SHRIYA DEVI MATA MANDIR PRAJAPAT SAMAJ SEVA SANSTHAN,RAJSAMAND V. CIT(EXEMPTION), JAIPUR

ITA 349/JODH/2024

AI Insights

The case involves Shriya Devi Mata Mandir Prajapat Samaj Seva Sansthan, a society registered under the Societies Registration Act, 1958, and the Rajasthan Public Trust Act, 1959, which appealed against the rejection of its applications for registration under section 12AB and approval under section 80G(5) of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemption), Jaipur, had rejected these applications citing non-compliance with the trust's objects and the genuineness of its activities. The Tribunal found that the CIT (Exemption) had not adequately considered the evidence and arguments presented by the appellant, leading to a decision to remand the case for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126268 (ITAT-JODHPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2024-2025
• Other Referred Cases: Ananda Social & Educational Trust vs CIT (EF), Maharaja Agrasen Society vs CIT (TE), Aruva Foundation vs CIT (LE), Parul University Alumni Association vs CIT (E), Hindu Mahotsav Samiti Pali vs CIT(E)
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Charitable institution; Commissioner; Commissioner of Income Tax; Statistical purposes; No income; Exempt; Department; Registration u/s 12AB; Purchase of land; Explanation; ADIT
• Section: 64; 12AA; 12A; 13; 2; 80G; 162

Judgement Text

") 03,202 . fa IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH (Virtual) JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI UDAYAN DAS GUPTA, HON’BLE JUDICIAL MEMBER ITA No. 348/Jodh/2024 (U/s. 12AA) ITA No. 349/Jodh/2024 (U/s.80G) Shriya Devi Mata Mandir Vs CIT (Exemption), Prajapat Samaj Seva Sansthan, Jaipur. Farara, Rajsamand — 343324 PAN No. AAVTS9510Q Assessee by Shri Shyam S. Singhvi, C.A. Revenue by Shri Manoj Kumar Mahar, CIT (D.R.) Date of Hearing 17.02.2025. Date of Pronouncement be) ORDER DR. MITHA LAL MEENA, A.M.: These appeals, by the Appellant are directed against the order even dated 31.03.2024 of Commissioner of Income Tax (Exemption), Jaipur [hereinafter refer to as (“the CIT”)], challenging rejection of its application for registration under section 12AA of Income Tax Act 1961(In short ‘the Act’) rejection of Application for Approval u/s 80G(5) of the Act. 2. Briefly the facts as per record are that application in Form No. 10AB seeking registration u/s 12AB of the Income Tax Act, 1961 was filed by the applicant online on 24.09.2023. The Ld. CIT being not satisfied with the reply of ITA No. 348/Jodh/2024 (U/s. 12AA) ITA No. 349/Jodh/2024 (U/s.80G) the applicant to the queries and show cause notice, hold that that applicant is not eligible for registration by observing that- Activities are not in accordance with the objects and application of part of income not towards objects of trust. Object for the benefit of particular caste/community. Non Genuineness of activities. 2.1 Consequently, the Ld. CIT has also cancelled the applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act and rejected application for approval u/s 80G (5) of the Act. 3. The Ld. Counsel for the assessee submitted that the appellant SHRIYA DEVI MATA MANDIR PRAJAPAT SAMAJ SEVA SANSTHAN is a society registered under Societies Registration Act 1958; Rajsamand & Rajasthan Public Trust Act 1959. The society has been provisionally registered u/s 12A (1) (ac) (vi) vide order dated 03/08/2022. In compliance, society applied for registration u/ s 12A (1) (ac) (iii) on dated 19/01/2023. The main object of the society are to serve for the welfare of the Prajapat Society to provide educational and medical help to poor and needy person & to run Dharamshala at no-profit-no-loss for the benefit of pilgrim at Farara (District Rajsamand) and any other activity for the welfare of the society. These have been further amended to bring clarity w.rt nature of service activities covered under the definition of section 2 (15) and beneficiaries ITA No. 348/Jodh/2024 (U/s. 12AA) ITA No. 349/Jodh/2024 (U/s.80G) to be society at large without profit any intent in the objects vide Para 3.7 and 3.10 of the objects as per the Vidhan Patra. 4. The Ld. AR further submitted that to achieve the objects, the trust acquired land admeasuring 0.5099 Hectare to construct and run Dharamshala in besides free medical assistance. In e-assessment proceedings and personal hearing, requisite details called for vide letter dated 12/01/2023, 16/03/2024, 26/03/2024 and hearing in person on 19/03/2024 have been attended and complied with successfully with requisite evidence. It has been categorically brought on record that investment made so far has been towards fulfilment of object laid in the Vidhan Patra at Para 3.10 to enable the society to function for the benefit of the \"society at large\" without any profit intent or the benefit of \"Prajapat Samaj\" in particular. The AR argued that the Ld. CIT (Exemption) has inferred wrongly without appreciating merits of the facts that purchase of land to construct and run Dharamshala is genuine charitable activity in consonance to the objects of the society only. Thus, he contended that the Ld. CIT (Exemption) rejected the application u/ s 12AB and 80G(5), and cancelled the provisional registration without considering the factual replies placed before him supported with documentary evidences before him. In support of its argument the Ld. AR has filed a tabular chart to rebut the objection of the Ld. CIT Exemption as under: LActi_ ities are notin accordance with obiccts and application of part of income! | ) speci tivity: beyon Vi reply _dited 16/03 _/ 2024 hearing on 19/03/2024, it has been stated and chirified that word \"Sar ITA No. 348/Jodh/2024 (U/s. 12AA) Onc amongst several objects at Para 3 of the deed, Para 3.10 has been explained to construct and run Dharamshala in reply dated 26/03/2024. (Pg. No 50-51, 53, 54- 59) An application for registration with Dev Sthan is nol lowards objects of rust: Vibhag dated 10/06/2023 giving detail of said Per CU: land purchased summarising \"object of the trust . . . to be welfare of the socictv to provide Object of trust mentioned at lucational and ical help and . . 3 of deed iy me: educational _and_mediecal_help_and_to_run point no 2 ol eed Is meant Dharamshala at_no profit no loss\". (Pp No 54- for running Shriya Devi 59) Temple. its management. It has filed clarficatory amendment of celebration. function. puja. clause 7 & 10 of the object clause 3 on various religious funetion etc, 22/03/2024 for registration and amended further observes that Wust deed registered purchase of land for construction of Dharamshala! “th Pew § . . constiucts Dharamshala theron (Pe No $0-51, $3) is beyond object as clause 3.1 0 allows only maintenance record before Ld. Cll (Exemption), the of Dharamshala and not appellant did not violate see IL (1) (a) and/ or construction, (Pg. No.4 & 5 12AB (4) in any manner as there has not caused of order u/s [2AB fic ‘violation Ile further observes that al the end of appellant. (Pg. No. 12 & 17) there has caused iolation of I2AB (4) of the act. (Pg. No. j & 8 ol order u/s 1L2AB) IIc Sthan Vibhay tl tao covers purchase land and It is visibly clear from these documents on ITA No. 349/Jodh/2024 (U/s.80G) rLd. CIE (Exemption) did noti consider facts in entirety av ailable: ‘before him On the one hand. registration with Dex Sthan Vibhag filed on 10/06/2023 confirm investment in purchase of land towards objects and clarlicatory amendment wort. construct and run Dharamshala is applicable retrospectively on the other. successfully negates observation relied by Ld. CIT (Exemption) as to amendment vis-Avis purchase of land lor Dharamshala. (Pg No 54-59. 66- 69) [sven otherwise. objects of the rust had been welfare of the socicty to provide educational and medical help to the socicly allarge too in addition = to srun Dharamshala at no profit no loss does not disentitle the Lrust Irom registration, Without prejudicing to the above, it is submitted that even if any a s d certain objeet. rejection of approva may nol be logical and justified. Reliance is placed on following case laws: 12020] 114 taxmam com 693 (SC); Ananda = Social & Educational Thust vs CIT (EF) [20241 168 taxmann com 437 (Delhi- 1): Maharaja Agrasen Society v/s CIT (TE) [2025] 170 taxmann com 198 (Indore- 1). Aruva Foundation v/s CLL (LE) The arrived Ld. CI (Exemption) Edueat o 2 Obicet for the particular caste/_ community: has arrived al conclusion on the! Per CIT: basis of nomenclature c.g. creators of the trust and word \"Samaj\" used 1 Th (Exempti in the object clause has presumed to The Td. CI (Exemption) and personal ‘be Prajapal Samaj Me highly observes that appellant — is categorically |: Hapar sara). mM) lincorrect. unjustified and making distinction on the basis of casle/ community — and restricting several benefils only lor Prajapat Samaj, it is clear that same is not eligible for registration u/s [2/ 80G. (Pg No Ll ol order u/s 12AB) naj\" used eg. sociely at large. Yid2.Z e2ly-da!gd-2GLQ3.L2024. objects clause : 3 of the trust had been summarily stated “welfare nomenclature refers to creator of the trust c.g \"Prajapat Samaj\" and word \"Samaj\" al various places in object clause refers to the \"bencficiarics It has been mistakenly | . ° understood by Ld. CIT (Exemption). (Pg.No 31-32) Ohe sentence in reply. of the n |hypothetical. ‘Ele did nol appreciate the object w ‘clauses in the spirit of totalits ‘and his observation is based on lappellant dated 26/03 12024 at Para 4 at pg No 51) he taken or Had note of the society al large lo_provide educational and reaistration nts filed medical help and to run Dharamshala atno profitno with Dev Sthan Vibha_and . loss\" with lurther clarficalory amendment in 3.7 & 3.10 retrospectively, (Pg. No 50-51. 53. 5459)|object clarficato amendment_in_ the | clause 3.7, & 3.10: belore a retrospectively of It has been explained thal society in entirety recognizes ownership of Shriya Devi ‘Temple to be of Prajapal Samaj as she happens to be their deity of creators of the trust and not beneficiaries’. There exist other objects extends lo other area of service of mankind as stated above. (Pg. No ) Facts and arguments in ground No | above adds further strength to explain that object of the trust is for the benefit of society at large and restricted to particular community ITA No, 348//odh/2024 (U/s. 12AA) ITA No. 349/Jodh/2024 (U/s.80G) filed him, there was no chance such eventuality al his end He did not even consider contention put forth before him in this regard vide reply darted 16/03/2024 and 26/03/2024 but simply framed his mind in blanket manner. (Pg. No. ) The appellant never -accepted_in the order sheet about the beneficiaries of the trust to_be restricted for Praiapat Samai. It rather goes against the spirit of the objects laid and accepted in the deed, adopted and clarified under Act 1959. It is alternatively submitted that even if formation of the trust is considered charitable and religious purposes. provision of section 13 (1) (b) shall not be applicable because: * Clause 3 of the * object ‘clause i assumed religious for benefit of Prajapat Samaj by — stretching imagination, section 13 (1) (b) will nol apply as it ig applicable to charitable trust only. * Clause 3.7, 3.8, 3.9, 3.103.13& 3.15 of the objects clause is expressly charitable for the entire community. It objectives cr A ne religious activity per oblect clause dealt ir detail _above had been for the benetit_o| | anny) « case ‘Thus, | framed An | count ITA No. 348//odh/2024 (U/s. 12AA) ITA No. 349/Jodh/2024 (U/s.80G) became trust with dual Whereas section 13 (1) (b) applicable for the charitable trust on and not religious or charitable cu religious (rust. Case law placed reliance by Ld. (Exemption) does have application in present appeal as Prajapat Samai. On fact il is Prajapat who happens to be creator of trust an beneficiaries is society at large. It has been a settled law that section 13(1)(b) is relevant at the stage of assessment and nol during registration process. Reliance is placed on following laws 120241 162 taxmanncom 98 (Abad-T'): Parul Universily Alumni Association v/s CIT’ (E) Hindu Mahotsav Samiti Pali vs CIT(E), Jaipur 1 TA No 444 & 445/lodh/2023 object of the trust evidently nol for the benefit of particular caste d thus rejection of approval on this is successfully negated. tiempl fo produced Lxpendli enntion the The appellant pur construct and run DI benefit of pilgrim temple to_meet_obi Genuineness of Activities: ¢ observes that activily is not uine because Shriya Devi e is old and trust has been rmed in 2012. yet trust did not accounl OF income / lure / management/ wrt the temple The trust did not did any charitable activily except purchase of land and therefore activities of trust is not genuine. ( No. 12 of order u/s 12AB) ITA No. 348/lodh/2024 (U/s. 12AA) ITA No. 349/Jodh/2024 (U/s.80G) Vide reply daled 26/03/2024. reasons for nil [tis humbly argued three fold: receipt and/or payment wort. Shriya Devi The Ud. CIT (Exemption) has acbitrarily | doubted _penuineness of the activitics on | ‘the strength of silly observations like: temple had been given that the temple is small temple in the vicinity of [arara | _ , * Income & [xpenditure of the temple} Mahadev and visitors are for the both are hot maintained? | common and hence there is no additional Ownership of the temple — not receipt or expense in the hand of the trust produced? * ‘here is no charitable activity he “IT (Exempti express doubts over : ; The Ld CIT (Exemption) expres except purchase of land? ownership of the temple is arbilrary in as much as ils existence more (han +300 years old, is only Virstly; [t has been explained to be a per convention and tradition without title (Pg. iconventional small temple attached No. iwith another temple larara Mahadev 51) open for entire society al large. there had been no Income & Expenditure jp the hands of the trust. However. three years audited income & expenditure account with complete accounting and explanation ag (o receipt & payment has been furnished before Ld CIT (Exemption) and after carrying detailed enquiry, he did not doubt its correctness |loo. (Pg No 12 of ordei u/s 12AB) Secondly; Per Google map. the temple is more than 300 years old open for the society at large. it has been stated the ownership always by possession unless ‘challenged. Thirdly; deed. It has been well explained before hd.j CIT (Exemption) and he did not doubt! genuinencss of the activity except his! observation that has been well explained ini the above mentioned Para's. Further to the above. the role of Ld CIT (exemption) in the assessment of trust activities and ensuring they align With its stated ~— objectives denying registration, ‘Reliance is placed on following case laws: Bai Navajbai lata Zoroastitan Girls School CIT (Lxemption) IVA No : 2177/Mum/202 | Chamber of Indian Charitable ‘Trust vs. Cll (Exemption) LTA, Nos. 2168 & 2169/Mum/202 1 ITA No. 348/Jodh/2024 (U/s. 12AA} ITA No. 349/Jodh/2024 (U/s.80G) Reliance is placed on finding of Hon'ble Bench in Aadi Parshwa Som Sunder Swe Murti Pujak Jain Trust v/s cit (Exemption) Jaipur, on similar issues is placed for your kind consideration sir, 5 The Ld. CIT (DR) relied on the impugned order. 6 We have heard the rival contention and perused the material available on record. On perusa of objects of the assessee, it is abundant y c ear that the assessee is engaged in the charitable activities of public welfare towards construction and running Dharamshala at no-profit- no loss\" vide amended trust deed dated 26/03/2024 as claimed that for purposes the assessee trust was established. The CIT exemption has point out that dominant object in his opinion was not charitable in nature and how was charitable and the Activities either as genuine or in consonance to the objects of the Trust needs to substantiate 7. From the perusal of the audited balance sheet, and other bank accounts statement it is clear that the assessee has utilised the fund for the purposes of construction of Dharamshala for pilgrims visiting Devi Mata Mandir and needy person who could not afford accommodation may constitute a charitable activity as per amended deed with clarity w.rt nature of service activities covered under the definition of section 2 (15) and beneficiaries to be society at large without profit any intent in the objects vide Para 3.7 and 3.10 of the objects as per the Vidhan Patra. a ITA No. 348/lodh/2024 (U/s. 12AA) ITA No. 349/Jodh/2024 (U/s.80G) 8. The Ld. CIT Exemption discussed that the activities of the society are not in accordance with objects and income is used by the society trust on carrying out genuine activities for the benefit of particular caste/community indeed. It is noted that registration with Dev Sthan Vibhag filed on 10/06/2023 confirm investment in purchase of land towards objects and clarificatory amendment w.rt. construct and run Dharamshala is applicable retrospectively however, Ld. CIT (Exemption) negated by referring to amendment vis-avis purchase of land for Dharamshala (APB, Pgs. No 54-59, 66-69) Without prejudice to above, the objects of the trust had been welfare activities by the society to provide educational and medical help to the people by the society at large, in addition to run Dharamshala at no profit and no loss and that does not disentitle the trust from registration 9 From the record, it is seen that the temple has been explained to be a conventional small temple attached with another temple of Farara Mahadev open for entire society at large, where three years audited income & expenditure account with complete accounting of receipt & payment has been furnished before Ld CIT (Exemption) and after carrying detailed enquiry, he did not doubt its correctness too (Pg No. 12 of order u/s 12AB). As regards to ownership, the temple is more than 300 years old, open for the society at large, where the ownership shall always be determined by possession unless challenged. inher rertaimatacmmitae aaa 10 ITA No. 348/Jodh/2024 (U/s. 12AA) ITA No. 349/Jodh/2024 (U/s.80G) 10 In our view, Ld. CIT (Exemption) has been carried by nomenclature where the word \"Samaj\" used in the object clause has been presumed to be Prajapat Samaj, may be hypothetical and can not be justified in isolation. Had he gone through registration documents filed with Dev Sthan Vibha and clarification amendment in the object clause 3.7 & 3.10 filed before him, with open mind and fairness, there may be different interpretation of such eventuality at his end, because, he did not even consider contention put forth before him vide reply darted 16/03/2024 and 26/03/2024 but drawn irrational conclusion in arbitrary manner. In fact, the CIT exemption ought to have brought on record corroborative evidence to disprove the contention of the appellant that society activities either not charitable in nature or were restricted for Praiapat Samai only 11. In fact, it is Prajapat Samaj who happens to be creator of trust and beneficiaries is society at large. Furthermore, it has been a settled law that section 13(1)(b) is relevant at the stage of assessment and not during registration process. However, whether the activities of the appellant society are charita ble in nature and are in consonance to the objects of the Society needs to be examined at the stage of registration by the CIT Exemption. 12 Considering the factual matrix of the case and judicial pronouncement, it would be appropriate to restore the matter back to the file of the Ld CIT il ITA No. 348/lodh/2024 (U/s. 12AA) ITA No. 349/lodh/2024 (U/s.80G) exemption to examine the issue afresh after considering the amended registration deed filed by the assessee and the relevant documentary evidence on record and may be filed in the course of the fresh proceedings before the Ld. CIT exemption and after granting adequate opportunity of being heard to the assessee 13. Accordingly, both the impugned order are set aside with restoring the provisional registration and the matters are remanded back to the file of the CIT Exemption to examine the issues of grant of registration u/s 12AB and Approval u/s 80G(5) in accordance with amended law 14. In the result both the appeals of the assessee are allowed for statistical purposes, Order pronounced J (DR. MITH LAL MEENA) ACCOUNTANT MEMBER on. wl. .../2025 under Rule 34(4) of ZI 64 Income Tax (Appellate Tribunal) Rules /f 4#O> Cd (UDAYAN DAS GUPTA) JUDICIAL MEMBER Dated ../ /2025 sess ITA No. 348/fodh/2024 (U/s. 12AA) ITA No. 349//odh/2024 (U/s.80G) Copies to: (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By Oder Assistant Registrar, Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur. "