Shree Mevad Maheshwari Samaj,(Tower),Baroda, Baroda V. The CIT-III, Baroda

ITA 861/AHD/2012

• Counselvise Citation: 86120514 RSA 2012
• Duration Of Justice: 3 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-08-2015
• Assessment Year: misc
• Appeal Filed On: 19-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: S H RI G. D. AGRAWAL , VICE PRESIDENT AND SHR I S. S. GODARA , JUDICIAL MEMBER SHREE MEVAD MAHESHWARI SAMAJ, (TOWER), BARODA, 4/B, NIVRUTI COLONY, OPP. LOHANA SAMAJ, WADI, NR. SARDAR VINAY SCHOOL KARELIBAUG BARODA - 18 PAN: AAJTS669R (APPELLANT) VS THE COMMISSIONER OF INCOME TAX - III, 2 ND FL OOR, AAYAKAR BHAVAN ANNEXE, RACE COURSE C IRCLE, BARODA - 390007 (RESPONDENT) ASSESSEE BY: S H RI MUKUND BAKSHI , A.R. REVENUE BY: S H RI R. I. PATEL, CIT - D.R. DATE OF HEARING : 14 - 08 - 2 015 DATE OF PRONOUNCEMENT : 20 - 08 - 2 015 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL , ARISES FROM ORDER OF THE CIT - I II, B ARODA DATED 27 - 05 - 2011 IN CASE NO. BRD/CIT - III/T ECH/12A(A)/110/60 - D/2011 - 12/211 IN REJECTING ITS REGISTRATION APPLICATION, IN PROCEEDINGS UNDER SECTION 12AA(1)(B)(II) R.W.S. 12A(A) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 861/ A HD/20 12 A SSESSMENT YEAR : NA I.T.A NO. 861 /AHD/20 12 A.Y. NA PAGE NO SHREE MEVAD MAHESHWARI SAMAJ. VS. CIT 2 2. THE ASSESSEE S TRUST WAS ESTABLISHED ON 16 - 07 - 2010 WITH FOLLOWING OBJECT S : - (1) TO ESTABLISH/CREATE THE FACILITIES SUCH AS SCHOOL - COLLEGE, STUDENT'S BOARDING HOU SE/HOSTEL AS WELL AS LIBRARY IN ORDER TO GET GOOD/COMPLETE EDUCATIO N TO THE CHILDREN OF SHRI MEVAD MAHESHWARI SAMAJ (TOWER). (2) TO CREATE NECESSARY FACILITIES AND TO PROVIDE AID/ASSISTANCE FOR THE PURPOSE OF PUBLIC'S GOOD HEALT H AND WELL BEING OF SHR I MEVAD MAHESHWARI SAMAJ (TOWER). (3) TO PUT EFFORTS/TRY TO INTRODUCE REQUISITE SOCIAL IMPROVEMENT WITH AN OBJECT TO SAVE THE PEOPLE FROM USELESS OR FALSE EXPENSES AND OLD TRADITIONALLY ES TABLISHED CUSTOMS OF SH RI MEVAD MAHESHWARI SAMAJ (TOWER). (4) TO PROVIDE INFORMATION AND SPREAD KNOWLEDGE THE TRUST SHALL PUBLISH PAMPHLET, GUIDES, BOOKS, BOOKLETS AND ESTABLISH LIBRARY, READING ROOMS AND MAINTAIN THEM. (5) FOR ANY TYPE OF EDUCATION OR BRINGING UP THE T RUST WILL ESTABLISH INSTITUTION AND MAINTAIN IT AND FOR THE STUDENTS ESTABLISH THE BOARDING HOUSE/HOSTEL FOR THE STUDENT AND MAINTAIN IT. TO DO PROGRESSIVE DEVELOPMENT WORK FOR THE WELFARE OF THE PEOPLE AND MAINTAIN IT AND TO ESTABLISH VIDYALAY AND DEVELOP THEM AND ALSO TO CARRY OUT SOCIAL WORK, EDUCATIONAL ENCOURAGEMENT AND PROVIDE ASSISTANCE ETC. (6) TO DO THE ACTIVITIES TO PROVIDE MEDICINES, INJECTION AND TO PROVIDE FINANCIAL AID IN CASH IN THE NATURE OF EQUIPMENTS FOR TREATMENT AND TO ARRANGE BLOOD DONATION CAMP. (7) TO CARRY OUT CULTURAL ACTIVITIES SUCH AS A COLLECTIVE CIRCULAR DANCE, DRAM, GROUP MARRIAGE AS WELL AS SPORTS, TOUR - PICNIC DISCUSSION MEETING AND FOR THE ENCOURAGEMENT OF STUDENTS TO TAKE INITIATIVE OF PRIZE/TROPHY DISTRIBUTION. (8) THE TRUST WILL HELP THE VICTIMS OF FLOOD, FAMINE, EARTHQUAKE, AND EPIDEMIC AND OTHER NATURAL CALAMITIES OR HUMAN CREATED P ROBLEMS, ACCIDENTAL PROBLEMS IN WHATEVER NATURE AND TO EXTEND ASSISTANCE TO THE NEEDY PEOPLE OF MAINTENANCE, CLOTHS AND DWELLINGS A ND FOR ANY OTHER REQUIREMENT. I.T.A NO. 861 /AHD/20 12 A.Y. NA PAGE NO SHREE MEVAD MAHESHWARI SAMAJ. VS. CIT 3 (9) TO IMPLEMENT A SCHEME OF LOAN, SCHOLARSHIP FOR THE PURPOSE OF EDUCATION AND TO PROVIDE NOTE - BOOKS, TEXT BOOKS ETC. (10) TO ESTABLISH AND MANAGE THE PANJARAPOLE/A CHARITABLE ASYLUM FOR CRIPPLED FOR THE DOMESTIC ANIMAL S AND BIRDS AND NECESSARY ACTIVITIES PERTAINING TO IT. TO TAKE INITIATIVES FOR ENVIRONMENT PROTECTION AND TO DO PLANTATION AND TO MAINTAIN THE FOREST AND TO DO ACTIVITIES FOR THE PROTECTION OF THE BIRDS AND ANIMALS. (11) DELETED. (12) TO DO THE ACTIVITI ES TO CREATE SENTIMENT OF RENDERING THE SERVICE TO THE PEOPLE OF THE SOCIETY. (13) TO MAKE FOUNDATION/ TO ERECT AND MAINTAIN THE HALL - COMMUNITY HALL FOR GOOD - B AD OCCASIONS/FUNCTIONS OF THE SOCIETY AND TO GIVE THE SAME TO THE NEEDY PEOPLE OF INSTITUTIONS TO USE IT. (14) TO PROVIDE INFORMATION OF MODERN INFORMATION TECHNOLOGY AND COMPUTER TECHNOLOGY ETC. TO START/OPEN TRAINING CENTER/CLASS AND ORGANIZE AND ARRANGE EXHIBITION, SEMINAR PERTAINING TO IT. (15) FOR THE UPLIFTMENT OF THE WOMEN TO ORGANIZE TR AINING CENTERS AND MANAGE FOR TRAINING. 3. THE ASSESSEE APPLIED FOR SEC. 12A REGISTRATION ON 15 - 11 - 2010. THE CIT HAS REJECTED THE SAME IN THE ORDER UNDER CHALLENGE AS UNDER: - 3. THE TRUST SUBMITTED THE DETAILS ON 23.3.2011. ON PERUSAL OF THE SUBMISSION IT IS FOUND THAT THE APPLICATION WAS FILED IN THE PRESCRIBED FORM NO. 10 A ALONGWITH THE OTHER DOCUMENTS. ON FURTHER PERUSAL OF THE ACTIVITY REPORT SUBMITTED BY THE TRUST IT IS SEEN THAT THE MAIN OBJECT OF THE TRUST IS LIMITED TO IMPART EDUCATION AND UPLIFT MENT/WELFARE OF MEVAD MAHESHWAR SAMAJ ALONE AND NOT TO THE GENERAL PUBLIC OR SOCIETY AS A WHOLE. IN THE C IRCUMSTANCES A LETTER DATED 4.5. 2011 WAS WRITTEN TO THE TRUST TO SHOW CAUSE AS TO WHY THE APPROVAL OF REGISTRATION SHOULD NOT BE REFUSED TO IT. THE CAS E WAS FIXED FOR HEARING ON 16.5.2011. ON THE DATE OF APPOINTMENT THE TRUST FILED A REPLY DATED 16.5. 2011. THE CONTENTS OF THE LETTER IS AS UNDER: WE WILL DO TH E ACTIVITY FOR GENERAL PUBLIC AND WE STARTED OUR ACTIVITY WITH PROVIDING HELP FO R BOOKS TO STUDE NT FROM ANOTHER COMMUNITY. I.T.A NO. 861 /AHD/20 12 A.Y. NA PAGE NO SHREE MEVAD MAHESHWARI SAMAJ. VS. CIT 4 FURTHER WE HAVE STARTED ONE WATER HUT AT RAOPURA ROAD FROM THAT PUBLIC ARE TAKING BENEFIT, THAT YOU CAN VERIFY FROM JAYESH BHAI CHAUHAN. PH NO. 2438725 IN PAST WE HAVE ORGANIZED BLOOD CAMP SO MANY TIMES THAT BENEFITS GOES TO GENE RAL PUBLIC FOR THAT SOME CERTIFICATE ALSO ATTACHED. AT THE TIME OF EARTHQUAKE ALSO WE HAVE DONATED TO SEVA BHARTI AND OTHER INSTITUTION. FO R THAT PROOF ALREADY GIVEN. AT THE TIME OF FLOOD, WE HAVE GIVEN MORE THAN 6000/ - (SIX THOUSAND) FOOD PACKET THAT YOU CAN VERIFY FROM BARODA. MUNICIPAL CORPORATION FOR WHICH I HAVE NO PROOF BUT I CAN GIVE EVIDENCE BY PERSONAL ATTENDANCE OF MY SAMAJ MEMBER. THE TRUST IS REGISTERED BECAUSE OF DOING MORE ACTIVITY FOR SOCIETY IN ORGANIZED MANNER'. 4. THE REPLY OF THE TRUST HAS BEEN CONSIDERED BUT FOUND UNTENABLE AND NOT SATISFACTORY. IT MAY BE MENTIONED HERE THAT THE TRUST WAS ESTABLISHED ON 16.7.2010 AND REGISTERED WITH THE CHARITY COMMISSIONER ON THE SAME DATE. THEREFORE, THE CONTENTION OF THE TRUST THAT IT HAD ORGANIZED S EVERAL BLOOD CAMP THAT BENEFITED PUBLIC AT LARGE IS NOT BELIEVABLE. MOREOVER, THE DOCUMENTARY EVIDENCE SUBMITTED BY THE TRUST IN RESPECT OF ITS ABOVE CONTENTION SHOWS THAT PARTICIPATION OF SHN PRADIPKUMAR JUGATIA IN THE BLOOD DONATION CAMP SPONSORED BY LOH ANA SEVA MANDAL, AND THUS IT IS CLEAR THAT THE TRUST HAS NOT ORGANISED ANY BLOOD CAMP ON ITS OWN. AS REGARDS THE CO NTENTION OF THE TRUST THAT IT HAD DONATED TO SEVA BHARTI AND OTHER INSTITUTION AT THE TIME OF EARTHQUAKE IT IS TO MENTION HERE THAT EARTHQUAK E IN GUJARAT OCCURRED ON 26.01.2001. THEREFORE, IT IS INCREDIBLE TO BELIEVE THAT A TRUST WHICH WAS ESTABLIS HED ON 16.07.2010 HAD DONATED TO SEVA BHARTI AND OTHER INSTITUTION TO THE AFFECTED PEOPLE OF EARTHQUAKE. FURTHER, IN THE LETTER ITSELF THE TRUST HAS MENTIONED THAT IT HAD NO PROOF FOR DISTRIBUTION OF FOOD PACKETS TO THE FLOOD VICTIMS. 5. FROM THE ABOVE DISCUSSION AND ALSO FROM THE OBJECT, OF THE TRUST IT IS CLEAR THAT TH E TRUST HAS BEEN ESTABLISHED TO PROVIDE BENEFIT ONLY TO A PARTICULAR CASTE AND NOT IN TH E INTEREST OF SOCIETY AS A WHOLE OR PUBLIC AT LARGE, AND THEREFORE THE TRUST HAS NOT ENGAGED IN ANY ACTIVITIES. THOUGH THE OTHER DETAILS SUB MITTED BY THE TRUST ARE SATISFACTORY, THE GENU INENESS OF THE TRUST, IS IN DOU BT F OR NOT HAVING CREA TED FOR ANY ACTIVITIES TO THE GENERAL PUBLIC AS A WHOLE FROM THE DATE OF ITS INCEPTION. I.T.A NO. 861 /AHD/20 12 A.Y. NA PAGE NO SHREE MEVAD MAHESHWARI SAMAJ. VS. CIT 5 6. IN VIEW OF THE FOREGOIN G, I AM OF THE CONSIDERED VIEW THAT THIS IS NOT A FIT CASE FOR U/S. 12A(A) OF THE ACT. THE APPLICATION IS ACCORDINGLY REJECTED. 4. WE HAV E HEARD BOTH SIDES. THE CIT OBSERVES THE ASSESSEE TRUST TO HAVE BEEN SET UP TO SERVE A PARTICULAR CASTE ONLY AND NOT TO THE WHOLE SOCIETY. THE ASSESSEE QUOTES CASE LAW OF (2014) 221 TAXMAN 75 (GUJ) CIT VS. LEUVA P ATEL SEVA SAMAJ TRUST DECIDING A N IDENTI CAL ISSUE AS UNDER: - 2. THE QUESTION ARISES IN FOLLOWING FACTUAL BACKGROUND. THE RESPONDENT, A PUBLIC CHARITABLE TRUST HAD APPLIED FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME - TAX ACT, 1961 ('THE ACT' FOR SHORT). THE COMMISSIONER, HOWEVER, UNDER HIS ORDER DATED 21 - 3 - 2011, REJECTED SUCH AN APPLICATION ON TH E GROUND THAT UNDER SECTION 13(1 )(B) OF THE ACT, NOTHING CONTAINED IN SECTION 11 OR 12 WOULD OPERATE TO EXCLUDE FROM THE TOTAL INCOME OF SUCH TRUST IN CASE THE TRUST IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. THE COMMISSIONER AFTER EXAMINING THE OBJECTS OF THE TRUST, CAME TO THE CONCLUSION THAT THE TRUST WAS FOR THE BENEFIT OF LEUVA PATEL COMMUNITY AND THEREFORE, WOULD BE COVERED UNDER SECTION 13(L)(B) OF THE ACT. 3. IN APPEAL BEFORE THE TRIBUNAL, THE TRIBUNAL REVERSED THE DECISION OF THE COMMISSIONER. THE TRIBUNAL REFERRED TO SEVERAL DECISIONS INCLUDING THE DECISION OF THE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION V. CIT [19711 82 ITR 704. THE TRIBUNAL ALSO EXAMINED THE OBJECTS OF THE TRUST AND OBSERVED AS UNDER: '7. FROM THE ABOVE CLAUSES OF THE TRUST DEED, ANY ADULT PERSON AFTER PAYING PRESCRIBED FEES CAN BECOME A MEMBER OF THE SAID TRUST. THIS TRUST WILL PERFORM WITHOUT ANY DISCRIMI NATION IN LEUVA PATEL CASTE AND WILL FOLLOW NON - POLITICAL AND SECULAR OBJECTS OF THE TRUST. THE FIRST OBJECT OF THE TRUST IS TO CARRY OUT ACTIVITIES FOR THE PURPOSE OF DEVELOPMENT AND IMPROVEMENT OF THE EDUCATION. THE ITAT, AHMEDABAD BENCH IN CASE OF LEUVA PATEL NUTAN KELWANI MANDA L V. ITO, 12 ITD 276 (AHD.) ON IDENTICAL SET OF FACTS HELD THAT THE CASE OF THE ASSESSEE COULD NOT BROUGHT WITHIN THE PROVISIONS OF SECTION 13(L)(B) IN VIEW OF I.T.A NO. 861 /AHD/20 12 A.Y. NA PAGE NO SHREE MEVAD MAHESHWARI SAMAJ. VS. CIT 6 THE EXPLANATION 2 TO THE SAID SECTION. APART FROM THIS, IT WAS ALSO HE LD THAT THE LEUVA PATEL COMMUNITY CONSISTS MAINLY OF AGRICULTURISTS. SUCH COMMUNITY CANNOT BE DUBED AS RELIGIOUS COMMUNITY OR CASTE AS HAD BEEN HELD BY THE INCOME - TAX AUTHORITIES. I ALSO FOUND THAT IN THE CASE OF DISSOLUTION OF THE TRUST THE ACCUMULATED F UND OR CAPITAL WILL NOT BE DISTRIBUTED FOR PERSONAL BENEFIT BUT IT WILL BE HANDING OVER TO THE OTHER INSTITUTION HAVING SIMILAR OBJECT. IN THE LIGHT OF THE ABOVE DISCUSSION, I FIND THAT THE FACTS OF THE CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF LEUVA PATEL NUTAN KELWANI MANDAL V. ITO, 12 ITD 276 (AHD.). I FOLLOW THE SAME AND IN THE LIGHT OF THAT, THE CIT IS DIRECTED TO ALLOW THE REGISTRATION U/S. 12AA OF THE ACT.' 4. HAVING THUS HEARD THE LEARNED COUNSEL FOR THE REVENUE, WE ARE OF THE OPINION THAT THE QUESTION WHETHER THE TRUST IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE WOULD BE RELEVANT WHEN THE INCOME OF THE TRUST IS BEING ASSESSED AND THE QUESTION WHETHER SUCH INCOME SHOULD BE EXCLUDED FROM THE TOTAL INC OME OF THE TRUST IN TERMS OF SECTION 11 OF THE ACT. INSOFAR AS SECTION 12AA OF THE ACT IS CONCERNED, THE COMMISSIONER HAD TO TAKE A DECISION IF THE TRUST FULFILLED NECESSARY REQUIREMENTS OF REGISTRATION AS PROVIDED UNDER SECTION 12A OF THE ACT. A DIVISION BENCH OF THIS COURT IN THE CASE OF SHANTAGAURI RAMNIKLAL TRUST V. CIT [19991 239 ITR 528. IN THIS CONTEXT, OBSERVED AS UNDER : 'WHILE CONSIDERING AN APPLICATION FOR REGISTRATION OF A TRUST, THE COMMISSIONER MUST ALSO MAKE A CLEAR DISTINCTION BETWEEN THE R EQUIREMENT OF REGISTRATION AND THE REQUIREMENT FOR CLAIMING TAX BENEFIT. THE LATTER QUESTION FALLS SQUARELY TO BE CONSIDERED BY THE ASSESSING OFFICER. SECTION 12A NEITHER MAKES REGISTRATION OF TRUST AS CONDITION PRECEDENT FOR CLAIMING BENEFIT UNDER SECTION S 11 AND 12 READ WITH SECTION 13, NOR REGISTRATION OBVIATES ENQUIRY INTO THE CONDITIONS ENVISAGED UNDER SECTION 13 BY THE ASSESSING OFFICER BEFORE THE TAX BENEFIT CAN BE ALLOWED. MERE FILING OF APPLICATION FOR REGISTRATION OF THE TRUST IS ENOUGH TO CLAIM B ENEFIT OF ITS INCOME UNDER SECTIONS 11 AND 12 AND JURISDICTION TO THE ASSESSING OFFICER TO ENQUIRE INTO THAT CLAIM, WHICH ALSO INCLUDES QUESTION AS TO WHO ARE THE BENEFICIARIES OF TRUST. ON OTHER CONDITIONS BEING FULFILLED, THE I.T.A NO. 861 /AHD/20 12 A.Y. NA PAGE NO SHREE MEVAD MAHESHWARI SAMAJ. VS. CIT 7 EXEMPTION MUST FOLLOW WHETHE R REGISTRATION IS ACCORDED OR NOT.' 5. IN VIEW OF THE ABOVE CONCLUSIVE OPINION OF A DIVISION BENCH OF THIS COURT, WE DO NOT SEE ANY REASON TO INTERFERE. TAX APPEAL IS, THEREFORE, DISMISSED. THE REVENUE FAILS TO DRAW ANY DISTINCTION ON FACTS. WE DRAW SU PPORT FROM THE ABOVE STATED DECISION AND HOL D THAT THE CIT S OBJECTION QUOTING CASTE ISSUE WOULD QUA SOME OF ASSESSEE S OBJECTS WOULD BE RELEVANT ONLY DUR ING SEC. 11 PR OCEEDINGS AND NOT AT THE IMPUGNED REGISTRATION STAGE . THE ASSESSEE S SOLE SUBSTANTIVE G ROUND SUCCEEDS. 5. ASSESSEE S APPEAL IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 20 - 08 - 2015 SD/ - SD/ - ( G.D. AGRAWAL ) (S. S. GODARA ) VICE PRESIDENT JUDICIAL MEMBER A HMEDABAD : DATED 20 /08 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,