT IS SURELY NOT INTERESTED IN PROTECTING THE PERSONAL INTERESTS OF THESE INDIVIDU ALS IF THEY ARC IN CONFLICT WITH THE INTERESTS OF TRADE, COMMERCE AND INDUSTRY. THEREFOR E, WHEN AN OBJECT SEEKS TO PROMOTE OR PROTECT THE INTERESTS OF A PARTICULAR TRADE OR INDU STRY, THAT OBJECT BECOMES AN OBJECT OF PUBLIC UTILITY, BUT NOT SO, IF IT SEEKS TO PROMOTE THE INTERESTS OF THOSE WHO CONDUCT THE SAID TRADE OR INDUSTRY. 16. THIS DISTINCTION BETWEEN THE PROTECTION OF THE INTERESTS OF INDIVIDUALS AND THE PROTECTION OF INTERESTS OF AN ACTIVITY, WHICH IS OF GENERAL PUBLIC UTILITY, GOES TO THE ROOT OF ITA NO. 469/AHD/2014 ASST. YEAR 11 THE WHOLE PROBLEM, AND, HENCE, THE SUPREME COURT HA S POINTEDLY REFERRED TO THIS PROBLEM IN CIT VS. ANDHRA CHAMBER OF COMMERCE (SUPRA) OF TH E REPORT BY OBSERVING AS UNDER : 'IT MAY BE REMEMBERED THAT PROMOTION AND PROTECTION OF TRADE, COMMERCE AND INDUSTRY CANNOT BE EQUATED WITH PROMOTION AND PROTECTION OF ACTIVITIES AND INTERESTS MERELY OF PERSONS ENGAGED IN TRADE, COMMERCE AND INDUSTRY.' 17. IN THIS CASE, THE SUPREME COURT HAS PAINTED OUT THAT EVEN AN OBJECT BENEFICIAL TO A SECTION OF THE PUBLIC IS AN OBJECT OF PUBLIC UTILIT Y AND THAT TO SERVE A CHARITABLE PURPOSE, IT IS NOT NECESSARY THAT THE OBJECT SHOULD HE TO BENEF IT THE WHOLE MANKIND OR PERSONS LIVING IN A PARTICULAR COUNTRY OR PROVINCE. BUT, WHILE MAK ING THESE OBSERVATIONS, THE SUPREME COURT HAS BEEN CAREFUL IN POINTING OUT THE DISTINCT ION BETWEEN 'A SECTION OF THE PUBLIC' AND SPECIFIED INDIVIDUALS. EVEN SO FAR AS 'A SECTIO N OF THE PUBLIC' IS CONERNED, THE SUPREME COURT HAS BEEN PARTICULAR IN IDENTIFYING IT IN THE FOLLOWING TERMS (PAGE 729) : 'THE SECTION OF THE COMMUNITY SOUGHT TO BE BENEFITE D MUST UNDOUBTEDLY BE SUFFICIENTLY DEFINED AND IDENTIFIABLE BY SOME COMMON QUALITY OF A PUBLIC OR IMPERSONAL NATURE: WHERE THERE WAS NO COMMON QUALITY UNITING THE POTENTIAL B ENEFICIARIES INTO A CLASS, IT MIGHT NOT BE REGARDED AS VALID.' (EMPHASIS ITALICISED IN PRIN T ADDED). 18. THESE OBSERVATIONS ARE REPEATED BY THE SUPREME COURT IN THE SUBSEQUENT DECISION IN AHMEDABAD RANA CASTE ASSOCIATION VS. CIT (1971) 82 ITR 704 (SC). THESE OBSERVATIONS SUPPLY A COMPLETE ANSWER TO THE CONTENTION OF THE L EARNED ADVOCATE-GENERAL THAT THE CATEGORY OF PERSONS COVERED BY THE EXPRESSION 'MILL OWNERS AND USERS OF MOTIVE POWER' CONSTITUTES A SECTION OF THE PUBLIC, WHICH CAN LEGI TIMATELY FORM THE OBJECT OF A CHARITABLE PURPOSE. THE OBSERVATIONS MAKE IT CLEAR THAT THE SE CTION OF THE PUBLIC WHICH IS TO BE BENEFITED TO MAKE THE PURPOSE A CHARITABLE ONE SHOU LD HAVE A COMMON QUALITY OF EITHER A 'PUBLIC' NATURE OR AN 'IMPERSONAL' NATURE. CAN IT B E SAID THAT 'MILLOWNERS AND USERS OF MOTIVE POWER' HAVE A COMMON QUALITY OF A 'PUBLIC NA TURE' ? IF THEY HAVE ANY COMMON QUALITY THE SAME IS OBVIOUSLY OF A 'PRIVATE' NATURE , AS EACH ONE OF THEM IS CONCERNED WITH HIS OWN INTEREST AND SHARES NOTHING IN COMMON WITH THE PUBLIC. IT WAS CONTENDED THAT THEIR COMMON QUALITY IS THE FACT THAT EACH ONE OF T HEM IS EITHER A MILLOWNER OR A USER OF MOTIVE POWER. GRANTING THAT THIS IS THEIR COMMON QU ALITY, IT CANNOT BE SAID THAT THE SAID COMMON QUALITY POSSESSES THE ATTRIBUTES OF A PUBLIC OR IMPERSONAL NATURE. IF INDIVIDUALS, WHOSE ONLY COMMON QUALITY IS THEIR PROFESSION OR VO CATION, CAN LEGITIMATELY BE INVESTED WITH THE ATTRIBUTES OF A PUBLIC NATURE, THEN EVERY PARTNERSHIP, COMPANY OR AN AOP CAN BE AN OBJECT OF CHARITY, AND THE TRUSTS CREATED FOR TH E BENEFIT OF SUCH PARTNERSHIPS, COMPANIES AND ASSOCIATIONS WOULD BE CHARITABLE TRUSTS EARNING EXEMPTION UNDER S. 11. ABSURDITY OF SUCH A SITUATION CANNOT BE OVEREMPHASISED. 19. WHAT IS THE EXACT NATURE OF 'SECTION OF THE PUB LIC' WHICH CAN LEGITIMATELY BECOME AN OBJECT OF A CHARITY, IS CONSIDERED BY LORD GREENE M . R. IN POWELL VS. COMPTON (1945) 1 CH 123, (CA). IN THAT CASE A BEQUEST WAS MADE FOR T HE EDUCATION OF A SMALL NUMBER OF INDIVIDUAL RELATIVES OF A TESTATRIX. THE QUESTION W HICH AROSE WAS WHETHER THESE INDIVIDUALS FORMED A 'SECTION OF THE PUBLIC' SO AS TO MAKE THE TRUST A CHARITABLE TRUST. LORD GREENE M. R. HELD THAT THE TRUST WAS NOT A VALID TRUST MAKING THE FOLLOWING OBSERVATIONS : 'NO DEFINITION OF WHAT IS MEANT BY A SECTION OF THE PUB LIC HAS, SO FAR AS I AM AWARE BEEN LAID DOWN, AND I CERTAINLY DO NET PROPOSE TO BE THE FIRS T TO MAKE THE ATTEMPT TO DEFINE IT. IN THE ITA NO. 469/AHD/2014 ASST. YEAR 12 CASE OF MANY CHARITABLE GIFTS IT IS POSSIBLE TO IDE NTIFY THE INDIVIDUALS WHO ARE TO BENEFIT, OR WHO AT ANY GIVEN MOMENT CONSTITUTE THE CLASS FRO M WHICH THE BENEFICIARIES ARE TO BE SELECTED. THIS CIRCUMSTANCE DOES NOT, HOWEVER, DEPR IVE THE GIFT OF ITS PUBLIC CHARACTER. THUS, IF THERE IS A GIFT TO RELIEVE THE POOR INHABI TANTS OF A PARISH THE CLASS TO BENEFIT IS READILY ASCERTAINABLE. BUT THEY DO NOT ENJOY THE BE NEFIT, WHEN THEY RECEIVE IT, BY VIRTUE OF THEIR CHARACTER AS INDIVIDUALS BUT BY VIRTUE OF THE IR MEMBERSHIP OF THE SPECIFIED CLASS. IN SUCH A CASE THE COMMON QUALITY WHICH UNITES THE POT ENTIAL BENEFICIARIES INTO A CLASS IS ESSENTIALLY AN IMPERSONAL ONE. IT IS DEFINABLE BY R EFERENCE TO WHAT EACH HAS IN COMMON WITH THE OTHERS, AND THAT IS SOMETHING INTO WHICH T HEIR STATUS AS INDIVIDUALS DOES NOT ENTER.' OUR SUPREME COURT HAS APPROVED OF THIS PRINCIPLE IN AHMEDABAD RANA CASTE ASSOCIATION'S CASE (SUPRA) AND HAS HELD THAT MEMBER S OF RANA CASTE HAD A RELATIONSHIP WHICH WAS AN IMPERSONAL ONE DEPENDENT UPON THEIR ST ATUS AS MEMBERS OF THAT CASTE. NO SUCH RELATIONSHIP OF IMPERSONAL NATURE CAN HE FOUND AMONGST THE MILLOWNERS AND USERS OF MOTIVE POWER, AND, HENCE, NONE OF THE OBJECTS MENTI ONED IN ELS. (A), (B) AND (C) CAN BE TREATED AS OBJECTS OF PUBLIC UTILITY. WE HAVE ALREADY DEALT WITH THE OBJECT FOUND IN EL. (D). SO FAR AS THE OBJECT CONTAINED IN CL. (E) IS CONCERNED IT CONSISTS OF TWO PARTS. THIS FIR ST PART CONTEMPLATES ESTABLISHMENT OR THE CREATION OF FUNDS TO BENEFIT EMPLOYEES OF THE ASSOC IATION OR THE DEPENDANTS OF SUCH PERSONS WHILE THE SECOND PART CONTEMPLATES SUBSCRIP TIONS, DONATIONS OR GUARANTEES OR 'CHARITABLE OR BENEVOLENT' PURPOSES AT THE DISCRETI ON OF THE ASSOCIATION. NOW, SO FAR AS THE FIRST PART IS CONCERNED, IT IS COVERED BY THE DECIS ION IN OPPCNHCIM VS. TOBACCO SECURITIES TRUST CO. LTD. (1951) AC 297 (HL), TO WHICH REFEREN CE IS MADE BY THE SUPREME COURT IN AHMEDABAD RANA CASTE ASSOCIATION'S CASE (SUPRA) OF THE REPORT. THE FACTS OF THAT ENGLISH DECISION WERE THAT THE TRUSTEES WERE DIRECTED TO AP PLY CERTAIN INCOME IN PROVIDING FOR THE EDUCATION OF CHILDREN OF EMPLOYEES OR 'FORMER EMPLO YEES' OF A BRITISH LIMITED COMPANY OR ANY OF ITS SUBSIDIARY ON AILIED COMPANIES. THE H OUSE OF LORDS HELD IN THIS CASE BY MAJORITY THAT THOUGH THE GROUP OF PERSONS INDICATED WAS NUMEROUS, THE NEXUS BETWEEN THEM WAS EMPLOYMENT BY PARTICULAR EMPLOYERS AND, AC CORDINGLY, THE TRUST DID NOT SATISFY THE TEST OF A PUBLIC BENEFIT REQUISITE TO ESTABLISH ; IT AS CHARITABLE. THIS PRINCIPLE HAS BEEN APPROVED BY OUR SUPREME COURT AND, THEREFORE, THE F IRST PART OF THE OBJECT CL. (E) IS ALSO NOT FOUND TO BE FOR GENERAL PUBLIC UTILITY WITHIN T HE MEANING OF S. 2(15) OF THE ACT. SO FAR AS THE SECOND PART IS CONCERNED, SHRI KAJI'S CONTEN TION WAS THAT A BENEVOLENT PURPOSE IS NOT NECESSARILY A CHARITABLE PURPOSE BUT IF THIS CL AUSE IS CONSTRUED LIBERALLY, IT MAY BE SAID THAT IT EMBODIES WITHIN IT THE OBJECT OF PUBLIC UTI LITY. NOW, PROCEEDING TO CL. (F) IT CONTEMPLATES PROMOTION OF GOOD RELATIONS BETWEEN TH E EMPLOYERS AND THE EMPLOYEES. SO FAR AS THIS OBJECT IS CONCERNED, THE MATTER IS CONC LUDED BY THE DECISION OF THE SUPREME COURT IN THE ABOVE REFERRED CASE OF CIT VS. INDIAN SUGAR MILLS ASSOCIATION (SUPRA), WHEREIN THE RELEVANT CLAUSE WHICH THE COURT CONSIDE RED WAS 'TO PROMOTE GOOD RELATIONS BETWEEN THE EMPLOYERS AND THE EMPLOYEES'. THIS CLAU SE WAS EXACTLY SIMILAR TO CL. (F) WITH WHICH WE ARE CONCERNED IN THIS REFERENCE. WITH REGA RD TO SUCH A CLAUSE, THE SUPREME COURT HAS OBSERVED THAT EVEN ASSUMING THAT IN SOME REMOTE AND INDIRECT MANNER SUCH AN OBJECT CAUGHT BE OF SOME PUBLIC UTILITY, IT CANNOT BE CALLED A CHARITABLE PURPOSE WITHIN THE ITA NO. 469/AHD/2014 ASST. YEAR 13 MEANING OF S. 4(3)(I) OF THE INDIAN IT ACT, 1922. I N VIEW OF THIS DECISION, EVEN THE OBJECT MENTIONED IN CL. (F) CANNOT BE CONSIDERED AS THE OB JECT SERVING ANY PUBLIC UTILITY. IF WE CLOSELY SCRUTINISE THE OBJECTS CONTAINED IN R . 3, WE FIND THAT A SUBSTANTIAL PART OF THESE OBJECTS BENEFIT THE ASSOCIATION'S OWN MEMBERS , THOSE CONNECTED WITH THEM, AND THEIR EMPLOYEES. IT IS NO DUBT TRUE THAT THE BENEFI CIARIES OF THESE OBJECTS ARC ALSO THOSE WHO ARE NON-MEMBERS BUT WHO HAPPEN TO BE MILLOWNERS OR USERS OF MOTIVE POWER. BUT THAT ASPECT OF THE MATTER DOCS NOT DETRACT FROM THE FACT THAT ALL THE MEMBERS, AND THEIR EMPLOYEES, AND 'THOSE WHO ARE CONNECTED' WITH MEMBE RS, FORM THE SUBSTANTIAL PART OF THE RECIPIENTS OF THE BENEFITS CONTEMPLATED BY THE OBJE CTS. IN IRC VS. CITY OF GLASGOW POLICE ATHLETIC ASSOCIATION (1953) 34 TC 76 (HL) LORD COHE N HAS SUMMARISED THE LEGAL POSITION IN SUCH CASES AS UNDER AT P. 105 OF THE RE PORT: '(1) IF THE MAIN PURPOSE OF THE BODY OF PERSONS IS CHARITABLE AND THE ONLY ELEMENTS IN ITS CONSTITUTION AND OPERATIONS WHICH ARC NON-CHARITABL E ARE MERELY INCIDENTAL TO THAT MAIN PURPOSE, THAT BODY OF PERSONS IS A CHARITY NOTWITHS TANDING THE PRESENCE OF THOSE ELEMENTS ROYAL COLLEGE OF SURGEONS OF ENGLAND VS. NATIONAL P ROVINCIAL BANK (1952) AC 631 (HL). (2) IF, HOWEVER, A NON-CHARITABLE OBJECT IS ITSELF ONE OF THE PURPOSES OF THE BODY OF PERSONS AND IS NOT MERELY INCIDENTAL TO THE CHARITA BLE PURPOSES, THE BODY OF PERSONS IS NOT A BODY OF PERSONS FORMED FOR CHARITABLE PURPOSES ON LY, WITHIN THE MEANING OF THE IT ACTS OXFORD GROUP VS. IRC (1949) 2 ALL ER 537 : 31 TC 22 1 (CA) (3) IF A SUBSTANTIAL PART OF THE OBJECTS OF THE BOD Y OF PERSONS IS TO BENEFIT ITS OWN MEMBERS, THE BODY OF PERSONS IS NOT ESTABLISHED FOR CHARITABLE PURPOSES ONLYIRC VS. YORKSHIRE AGRICULTURAL SOCIETY (1928) 1 KB 611 (CA) .' IN OUR OPINION, THE PRESENT CASE FALLS WITHIN THE SECOND AND THIRD CATEGORIES MENTIO NED BY LORD COHEN. EVEN OTHERWISE IT IS APPARENT THAT DIFFERENT OBJECTS CONTAINED IN R. 3 ARE MIXED OBJECTS AND IT IS FURTHER CLEAR BY REFERENCE TO RR. 22 AND 22(A) THAT THE FUNDS OF THE ASSOCIATION CAN BE SPENT ON ANY OF THESE OBJECTS AT THE DISCRETION OF THE MANAGING COM MITTEE. HENCE, THE PRESENT CASE IS FULLY COVERED BY THE RATIO OF THE PRIVY COUNCIL DECISION IN MOHAMMAD IBRAHIM RIZA MALAK VS. CIT AIR 1930 PC 226, WHERE IT IS HELD THAT WHERE TH E PROPERTY IS VESTED IN THE HEAD OF A COMMUNITY UNDER DEEDS OF TRUST, BUT THE TRUST PROPE RTY IS APPLICABLE TO PURPOSES, MANY OF WHICH ARE NEITHER RELIGIOUS NOR CHARITABLE, AND IT IS NOT SUGGESTED THAT ANY PART OF THE PROPERTY IS SET ASIDE FOR ANY CHARITABLE OR RELIGIO US PURPOSES, SO THAT IT CAN BE IDENTIFIED AS APPROPRIATED EXCLUSIVELY FOR SUCH PURPOSES, THEN TH E INCOME OF THE WHOLE OF THE PROPERTY IS ASSESSABLE TO INCOME-TAX. THIS PRINCIPLE IS APPR OVED BY THE SUPREME COURT IN EAST INDIA INDUSTRIES (MADRAS) (P) LTD. VS. CIT (1967) 6 5 ITR 611 (SC). CONSIDERING ALL THESE FACTS WE CONCLUDE THAT THE RE SPONDENT- ASSOCIATION IS NOT ENTITLED TO THE BENEFIT CONTEMPLATED BY S. 11 IN VIEW OF THE MI XED PURPOSES FOR WHICH THE RESPONDENT-ASSOCIATION IS EXPECTED TO FUNCTION. SHR I KAJI'S NEXT ARGUMENT WAS THAT SINCE THE EXEMPTION CONTEMPLATED BY CL. (A) OF S. 11 (1) IS EARNED ONLY WITH REGARD TO THAT INCOME, WHICH IS DERIVED FROM PROPERTY HELD UNDER T RUST AND SINCE THE COAL BUSINESS DONE ITA NO. 469/AHD/2014 ASST. YEAR 14 BY THE RESPONDENT-ASSOCIATION WAS NOT THE PROPERTY OF THE TRUST, S. 11 HAS NO APPLICATION SO FAR AS PROFIT FROM COAL BUSINESS IS CONCERNED. BUT HERE WE FIND THAT, ACCORDING TO S. 11(4), A PROPERTY HELD UNDER TRUST INCLUDES EVEN A BUSINES S UNDERTAKING SO HELD. NOW, IF IT IS FOUND FROM THE FACTS OF THE CASE THAT THE COAL BUSI NESS WHICH THE RESPONDENT-ASSOCIATION HELD UNDERTAKEN DURING THE ACCOUNTING PERIOD, WAS A N UNDERTAKING HELD BY THE RESPONDENT-ASSOCIATION IN TRUST FOR OTHERS, THEN TH E SAID BUSINESS CAN BE LEGITIMATELY CONSIDERED TO BE A PROPERTY HELD IN TRUST. THEREFOR E, THE INCOME WHICH THE RESPONDENT- ASSOCIATION HAS DERIVED FROM THIS COAL BUSINESS CAN BE LEGITIMATELY DEALT WITH AS PER THE PROVISIONS CONTAINED IN S. 11 IF THAT BUSINESS IS F OUND TO BE A TRUST PROPERTY. THEREFORE, THE CONTENTION OF SHRI KAJI, THAT INCOME FROM COAL BUSI NESS CANNOT BE A SUBJECT-MATTER OF TREATMENT UNDER S. 11, CANNOT BE ACCEPTED. 11. ON APPLICATION OF THE ABOVE DECISION TO THE FAC TS OF THE CASE OF ASSESSEE, WE FIND THAT THE OBJECTS OF THE ASSESSEE COMPANY SPEAKS ABOUT TO BUILD, CONSTRUCT, OPERATE AND MAINTAIN WAT ER SUPPLY SCHEME, DRAINAGE SCHEME, STORM WATER DRAINAGE SCHEME, GAS U TILITY SERVICES, POWER UTILITY, ROAD NETWORK, RAINWATER HARVESTING, ARTIFICIAL RECHARGING AND OTHER UTILITIES OF PANOLI GIDC INDUS TRIAL ESTATE FOR THE BENEFIT OF MEMBER INDUSTRIES. WE FURTHER OBSERVE TH AT DURING THE COURSE OF HEARING WHEN A QUESTION WAS POSED TO THE LD. AR REGARDING AS TO WHO WILL BEAR THE COST OF ACCOMPLISHING ALL THESE OBJECTS, THEN LD. AR REPLIED THAT ASSESSEE COMPANY SHALL CHARGE T HE COST OF SERVICES TO THE MEMBER INDUSTRIES ONLY. THIS INDICA TES THAT THE OBJECTS FOR WHICH THE ASSESSEE COMPANY IS SEEKING REGISTRAT ION U/S 12A, THEY GENERALLY COME IN THE AREA OF WORK OF LOCAL AUTHORI TIES OR THE GOVERNMENT DEPARTMENT WHICH HAS ESTABLISHED THE IND USTRIAL ESTATE BUT FOR THE BETTER AND IMPROVED QUALITY OF SERVICES THAT TOO WITHIN THE CONTROL OF MEMBER INDUSTRIES THE CONCEPT OF FORMATI ON OF SUCH NON- PROFIT MAKING COMPANY GETS ITS ORIGINATION. WE FURT HER OBSERVE THAT THE WORKING OF ASSESSEE COMPANY IS FOR THE MEMBER I NDUSTRIES OF GIDC INDUSTRIAL ESTATE AND THE PUBLIC AT LARGE IS N OT COMING IN THE ITA NO. 469/AHD/2014 ASST. YEAR 15 PICTURE NOR IS THERE ANY INDICATION IN THE OBJECTS WHICH SAYS THAT ANY SPECIFIC ACTIVITY FOR THE OBJECTS TO GENERAL PUBLIC UTILITY WILL BE CARRIED OUT RATHER THE CONTENTION OF ASSESSEE IS INDICATING ABOUT REMOTE AND DIM EFFECT ON THE GENERAL PUBLIC WILL BE THERE WITH THE ATTAINMENT OF MAIN OBJECTS BUT WE DO NOT FIND IT SO. THEREFORE, R ESPECTFULLY FOLLOWING THE DECISION OF HON. HIGH COURT IN THE CASE OF AHME DABAD MILL OWNERS ASSOCIATION (SUPRA) AND LOOKING TO THE FACT S AND OBJECTS OF THE CASE BEFORE US, WE ARE OF THE VIEW THAT MAIN OB JECTS OF THE ASSESSEE COMPANY ARE NOT COVERED UNDER THE PROVISIO NS OF SECTION 2(15) OF THE ACT AND ARE NOT CHARITABLE IN NATURE A S THEY ARE CONFINED TO A SPECIAL CLASS OF MEMBER INDUSTRIES OF GIDC IND USTRIAL ESTATE, PANOLI. ACCORDINGLY, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT AND DISMISS THE APPEAL OF ASSESSEE. 12. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD MAY, 2016 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 23/5/2016 MAHATA/- ITA NO. 469/AHD/2014 ASST. YEAR 16 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: 20/05/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 23/05/2016 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: 23/5/2016 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: