Loading judgment…
Facts
The assessee, an alumni association of ICG/IISU, applied for registration under Section 12AA of the Income Tax Act. The CIT(E) rejected the application on grounds that the trust was for members only, involved business/commercial activities, and lacked genuineness.
Held
The Tribunal held that the CIT(E) erred in rejecting the application. The Tribunal observed that the activities are not for profit, the definition of 'public' includes a section of the public, and the lack of mobile numbers of beneficiaries does not inherently prove lack of genuineness.
Key Issues
Whether the assessee's alumni association activities qualify as for the benefit of the 'public at large' and whether the activities are genuine and free from commercial elements for the purpose of Section 12AA registration.
Sections Cited
12AA, 13(1)(c), 2(15), 13(8)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”B JAIPUR
ORDER PER: DR. S. SEETHALAKSHMI, J.M. The assessee has filed an appeal against the order of the ld. CIT(Exemption) dated 13-06-2024 passed u/s 12AA of the Income Tax Act, 1961 raising therein following grounds of appeal. ‘’1. In the facts and circumstances of the case and in the law the ld. CIT(E) has erred in not appropriately following the set aside directions given by the Hon’ble ITAT in ITA No. 47/JP/2021. Action of the ld. CIT(E) is illegal, unjustified, arbitrary and against the directions of Hon’ble ITAT. Relief may please be granted by quashing the order of ld. CIT(E) and directing the grant of registration under section 12AA of the Act.
ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR 2. In the facts and circumstances of the case and in the law the ld. CIT(E) has erred in not granting registration under section 12AA of the following alleged reasons. Assessee trust meant for the benefit of its members and not for public at large and violation of section 13(1)©& 12AA. Business / commercial activities. Non-genuineness of activities. The action of ld. CIT(E) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the order of ld. CIT(E) and directing the grant of registration under section 12AA.’’ 2.1 Besides above, the ld. AR of the assessee vide application dated 25- 06-2025 prayed under rule 29 of Income Tax (Appellate Tribunal) Rules, 1963 for admission of additional evidence which are as under:- ‘’The Appellant most humbly prays for admission of the following additional evidences which is in supersession of the earlier Prayer for Additional Evidences filed on 04.06.2025. The present Prayer replaces the earlier one and, therefore, the earlier one may please be ignored. Request you to consider the following:- S.N. Particulars Page No.
Copy of approval of ISS (Deemed to 1 be University) Trust u/s 12AA 2. Audited Financial Balance Sheet and 2-7 income and Expenditure acount for the year ended 31-03-2024 It is submitted that Approval of IIS (Deemed to be University) Trust u/s 12AA is a certificate issued by the Department. However, as a matter of precaution, Prayer for admission of Additional Evidence is made. It is also submitted that this Certificate was also before the Hon'ble ITAT in the First Round of appeal. Ld. CIT(E) has rejected the application for the reason that this Certificate was not produced during proceedings before him. It is further submitted that the Audited Balance Sheet and Income and Expenditure Account at S. No. 2 are documents which came into existence after ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR the Order of Id. CIT(E). This document is necessary to explain non-business and non-commercial nature of activities of the Appellant. The evidences are vital for adjudication of the present appeal which is before the Hon'ble ITAT. In view of above, it is very humbly prayed that the evidences may kindly be accepted and considered. Reliance is placed on the following judicial pronouncement: CIT v/s Text Hundred India (P) Ltd. (2011) 239 CTR (Del) 263 "Headnote Section 254 of the Income-tax Act, 1961, read with rule 29 of the Income-Tax (Appellate Tribunal) Rules, 1963 Appellate Tribunal - Powers of - Assessment year 2004-05 Whether under rule 29 Tribunal has discretion to admit additional evidence in interest of justice once Tribunal affirms opinion that doing so would be necessary for proper adjudication of matter, this can be done even when application is filed by one of parties to appeal and it need not to be a suo motu action of Tribunal- Held yes- Whether once it is found that party intending to lead evidence before Tribunal for first time was prevented by sufficient cause to lead such an evidence, that said evidence would have material bearing on issue which needed to be decided by Tribunal, and that ends of justice demand admission of such an evidence, Tribunal can pass an order to that effect-Held, yes - Whether, however, this rule would not apply where with existing evidence on record appellate court can pronounce a satisfactory judgment-Held, yes.." 2.2 The Bench has taken into consideration the additional ground raised
by the assessee with a view to providing opportunity of justice for which the ld.DR has no objection. 3.1 Apropos grounds of appeal, it is noticed that the ld CIT(E) has rejected the claim of registration u/s 12AA of the Act of the assessee on following grounds:-
1. Assessee trust meant for the benefit of its members and not for public at large & violation of Section 13(1)©& 12AA.
The relevant narration as made by the ld. CIT(E) in his orderas to rejection of Ground Nos. 1,2 and 3 arereproduced asunder:-
(Ground No. 1)‘’3.2. . It is clear from the above reply that assessee is working only for the members of applicant, para B-3 of page-9 of the reply confirms this fact. Further the contention of the assessee that members are not covered under section 13(3) is not acceptable, as the benefit from objects is restricted for the members and not for the general public, this fact also makes institution as private not public. Apart from the above, assessee submitted in para 84 that applicant has membership of the students who have passed out from IIS University as well as International college for Girls (ICG) and both IIS & ICG are having approval u/s 12AA/10(23C)(vi), same students after passing out become members of the alumni and consequently members/beneficiaries of the applicants charitable activities, thus for the same set of beneficiaries, the allegation that in the case of applicant the beneficiaries are not General Public is wholly unjustified Above contention of the assessee is without proper proof regarding approval us 12AA/10(230)(vi) of IIS & ICG, even otherwise approval given is for formal education that comes under the proviso of 2(15). Here the case of assessee is totally different from IIS & ICG, assessee is not imparting formal education, thus facts of both institutions are different from each other Further, assessee in para B-5 is making multi folds regarding definition of general public. It is clear that assessee is engaged in activities that only for the members of association and not for the general public. The beneficiaries in this case are definite, thus not public. Further being member of association it is they who have right to choose the trustees and important functionaries of company, including Director. Thus same are certainly part of 13(3) persons who include the management. General public signify to a large number of people comprising cross section of society or town or country and not from a group of members of particular institution. Here in present case all the benefits are for the members of applicant institution and this fact is itself accepted by the assessee in its reply in PARA-B3 & B-4 above.
ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR It is also important to mention here that assessee's most of activities are also related to and limited to its members, thus in practice also assessee is working predominantly for its members only. Thus assessee is not a public trust. Most important working for members comes u/s 13(1)(c) and under 12AA(4). Thus, these activities also result in non- genuineness of activities as benefit is being provided to members. Thus assessee case is being rejected.’’ (Ground No. 2)’’4.3. Above response fumished was examined carefully and not found satisfactory to counter the impugned objects mentioned above, discussion on reply is as under:- It is seen from reply that assessee only submitted in reply only that no activities will done on commercial basis however, not clanfyin deed that same would be done at free of costat margin. Further the decision of Hon'ble Apex court in case of Ahmedabad Urban Development Authority AUDA, supra has confirmed its position in Sole Trustee Loka Shikshana Sanshtan 101 ITR 234 that position of not meant for profit can be established only if mentioned in deed that assessee would conduct such activities on cost or nominal margin, as assessee failed to include such point in deed, same cannot be considered charitable. Assessee submitted in reply, that by any stretch of imagination library reading room's facilities are not commercial in nature. Above contention is acceptable only when there is provision in its constitution/MOA that these should done on free of cost or at margin only. These activities may involve generating revenue through means such as book sales, membership fees, but assessee has not clear in deed regarding charge and merely written submission in this regard is not acceptable as the institution governs through its MOA Similarly other objects mentioned above are also having business elements. Further assessee in para A-7, mentioned that provisions of section 8 company and clauses of MOA put enough restrictions on applicant to not carry out any activity having profit motive As per above contention it presumed that every section & company is constitute with no business objects. Also the assessee placed reliance in the case of ACIT v. Ahmedabad Urban Development Authority It is to clear that Hon'ble Supreme Court in its decision in the case of ACIT(Exemptions) versus Ahmedabad Urban Development Authority in Civil appeal no. 21762 of 2017 dated 19.10.2022 has also opined the following: A.1. It is clarified that an assessee advancing general public utility cannot engage itself in any trade, commerce or business, or provide service in relation thereto for any consideration ("cess, or fee, or any other consideration");"
ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR Thus, activities are of business nature which is not within the ambit of charitable spirit of an institution. Thus, these activities are not charitable in the light of section 2(15) of the Income Tax act, hence the application of the applicant for registration u/s 12AA is liable to be rejected.’’ (Ground No. 3)’’5.1 It is important to mention here that while examining the claim of the assessee u/s 12AA of I.T. Act, the Commissioner of Income-tax has been empowered to call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf. Under such powers vested in CIT (E), the applicant was asked to file details certain details vide letter dated 25.05.2024, relevant queries are as under:- *Furnish details of activities done by you in the following form.
Description activity Date Venue Number of Amount Object beneficiary spent to which (Rs.) related 1. 2. 3. 4. 5. 6. *Furnish copies of income and expenditure account , bills vouchers, supporting evidence in support of expenses. *Furnish details of beneficiaries:-
Name of person Mobile No. What Amount Related exactly spent object of done institution Above details were called to verify the genuineness of activities, on perusal of reply submitted by the assessee it is noticed that assessee is not doing its activities genuinely. As clear from the Income and expenditure account furnished for the F.Y. 2020-21 & 2021-22 that no expense related to any charitable activity is shown. Only expenditure of Rs. 15,000/-and 39,340/- shown in both years and that too related with audit fee, ITR fee, legal exp etc Further details of activities shown in FY 2022-23 it is seen that assessee not furnished complete details, amount spent column left blank. Also the assessee not furnished supporting evidences in respect of so called activities. In absence of amount spent details it is not clear whether any activity is done or not, whether expense made through bank account or on cash. Also to mention here that no expense related to any activity is shown in IVE account for the FY 2022-23, thus ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR this shows that assessee has not done so called activities and details furnished are not proved. Thus, the so called activities seems non genuine. Further, assessee was also asked to furnish details of beneficiaries in above format, however assessee furnished the same but without mobile no. of beneficiary, which was specifically asked to get contact with so called beneficiaries and asked about genuineness of activities, Therefore, assessee claim of registration u/s 12AA is also liable to be rejected on ground of not proving its genuineness of activity.’’ 3.2 During the course of hearing, the ld.AR has filed the gist of submission as to the case of section 12AA and prayed that the ld. CIT(E) may be directed to grant registration and the same is reproduced as under:-
‘’I. Assessee Appellant (“Assessee”) is a company incorporated under the provisions of section 8 of the Companies Act, 2013.
II. The Assessee is promoted by IIS (Deemed to be University) Trust which is also solely engaged in imparting education having necessary approvals under section 12AA of the Act [PB 189].
III. The main object of the Assessee is to foster the spirit of comradeship and to promote co-operation and mutual help amongst the students passing out from the International College for Girls (ICG) as well as from the IIS (Deemed to be University) (IISU), Jaipur. The Memorandum of Association and Articles of Association are placed at PB 12- 19.
IV. Being an alumni association the activities of the Assessee are very minimal as is evident from the extracts of Audited Financial Statements for the following three years:
ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR Particulars 31.03.2021 31.03.2022 31.03.2023 31.03.2024 [PB 90, 91] [PB 96, 97] [PB 111, 112] [Additional Evidence] Share Capital 10,000 10,000 10, 000 10, 000 Income NIL 50,000 54, 870 60, 000 Expenses 15000 39, 340 60, 120 55, 650 Surplus/ (Defecit) (15000) 10, 660 (5, 250) 4, 350 V. Round I- Application seeking registration under section 12AA- Rejected by CIT(E)- Matter remanded back by Hon’ble ITAT i. The Assessee filed an application seeking approval under section 12AA in Form 10A with the office of the ld. CIT (E) on 16.10.2020 which was rejected by ld. CIT (E) vide his order dated 30.03.2021. ii. CIT(E)- The ld. CIT (E) rejected the application on the following three grounds: Object No. (a) 6, 8 & (b) 2, 8, 26 as stated in the Memorandum of Association of the Assesse Appellant are having element of Commercial/business nature Objects being pertaining to benefit of particular community or class Genuineness of the activities of the Assessee Appellant iii. ITAT- Aggrieved by the order of the ld. CIT(E), Assessee preferred appeal before the Hon’ble ITAT. Hon’ble ITAT vide ITA No. 47.JP/2021 dated 02.11.2021 set aside the case to the file of the CIT(E). The relevant extracts of the directions of Hon’ble ITAT are as under [PB 199, 200]: “We therefore find that while examining the assessee’s application seeking registration u/s 12AA, the ld. Pr. CIT has raised broadly two issues which require deeper examination. Firstly, certain objects of the assessee company have been stated to be having elements of commercial/business nature and secondly, whether the objects sought to be achieved were for the benefit of Alumnae ICG-IISU and whether the same qualify as benefiting the public at large and can therefore be classified as object of general public utility. Though the assessee claims to have submitted the requisite explanation, however, in absence of findings by the ld. Pr. CIT, we deem it appropriate that matter is set aside to the file of the ld. Pr. CIT to examine the same ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR afresh as per law after taking into consideration the submissions so filed by the assessee company and calling for any further information/ clarification as may be deisired and after providing reasonable opportunity to the assessee company.”
VI. Round II- Registration again refused by CIT(E) i. CIT(E)- The CIT (E) vide order dated 13.06.2024, again rejected the Assessee’s claim of registration under section 12AA on broadly three grounds. The relevant para of the CIT(E) Order rejecting the claim for registration is reproduced hereunder “6. In view of above discussion assessee’s claim of registration section 12AA is liable to be rejected and thus being rejected on following grounds:- Assesee trust meant for the benefit of its members and not for public at large & violation of section 13(1)(c) & 12AA. Business/Commercial activities Non genuineness of activities” ii. Aggrieved by the order of the ld. CIT(E) the Assessee Appellant is again in appeal before the Hon’ble ITAT raising the following grounds: Ground No. 1: Assessee Trust meant for the benefit of public at large Ground No. 2: No element of business or commercial nature in the objects as set out in the MOA of the Assessee Trust Ground No. 3: Genuineness of activities
GROUND NO. 1: Assessee Trust meant for the benefit of public at large 1.1 It is submitted that the Assessee is a section 8 company incorporated under the Companies Act, 2013.
1.2. It is reiterated that the Assessee is promoted by IIS (Deemed to be University) Trust which is also solely engaged in imparting education having necessary approvals under section 12AA of the Act [PB 189].
ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR 1.3 The Assessee is an alumni association having membership of students who have passed out from IIS University as well as International College for Girls(ICG). .
1.4 The same students (students studying in IIS University and ICG) become members of the alumni and consequently are members/beneficiaries of the Assessee’s charitable activities.
1.5 Ld. CIT(E) although accepted the objects being charitable in nature rejected the Assessee’s application for the reason that it is only for its members and, therefore, in his understanding, it was not meant for public at large.
1.6 Before CIT(E), in this regard, following submissions at para B5 were made [PB 9]: “B5. It is submitted that “General Public” includes a “Section of Public” also if such section of public is determined on a non-subjective or a non- discriminatory manner. The word “Public” does not mean humanity as a whole, but means some indefinite class of persons, across section of the Public. The basic requirement, to fall in the definition of Public, is that the common quality which unites such individuals within the class concerned is essentially impersonal.” 1.7 The expression 'public' includes cross section of public. It is well settled that for satisfying the requirements of Section 2(15), it is not necessary that the benefit should reach each and every poor person in the state or country. The court in the case of Girijan Co-operative Corporation Ltd vs. CIT [1989] 178 ITR 359(AP) held that it is sufficient if it reaches a sizable number of members ofpublic.
1.8 In the case of CIT vs. Indian Sugar Mills Association [1974] 97 ITR 486 (SC) it was held that "the expression object of general public utility' is not restricted to objects beneficial to the whole of mankind or even all people living in particular country or province. It is sufficient if the intention is to benefit a section of the public as distinguished from specified individuals. The Section of the public sought to be benefited must undoubtedly be sufficiently defined and identifiable by some common quality of a public or impersonal nature; where there is no common quality uniting the potential beneficiaries into a class, it may not be regarded as valid. 1.9. Reliance is further placed on the following judicial pronouncement:
ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR National Real Estate Development Council Gujarat v. CIT (E) [MANU/IB/02752024] “4…Further to serve charitable purpose, it is not necessary that the objects should be to benefit the whole of mankind or all persons in a country or state. It is sufficient if the intention is to benefit a section of the public, as distinguished from specified individuals.” 1.10. It is submitted that in the undernoted case application for registration was rejected on the same ground but the Hon’ble ITAT was pleased to hold that these alumni association is for the benefit of Public and eligible for registration. Parul University Alumni Association v. CIT (E) in “15. In our considered view, looking into the objects of the trust, it cannot be held that the assessee/applicant trust has been formed only for the benefit of a particular community only. Further, we also agree with the Counsel for the assessee that this aspect should be considered at the time of grant of exemption under Section 11 of the Act and the provisions of Section 13 should not be invoked at time of grant of registration under Section 12AA of the Act.” 1.11 Before CIT(E) it was also submitted that the alumni association is consisted of the students who passed from ICG/IISU and that ICG/IISU had proper registration under section 12AA. Therefore, how for the same students it can be alleged that it is not for public.
1.12. Ld. CIT(E) rejected the submission not on merits but by simply saying that no evidence of IISU being registered under section 12AA was submitted.
1.13. It is most respectfully submitted that the said certificate was issued by the office of CIT(E) only and it was incumbent upon him to verify the fact on the records of his own office. However, the said registration certificate is being filed herewith at PB 189 with a separate prayer for admission of the same as additional evidence. GROUND NO. 2: Business/Commercial activities 2.1 Ld. CIT (E) although accepted the objects being charitable in nature and after having found the objects being charitable in nature, rejected the application for the reason of “elements of Commercial/Business nature”.
ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR 2.2 Issue of business/commercial objects is being dealt with by ld. CIT(E) at para 4, pages 9 to 15 of his Order. The reply of the Assessee before ld. CIT(E) is also appearing at para 4.2 at pages 10 to 14 of the Order. The submissions before ld. CIT(E) may please be appreciated in correct perspective. 2.3 It is most humbly submitted that for the activities conducted by the Assessee no fee is charged from its members. The activities are held in the college using its infrastructure. The Income and Expenditure Accounts produced before ld. CIT(E) do not depict any significant surplus (out of three years there was deficit in two years) therefore allegation of business or commercial nature is absolutely baseless. 2.4 Without prejudice to above, alternatively, it is submitted that alleged commercial/business nature of activities cannot be a reason for rejection of the application u/s 12AA. Reliance is placed on the following judicial precedents:
Hon’ble Gujarat High Court in the case of CIT vs Gujarat Maritime Board [2021] 123 taxmann.com 35 (Gujarat)
Hon’ble ITAT Jaipur Bench in the case of Rajasthan Housing Board vs CIT [2012] 21 taxmann.com 77 (Jp.)
Hon’ble ITAT Cochin Bench in the case of Mahatma Gandhi Charitable Society vs CIT [2013] 142 ITD 565 (Cochin)
Hon’ble ITAT Chennai Bench in the case of Madras Motor Sports Club vs DIT [2013] 90 DTR 197 (Chennai)
Hon’ble ITAT Ahmedabad Bench in the case of Gujarat Cricket Association vs DIT [2012] 19 ITR 520 (Ahd.)
2.5 Attention is invited towards the provision of section 13(8) introduced in the Finance Act, 2012 w.r.e.f. 01.04.2009. This makes its clear that allegation of commercial/business nature cannot be a reason for rejection of application u/s 12AA. Allowability of benefit u/s 11 can be seen by the Assessing Officer at the time of assessment of each year, if for any year, activities of commercial/business nature are carried out. GROUND NO. 3: Non- genuineness of activities 3.1 For ascertaining the genuineness of activities ld. CIT(E) sought details of activities carried out by the Assessee. These details were submitted before ld. CIT(E) [PB 20-82].
3.2 Ld. CIT(E) after perusal of the reply submitted in this regard by the Assessee held that the activities are not genuine. The observation in this regard of ld. CIT(E) is at page 16 of his Order. The screenshot of the same is being placed below: Above details were called to verify the genuineness of activities, on perusal of reply submitted by the assessee it is noticed that assessee is not doing its activities genuinely. As clear from the Income and expenditure account furnished for the F.Y. 2020-21 & 2021-22 that no expense related to any charitable activity is shown. Only expenditure of Rs. 15,000/-and 39,340/- shown in both years and that too related with audit fee, ITR fee, legal exp etc Further details of activities shown in FY 2022-23 it is seen that assessee not furnished complete details, amount spent column left blank. Also the assessee not furnished supporting evidences in respect of so called activities. In absence of amount spent details it is not clear whether any activity is done or not, whether expense made through bank account or on cash. Also to mention here that no expense related to any activity is shown in IVE account for the FY 2022-23, thus this shows that assessee has not done so called activities and details furnished are not proved. Thus, the so called activities seemsnon genuine. Further, assessee was also asked to furnish details of beneficiaries in above format, however assessee furnished the same but without mobile no. of beneficiary, which was specifically asked to get contact with so called beneficiaries and asked about genuineness of activities, Therefore, assessee claim of registration u/s 12AA is also liable to be rejected on ground of not proving its genuineness of activity.
3.3 It is submitted that the main grievance is that the Assessee has not incurred any expenses for charitable activity as appearing in the audited financial statements. It is most respectfully submitted that the nature of activity is in the form of meetings and workshops held at the premises of the college itself and, ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR therefore, practically no expenses are incurred for conducting these activities as is evident from the report submitted before ld. CIT(E).
3.4 Another objection raised by ld. CIT(E) is that mobile numbers of beneficiaries were not provided. It is submitted that when enough other evidences of activities were produced and ld. CIT(E) could not pin point any defects in the same merely lack of mobile numbers alone should not lead to conclusion of non genuineness of activities. In view of the above ld. CIT(E) may please be directed to grant registration. ‘’ 3.3 On the other hand, the ld.DR supported the order of the ld. CIT(E). 3.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the Assessee is an Alumni Association which is for the students passing out from International College for Girls (ICG) as well as from IIS (Deemed to be University) (IISU), Jaipur. It is a Company incorporated under the provisions of section 8 of the Companies Act, 2013. It is pertinent to mention that the assessee has filed the copy of the order of ld. CIT(E) dated 30-03-2021 in respect of assessee’s own case in first round (Paper Book Page 202 to 204) wherein the appeal of the assesee was rejected by the ld. CIT(E) by observing at para 4 and 5 of his order as under:-
‘’4. To decide the matter of seeking registration u/s 12AA, the genuineness of the activities being undertaken by the applicant are also to be examined. As discussed above, even after giving sufficient opportunities, the applicant failed to establish genuineness of the charitable activities undertaken by him.
ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR 5. Sufficient opportunities has been provided to the applicant to produce details and furnish explanations in support of his claim for registration u/s 12AA of the Income Tax Act but applicant has failed to do so. In the light of the above facts, the application seeking registration u/s 12AA is hereby rejected and filed.’’ Now this is the Second Round of appeal before the Hon’ble ITAT. In the First Round as well as in the Second Round, the application of the Assesee was rejected by the ld.CIT(E) broadly for the same reasons as under:-
Assesee trust meant for the benefit of its members and not for public at large & violation of section 13(1)(c) & 12AA. Business/Commercial activities Non genuineness of activities The Assessee is charitable in nature which aspect is not disputed by ld. CIT(E). The grievance of ld. CIT(E) is that it is for the students passing out from the two institutions and, therefore, it is not for public at large. The expression 'public' includes cross section of public. It is well settled that for satisfying the requirements of Section 2(15), it is not necessary that the benefit should reach each and every poor person in the state or country. The court in the case of Girijan Co-operative Corporation Ltd vs. CIT [1989] 178 ITR 359(AP) held that it is sufficient if it reaches a sizable number of members of public. It is also pertinent to mention that the Coordinate Bench at Ahmedabad in the case of Parul University Alumni Association v. CIT (E) in has allowed the grant of ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR registration under section 12AA holding that the Alumni Association cannot be said to be working for the benefit of its members only and the same will amount for the benefit of public at large. Otherwise also it is meant for the students passing from the two education institutions which both institutions have been granted registration under section 12AA.
3.4.1 Another grievance of ld. CIT(E) is that the activities of the Assessee Appellant are having elements of business/commercial nature. However, it is noticed that no fees is charged from the Members. The activities are carried out in the premises of the two educational institutions using their infrastructure. The volume of activities is also very minimal. Out of the four preceding year there has been deficit in two years. Therefore, we don’t see any element of business/commercial nature in the activities of the Appellant Trust.
3.4.2 Regarding the last issue concerning the non- genuineness of activities the Assessee had placed sufficient evidences before ld. CIT(E) to explain and substantiate the activities it had carried out. Requiring the mobile number of beneficiaries is not an appropriate way to ascertain the genuineness of activities and lack of such mobile number of beneficiaries will not make the activities non genuine particularly when other evidences ICG-IISU ALUMNAE ASSOCIATION – BANDHAN VS CIT (EXEMPTION), JAIPUR are not disputed. The Ld. CIT(E) has also observed that it is not clear whether any activity is done or not in the absence of any expenses related to any charitable activity. Probably the ld. CIT(E) has failed to appreciate the activities which the alumni associations do undertake. The activities are in the nature of connecting old students with the present students as well old students of different batches. Such meetings are meant for exchange of experiences so that theoretical knowledge can be combined with practical experiences to make the education wholesome. Such activities do not require incurring of expenses because infrastructure of the parent educational institutions is used. We, therefore, feel that the ld. CIT(E) was not correct in observing the activities tobe non-genuine. However, in the interest of equity and justice and in view of the above facts and circumstances of the case and considering the fact the assessee has filed the additional evidence in support of its contention, the Bench feels that ld. CIT(E) shall consider these additional evidence so filed by the assessee and also consider the judicial precedent cited and thereby decide the issue of the object of the assessee are charitable in nature or not after giving proper opportunity of being heard to the assessee and decide the issue in accordance with law. The assessee is also directed to submit all the 3.4.3 Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by ld. CIT(E) independently in accordance with law. 4.0 In the result, the appeal of the assessee is allowed for statistical purposes as indicated hereinabove. Order pronounced in the open court on 11 /09/2025. Sd/- Sd/- ¼ jkBkSM+ deys'kt;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 11 /09/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- ICG-IISU Alumnae Association-Bandahan Jaipur 2. izR;FkhZ@ The Respondent- The CIT (Exemption), Jaipur 3. vk;djvk;qDr@ Theld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File (ITA No. 923/JP/2024) vkns'kkuqlkj@ By order,
सहायकपंजीकार@Aेेज. त्महपेजतंतच्