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TMI Blog2021 (10) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... employees of the company ICRW . However, we find some merit in the argument of the Ld. DR that trust has been engaged in discharging the statutory obligation of the company ICRW of making gratuity payment to their employees. But in this regard the competent authority has not examined the activities actually carried out by the trust, sources of funds and how the same are distributed to the employees, whether by way of creating the trust, the company is getting some benefit of saving of money, whether any activity of welfare of the employees other than making gratuity payment has been carried out by the trust etc. The assessee has also not filed any information with regard to its activities before us. Therefore, examining those issues need enquiry at the end of the Ld.CIT(E) - We restore this issue back to the Ld. CIT(E) for re-examination of the application of the assessee trust as per the provisions of the law, in the light of the decision in the case of Ahmedabad Rana caste Association (supra) and the decision of the Hon ble High Gujrat of in the case of Hiralal Bhagwati (supra) - Appeal of the assessee is allowed for statistical purposes. - ITA No.2244/Del/2018 - - - Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the assessee submitted that (i) the ICRW is a non-profit organisation and already registered under section 12A and 80 G of the Act. (ii) The assessee trust has been formed for benefit of it s employees. The amount of gratuity will be set aside by the ICRW for the payment of the gratuity to the employees of the ICRW and the interest received on the said amount shall also be payable to the said employees. There will be no income besides interest in the assessee trust. (iii) Relied on the decision of Hon ble Supreme Court in the case of the Ahmedabad Rana Caste Association (1971) 82 ITR 704 (SC) wherein it is held that to serve a charitable purpose, it is not necessary that object should be to benefit the whole of the mankind or all persons in a particular country or state and it is sufficient if the intention to benefit section of the public as distinguished from a specified individual is present. (iv) Also relied on the decision of Hon ble Gujarat High Court in the case of Hiralal Bhagwati Vs CIT (2000) 246 ITR 188 (Guj) wherein the Hon ble court held that trust formed for the benefit of employee shall also be entitled for benefit of 80G and 12A registra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount in accordance with the provisions of the Act; b) To receive the amount of grant, donation or the share of amount from ICRW for the purpose of making payment to the employees of the gratuity amount in accordance with the provisions of the Act; c) To contribute the respective amount of the fund required for creating a corpus that can be utilised for the purpose of making payment to the employees of the gratuity' amount in accordance with the provisions of the Act; d) To enter into arrangements/agreements with the approved Insurance companies for insuring the payment of the gratuity amount to the employees e.) To do all such act{s)which is consequential or incidental to the aforesaid objects. 8. In the case of Ahmedabad Rana caste Association (supra) Hon ble Supreme Court held as under: It is well settled by now and the High Court also has rightly taken that view that an object beneficial to a section of the public is an object of general public utility. 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 particular country or State. It is sufficient if the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of what was meant by a section of the public had, so far as he was aware, been laid down. But he indicated that the trust of a public character is one in which the beneficiaries do not enjoy the benefit when they receive it by virtue of their character as individuals but by virtue of their membership of a specified class the common quality, uniting potential beneficiaries into the class being essentially an impersonal one. This common quality he said was definable by reference to what each has in common with the others and that is something into which their status as individuals does not enter . Andrew, L.C.J. accepted this statement of law without hesitation in Trustees of the Londonderry Presbyterian Church House v. Commissioners of Inland Revenue(2). What has to be seen in the present case is whether the members of the Rana caste who are not natives of Ahmedabad but who come to reside there and are accepted as members of that caste according to its usage and customs can be said to have a relationship which is an impersonal one dependent on their condition as members of the Rana community. We are unable to comprehend how such members of the Rana caste can be regarde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... play a decisive and vital part. That cannot be regarded as an element which would detract from the impersonal nature of the common quality. For the reasons given above the appeals are allowed and the answer returned by the High Court is discharged. The matters are remitted to the High Court for returning the answer to the question referred after determining the,- other points which were left undecided. The parties shall bear their own costs in these appeals. Appeals by certificate (i.e. CAs. 2146-2148 of 1968) are dismissed, the certificate being defective for want of reasons. 9. In the case of Hiralal Bagwati (supra), the trust was created for the benefit of employees of the 16 institutions with the object of providing aid in case of sickness and disablement. The Hon ble High Court following the decision of Hon ble Supreme Court in the case of Ahmedabad Rana caste Association (supra) held that an object beneficial to a section of the public is an object of general public utility. 10. In view of the above decisions, the registration of the assessee trust cannot be rejected merely on the ground that it is for the benefit of a restricted group of employees of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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