Sorathia Parivar Charitable Trust, RAJKOT-GUJARAT V. The Commr. of Income Tax-1, RAJKOT-GUJARAT

ITA 636/RJT/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5273 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 07-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JITENDRA KUMAR CIT D R WRITTEN
• Keywords: Charitable institution
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI RAJPAL YADAV, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SORATHIA PARIVAR CHARITABLE TRUST, MAVDI BYPASS ROAD, NR. RADHE KRISHNA DAIRY, MAVDI, RAJKOT PAN: AAMTS2096J (APPELLANT) VS THE COMMISS IONER OF INCOME TAX - I, RAJKOT (RESPONDENT) REVENUE BY : S H RI JITENDRA KUMAR , CIT - D . R. ASSESSEE BY: WRITTEN SUBMISSION DATE OF HEARING : 2 2 - 06 - 2 018 DATE OF PRONOUNCEMENT : 10 - 07 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL AR ISES FROM ORDER OF THE CIT - I, RAJKOT DATED 11 - 09 - 2014 , IN PROCEEDINGS UNDER SECTION 12AA(1 ) (B)(II) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAI SED FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. C.I.T. HAS ERRED IN LAW AND FACTS IN REJECTING APPLICATION FOR REGISTRATION U/S. 12A FILED BY THE APPELLANT. THE APPELLANT DESERVES REGISTRATION. 2. THE LD. C.I.T. HAS ERRED IN LAW AND FACTS IN REJECTING THE AP PLICATION 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 REJECTING THE APPLICATION MADE FOR REGISTRATION U/S. 12A ON THE IRRELEVANT CONSIDERATIONS. THE APPELLAN T DESERVES REGISTRATION. I T A NO . 636 / RJT /20 14 A SSESSMENT YEAR: NA I.T.A NO. 636 /RJT /20 14 A.Y. N.P. PAGE NO SORATHIA PARIVAR CHARITABLE TRUST. VS. CI T 2 4. THE LD. C.I.T. HAS ERRED IN LAW IN NOT APPRECIATING THAT AS PER LEGAL AND STATUTORY POSITION, THE APPELLANT WAS DESERVING REGISTRATION. THE APPELLANT DESERVES REGISTRATION. 5. THE LD. C.I.T. HAS ERRED IN NOT GRANTING REGISTRATIO N WITHOUT APPRECIATING THE FACTUAL AND LEGAL POSITION THAT THE APPELLANT DESERVES REGISTRATION FORM THE FIRST DAY OF F.Y. IN WITH APPLICATION IS MADE, I.E. 01 - 04 - 2013. THE APPELLANT DESERVES REGISTRATION. 6. WITHOUT PREJUDICE, THE LD. C.I.T. HAS ERRED IN N OT PROVIDING ADEQUATE AND REASONABLE OPPORTUNITY. THE ORDER PASSED BY HIM DESERVES TO BE SET ASIDE WITH DIRECTION TO CONSIDER A FRESH MATTER GIVING REASONABLE TIME. 3. ALL THE GROUNDS OF APPEAL OF REVENUE ARE INTER CONNECTED TO THE COMMON ISSUE, THEREFORE , FOR THE SAKE OF CONVENIENCE, ALL ARE DECIDED BY THIS COMMON ORDER AS UNDER: - 4 . THE BRIEF FACT OF THE CASE IS THAT ASSE SSEE HAS APPLIED FOR APPROVAL U/S. 12A TO THE CIT ON 5 TH MARCH, 2014. THE APPLICATION OF T HE ASSESSEE WAS ACCOMPANIED WITH THE COPY O F TRUST DEED AND REGISTRATION CERTIFICATE DATED 21 ST JAN, 2012. THE LD. CIT ON VERIFICATION OF THE APPLICATION OF THE ASSESSEE HAS NOTICED THAT OBJECTS OF THE ASSESSEE TRUST WERE NOT CHARITABLE IN TERMS OF SECTION 2(15) OF THE ACT. HE OBSERVED THAT AS SESSEE TRUST HAS BEEN CREATED FOR THE DEVELOPMENT OF SORATHIA PARIVAR WHICH INCLUDED BUILDING OF COMMUNITY HALL , GIVING HELP TO STUDENTS OF SORATHIA PARIV AR , CELEBRATION OF RELIGIOUS FESTIVAL AND CARRYING OUT OTHER WELFARE ACTIVITY FOR THE BENEFIT OF THE SORATHIA PARIVAR COMMUNITY. THE DETAILS OF THE OBJECT OF THE TRUST AS NARRATED IN T H E ORDER U/S. 12AA(I)( B)( II) ARE REPRODUCED AS UNDER: - 4 (1) TO BUILD, RUN AND MAINTAIN A COMMUNITY HALL FOR MEMBERS OF SORUIHIA PARIVAR. 4(5) FOR CELEBRATION OF SOCIAL, CULTURAL AND RELIGIOUS EVENTS OF THE SORATHIA PARIVAR LIKE NAVRATRI, JANMASHTMI, DASHARA, NEW YEAR ETC. THE TRUST SHALL BUILD AND MAINTAIN COMMUNITY HALL AND DINING HALL 4(6) THE TRUST SHALL PROCURE AND MAINTAIN U SEFUL ARTICLES LIKE UTENSILS, BEDDINGS, CHAIRS ETC. AND ALLOW THEIR FOR FARE FOR CELEBRATION OF SOCIAL, CULTURAL AND RELIGIOUS EVENTS, GROUP MARRIAGE, SNEH MILAN ETC. 4(7) TO SUPPLY FOODS, CLOTHES, MEDICINES AND CASH OR PROVIDE EMPL OYMENT TO NEEDY SORATHIA PARIVAR MEMBERS WHO ARE ECONOMICALLY WEAK. THE LD. CIT(A) HAS S T ATED THAT TO GET ITSELF REGISTERED U/S. 12A OF THE ACT, IT IS NECESSARY THAT OBJECTS OF THE TRUST SHOULD BE OF CHARITABLE NATURE FOR WELFARE AND BENEF IT OF HUMAN BEING WITHOUT DISCRIMINATING ON THE BASIS OF CASE, COLOUR, CREED I.T.A NO. 636 /RJT /20 14 A.Y. N.P. PAGE NO SORATHIA PARIVAR CHARITABLE TRUST. VS. CI T 3 OR RELIGION. CONSEQUENTLY HE HAS REJECTED THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S. 12A OF THE ACT ON THE GROUND THAT THE ASSESSEE TRUST IS CREATED FOR WELFARE AND BENEFIT OF A PARTICULAR COMM UNITY FOR EXAMPLE SORATHIA PARIV AR. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE LD. CIT RAJKOT - I HAS REJECTED THE APPLICATION OF THE ASSESSEE U/S. 12A ON THE GROUND TH AT T H E ASSESSE E TRUST IS ESTABLISHED FOR THE BENEFIT OF MEMBERS OF SORATHIA P ARIVAR AND ITS OBJECT IS FOR THE WELFARE OF PARTICULAR COMMUNITY. W E OBS ERVE THAT TO GET THE CLAIM OF EXEMPTION U/S. 11 OF THE ACT, THE ASSESSE IS REQUIRED TO OBTAIN REGISTRATION U/S. 12A OF THE ACT . S ECTION 12AA OF THE ACT PRESCRIBE S THE PROCEDURE FOR REGISTRATION OF TRUST U/S. 12A OF THE ACT. A S PER THE PROCEDURE PRESCRIBED UNDER THE PROVISIONS OF SECTION 12AA OF THE ACT , THE LD. CIT HAS VERIFIED AND OBTAINED DOCUMEN T S AND INFORMATION AB OUT THE ACTIVITIES OF THE ASSESSEE AND FOUND THAT T H E ASSESSE E T R UST HAS BEEN CREATED FOR THE FOLLOWING OBJECTS: - 4 (1) TO BUILD, RUN AND MAINTAIN A COMMUNITY HALL FOR MEMBERS OF SORUIHIA PARIVAR. 4(5) FOR CELEBRATION OF SOC IAL, CULTURAL AND RELIGIOUS EVENTS OF THE SORATHIA PARIVAR LIKE NAVRATRI, JANMASHTMI, DASHARA, NEW YEAR ETC. THE TRUST SHALL BUILD AND MAINTAIN COMMUNITY HALL AND DINING HALL 4(6) THE TRUST SHALL PROCURE AND MAINTAIN USEFUL ARTICLES LIKE UTENS ILS, BEDDINGS, CHAIRS ETC. AND ALLOW THEIR FOR FARE FOR CELEBRATION OF SOCIAL, CULTURAL AND RELIGIOUS EVENTS, GROUP MARRIAGE, SNEH MILAN ETC. 4(7) TO SUPPLY FOODS, CLOTHES, MEDICINES AND CASH OR PROVIDE EMPLOYMENT TO NEEDY SOR ATHIA PARIVAR MEMBERS WHO ARE ECONOMICALLY WEAK. AFTER CONS IDERING THE ABOVE FACTS AND FIN DINGS W E OBSERVE THAT THE ASSESSEE TRUST HAS BEEN PARTICULARLY CREATED FOR BENEFIT AND WELFARE OF THE MEMBERS OF THE SORAHIA PARIVAR. THEREFORE T HE PROVISIONS OF SECTION 13(1)(B) ARE CLEARLY ATTRACTED TO THE ASSESSEE TRUST. THE TRUST FALL UNDER CLAUSES (A) AND (B) OF SECTION 13(1) OF THE ACT ARE NOT ENTAILED FOR BENEFIT OF SECTION 11 OR SECTION 12 OF THE ACT. THE PROVISIONS OF SECTION 13(1) ARE R EPRODUCED AS UNDER: - 13(1) NOTHING CONTAINED IN SECTION 11 5 OR SECTION 12] SHALL OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT THEREOF - (A) ANY PART OF TH E INCOME FROM THE PROPERTY HELD UNDER A TRUST FOR PRIVATE RELIGIOUS PURPOSES WHICH DOES NOT ENURE FOR THE BENEFIT OF THE PUBLIC; I.T.A NO. 636 /RJT /20 14 A.Y. N.P. PAGE NO SORATHIA PARIVAR CHARITABLE TRUST. VS. CI T 4 (B) IN THE CASE OF A TRUST - FOR CHARITABLE PURPOSES OR A CHARITABLE INSTIT UTION CREATED OR ESTABLISHED AFTER THE COMMENCEMENT OF THIS ACT, ANY INCOME THEREOF IF THE TRUST OR INSTITUTION IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICUL AR RELIGIOUS COMMUNITY OR CASTE. AFTER CONSIDERING THE FINDINGS OF THE LD. CIT(A) AND PROVISIONS OF LAW, WE FIND NO INFIRMITY IN THE DECISION OF THE LD. CIT(A) - RAJKOT - 1 STATING THAT ASSESSEE TRUST HAS BEEN ESTABLISHED FOR THE BENEFIT OF A PARTICULAR COMMUNITY, THEREFORE, NO CHARITABLE ACTIVITIES ARE CARRIED OUT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 10 - 07 - 201 8 SD/ - SD/ - (RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 10 /07 /201 8 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT