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TMI Blog2018 (1) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... in law in confirming the denial of registration u/s 12AA of the Income Tax Act, 1961 to the assessee appellant society? 3. The main ground on which registration was refused was clause v which reads as under:- 4. When the matter was admitted an assurance was given by an undertaking by the management i.e. appellant, duly supported by resolution which reads as under:- I, Nem Kumar Jain, aged about 70 years, S/o Shri Ishwar Lal Jain, r/o 550/7, Shanti Vihar, Flat No. 2, Udai Marg, Raja Park, Jaipur do hereby solemnly affirm on oath and state as under: 1. That I am the secretary Authorised Signatory of the Appellant Society in the present Income tax Appeal which stands registered as DBITA 219/2017 and therefore well conversant with the facts and circumstances of the present case and competent to swear this affidavit. 2. That it is submitted that during the course of admission of the present Income-tax Appeal the Hon ble Court was of the opinion that clause No. 5 [PB 35] in the objects of the Appellant Society which reads as under runs contrary to charitable objects of a society: 3. That the counsel of the appellant society Shri Siddharth R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is deemed necessary to ensure that the said clause No. 5 is removed at the earliest. 5. That I thus give an undertaking on behalf of the appellant society that the appellant society till date has never acted upon the above-said clause No. 5 as enshrined in its object clause and in coming time shall be taking active steps to ensure that the same is deleted from its objects. Copy of minutes of meeting held on 02.08.2017 is enclosed herewith and marked as Annexure 5. 5. In that view of the matter, we are of the opinion that in view of the judgments which have sought to be relied upon by the counsel for the appellant: 1. CIT vs. Dawoodi Bohara Jamat, [2014] 364 ITR 31 (SC),wherein it has been observed as under:- 28. The objects of the Respondent-trust are not indicative of a wholly religious purpose but are collectively indicative of both charitable and religious purposes. It is expedient to comprehend the objects of the Respondent-trust with reference to the construction of the expressions charitable purpose and religious purpose. 29. The phrase charitable purpose is expansive and inclusive. The expression charitable purpose is defined in the dictionary c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat however does not mean that if a trust is a composite one, that is one for both religious and charitable purposes, then it would not be covered by clause (b). What is intended to be excluded from being eligible for exemption under Section 11 is a trust for charitable purpose which is established for the benefit of any particular religious community or caste. 46. Such trusts with composite objects would not be expelled out of the purview of Section 13(1)(b) per se. The Section requires it to be established that such charitable purpose is not for the benefit of a particular religious community or caste. That is to say, it needs to be examined whether such religious-charitable activity carried on by the trust only benefits a certain particular religious community or class or serves across the communities and for society at large. (Sole Trustee, Loka Shikshana Trust v. C.I.T.(1975) 101 ITR 234 (SC)). The section of community sought to be benefited must be either sufficiently defined or identifiable by a common quality of a public or impersonal nature. 2. CIT vs. Bayath Kutchhi Dasha Oswal Jain Mahajan Trust, (2016) 74 Taxman.com 199 (Gujarat), ,wherein it has been observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of corpus fund. Held: Justified. Tribunal had rightly examined the controversy. Tribunal had further found that AO cannot initiate reassessment proceedings, simply to verify the contents of the return, unlike before it was vested in him in making regular assessment. It was found that the time-limit available for issuance of notice and making assessment under Section 143(3) had expired, but then, on that count, he cannot assume the jurisdiction by venturing to make assessment under Section 148. The reasons given by Tribunal were in accordance with law. AO had not inquired into the nature of the receipts, before issuing notice under Section 148, and in the earlier years also, the receipt of donation was held to be received in the corpus fund. Therefore, Tribunal was justified in setting aside the assessment. It has been found by the Tribunal that one of the conditions necessary for issuance of notice under Section 148, being under statement of income of the assessee, is not fulfilled. It has been held, that in order to bring an item within the purview of Section 147, it is, of utmost importance, that the AO should have reason to believe, based on relevant and cogent material, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT v. JSB Shikshan Sansthan (DHITA 172/2017 dated 07.11.2017 Rajasthan High Court, wherein it has been observed as under:- 5. We have heard both the sides contentions raised by Mr. Jain regarding, sub-section (4) of Section 12AA will come into operation after the registration is carried out in consonance with the provisions of object of the trust not at the time of registration. 7. CIT v. Shri Digamber Jain mandir Godhaji (DBITA 21/2017 dated 14.02.2017 Rajasthan High Court), wherein it has been observed as under:- 4. We are in complete agreement with the view taken by the Tribunal. Though Mr. Jain has tried to justify the order of the Assessing Officer and CIT(A), but in our view, in view of the binding decision of the Supreme Court in the case of CIT Vs. Dawoodi Bohara (2014) 43 Taxmann.com 242, the Tribunal has not committed any error in allowing the appeal of the assessee. 8. CIT v. Bhagwan Mahaveer Pursharth Prerna Nidhi Nyas (DBITA 163/2012) dated 11.09.2017 Rajasthan High Court, wherein it has been observed as under:- 2. This Court while admitting the matter framed the following substantial question of law:- Whether in the facts and circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT v. Jodhpur Chartered Accountant Society, (2003) 127 Taxman 90 (Raj.),wherein it has been observed as under:- 10. Applying the test laid down by the apex court in Ahmedabad Rana Caste Association v. CIT[1971] 82 ITR 704, we find that the predominant object of the society is dissemination of knowledge and education of commercial laws, tax laws for the benefit of general public to inculcate a sense of responsibility towards the nation and foster law abiding citizens. The objects clause of the constitution emphasises to propagate and disseminate knowledge about the auditing, accounting, direct and indirect taxes by holding seminars, conferences and workshops, etc. The fruits of such seminars, conferences, etc., would be available to the public at large, thus, it appears that the society is not for the benefit of a small group of individuals and it is also not only for the benefit of members but to promote awareness and education of the commercial and tax laws for the general public without any profit motive. As observed by the Supreme Court, 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 country ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineness of its objects. Such a requirement is expressly incorporated in clauses (a) and (b) of sub-section (1) of section 12AA. 12. The assessee having failed to discharge the burden, the Tribunal, in our view, was justified in confirming the decision of the Commissioner. At the same time, it has been left open to the assessee to move a fresh application for registration before the Commissioner. We need only to clarify that if this is done, it shall be duly considered in accordance with law on the basis of the materials that will be produced by the assessee. 14. In the circumstances, on the basis of the material which was produced by the assessee on the record of the Commissioner and before the Tribunal, we are of the view that no substantial question of law would arise in this appeal so as to warrant the interference of this court. However, while dismissing the appeal, we clarify that this would not affect the liberty which has been granted to the society to file a fresh application for registration. 7. On the second issue regarding object for a particular community, counsel for the appellant has relied on the following decisions: 1. C.P. Vidya Niketan Inter Col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 orally, but that before the time allowed could expire the order was passed. The enquiry under Second Proviso to Section 10(23), was not complete and thus the opinion of the Chief Commissioner of Income Tax, Ghaziabad as Prescribed Authority was not formed on the examination of the relevant records, which he had directed to be produced. 27. In the facts and circumstances of the case, we allow the writ petition and while setting aside the order dated 27.5.2011 passed by the Chief Commissioner of Income Tax, Ghaziabad, direct him to decide the application again confined to the enquiry on the Second Proviso to Section 10(23C) of the Act to satisfy himself of the conditions of grant of approval. A fresh notice will be given to the petitioner to submit the requisite documents on which a fresh order will be passed by the Chief Commissioner, Income Tax, Ghaziabad. 2. Sri Venkateshwar Educational Society (Regd.) v. Director General of Income Tax (exemptions), [2011] 9 taxmann.com 196 (Delhi), wherein it has been observed as under:- 9. Insofar as apprehension of the respondent that in view of other objectives mentioned in the Memorandum of Association, the petitioner may u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affidavit of undertaking given by the petitioner society that it would not breach any of those conditions and further that surplus funds shall be utilized only for educational purposes and will not be diverted to other non-educational objectives. No cost. 4. Neo Gurishi Educational Society (Registered) v. Director of Income Tax, [2010] 2 DTLONLINE 119 (DELHI), wherein it has been observed as under:- 3. A perusal of the said order would show that the petitioner society had filed an affidavit dated 25th April, 2009 inter alia stating that the society is doing solely the educational activity till date and will not undertake any other activity in future as well. Undertaking is also given to the fact that Clauses B, D and E of the memorandum of association would be deleted/amended within a period of six months. 8. In our considered opinion, we remit matter back to the authority to consider the law on subject and will reconsider independently, in view of observation made by us, will independently consider the law declared by the Supreme Court and also while remitting matter back, we restrained from passing order of registration, keeping the power of authority intact t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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