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TMI Blog2015 (2) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... dering assessee’s claim of exemption u/s 11. Grant of registration u/s 12AA does not automatically entitle the assessee for exemption u/s 11 though, it is one of the conditions. It is only the AO who can examine assessee’s claim of exemption u/s 11 at the time of assessment subject to fulfillment of conditions imposed u/s 11 to 13 of the Act. It is evident from the order of DIT(E), he has not raised any doubt whatsoever with regard to the charitable object of the society or genuineness of its activity. In the aforesaid view of the matter, we hold that the DIT(E) was not correct in rejecting assessee’s application for grant of registration u/s 12A of the Act. - Decided in favour of assessee. - ITA No. 1384/H/13 - - - Dated:- 28-8-2014 - S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that as the society has been established for the benefit of only one community, it cannot be granted registration in view of restriction imposed u/s 13(1)(b) of the Act. Though, assessee explained that restriction imposed u/s 13(1)(b) is subject to exceptions provided under Explanation 2 to section 13 as per which restrictions imposed u/s 13(1)(b) would not apply to trust and institutions created for the benefit of backward classes. However, the DIT(E) interpreting the said explanation concluded that as per the language of explanation 2, the trust/institutions should be for the benefit of number of castes and number of classes or number of tribes since the language used is in plural sense. As the assessee society is meant only for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Therefore, instead of interpreting in a narrow manner, it has to be interpreted in a broader manner to take within its sweep all the under privileged castes/classes. The learned AR referring to section 13 of the General Clauses Act submitted that words in singular shall include plural. Taking shelter under the aforesaid provision of the General Clauses Act, the learned AR submitted, reference to scheduled castes, backward classes in explanation 2 to section 13 should be read to mean the same i.e. plural include singular and vice versa. So far as second objection of the DIT(E) that the membership of the assessee society is only restricted to Members of the Kurni community, the learned AR submitted that the said clause cannot be a ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the parties and perused the order of the DIT(E). As stated earlier, the DIT(E) has rejected appellant s application for grant of registration on the following two grounds, i) the society as per its object, has been established from the benefit of only one community i.e. Kurni community, hence, it cannot be considered as public charitable trust, ii) membership of the society is restricted to people from Kurni community, hence, the society is not in the nature of public charitable trust. So far as the first objection of the DIT(E) is concerned, though section 13(1)(b) of the Act provides that exemption u/s 11 shall not apply to a trust or institution created or established for benefit of a particular religious community or caste, but, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come within the exception provided under Explanation 2 to section 13, Therefore, restriction imposed u/s 13(1)(b) of the Act will not apply to the assessee. The observation of the ld. DIT(E) that appellant society is for the benefit of single backward class and not all backward classes as envisaged under explanation 2 of section 13 is not the correct interpretation of the provision. The term backward classes used in explanation 2 of section 13 will also include any backward class. For coming to such view we can refer to section 13 of General Clauses Act, 1897, which reads as under: Section 13 Gender and number. In all [Central Acts] and Regulations, unless there is anything repugnant in the subject or context, (1) words importing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... community, Viz., Vaish Community can be considered to be for charitable purpose. The Hon ble Kerala High Court in case of Abdul Sattar Hajee Moosa Sait (supra) also expressed similar view. Further, the entire issue can be looked into from another angle. As would be evident, only reason for which DIT(E) has refused to grant registration is, the society having been established for the benefit of a particular community, Viz., Kurni caste, comes within the restriction imposed u/s 13(1)(b). However, the provisions contained u/s 12A and 12AA would make it clear that at the time of grant of registration u/s 12AA, the CIT/DIT(E) can only look into the charitable object and genuineness of activities of a trust or institutions. At that stage the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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