GOWDA SARASWATH SEVAK SAMAJ,BANGALORE vs. DIT, BANGALORE

The ld. AR of the assessee has submitted that the DIT(Exemption) has rejected the application of the assessee on the ground that the assessee-trust is created to cater the needs of only one community of the society therefore neither its membership nor its benefits are are not charitable in nature. The learned Authorised Representative has referred to the objects of the assessee-trust and submitted that even if the objects of the trust are for advancement and benefit/welfare of a particular community, it cannot be said that it is not for general public utility. In support of his contention, he has relied upon the decision of Hon'ble jurisdictional High Court dt.23.2.2016 in the case of Bangalore Urban and Rural District Co-operative Milk Producers Societies Members & Employees Welfare Trust Bangalore Milk Union Ltd. Vs. DIT(Exemption) in and submitted that Hon'ble High Court has held that the phrase “any other object of general public utility” is not necessarily that the object should benefit whole mankind or persons in a country or state. If it is to the benefit of section of public it is to be construed as charitable purpose. The learned Authorised Representative has then relied upon the decision dt.30.1.2015 of Pune Bench of this Tribunal in the case of Kul Foundation Vs. CIT in ITA No.1692/PN/2013 and submitted that the Tribunal has held that merely because one of the object of the trust was for the benefit or upliftment Section 12AA of the Act. Thus the learned Authorised Representative has submitted that the objects of the assessee-trust for the benefit and advancement of a section of public as held by the Hon'ble jurisdictional High Court as well as by Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association v. CIT [1971] 82 ITR 704 (SC) would be in the nature of charitable.

On the other hand, the learned Departmental Representative has submitted that the decisions relied upon by the ld. AR are not applicable to the facts of the assessee's case as the whole objects of the assessee- trust are for the benefit of a particular community/caste and therefore the same cannot be said to be the objects of general public utility to serve a charitable purpose. He has relied upon the impugned order of the DIT(Exemption).

We have considered the rival submissions as well as the relevant material on record. As regards the decisions relied upon by the ld AR of the assessee, we find that it is settled position of law that if the primary purpose and predominant objects of the trust are to promote the even if some secondary or ancillary objects are for the benefit of a particular community or class of public. If the primary or predominant objects of institution is charitable then any other object which might not be charitable but are ancillary or incidental to the dominant purpose would not change the nature of charitable trust. Therefore only an ancillary and incidental object would not be sufficient to conclude that the entire purpose and activity of the trust would not be charitable. In case of the assessee-trust, the objects are reproduced by the DIT(Exemption) in the impugned order as under : charitable purpose as per Section 2(15) of the Act. However, the objects of the assessee-trust reveals the intent of the trust and therefore the whole purpose contemplated in the objects of the creation and existence of the trust is for a particular community/caste. It does not refer to any welfare or other service or help to the poor or need of the particular community but it is only for a particular community without distinguishing the needy and poor even within this said community.

Therefore the element of charity is completely missing in the objects of the assessee-trust. A community or a particular caste cannot be equated with a section of general public representing or tracing their roots from general masses without distinguishing their identity based on caste or community. A section of the general public identified on the basis of their occupation or profession do not represent any particular community or caste but comprising its members from general public and masses. Therefore the decisions relied upon by the ld. AR would not help the case of the assessee when the entire objects and purpose of the assessee-trust is absolutely for a particular caste which cannot be treated would not qualify as charitable trust as per the provisions of section 2(15) of the Act. In view of the above facts and circumstances of the case, we do not find any error or illegality in the impugned order of the DIT(Exemption).

In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on the 19th day of Oct., 2016.