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TMI Blog2024 (7) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings, Commissioner is not competent to invoke such provisions for purpose of declining registration u/s 12AA. In the case of St. Joseph Academy [ 2015 (2) TMI 495 - ITAT HYDERABAD] the ITAT held that provisions of Section 13 can be invoked by Assessing Officer while framing assessment and not by Commissioner while considering application for registration u/s 12AA. We are of the considered view that the provisions of Section 13 can be invoked only at the time of assessment while considering the applicability of section 11/12 with respect to assessee s set of facts and not at the time of grant of registration under Section 12A of the Act. Our view is further supported by the decision of Bayath Kutchhi Dasha Oswal Jain Mahajan Trust [ 2016 (9) TMI 8 - GUJARAT HIGH COURT] wherein on the issue of denial of grant of registration u/s 12A of the Act by invoking Section 13(1)(b) of the Act, it was categorically held that the provisions of Section 13 would be attracted only at the time of assessment and not at the time of grant of registration. Thus the matter is restored to the file of CIT (E), for de novo consideration, after giving due opportunity of being heard and with the directio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was of the view that the objects of the assessee-trust are confined/restricted for the members of National Real Estate Development Council Gujarat, which is in contravention to the provisions of section 13(3) of the Act. The CIT was of the view that on going through the objects of the trust, the same are not for the benefit of public at large but trust has been incorporated to take care of the interest of the members. Therefore, the prime focus of the object is only to safeguard the interest of the members of NREDC, Gujarat and not any section of public or public at large. Whenever, there is a conflict of interest, then preference will be given to the interest of it s members only. The membership of the Association is limited to people dealing in real estate development, land development, lay-out planning, development of township, architecture, estate finance etc. The applicant trust does not include the members who represent the interest of customers as such. Therefore, looking into the instant fact, it cannot be said that the objects of the assessee-trust are for general public utility or for the benefit of the public at large or for the benefit for a section of the public, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... association i.e. members of National Real Estate Development Council Gujarat and not for the benefit of the public at large. Therefore, I am not satisfied about the genuineness of activities of trust and is of the considered opinion that the applicant/assessee is not eligible for registration u/s 12A of the Act Therefore in the facts and circumstances of the case, the applicant/assessee cannot be granted registration u/s 12A of the Act. 11. In view of the above, the present application filed in Form No.10AB u/s 12A(1))(ac)(iii) of the Act is rejected and provisional registration stands cancelled. 4. The assessee is in appeal before us against the order of the ld.CIT (Exemption) rejecting the application filed by the assessee/applicant trust. The ld.counsel for the assessee primarily contended before us that in view of various judicial precedents and looking into the objects of the trust, it cannot be inferred that the objects beneficial to a section of the public is an object of general public utility. Further to serve charitable purpose, it is not necessary that the objects should be to benefit the whole of mankind or all persons in a country or state. It is sufficient if the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject (d) would embody a restrictive purpose of religious activities only. Similarly, assistance by the respondent-trust to the needy and poor for religious activities would not divest the trust of its altruist character. 41. Therefore, the objects of the trust exhibit the dual tenor of religious and charitable purposes and activities. Section 11 of the Act shelters such trust with composite objects to claim exemption from tax as a religious and charitable trust subject to provisions of Section 13. The activities of the trust under such objects would therefore be entitled to exemption accordingly. 42. We would now proceed to examine the objects under the provisions of Section 13(1)(b) of the Act. It becomes amply clear from the language employed in the provisions that Section 13 is in the nature of an exemption from applicability of Sections 11 or 12 and the examination of its applicability would only arise at the stage of claim under Sections 11 or 12. Thus, where the income of a trust is eligible for exemption under Section 11, the eligibility for claiming exemption ought to be tested on the touchstone of the provisions of Section 13. In the instant case, it being established that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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