2014 (12) TMI 1399 - AT - Income Tax

Exemption u/s 11 - registration u/s.12A rejected - application rejected by the CIT that object of the assessee-trust is to benefit of a particular family - HELD THAT - As per clause(3) of the Objects the assessee-trust has to undertake and help the activities in the field of compassion for all the forms of life (Jiv daya). To establish run and maintain Cattele-Camps Dhor-Wada Panjra Pol etc. To provide food and other necessary help to the miserable and mute animals. To undertake activities in the field of welfare of people and welfare of animals and provide help to them at the time of Natural or Manmade calamities. As per clause (7) of the Objects the assessee-trust has to undertake activities for the protection of environment afforestation and conservation of forest. To save the environment from getting polluted. To undertake activities to stop soil erosion and to stop destruction of forest. To undertake all the activities like plantation etc. to save the environment and to be helpful in all such activities. From the Objects it is clear that the assessee-trust apart from benefitting a particular family also have Objects which would benefit the public at large without being limited to a particular family or a community. In the case of CIT vs. Dawoodi Bohara Jamat 2014 (3) TMI 652 - SUPREME COURT held that where objects of assessee-trust exhibit dual tenor of religious and charitable purposes and activities are not exclusively meant for a particular religious community provisions of Section 13(1)(b) are not applicable and assessee-trust is entitled to claim exemption u/s.11 of the Act. Thus CIT was not justified in rejecting the application of the assessee - Decided in favour of assessee.

Summary

Issues:
1. Rejection of registration u/s.12A of the Income Tax Act, 1961.

Analysis:
The Appellate Tribunal ITAT Rajkot heard an appeal against the order of the Commissioner of Income Tax rejecting the registration under section 12A of the Income Tax Act. The assessee-trust's application for registration was declined based on the belief that the trust was established for the benefit of a specific family. The Tribunal noted that the rejection was primarily due to this reason, overlooking other clauses in the trust's Objects. The appellant argued that the trust had various charitable Objects beyond benefiting a particular family, citing relevant legal precedents to support their case.

The Commissioner of Income Tax, on the other hand, supported the initial rejection and referred to a decision by a Coordinate Bench to justify the action. After considering the arguments, the Tribunal observed that the trust's Objects included activities for educational development, cultural welfare, compassion for all forms of life, environmental protection, and conservation efforts. These broader charitable purposes indicated that the trust's activities were not solely limited to benefiting a particular family, thus meeting the conditions for registration under section 12A of the Income Tax Act.

Relying on the judgment in the case of CIT vs. Dawoodi Bohara Jamat and other legal precedents, the Tribunal concluded that the rejection of the registration application by the Commissioner was unjustified. The Tribunal set aside the Commissioner's order and directed the grant of registration to the assessee-trust in accordance with the legal principles established in the relevant judgments. The appeal by the Assessee was allowed, and the decision was pronounced in favor of the Assessee on the 5th of December 2014 in Rajkot.