THE SURSEZ UNIT HOLDERS ASSOCIATION,SURAT vs. CIT(EXEMPTION), AHMEDABAD

Aggrieved by the order of CIT(E), the assessee filed an appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted copy of MoA and AoA and relied on various decisions. He submitted that cricket tournament is organized every year and the surplus of receipt over expenditure is spent on objects of Trust. He requested that the case may be set aside to CIT(E) for verification and fresh decision. The ld. AR relied upon the following decisions (i) CIT vs. Babu Ram Education Society, 96 taxmann.com 606 (Allahabad), (ii) Fateh Chand Trust & College Committee vs. CIT, 101 taxmann.com 364 (Agra – Trib.), (iii) Bhojalram Leuva Patel Seva Samaj Trust vs. CIT, 162 taxmann.com 270 (Ahd – Trib.), (iv) Swayam Siddha Foundation Society vs. CIT, 159 taxmann.com 1634 (Raipur – Trib.), (v) George Institute & Global Health vs. DIT(E), 49 taxmann.com 248 (Hyd – Trib.) , (vi) St. Don Bosco Educational Society vs. CIT, 84 TTJ 505 (Lucknow) and (vii) Shah Gulabchand Shree Parshwanath Trust vs. CIT(E), dated 26.07.2024.

On the other hand, the learned Commissioner of Income-tax - Departmental Representative (ld. CIT-DR) for the revenue supported the order of CIT(E). He submitted that the CIT(E) has clearly found that organizing cricket tournament is not the object of the Trust. He also submitted that assessee was changing his stand on different occasions. Expenditure of The Sursez Unit Holders Association Rs.31,910/- only was spent by the assessee-trust out of the surplus of Rs.1,86,768/- such expenses are for audit fees, salary etc. and hardly anything was spent on objects of the Trust. He submitted that the decisions relied upon by the ld. AR are not at all applicable to the facts of the present case.

We have head both the parties and perused the materials available on record. We have also deliberated on the decision relied upon by both sides. The CIT(E) observed that the assessee failed to file documentary evidence to enable him to satisfy about the genuineness of the activities of the trust and whether the activities are in consonance with the objects of the trust. The ld. AR submitted that object behind the organization of the tournament is to raise funds for the activities of the association. We have carefully perused the MoA submitted by the ld. AR. It is seen therefrom that the aims and objectives of the assessee-Association are: (i) advances in the fields of industrial science, mechanical science, instrumentation and design, discoveries and newly introduced tools, techniques, machines etc. (ii) to organize activities to make the knowledge of industrial legal education available to the public, (iii) to promote afforestation for the preservation of the environment, accelerate tree plantation and to organize guiding for the preservation of the environment, (iv) to carry out the activities for the promotion and dissemination of literature related to cottage industry, home industry and other industries, (v) to help victims of natural calamities like rail, The Sursez Unit Holders Association fire, earthquake, drought, epidemic etc. without discrimination of caste, gender, religious and creed, (vi) to organize medical activities like blood donation camp, disease diagnosis camp, physical therapy etc., (vii) to carry out research and verification for the purposes of association and to collect statistics and other useful information and disseminate its report to member and issue magazine for the benefit of members. It is clear from the above that organizing cricket tournament was not one of the objectives or aims of the Association. From the details submitted by the assessee before the CIT(E) and the Tribunal, the genuineness of the activities of the Trust as well as the fact that the activities are in consonance with the objects of the Trust or Institution are not established. The CIT(E) has relied on the decision in case of Dawoodi Bohara Jamat (supra) and new Nobel Education Society (supra). As per the said decisions, the Commissioner can call for documents and information and conduct enquiry to satisfy himself about genuineness of the institution and authenticity of activities of the institution. If he is not satisfied of the aforesaid, the application can be declined. The Commissioner is also not constrained from examining accounts and other related documents to see the pattern of income and expenditure. The ratio of the above decisions of the Hon’ble Supreme Court relied upon by the CIT(E) is applicable to the facts of the case. The Hon’ble Kerala High Court in case of Self Employers Service Society vs. CIT, 247 ITR 18 (Kerala) held that since the petitioner society had not done any charitable work during the relevant period and its