BHANDARY SEVA SAMITHI, MUMBAI V. DIT (E), MUMBAI

ITA 5487/MUM/2010

• Counselvise Citation: 548719914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 06-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P K B MENON
• Keywords: Charitable institution
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, MUMBAI. BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A NO.5487/ MUM/2010 BHANDARY SEVA SAMITHI, .. APPELLANT C/O. SHANKAR & KISHORE, B/702, OXFORD CHAMBERS, SAKIVIHAR ROAD, NEAR L&T, POWAI, MUMBAI. PA HO.AAATB 4586 A VS DIT (EXEMPTION), .. RESPONDEN T 6 TH FLOOR, PRAMAL CHAMBER, PAREL, MUMBAI-400012 APPEARANCES: HARIDAS BHAT, FOR THE APPELLANT P.K.B.MENON , FOR THE RESPONDENT DATE OF HEARING : 26.9.2011 DATE OF PRONOUNCEMENT : 25 -10-2011 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE -INSTITUTION HAS C ALLED INTO QUESTION CORRECTNESS OF DITS ORDER DATED 26 TH MAY, 2010, PASSED UNDER SECTION 12A OF THE INCOME TAX ACT, 1961, DECLINING THE REGISTRATION AS A CHARITABLE INSTITUTION. 2. GRIEVANCE RAISED BY THE ASSESSEE IS AS FOLLOWS: 2 THE DIT (E) HAS REJECTED THE REGISTRATION OF TRUST U/ S.12AOF THE I,.T.ACT, 1961 OBJECTING THAT THE MAIN OBJECT OF TH E TRUST/INSTITUTION HAS WORD BHANDARY, THEREFORE THE TRUST AS ENVISAGED B Y THE LEGISLATURE, SHOULD BE FOR THE BENEFIT OF GENERAL PUB LIC AT LARGE AND NOT FOR THE BENEFIT OF SPECIFIC COMMUNITY AND THAT TO PE RSONS OF THIS COMMUNITY LIVING IN MUMBAI. DESPITE OF CLEARLY MENT IONED IN THE MEMORANDUM OF ASSOCIATION OF THE TRUST THAT TO BRING TOGETHER ALL THE MEMBERS OF THE COMMUNITY KNOWN AS BHANDARY IN PARTI CULAR AND OTHERS IN GENERAL LIVING IN AND AROUND MUMBAI, BE EN LISTING THEM AS MEMBERS OF THE SOCIETY TO FOSTER A SPIRIT OF BROTHERHOO D, ONENESS AND BELONGING AND TO STRIVE FOR THEIR SOCIAL, PHYSICAL, MO RAL, EDUCATIONAL, ECONOMICAL IMPROVEMENTS AND TO SECURE EQUALITY OF STAT US AND OPPORTUNITIES FOR THEM SO AS TO BRING ABOUT AN INTEGRA TED UPLIFTMENT OF THE CONDITIONS OF LIFE OF EVERY MEMBER OF THIS COM MUNITY IN PARTICULAR AND OTHERS IN GENERAL SO AS TO LIVE HARMONI OUSLY IN DIGNITY AND ENDURING PEACE IN THE INDIAN SOCIETY AND TO PURSU E SOCIAL SERVICES AND CHARITABLE PURPOSES 3. THE APPELLANT BEFORE US IS A TRUST INCORPORATED UN DER BOMBAY PUBLIC TRUST ACT, 1950 AND IT HAD FILED AN APPLICATION SEEKING RE GISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, ON 16.11.2009. THIS REGISTRATION WAS DECLINED ON THE GROUND THAT THE BASIC OBJECT OF THE ASSESSEE TRUST IS FOR THE BENEFIT OF BHANDARY COMMUNITY AND TO THE PERSONS OF THIS COMMUNITY LIVING IN BOMBAY . THE DIT (EXEMPTION) WAS OF THE CONSIDERED VIEW THAT SINCE 13(1)(B) OF THE OF THE OF THE ACT REFERS APPLICATION OF SECTION 11 TO A CHARITABLE INSTITUTION, IF SUCH INST ITUTION IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNIT Y OR CASTE. IN COMING TO THIS CONCLUSION, THE DIT(E) ALSO FOUND SUPPORT FROM HONBLE J&K HIGH COURT IN THE CASE OF GHULAM MOHIDIN TRUST VS CIT(2001) 248 ITR 587(J&K) AND HONBLE SUPREME COURTS JUDGMENT IN THE CASE OF STATE OF KERALA V. M. P.SHANTI VARMA JAIN, 231 ITR 787(SC). THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFO RE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO THE A PPLICABLE LEGAL POSITION. 5. WE FIND THAT SO FAR AS THE ASSESSEE BEFORE US IS CONCERN ED, IT IS NOT EVEN IN DISPUTE THAT ITS OBJECT IS TO BRING TOGETHER ALL THE MEMBERS OF COMMUNITY KNOWN AS 3 BHANDARY IN PARTICULARS, AND OTHERS LIVING IN AROUND BOMBAY, BY ENLISTING THEM AS MEMBERS OF SOCIETY TO FOSTER SPIRIT OF BROTHERHOOD, ONE NESS AND BELONGINGNESS, AND YET REGISTRATION IS DECLINED ON THE GROUND THAT THE T RUST IS ESTABLISHED FOR THE BENEFIT OF PARTICULAR RELIGIOUS COMMUNITY OR CASE. THE MERE FACT THAT THE WORD BHANDARY IS MENTIONED IN THE ABOVE OBJECT CLAUSE DO ES NOT IMPLY THAT THE TRUST IS ONLY FOR THE BENEFIT OF THIS COMMUNITY, AND IT ONLY STATES THAT ONE OF THE SOURCES OF MEMBERS WILL BE FROM THIS COMMUNITY WHICH IS OPEN TO A LL PERSONS. ON THESE FACTS, LEARNED DIRECTORS RELIANCE ON HONBLE J&K HIGH COUR TS JUDGMENT IN THE CASE OF GHULAM MOHIDIN TRUSTS CASE (SUPRA) IS SIMPLY OUT OF PLA CE FOR THE REASON THAT IN THE CASE BEFORE US HONBLE J&K HIGH COURT, THE OBJECT OF THE TRUST WAS PROMOTION OF SCIENCE AND TECHNOLOGY AND MUSLIM THEOLOGY AMONGST MUSL IM INTELLIGENTSIA. THE BENEFICIARY CLASS WAS THUS ONLY OF A PARTICULAR RELIGIO N. WHEN WE CONTRAST THIS WITH THE CASE BEFORE US IN WHICH BHANDARY COMMUNITY IS ONE OF THE SOURCES OF MEMBERS WHO WILL JOIN THE ACTIVITIES OF THE TRUST, WE FIND TH AT THE DIFFERENCE IN FACTS IS TOO SIGNIFICANT TO BE IGNORED. WE FURTHER FIND THAT AS H ELD BY HONBLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION VS. CIT (82 ITR 704), EVEN AN OBJECT BENEFICIAL TO A PARTICULAR SECTION OF SOCIETY IS AN O BJECT OF GENERAL PUBLIC UTILITY . TO SERVE A CHARITABLE PURPOSE, IT IS NOT NECESSARY THAT T HE OBJECT SHOULD BE TO THE BENEFIT THE WHOLE OF MANKIND. IN VIEW OF THESE DISCU SSIONS, IN OUR CONSIDERED VIEW, NEITHER THE OBJECTS OF ASSESSEE TRUST ARE FOR THE BENEFI T OF A PARTICULAR CASTE, NOR BEYOND THE SCOPE OF GENERAL PUBLIC UTILITY. LEARNED DIRECTOR THUS CLEARLY ERRED IN REJECTING THE APPLICATION FOR REGISTRATION FILED BY THE ASSESSEE. WE, THEREFORE, DIRECT HIM TO GRANT THE REGISTRATION U/S.12AA. THE ASSESSEE GE TS THE RELIEF ACCORDINGLY. OR ALL PERSONS IN A PARTICULAR COUNTRY OR STATE. IT IS SU FFICIENT IF THE INTENTION TO BENEFIT. 6. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER, 2011 SD/- (D.MANMOHAN) VICE PRESIDENT SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 25 TH OCTOBER, 2011 4 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. DIT( EXEMPTION) MUMBAI 4. DEPARTMENTAL REPRESENTATIVE, BENCH B MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI