COMMISSIONER OF INCOME TAX, EXEMPTION, vs. RAJASTHAN STAINLESS STEEL RE-ROLLERS

PDF · subscribers
ITA/88/2018HC RajasthanRJHC01013833201811 April 2018Author: GOPAL KRISHAN VYAS,RAMCHANDRA SINGH JHALA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for consideration in the appeal. The Court noted that the ITAT had passed its judgment by following the judgment of the Hon'ble Supreme Court reported in 55 ITR 722 (SC) and other judicial precedents. The ITAT had found that the memorandum of the object clause of the Association showed it to be a public charitable institution, entitling it to registration under Section 12AA. Consequently, the High Court dismissed the appeal filed by the Revenue. No specific amount in dispute was recorded. The issue of whether the Association's benefits were for members or the public was decided in favor of the Assessee by the ITAT, and this finding was upheld by the High Court's dismissal of the appeal.

What were the facts?

The Commissioner of Income Tax (Exemption), Jaipur (Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, against the order dated 22.05.2017 passed by the Income Tax Appellate Tribunal (ITAT), Jodhpur Bench. The ITAT had directed the CIT to grant registration to the Assessee-Association, Rajasthan Stainless Steel Re-Rollers Association, under Section 12AA of the Income Tax Act. The Assessee had applied for registration on 17.02.2014. The Association was established on 14.10.1982 and was registered as a Non-Trading Company. The CIT rejected the application, holding that the benefits accrued to its members, not the public at large.

What were the issues?

1. Whether the Assessee-Association qualifies for registration as a public charitable institution under Section 12AA of the Income Tax Act, 1961, given its objects and by-laws. Assessee's Contentions: The Assessee argued that its memorandum of objects clearly indicated it was a public charitable institution and therefore entitled to registration under Section 12AA. The ITAT, in its decision, relied on the judgment of the Hon'ble Apex Court reported in 55 ITR 722 (SC) and several other judicial precedents to support this view. Revenue's Contentions: The Revenue contended that the objects of the Assessee-Association, its membership criteria, and its Income & Expenditure Account demonstrated that the benefits were primarily for its members and not for the public at large, thus disqualifying it from charitable status under Section 12AA.

Which sections of the Income-tax Act were involved?

Section 260A,Section 12AA

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 88 / 2018 Commissioner of Income Tax-Exemption, Jaipur. ----Appellant Versus Rajasthan Stainless Steel Re-Rollers Association, Steel Bhawan, SPL-1, Electronic Complex, Shastri Circle, Jodhpur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. K.K. Bissa. _____________________________________________________ HON'BLE MR. JUSTICE GOPAL KRISHAN VYAS HON'BLE MR. JUSTICE RAMCHANDRA SINGH JHALA

J U D G M E N T Date of Judgment

11/04/2018

The instant income tax appeal has been filed by the Commissioner of Income Tax (Exemption), Jaipur under Seciton 260A of the Income Tax Act, 1961 against the judgment dated 22.05.2017 passed by learned Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur in I.T.A. No.479/Jodh/2014 whereby the learned ITAT issued direction to the learned C.I.T. to grant required registration to the Assessee-Association as per law under Section 12AA of the Income Tax Act.

After hearing the learned counsel for the appellant it emerges from the facts that Assessee filed an application for registration of a Charitable Trust under Section 12AA of the Act on 17.02.2014 in Form No.10A under Rule 17A of the Income Tax

(2 of 2) [ITA-88/2018]

Rules, 1962. As per Form No.10A Association was established on 14.10.1982 but not registered under the provisions of Rajasthan Public Trust Act, 1959 but was registered as Non-Trading Company under the Registration Non-Trading Companies Act, 1960. The learned C.I.T. (E), Jaipur rejected the application filed by the assessee on the ground that objects of the Assessee- Association and its by-laws for becoming Member and form of Income & Expenditure Account, it can be said that benefit of association goes to its members and not to the public at large. The learned I.T.A.T. however, while considering all the relevant facts and judgment of Hon’ble Apex Court reported in 55 ITR 722 (SC) and several judicial precedents held that memorandum of the object clause of the Association shows that it is a public charitable institution, thus the assessee is entitled for registration as per law under Section 12AA of the Act.

In view of the fact that the judgment under challenge passed by learned I.T.A.T., Jodhpur Bench, Jodhpur has been passed while following the judgment of Hon’ble Supreme Court, we are of the opinion that no substantial question of law emerges for consideration, therefore, the present income tax appeal is hereby dismissed.

(RAMCHANDRA SINGH JHALA) J. (GOPAL KRISHAN VYAS) J.

DJ/- 28

More judgments on Section 12AA

All 4,243 judgments and leading authorities on Section 12AA →

Recent GST High Court judgments

Search GST case law →