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TMI Blog2020 (4) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... es for betterment of the war widows and their families. If there trust registration is legal and valid why Rotary Club Social Security fund cannot held to be legal and valid. In our considered opinion, rejecting the application for registration of the Trust is amounting to miscarriage of justice. DIT(E) ought to have allowed the registration application filed to the assessee - Direct the department to grant registration u/s. 12AA to the assessee. - Decided in favour of assessee. - ITA. No: 649/AHD/2014 - - - Dated:- 19-2-2020 - Shri Mahavir Prasad, Judicial Member And Shri Amarjit Singh, Accountant Member For the Appellant : Shri Mehul K. Patel, AR For the Respondent : Shri O P Sharma, CIT/ D.R. ORDER PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. This appeal filed by the Assessee is directed against the order of the Ld. DIT(E), Ahmedabad dated 30.12.2013. 2. In this case, assessee has filed an application for registration of trust u/s. 12AA of Income Tax Act. The application was accompanies by copy of the certificate of registration by Asstt. Charity Commissioners and copy of PAN Card. 3. Thereafter ld. DIT(E) and asked the assessee to submit the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is a operating deficit of 978.96 lakhs i.e. expenditures are far more than the receipts. In such a situation a club or trust does try to generate receipts to cover its expenditure which are only for fulfillment of its objects. However, such receipts should be strictly confined to attainment of its object and not for simply accumulating surplus. Thus, the embargo or rider given in proviso to section 2(15), cannot be the ground for cancellation of registration in the case of the assessee. Even otherwise this aspect has to be examined in the course of assessment proceedings and not for the purpose of cancellation of registration u/s.12AA(3) which is confined to twin conditions laid down therein. 11. There is another angle in this case, that it is a Club and all its activities are restricted to among its members and, therefore, principle of mutuality applies in its case. Reliance has been placed on Board Circular No. 11 of 2008 dated 19-12- 2008 by the assessee which explains the amended proviso to section 2(15) in the following manner :- The newly inserted proviso to section 2(15) will apply only to entities whose purpose is advancement of any other object of general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d direct that registration granted u/s 12AA earlier cannot be cancelled in view of the reasoning given by learned DIT(E). Accordingly ground taken by the assessee is allowed. 13. In the result, the appeal filed by the assessee is allowed. 6. Ld. A.R. also cited a judgment of Hon ble Supreme Court in the matter of Ahmedabad Rana Caste Association vs. CIT (1971) 82 ITR 704 (SC) wherein Hon ble Supreme Court granted relief to a trust which belonging to a Rana Community of Ahmedabad with following observation: Section 11 of the Income-tax Act, 1961 [Corresponding to section 4(3)(i) of the Indian Income-tax Act, 1922] - Charitable or religious trust - Exemption of income from property held under - Assessment years 1960-61 to 1962-63 - Assessee, an association of persons, held properties for various purposes including management of movable and immovable properties of Rana caste or community of Ahmedabad, doing acts to improve education of community to give medical help etc. - Tribunal found that beneficiaries of assessee were members of Rana community meaning thereby natives of Ahmedabad only and other members of community accepted by caste as per old customs and usage of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not entitled for registration. 9. As against the above findings, the Appellate Tribunal has referred in paragraph 6 of its impugned order, the aims and objects for which the association is established. The aims and objects categorically refer to conduct of pre-medical checkup camps for public at large without discriminating on the basis of caste, creed, community and religion and to reach out public at large to educate them about healthy life and benefit of cleanliness, amongst other objects. 10.The provision contained under Section 12A nowhere empowers the CIT to assess the objects vis-a-vis the books of accounts. Even otherwise, it is not to be seen at this stage as to whether the fulfillment of the charitable trust would eventually benefit the members of the society. If the constituent of the trust engage in some genuine charitable activity which may benefit them in some other aspect of their personality which may include their vocation in life, it would not affect the genuineness of the objects of the trust. A person does not engage in charity for not doing anything in the other walks of life. A charity for one particular object is not for destroying the career fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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