Shri Amreli Gurjar Sagar Gnati Trust, AMRELI V. The Commissioner of Income Tax - III, RAJKOT-GUJARAT

ITA 479/RJT/2012

• Counselvise Citation: 47924914 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-11-2013
• Assessment Year: misc
• Appeal Filed On: 17-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M L MEENA
• Assessee Lawyers: DR ADHIA
• Section: 11; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 479/RJT/2012 SHRI AMRELI GURJAR SAGAR GNATI TRUST, STREET NO.1, JESHINGPARA, AMRELI PAN : AACTA 3460 E ( / APPELLANT) THE COMMISSIONER OF INCOME-TAX-III RAJKOT / RESPONDENT / ASSESSEE BY SHRI D R ADHIA, AR / REVENUE BY DR M L MEENA, DR / DATE OF HEARING 26.11.2013 !'# / DATE OF PRONOUNCEMENT 29.11.2013 / ORDER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 29.06.2012 OF THE COMMISSIONER OF INCOME-TAX, RAJKOT-III, RAJKOT REJE CTING THE APPLICATION OF THE ASSESSEE-TRUST FOR REGISTRATION U/S 12AA OF THE INC OME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE-INSTI TUTION/ASSOCIATION FILED AN APPLICATION FOR REGISTRATION U/S 12AA OF THE INCOME -TAX ACT ON 08.12.2011 IN FORM NO.10A ALONGWITH REQUISITE DETAILS AND DOCUMENTS. T HIS INSTITUTION/ASSOCIATION CAME INTO EXISTENCE BY A MEMORANDUM OF ASSOCIATION ON 12 .03.2004 WHICH WAS REGISTERED UNDER THE BPT ACT, 1950 WITH THE ASSISTANT CHARITY COMMISSIONER, JUNAGADH ON 14.08.2007. ON PERUSAL OF MEMORANDUM OF ASSOCIATION OF THE INSTITUTION, THE ASSESSING OFFICER OBSERVED THAT THE INSTITUTION/ASS OCIATION WAS CREATED FOR THE BENEFIT OF FAMILIES OF GURJAR SAGAR COMMUNITY ONLY RESIDI NG IN AMRELI AND ALL THE CHARITABLE OBJECTS MENTIONED IN THE MEMORANDUM ARE FOR THE BEN EFIT OF THE SAID COMMUNITY. ACCORDING TO THE LD. COMMISSIONER OF INCOME-TAX, RA JKOT-III, THE OBJECT OF THE TRUST IS COVERED UNDER THE PROVISIONS OF SECTION 13(1)(B) OF THE ACT, I.E. THE TRUST IS CREATED FOR THE BENEFIT OF A PARTICULAR COMMUNITY/CAST. ACCORD INGLY, A SHOW-CAUSE NOTICE WAS ISSUED TO THE ASSESSEE-TRUST VIDE LETTER DATED 19.0 6.2012 ASKING THE ASSESSEE TO ATTEND BEFORE THE LD. COMMISSIONER OF INCOME-TAX, R AJKOT-III ON 27.06.2012 AT 3.00 PM ALONGWITH THE DOCUMENTS/DETAILS REQUIRED BY HIM VIDE HIS LETTER DATED 19.06.2012, BUT NO COMPLIANCE WAS MADE TO THE SHOW-CAUSE NOTICE TILL THE DATE OF IMPUGNED ORDER PASSED BY LD. COMMISSIONER OF INCOME-TAX, RAJKOT-II I. THE LD. COMMISSIONER OF INCOME-TAX, RAJKOT-III ACCORDINGLY REJECTED THE APP LICATION OF THE ASSESSEE FOR 2 479-RJT-2012 - SHRI AMRELI GURJAR SAGAR GNATI TRUST (SMC) REGISTRATION U/S 12AA OF THE INCOME-TAX ACT FOR THE DETAILED REASON GIVEN BY HIM IN PARAGRAPH NOS. 4 AND 5 OF THE IMPUGNED ORDER, WHICH ARE REPRODUCED HEREUNDER:- 4. AS THE TRUST/ASSOCIATION IS CREATED FOR THE BEN EFIT OF FAMILIES OF GURJAR SAGAR COMMUNITY ONLY RESIDING IN AMRELI. ALL THE C HARITABLE OBJECTS MENTIONED IN THE MEMORANDUM ARE FOR THE BENEFIT OF THE ABOVE COMMUNITY. THUS, THE ASSOCIATION/TRUST IS NOT CREATED FOR THE BENEFIT OF GENERAL PUBLIC. THUS THE OBJECT OF THE TRUST/ASSOCIATION IS HT BY THE PROVIS IONS OF SECTION 13(1)(B) OF THE ACT. THEREFORE, THE SECTION 11 OF THE I.T. ACT IS N OT APPLICABLE TO THE ASSESSEE. 5. CONSIDERING THE ABOVE FACTS, IT IS HELD THAT THE TRUST/ASSOCIATION IS NOT CREATED FOR THE BENEFIT OF GENERAL PUBLIC BUT IT CR EATED FOR THE BENEFIT FO FAMILIES OF GURJAR SAGAR COMMUNITY ONLY RESIDING IN AMRELI. THUS THE CASE OF THE ASSESSEE TRUST IS COVERED UNDER THE PROVISIO NS OF SECTION 13(1)(B) OF THE ACT. THEREFORE, THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S 12AA OF THE ACT IS REQUIRES TO BE REJECTED AS THE INSTITUTION / ASSOCIATION IS CREATED FOR A PARTICULAR COMMUNITY / CAST. ACCORDINGLY, ASSESSEE S APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT IS HEREBY REJECTED . AGGRIEVED WITH THE ORDER OF LD. COMMISSIONER OF IN COME-TAX, RAJKOT-III, THE ASSESSEE-TRUST IS NOW IN APPEAL BEFORE THIS TRIBUNA L, ON THE FOLLOWING GROUNDS:- 1. THE LD. C.I.T. HAS ERRED IN LAW AND FACTS IN RE JECTING APPLICATION FOR REGISTRATION U/S 12A FILED BY THE APPELLANT. THE AP PELLANT DESERVES REGISTRATION. 2. THE LD. C.I.T. HAS ERRED IN LAW AND FACTS IN REJ ECTING APPLICATION MADE FOR REGISTRATION U/S 12A ON THE IRRELEVANT GROUNDS. THE APPELLANT DESERVES REGISTRATION. 3. THE LD. C.I.T. HAS ERRED IN LAW AND FACTS IN REJ ECTING THE APPLICATION MADE FOR REGISTRATION U/S 12A ON THE IRRELEVANT CON SIDERATIONS. THE APPELLANT DESERVES REGISTRATION. 4. THE LD. C.I.T. HAS ERRED IN LAW IN NOT APPRECIAT ING THAT AS PER LEGAL AND STATUTORY POSITION, THE APPELLANT WAS DESERVING REG ISTRATION. THE APPELLANT DESERVES REGISTRATION. 5. THE LD. C.I.T. HAS ERRED IN NOT GRANTING REGISTR ATION WITHOUT APPRECIATING THE FACTUAL AND LEGAL POSITION THAT THE APPELLANT D ESERVES REGISTRATION FORM THE FIRST DAY OF F.Y. IN WITH APPLICATION IS MADE, I.E. 01.04.2011. THE APPELLANT DESERVES REGISTRATION. 6. WITHOUT PREJUDICE, THE LD.C.I.T. HAS ERRED IN NO T GRANTING REGISTRATION WITHOUT APPRECIATING THE FACTUAL POSITION THAT THE APPELLANT DESERVES REGISTRATION AT LEAST FROM 01.04.2011 OR 15.08.2011 , I.E. THE DATE OF MAKING APPLICATION. THE APPELLANT DESERVES REGISTRATION. 7. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND AN D/OR ANY OR ALL THE GROUNDS OF APPEAL BEFORE THE ACTUAL HEARING TAKE PL ACE. 3. AT THE TIME OF HEARING, ON BEHALF OF ASSESSEE-TR UST, SHRI D. R. ADHIA, AR APPEARED AND FILED WRITTEN SUBMISSIONS WHEREBY HE C ONTENDED THAT THE OPPORTUNITY GRANTED BY THE LD. COMMISSIONER OF INCOME-TAX, RAJK OT-III TO THE ASSESSEE-TRUST VIDE HIS LETTER DATED 20.06.2012 WAS NOT COMPLIED WITH I S ERRONEOUS AS THE COPY OF THE TRUST DEED FURNISHED TO THE LD. COMMISSIONER OF INC OME-TAX, RAJKOT-III SHOWS THE FOLLOWING:- 3 479-RJT-2012 - SHRI AMRELI GURJAR SAGAR GNATI TRUST (SMC) 1. VIDE OBJECT NO.9 IT IS MENTIONED THAT TO CARRY O UT NECESSARY ACTION FOR DEVELOPMENT, TO HELP THEM, TO CREATE OPPORTUNITIES FOR EMPLOYMENT, TO PROVIDE AT REASONABLE COST PRIMARY THINGS FOR LIFE NECESSITY TO THE SOCIALLY AND ECONOMICALLY BACKWARD CLASS PERSONS. 2. VIDE OBJECT NO.10 TO PROVIDE NECESSARY HELP TO T HE PEOPLE OF THE SOCIETY AT THE TIME OF SCARCITY, FLOOD, EARTHQUAKE ETC.. ALSO TO CONDUCT CATTEL CAMP AT THE TIME OF SCARCITY FOR COWS ETC. 3. VIDE OBJECT NO.11 TO HEALTH THE PEOPLE OF THE SO CIETY TO LEAVE AWAY VICES AND BAD PARAMPARA. 4. VIDE OBJECT NO.12 IT PROVIDES FOR OVER ALL DEVEL OPMENT OF LADIES, YOUNG AND ALL ECONOMICALLY BACKWARD 5. VIDE OBJECT NO.13 IT PROVIDES FACILITIES FOR SCH OLARSHIP, BOOKS, TOOLS, FOR STUDYING STUDENTS AND TO ENCOURAGE BRIGHT STUDENTS AND ALSO TO TAKE UP THE SOCIAL IMPROVEMENT ACTIVITIES, SELF EMPLOYMENT ACTI VITIES VILLAGE DEVELOPMENT OPPORTUNITY AND ENVIRONMENT DEVELOPMENT OPPORTUNITY. 6. VIDE OBJECT NO.14 IT PROVIDES TO CONDUCT TRAININ G INSTITUTE FOR TECHNICAL AND BUSINESS ACTIVITIES AND FOR COMPUTER CENTERS WITH T HE HELP OF GOVERNEMTNS. THE LD. AR OF THE ASSESSEE POINTED OUT THAT ALL THE AFORESAID ACTIVITIES ARE NOT FOR ONLY GURJAR SAGAR COMMUNITY IN AMRELI. BEFORE THE TRIBUNAL, THE LD. AR OF THE ASSESSEE-TRUST PRODUCED A COPY OF LETTER DATED 27.0 6.2012 IN REPLY TO THE NOTICE OF THE LD. COMMISSIONER OF INCOME-TAX, RAJKOT-III ALON GWITH WRITTEN SUBMISSIONS AND CONTENDED THAT THE SAME HAS NOT BEEN CONSIDERED BY LD. CIT, RAJKOT-III WHILE REJECTING THE APPLICATION OF THE ASSESSEE-TRUST U/S 12AA OF THE INCOME-TAX ACT. HE HAS ALSO RELIED UPON THE FOLLOWING DECISIONS AND SU BMITTED THAT ASSESSEE-TRUSTS CASE IS ALSO SQUARELY APPLICABLE TO THESE DECISIONS. 1. 246 ITR 188 (GUJ) HIRALAL BHAGWATI V/S CIT 2. 110 ITR 871 (MAD) SOUTHERL INDIA MILL OWNER AS SOCIATION 3. 121 ITR 1 (SC) SURAT ART SILK CLOTH MFG. ASSOC IATION 4. 82 ITR 704 (SC) AHMEDABAD RANA CASTE ASSOCIATI ON V/S CIT 5. ITA NO.425/AGRA/211 ITAT AGRA DAWOODI BOHRA JAMAD GUNA THE LD. AR OF THE ASSESSEE ALSO SUBMITTED THAT THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V. PALGHAT SHADI M AHAL TRUST (254 ITR 212) (SC) RELIED BY THE LD. DR IS ON A DIFFERENT FOOTING AS I T RELATES TO AN ATTEMPT MADE TO ALTER THE OBJECT OF THE TRUST DEED AND HENCE THE SAME IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. FINALLY, THE LD AR OF THE ASSESSEE PRODUCED A DECIS ION OF THE ITAT, RAJKOT SMC BENCH IN ITA NO.1053/RJT/2010 DATED 08.09.2010 IN THE CASE OF SHREE KADVA PATEL KELAVANI MANDAL V. CIT; WHEREIN ON IDENTICAL FACTS, THE TRIBUNAL HAS GRANTED THE 4 479-RJT-2012 - SHRI AMRELI GURJAR SAGAR GNATI TRUST (SMC) REGISTRATION U/S 12AA OF THE INCOME-TAX ACT. THE CO PY OF THE SAID DECISION IS PLACED ON RECORD. 4. DR. M. L. MEENA, DRA APPEARED ON BEHALF OF THE R EVENUE POINTED THAT IN THE IMPUGNED ORDER, LD. COMMISSIONER OF INCOME-TAX, RAJ KOT-III HAS NOT RECEIVED THE ASSESSEES LETTER DATED 27.06.2012 ALLEGED TO BE FI LED BEFORE THE LD. COMMISSIONER OF INCOME-TAX, RAJKOT-III; THEREFORE THE VIEW TAKEN BY THE LD. COMMISSIONER OF INCOME- TAX, RAJKOT-III REJECTING THE APPLICATION OF THE AS SESSEE-TRUST BE UPHELD. 5. HAVING HEARD BOTH SIDES, I HAVE CAREFULLY GONE T HROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THE IMPUGNED ORDER, THE LD. C OMMISSIONER OF INCOME-TAX, RAJKOT-III HAS NOT REFERRED THE LETTER OF THE ASSES SEE DATED 26.06.2012, WHICH IS ALLEGED TO BE FILED BY THE ASSESSEE-TRUST BEFORE TH E LD. COMMISSIONER OF INCOME-TAX, RAJKOT-III. FURTHER, IT APPEARS THAT THE DECISION O F THE ITAT, RAJKOT SMC BENCH IN ITA NO.1053/RJT/2010 DATED 08.09.2010 IN THE CASE OF SH REE KADVA PATEL KELAVANI MANDAL V. CIT, RELIED UPON BY THE LD. AR OF THE ASS ESSEE-TRUST BEFORE THE TRIBUNAL WAS ALSO NOT FILED BEFORE THE LD. COMMISSIONER OF I NCOME-TAX, RAJKOT-III. IN THIS VIEW OF THE MATTER, THE IMPUGNED ORDER OF LD. COMMISSION ER OF INCOME-TAX, RAJKOT-III IS SET ASIDE AND HE IS DIRECTED TO DECIDE THE APPLICATION OF THE ASSESSEE-TRUST FOR REGISTRATION U/S 12AA AFRESH AFTER CONSIDERING THE REPLY OF THE ASSESSEE DATED 26.06.2012 AND THE DECISION OF THE ITAT, RAJKOT SMC BENCH IN THE CASE SHREE KADVA PATEL KELAVANI MANDAL (SUPRA). THE LD. AR OF THE ASSESSEE IS ALSO DIRECTED TO FURNISH A COPY OF THESE TWO DOCUMENTS BEFORE THE LD . COMMISSIONER OF INCOME-TAX, RAJKOT-III. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 29.11.2013 !$ /RAJKOT *BT 5 479-RJT-2012 - SHRI AMRELI GURJAR SAGAR GNATI TRUST (SMC) / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- SHRI AMRELI GURJAR SAGAR GNATI TRUST, JESHINGPARA, AMRELI 2. / RESPONDENT- THE COMMISSIONER OF INCOME-TAX-III, RAJKOT 3. ,0,1 * * 2 / CONCERNED JT. CIT, RANGE-2, JUNAGADH 4 . 345 1, * 1#, !$ / DR, ITAT, RAJKOT 5 . 57 89 / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT