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Issues involved: Appeals against rejection of registration application u/s 12AA of the Income Tax Act by the Director of Income Tax (Exemption), Ahmedabad based on the application of provisions of section 13(1)(b) of the Income Tax Act.
The Appellate Tribunal, ITAT Ahmedabad, heard appeals by different assessees challenging the rejection of their registration applications u/s 12AA of the Income Tax Act by the Director of Income Tax (Exemption), Ahmedabad. The Director had rejected the applications citing that the cases of the assessees fell under the purview of section 13(1)(b) of the Income Tax Act. The counsel for the assessees contended that the issue was favorably decided by the ITAT, Indore Bench in the case of Dawoodi Bohra Jamat and Others Vs CIT, where it was held that the provisions of section 13(1)(c) were not applicable as the trust in question was a public religious trust with solely religious objectives. This view was further supported by the Madhya Pradesh High Court in the case of CIT Vs Dawoodi Bohra Jamat, emphasizing that section 13(1)(b) was not applicable to a religious trust like the one in question. In contrast, the Deputy Commissioner of Income Tax stood by the decisions of the Director of Income Tax (Exemption) in rejecting the registration applications. After considering the arguments and legal precedents, the Tribunal found in favor of the assessees, citing the decisions of the ITAT, Indore Bench, and the Madhya Pradesh High Court. The Tribunal directed the Director of Income Tax (Exemption) to grant registration to the assessees u/s 12AA of the Income Tax Act within one month from the date of the order. Consequently, both appeals of the assessees were allowed. The order was pronounced on 22nd December 2009.
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