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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: Ms. Annapurna Gupta & Shri Siddhartha Nautiyal
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/EXM1/2019-20/1018263132(1) vide order dated 23/09/2019 passed for the assessment year 2019-20.
I.T.A No. 1767/Ahd/2019 A.Y. 2019-20 Page No. 2 Sri Rajput Yuvak Mandal Sarvajanik Trust vs. CIT (Exemption)
The assessee has taken the following grounds of appeal:-
“1. The learned CIT (Exemption), Ahmedabad erred in law by rejecting the application filed by the assessee U/S.12AA as received by the office of CIT(Exemption), Ahmedabad on 27/03/2019. 2. The learned CIT (Exemption), Ahmedabad erred by refusing the application and rejecting it on a baseless understanding of the trust activities, by stating that the Trust's objects are restricted to particular community, i.e. Rajputs. The name of the trust itself is "Sarvajanik", and is created for the benefit of Public, and the reading of the Object clause(Clause No. 14 of the Trust Deed), it confers br objects such as promoting education by distributing prizes to encourage students coming first class, provision of medical assistance, upliftment of economically weaker sections of caste, distribute food, provision of hostel facilities, and EVEN establish blood banks, urine pots, etc. Also, it has stated in sup point 2, of clause (j) of the Para 14(Objects) of the Trust deed highlighting that "The entire property of the trust is for public interest" 3. Without prejudice to the above, the learned CIT (Exemption), Ahmedabad erred in neglecting the judicial precedents from IT AT Ahmedabad and other judiciary Dodies in deciding the case. -Welfare of a particular community can also be a charitable purpose for registration u/s 12AA: RanpariyaSolankiSukhadiyaParivar Trust Vs CIT (Exemptions) (ITAT Ahmedabad) - ITA No.467/Ahd/2015, 05/11/2015 4. Genuineness of the Activities of the Trust was never questioned by the learned CIT (Exemptions) -Section 12AA Registration cannot be cancelled unless CIT / Pr. CIT satisfied that activities of such trust or institution are not genuine: St. Michaels Educational Association Vs CIT (Patna High Court) -Miscellaneous Appeal No. 438 of 2015, 13/08/2019 Lack of opportunity after the learned CIT (Exemptions) evoked a ground of rejection for the certificate. Section 12AA Application cannot be rejected without affording opportunity of being heard to assessee: Sri SahasraLingeshwaraMahakaliDevasthanaVs CIT (E) (ITAT Bangalore) - ITA No.l602/Bank/2017, 13/12/2018 5. The appellant craves leave to add, amend, alter, or withdraw all or any grounds of appeal at any time up to the date of hearing of the appeal.”
The brief facts of the case are that the assessee is a religious Trust created for the purpose of carrying on social, charity, religious and
I.T.A No. 1767/Ahd/2019 A.Y. 2019-20 Page No. 3 Sri Rajput Yuvak Mandal Sarvajanik Trust vs. CIT (Exemption)
educational activities. The applicant made application for registration of the trust under section 12AA of the Act on 27 March 2019. However, Ld. CIT(Exemption) rejected the application filed by the assessee for the reason that the trust is established for the benefit of a particular community namely “Rajput” and not for general public. The Ld. CIT(Exemption) rejected the assessee’s application with the following observations:
“6. On verification of the details available on records as well as Self-Certified copy of Trust Deed & Public Trust Register [PTR], it is revealed from the objects of the trust that objects are restricted to particular community i.e. " Rajput". The objects of the trust show that the trust is established for the benefit of a particular community i.e. "Rajput" and not for general public. Therefore, it transpires that the trust is created for the benefit of a particular community i.e. "Rajput" which does not endure for the benefit of the public, and thus, provisions of Section 13(1)(b) of the I.T. Act, 1961 are fully applicable in this case. Further, the applicant has not furnished any documentary evidences to change in the object of the trust till date. In view of the above said the applicant does not satisfy the conditions for grant of approval as sought. Hence, it is not a case fit enough for granting registration u/s. 12AA of the I.T. Act, 1961. This clearly indicates that the applicant does not have intention even to start charitable/religious activities. Section 12AA makes, it very clear that before granting registration under this section, the Commissioner has to satisfy himself about the genuineness of the activities of the trust or institution and also he has to verify that these activities are in consonance with the objects of the trust or institution. Reliance in this regard is placed on judgment delivered by the Hon'ble Supreme Court in the case of Commissioner of Income-tax, Ujjain Vs Dawoodi Bohara Jamat Civil Appeal No. 2492 of 2014. The facts considered in Para 14 of the judgment by the Hon'ble Apex Court are reproduced for sake of convenience: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx As discussed above, the applicant has failed to file documentary evidences to enable me to satisfy about the genuineness of its activities and to verify these activities are in consonance with its objects. 7. Looking to the above facts, I am unable to arrive at the satisfaction of the genuineness of the activities. Hence, the application filed in Form No. 10A for the approval u/s. 12AA of the I.T. Act, is rejected.”
I.T.A No. 1767/Ahd/2019 A.Y. 2019-20 Page No. 4 Sri Rajput Yuvak Mandal Sarvajanik Trust vs. CIT (Exemption)
The assessee is in appeal before us against the order passed by Ld. CIT(Exemption). The assessee filed written submission and placed reliance on the case of Ranpariya Solanki Parivar Trust v Ld. CIT(Exemption) in ITA number 467/Ahd/2015 wherein the ITAT Ahmedabad held that “an object beneficial to a section of the public is an object of general public utility because to serve a charitable purpose it is not necessary that the object should be to benefit the whole of mankind or all persons in a particular country or state. It is sufficient if the intention is to benefit a section of the public as distinguished from a specified individual is present”. Further, the assessee placed reliance on the case of Ahmedabad Rana Caste Association v CIT (order dated 16 September 1971), wherein it was held that “an object beneficial to a section of the public is an object of general public utility. But the section of the community sought to be benefited must be sufficiently defined and identifiable by some common quality of a public order or impersonal nature.
By way of the above submission, the assessee submitted that Ld. CIT(Exemption) never questioned the genuineness of the activities of the Trust. He has only observed that “the objects of the Trust show that the Trust is established for the benefit of a particular community”. Further, the assessee submitted that insufficient opportunity of hearing was granted by Ld. CIT(Exemption). The assessee submitted that in the order CIT(Exemption) mentioned that he was in receipt of the submission dated 18-09-2019 in reply to his notices. However, no show cause notice was issued in response to the written submission filed with CIT (Exemption), proposing to reject the assessee’s application and no opportunity was given
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to the assessee to rebut the same. In absence of any show cause notice issued by CIT (Exemption), the assessee was unable to place the above judicial precedents before Ld. CIT(Exemption) for his consideration, which directly support the case of the assessee as a response to the reasons for which the application was rejected by CIT (Exemption). In response, DR placed reliance on the observations made by CIT (Exemption) in the order.
We have heard the rival contentions and perused the material on record. In our view, in the interest of justice, we are restoring the file to the CIT (Exemption) for fresh adjudication, after giving due opportunity of hearing to the assessee to present its case on merits. The DR has also not objected to the same.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 11-11-2022
Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 11/11/2022 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.
I.T.A No. 1767/Ahd/2019 A.Y. 2019-20 Page No. 6 Sri Rajput Yuvak Mandal Sarvajanik Trust vs. CIT (Exemption)
By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद