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2023 (8) TMI 149 - AT - Income TaxExemption u/s 11 - rejecting application u/s 12AB - CIT(E) dismissed the application of the assessee by taking view that that objects of assessee are otherwise charitable in nature is / are for the benefits of any particular religious community - HELD THAT - As assessee submits that the activities are not disputed, however, we find that, in fact the activities were not examined by ld CIT(E). On examination of various evidence, we find that assessee is in existence from 1983 and registered under the provisions of Bombay Public Charitable Trust vide registration No. A-75 - Tapi. Further the assessee was allowed provisional registration certificate up to AY 204-25 on the basis of similar objects and activities. However, as noted above the activities of the assessee was not examined by ld CIT(E). We find that in CIT Vs Bayath Kutchhi Dasha Oswal Jain Mahajan Trust 2016 (9) TMI 8 - GUJARAT HIGH COURT held that where Trust had large number of other objects for benefit of general public apart from objects for benefit of a religious community, Tribunal was correct in allowing registration to it. Also in CIT Vs Chandra Charitable Trust 2006 (7) TMI 96 - HIGH COURT , GUJARAT it was held that when from covenants of trust deed, it was spelt out that objects of trust were not only to propagate Jainism or help and assist maintenance of temple, Sadhus, Sadhvis, Shraviks and Shravaks, but other goals were also set out in trust deed, it could be said that trust was a charitable religious trust and section 13(1)(b) would not be applicable. As we deem it appropriate to restore the issue back to the file of ld. CIT(E) reconsider the registration of assessee under Section 12AB of the Act afresh and pass order in accordance with law. Needless to direct that before deciding the application afresh, the ld. CIT(E) shall grant opportunity of hearing to the assessee and further to allow to make further submission to prove the object of assessee-trust and its activities.
Issues involved:
The appeal by the assessee-trust against the rejection of registration under Section 12AB of the Income Tax Act, 1961. Details of the Judgment: Issue 1: Rejection of application under Section 12AB: The assessee filed an application for registration under Section 12AB of the Act, providing necessary details as required. The ld. CIT(E) rejected the application, citing that the objects of the trust were for the benefits of a particular religious community, invoking section 13(1)(d) and denying exemption under section 11. The assessee contended that the rejection was unjustified and driven by extraneous considerations. The Tribunal found that while the objects of the trust were charitable, the genuineness of its activities needed examination. The Tribunal noted that the activities were not examined by the ld CIT(E) and decided to restore the issue back to the ld. CIT(E) for reconsideration. Issue 2: Examination of Trust's Activities: The ld AR for the assessee argued that the trust's activities were genuine and not doubted by the ld CIT(E). The trust had been in existence since 1983, with no change in its object and activities. The ld AR contended that the rejection was mechanical and without seeking clarification from the assessee. The Tribunal observed that while the objects of the trust were charitable, the activities were not thoroughly examined by the ld CIT(E). Citing relevant case laws, the Tribunal emphasized the need for a detailed examination of the trust's activities to determine its eligibility for registration under Section 12AB. Decision and Conclusion: In light of the above, the Tribunal deemed it appropriate to remand the issue back to the ld. CIT(E) for a fresh consideration of the registration of the assessee under Section 12AB. The ld. CIT(E) was directed to provide the assessee with an opportunity to be heard and submit further evidence to establish the trust's objects and activities. The Tribunal allowed the appeal of the assessee for statistical purposes, emphasizing the importance of a thorough examination of both the objects and activities of the trust in such matters. Order pronounced on 31/07/2023 in open court.
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