Shree Khataamba Prajapati Gnati Seva Mandal, Gandhinagar V. The CIT (Exemption), Ahmedabad

ITA 880/AHD/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1906 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 20-05-2019
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Shree Khataamba Prajapati Gnati S eva Mandal PAN: AAPTS4389 D (Appellant) Vs CIT(Exemption), Ah med abad (Resp ondent) Asses see b y : None Revenue by : Shri Vijay Kumar J aisw al, Sr. D.R. Date of hearing : 18-05 -2 022 Date of pronouncement : 19-05 -2 022 आदेश /ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Exemption), Ahmedabad in Order No. ITBA/EXM/S/EXM1/2019-20/1015733588(1) vide order dated 15/04/2019 passed for the assessment year 2019-20. ITA No. 880/Ahd/2019 Assessment Year 2019-20 I.T.A No. 880/Ahd/2019 A.Y. 2019-20 Page No. Shree Khataamba Prajapati Gnati Seva Mandal vs. CIT(E) 2 2. The assessee has taken the following grounds of appeal:- “1 The Commissioner of Income Tax(Exemption) Ahmedabad has erred in law and on fact and also in law in rejecting application U/S 12AA of the Income Tax Act, 1961. 2 Your appellant crave, leave to add, alter, & or to emend modify substitute all or any ground of appeal before final hearing if necessity so arise.” 3. The brief facts of the case are that the assessee made an application for registration of Trust under section 12AA of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) electronically on 22.10.2018 along with the Registration Certificate issued by the Charity Commissioner. Thereafter, the CIT(Exemption), Ahmedabad issued letter dated 05.03.2019 asking the assessee to furnish certain details/documents. However, no response was filed by the applicant in response to the above notice. The CIT(Exemption), Ahmedabad issued final opportunity/notice dated 26.03.2019 asking the assessee to produce further documents as mentioned in the said notice. In response thereto, the assessee filed letter dated 04.04.2019 and submitted certain details as requisitioned for. The CIT (Exemption), Ahmedabad on consideration of the aforesaid reply filed by the assessee by the letter dated 04.04.2019, rejected the assessee’s application for registration of the Trust u/s 12AA of the Act, with the following observations: “6. Further, on perusal of the details/documents submitted by applicant trust it is also revealed from the objects of the trust that objects are restricted to particular community i.e. "Prajapati Samaj of Village Khata Amba Ta. Vijapur Dist Mehsana". Some objects of the trust deed are as follow. I.T.A No. 880/Ahd/2019 A.Y. 2019-20 Page No. Shree Khataamba Prajapati Gnati Seva Mandal vs. CIT(E) 3 1. To construct community hall, vadi and to maintain it for organizing mass marriage function for Prajapati Samaj. 2. To do such activities so that feeling of brotherhood amongst Prajapati Samaj of Village KhateAmba. 3. To do activities for economic development of Prajapati Samaj The objects of the trusts as mentioned above show that the trust is established for the benefit of a particular community i.e. Praiapatj Samai of Village Khata Amba Ta. Vijapur Dist Mehsana and not for general public. The jurisdiction of the trust is also restricted to Prajapati Samaj of Village Khata Amba Ta. Vijapur Dist Mehsana only. As per trust deed only members belonging to Prajapati Samaj of Village Khata Amba Ta. Vijapur Dist Mehsana can be a trustee of the trust. 7. In view of this, it cannot be said to be charitable trust. Therefore it is concluded that the trust is created for the benefit of a particular community which does not endure for the benefit of the public, and thus, provisions of Section 13(1)(b) are squarely applicable in this case. 8. Further, in spite of specific requisitions the applicant has not submitted the requisite details such notes on activities being carried out by the trust with evidences with project/plan of action for the main charitable activities to be carried out in the next two years, copy of proof of identity of the main trustee/president/secretary of the trust, undertaking u/s 2(15), u/s 11(5) and 13(1)©, details of donation received/paid. Therefore, in the absence of complete details/documents as mentioned above, it is not possible to verify the genuineness of the activities of the above trust or the same being carried out in accordance with the objects of the trust. Thus, the genuineness of the activities does not get established. 9. Looking to the above facts, I am unable to arrive at the satisfaction of the genuineness of the activities. Hence, the application I.T.A No. 880/Ahd/2019 A.Y. 2019-20 Page No. Shree Khataamba Prajapati Gnati Seva Mandal vs. CIT(E) 4 filed in Form No. 10A for the approval u/s. 12AA of the Income-tax Act, is rejected by invoking provisions of section 13(1)(b) of the Act.” 4. The assessee is in appeal before us against the rejection order passed by CIT(Exemption). 5. The assessee in the Statement of Facts has stated that the Trust clause included educational activities and also advancement of any other object of general public utility, but the CIT (Exemption) did not take note of the above facts and denied the issuance of certificate under section 12AA of the Act on the basis that objects of the trust states that it is established for the benefit of a particular community only i.e. Prajapati Samaj only. The assessee has stated in the statement of facts that CIT (Exemption) omitted to take note of the fact that the trust is not registered for the benefit of any specified individual, but for the benefit of a “section of public” and has placed reliance on various judicial precedents which have held that an object beneficial to a “section of the public” is an object of general public utility. Accordingly, the CIT (Exemption) has erred in facts and in law in denying registration of the trust to the applicant u/s 12AA of the Act. 5.1 In view of the above facts as stated before us, we note that effectively the CIT (Exemption) did not give adequate opportunity to the applicant to present his case. Therefore, we think fit in the interest of justice, that the matter may be restored to the file of CIT(Exemption) for de novo consideration, after giving due opportunity of hearing to the assessee to present his case. The Ld. Departmental Representative has also not objected to the same. I.T.A No. 880/Ahd/2019 A.Y. 2019-20 Page No. Shree Khataamba Prajapati Gnati Seva Mandal vs. CIT(E) 5 6. In the result, the assessee’s appeal is allowed for statistical purposes. Order pronounced in the open court on 19-05-2022 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 19/05/2022 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद