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TMI Blog2021 (5) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... ple from drug addictive disorder, to save and educate girl child and also to spread legal awareness among the general public. The assessee-society filed an application in Form No.10A on 12.1.2019 seeking registration under section 12AA of the Income Tax Act, 1961. The ld.CIT(Exemptions) sought various information from the assessee for compliance of relevant conditions contained in the provisions and for satisfaction of the competent authority in respect of genuineness of activities as per sections 12AA of the Act. They were listed by the ld.CIT(E) in his impugned order at page no.3 to 5. In response, the assessee filed objects and financial statement of the society. On perusal of these details submitted by the assessee-society, the CIT(E) of the view that the main activity of the assessee was to construct and allot the chambers to the members of District Bar Association, and these activities and benefits restricted only to the members of District Bar Association, who were professionals and not general public. In other words, in the opinion of the ld.CIT(E), the society was formed for specific purpose and for the benefit of specific group of professional people, and therefore, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bers of the Bar, it also provide services to the general public at large. The receipts of the Society are in the form of donations from associations, members, well wishers or other bodies. Bye-laws further provide that the Society would work on no profit and no loss basis, and not an institution for profit. Considering all these, the ld.CIT(A) has erred in ignoring this very vital factor before considering the application of the assessee-society under section 12AA of the Act. 6. On the other hand, the ld.DR supported order of the ld.CIT(E). He further submitted that so-called committee was formed for a specific purpose for the benefit of specific group of professionals, and such activities do not fall within the scope of expression "advancement of any other objects of general public utility", and therefore, assessee not entitle for registration under section 12AA of the Act. 7. We have considered rival submissions and gone through the record carefully. We also gone through various materials placed on record and also case laws cited. The issue for adjudication before us is, that whether the ld.CIT(E) is correct in rejecting the application of the assessee-society seeking registra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is aspect also. In brief, this activity can be treated uncharitable if hit by conditions provided in the proviso to section i.e. an assessee should not carry out activities in the nature of trade, commerce or business for fees, cess or for any other consideration. In other words, it should not be carried out with a profit embedded intention or motive. If some incidental profit is there, then it is a secondary circumstance. Sub-clause (i) and (ii) further provides guidance and conditions to find out whether this fifth category of activity is being carried out on trade, commerce or business. Section 12AA 12AA. (1) The Principal Commissioner or Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) or clause (aa) or clause (ab) of sub-section (1) of section 12A, shall- 48[(a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about,- (i) the genuineness of activities of the trust or institution; and (ii) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achievin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information from the trust or institution as he thinks necessary in order to satisfy himself about; (i) genuineness of the activities of the trust/institution, (ii) compliance of such requirement of any other law for the time being in force by the trust or institution as material for the purpose of achieving its objects. The ld.Commissioner thereafter may make such inquiry as he may deem necessary in this behalf. Once he has satisfied with the genuineness of activities of the trust or institution, and also satisfied with the objects and compliance of any other laws, then he would pass an order in writing registering the trust or institution. 10. In the case on hand, the basis on which the ld.CIT(E) rejected the claim of the assessee is mainly that the purpose for which the society was formed is for the benefit of specific group of professionals and to carter their specific purpose, which do not come under the definition of section 2(15) of the Act. While going through the contents of bye-laws of the society filed by the assessee, it interalia provide that the society was established for the welfare, construction and allotment of chambers in the District Court Complex, Barnala for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture: where there is no common quality uniting the potential beneficiaries into a class, it might not be regarded as valid." Hon'ble Kerala High Court in Sree Anjaneya Medical Trust vs. CIT 382 ITR 399 also held that the stage for consideration of the relevance of the object of the assessee and the application of its funds arises at the time of assessment. It is pertinent to observe that the ld.CIT(E) failed to comprehend the role of Bar Association in judicial dispensation. He construed the existence of the assessee-society in a very narrow manner, as if it is a group of some professionals who are working for their individual benefits. No doubt incidence of benefits rests with individual lawyers while prosecuting any litigation in the Court, but one has to understand our judicial system before branding such society as a group of some professionals working for their benefits only. Attainment of justice for all the parties of the case and the society at large is the main object of our judicial system. Bar Associations are voices of voiceless. The Bench and Bar are the essential partners in judicial dispensation, and therefore, considering the importance of Bar Association in e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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