Income Tax Appellate Tribunal - Ahmedabad
Ranpariya Solanki Sukhadiya Parivar ... vs Assessee on 5 November, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD ''B'' BENCH - AHMEDABAD
Before S/Shri Kul Bharat, JM, & Manish Borad, AM.
ITA No.467/Ahd/2015
Asst. Year: 20014-15
Ranpariya Solanki Sukhadiya Vs CIT(Exemption), Ahmedabad.
Parivar Trust, c/o Kamlesh A.
Sheth, Sheth Associates, 27,
Medicare Complex, Nr. A-One
Autogarage, Surendranagar.
(Appellant) (Respondent)
PA No.AACTR1519F
Appellant by Pranali V. Thakore, AR
Respondent by Shri Jagdish, CIT, DR
Date of hearing: 3/11/2015
Date of pronouncement: 05/11//2015
ORDER
PER Manish Borad, Accountant Member.
This appeal of the assessee is directed against the order of CIT(Exemption), Ahmedabad dated 21.1.2015 passed under section 12AA of the Income-tax Act, 1961 (in short the Act). Solitary issue involved in this appeal of the assessee is that the ld. CIT(Exemption) erred in rejecting the application of the assessee for registration under section 12AA of the Act.
2. Briefly stated the facts of the case are that the assessee is a religious trust newly created for the purpose of carrying on social ITA No. 467/Ahd/2015 2 Asst. Year 2014-15 charity, religious and educational activities. The appellant had made application for registration of the trust u/s 12AA of the Act in prescribed form no.10A on 24th July, 2014 along with all necessary documents including registration certificate, trust deed, PAN Card, copy of Charity Commissioner's certificate, audit report and all necessary undertakings and declarations as per the requirement of provisions laid down u/s 12AA of the Act. However, ld. CIT(Exemption) rejected the application filed by the appellant for the very reason that the trust is established for the benefit of a particular community namely Ranpariya Solanki Sukhadiya Parivar Trust and not for general public.
3. Aggrieved, the assessee is now in appeal before the Tribunal. The ld. AR of the assessee submitted that the main objects of the trust are welfare of Shri Ranpariya Solanki Sukhadiya Parivar Trust, social charity and religious works, to conduct educational activities by establishing school and colleges to motivate students by giving scholarships, welfare activities in the villages and other activities for the benefit of general public. The detailed objects of the trust are mentioned in the trust deed available from pages 19 to 30 of the Paper Book. The ld. AR further submitted that all the requirements necessary for filing the application for registration u/s 12AA of the Act along with supporting documents mainly including PAN, certificate of registration, trust deed, audited accounts, undertaking and declaration, copy of Charity Commissioner's certificate and nothing contrary to the documents submitted has been objected by the ld. CIT(Exemption).
ITA No. 467/Ahd/2015 3Asst. Year 2014-15
4. As regards the objection raised by the ld. CIT(Exemption) that the trust is established only for the benefit of a particular community and not for general public, the ld. AR submitted that the objects enumerated in the trust deed are not only for the specific community but the objects of the trust are also to provide benefit to general public and the same can be inferred from the trust deed. Further in support of the contentions made, ld. AR relied on the decision of Hon'ble Supreme Court in the case of Ahmedabad Rana Cast Association vs. CIT (1971) 82 ITR 704, the decisions of the co- ordinate Bench in the case of Shree Vasupujya Swami Jain Derasar Trust vs. CIT, Valsad, in ITA No.4470/Ahd/2007 dated 6.8.2010 and in the case of Shri Sayla Sukhadiya Parivar Trust vs.CIT(Exemption) in ITA No.468/Ahd/2015 dated 12.6.2015.
5. On the other hand the ld. DR supported the order of ld. CIT(Eexemption) and also submitted that in the decision of co- ordinate Bench in the case of Shree Vasupujya Swam Jain Derasar Trust vs. CIT, Valsad in ITA No.4470/Ahd/2007, relied by the assessee, the matter was restored to the file of CIT(Exemption) with the directions to examine, the matter and, therefore, the matter in this appeal may be restored to the file of CIT(Exemption).
6. We have heard the rival contentions and perused the material on record. As per the provisions of section 12AA the CIT(Exemption) has to call for such documents or information from the trust or institution as the things necessary in order to satisfy himself about the ITA No. 467/Ahd/2015 4 Asst. Year 2014-15 genuineness of the activities of the trust or institution and may also make such inquiries he may deem necessary in this behalf and after satisfying himself about the objects of the trust or institution and the genuineness of its activities shall pass order of either registering the trust or institution or refusing to register the trust or institution. In the case under appeal the assessee has duly submitted application in form No.10A for seeking registration u/s 12AA of the Act with all the necessary enclosures as mentioned in form no.10A. The only reason for which CIT(Eexemption) has denied the registration is that as per his observation the applicant trust is established only for the benefit of a particular community and not for the benefit of general public.
7. Honble Supreme Court in the case of Ahmedabad Rana Cast Association vs. CIT (supra) has examined similar issue and the the observation thereof is reproduced below :-
"The assessee, an association of persons, held properties for various purposes including management of the movable and immovable properties of the Rana caste or community of the city of Ahmedabad, doing acts to improve the education of the community, giving medical help to the community, etc. Under the constitution of the assessee the beneficiaries were members of the Rana caste or community who were natives of Ahmedabad and other members of the community accepted by the caste according to its old custom and usage and staying in Ahmedabad. The question whether for the purposes of the exemption under section4(3)(i) of the Indian Income-tax Act, 1922, and section 11(1)(a) of the Income-tax Act, 1961, the beneficiaries constituted a section of the public.
Held, that between the members of the Rana caste or community of Ahmedabad and thse who had to get admitted to that community according to custom and usage there was common quality which united them, namely, of being members of the Rana caste or community. The mere fact that a person of the Rana community who was not an original native of Ahmedabad had to prove his credentials according to the custom and usage of that community to get admitted into that community did not introduce a personal element which would detract from the impersonal nature of the common quality.
It is well settled that an object beneficial to a section of the public is an object of general public utility. 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 ITA No. 467/Ahd/2015 5 Asst. Year 2014-15 sufficient if the intention to benefit a section of the public as distinguished from a specified individual is present. The section of the community sought to be benefitted must be sufficiently definite and identifiable by some common quality of a public or impersonal nature."
8. Similar issue came up before the co-ordinate Bench in the case of Shree Vasupujya Swam Jain Derasar Trust vs. CIT, Valsad in ITA No.4470/Ahd/2007(supre) wherein the trust was formed for a particular community i.e. Jain Swetambar and the co-ordinate Bench relying on the decision of Hon'ble Supreme Court in the case of Ahmedabad Rana Cast Association vs. CIT (supra) has held as under :-
"4. We have heard both the parties and gone through the facts of the case. In terms of provisions of sec. 12AA of the Act, while examining the application of the assessee filed under s. 12A of the Act, the CIT has to satisfy himself regarding objects of the trust and the genuineness of its activities after making necessary enquiries ,if considered necessary. In the instant case, the ld. CIT declined registration on the ground that objects of the trust are not charitable. The ld. CIT has not specified as to which particular object is not charitable or is for a particular community or caste.. The main objects of the trust ,as placed before us on page 4 of the paperbook, are undisputedly religious in nature. Religious activities are also construed to be charitable activities as per the decisions in CIT vs. Radhaswami Satsang (1993) 201 ITR 493 (All) and Hazarat Pirmahomed Shah Saheb Roza Committee vs. CIT (1967) 63 ITR (SC) 490.. Moreover, Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association v. CIT [1971] 82 ITR 704 held that for serving a charitable purpose, it is not necessary that the object should be for the benefit of the whole mankind or all persons in a country or a State and it is sufficient if the intention is to benefit, a section of the public as distinguished from a specific individual or person. It was also held that the section of the community sought to be benefited must be ITA No. 467/Ahd/2015 6 Asst. Year 2014-15 sufficiently defined and identifiable by some common quality of a public or impersonal nature. In view of the foregoing, we find merit in the undisputed contentions of the ld. AR on behalf of the trust and accordingly, restore the matter to the file of the ld. CIT with the directions to re-examine the matter in the light of various objects of the trust stipulated in the trust deed and after satisfying himself about the genuineness of objects of the trust and its activities, pass appropriate orders in accordance with law after allowing sufficient opportunity to the assessee trust. With these directions ground nos. 1 to 4 in the appeal are disposed of."
8. In the case of Shri Sayla Sukhadiya Parivar Trust vs.CIT(Exemption) (supra), similar issue came up before the Tribunal, wherein Commissioner of Income-tax (Exemption) held that the trust was constituted for the benefit of a particular community and not for general public, the co-ordinate Bench, held as under :-
"13. In the circumstances, in our considered view it shall be just and in the interest of justice to restore the matter back to the CIT)E) for deciding the issue after taking into consideration the above stated decisions. CIT(E) shall allow reasonable and proper opportunity of hearing to the assessee before adjudicating the issue. Thus the appeal of the assessee is allowed for statistical purposes."
9. Applying the ratio of Hon'ble Supreme Court Ahmedabad Rana Cast Association vs. CIT (supra), the decision of the Co-ordinate Bench in the case of Shree Vasupujya Swam Jain Derasar Trust vs. CIT, Valsad (supra) and the decision of co-ordinate Bench in the ITA No. 467/Ahd/2015 7 Asst. Year 2014-15 case of Shri Sayla Sukhadiya Parivar Trust vs.CIT(Exemption) (supra), to the facts of the case of assessee, wherein the trust is formed mainly for the benefit of a particular community i.e. Shri Ranpariya Solanki Sukhadiya Parivar Trust but the type of activities which the trust is running are for general public also i.e. for charity, medical relief and promotion of educational activities, we are of the view that the trust is serving charitable activities. Accordingly in our considered view it will be just and in the interest of justice to restore the matter back to the ld. CIT(E) with the directions to re-examine the matter in the light of various decisions mentioned above as well as the objects of the trust stipulated in the trust deed so as to satisfy himself about the genuineness of objects of the trust and its activities and pass appropriate orders in accordance with law after allowing reasonable and proper opportunity of hearing to the assessee before adjudicating the issue. The appeal of the assessee is allowed for statistical purposes.
10. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 5th Nov 2015
Sd/- Sd/-
(Kul Bharat) (Manish Borad)
Judicial Member Accountant Member
Dated 5/11/2015
Mahata/-
ITA No. 467/Ahd/2015 8
Asst. Year 2014-15
Copy of the order forwarded to:
1. The Appellant
2. The Respondent
3. The CIT concerned
4. The CIT(A) concerned
5. The DR, ITAT, Ahmedabad
6. Guard File
BY ORDER
Asst. Registrar, ITAT, Ahmedabad
1. Date of dictation: 3/11/2015
2. Date on which the typed draft is placed before the Dictating Member: 4//11/2015 other Member:
3. Date on which approved draft comes to the Sr. P. S./P.S.:
4. Date on which the fair order is placed before the Dictating Member for pronouncement: __________
5. Date on which the fair order comes back to the Sr. P.S./P.S.:
6. Date on which the file goes to the Bench Clerk: 5/11/2015
7. Date on which the file goes to the Head Clerk:
8. The date on which the file goes to the Assistant Registrar for signature on the order:
9. Date of Despatch of the Order: