9911796707
TMI Blog2024 (10) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 13 would only be applicable at the time of assessment, not during the registration stage. CIT(E) s order is flawed both in its interpretation of the assessee s objects and in the premature invocation of Section 13(1)(c) and 13(3) of the Act. Judicial precedents clearly establish that the applicability of Section 13 should only be examined during assessment and not at the registration stage u/s 12A of the Act. We set aside the order of the CIT(E) and restore the matter to his file for de novo consideration. CIT(E) is directed to evaluate the application for registration afresh, focusing solely on the charitable nature of the assessee s objects, without invoking the provisions of Section 13(1)(c) or Section 13(3) at this stage. CIT(E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to be commercial and business-like in nature, rather than charitable. Objects 37, 38, and 43 of the MOA were particularly scrutinized by the CIT(E), revealing that the activities were geared towards the welfare and empowerment of the members, and thus not fully aligned with the broader public purpose required under Section 12A of the Act. The CIT (Exemption) referred to Section 13(3) of the Act, which prevents organizations serving the interests of particular persons, including members, from being granted charitable registration. The CIT(E) placed reliance on the judgement of the Hon ble Punjab Haryana High Court in the case of CIT vs. Truck Operators Association (9 taxmann.com 267) , where the registration was denied to a truck operato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjects. The AR further submitted that the CIT(E) selectively pointed out three matters out of 43 matters and rejected the registration. The AR placed reliance on the following judicial precedents: 1. Bargahe Husaini Trusr-Monpar Vs. CIT(E) - [2024] 165 taxmann.com 141 (Ahmedabad Trib.). 2. Anjuman E Nusratul Muslimin Tankaria Vs. CIT(E) [2024] 162 taxmann.com 42 (Ahmedabad Trib.). 5. The Departmental Representative (DR) relied on the order of the CIT(E). 6. We have heard the rival contentions and perused the material on record. We note that the CIT(E) s interpretation of the MOA and the invocation of Section 13(1)(c) and 13(3) of the Act raise two key issues i.e. charitable nature of the objects and application of section 13 at the stage of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axmann.com 42 (Ahd- Trib) and Bargahe Husaini Trust vs. CIT(E) [2024] 165 taxmann.com 141 (Ahd-Trib) , have clarified that the provisions of Section 13 should not be invoked at the stage of registration. These rulings emphasize that the CIT(E) should confine his examination to the charitable objects and not speculate about potential benefits to members unless and until actual instances of such benefits arise, which can only be verified during assessment. In Anjuman E Nusratul Muslimin Tankaria , the Co-ordinate Bench held that while the trust s objects may have benefitted a specific community, this does not automatically disqualify it from registration under Section 12A of the Act. The Tribunal observed that such provisions of the Act are r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicability of Section 13 should only be examined during assessment and not at the registration stage under Section 12A of the Act. 6.3. In light of these judicial precedents and the factual matrix of the case, we set aside the order of the CIT(E) and restore the matter to his file for de novo consideration. The CIT(E) is directed to evaluate the application for registration afresh, focusing solely on the charitable nature of the assessee s objects, without invoking the provisions of Section 13(1)(c) or Section 13(3) of the Act at this stage. The CIT(E) shall provide the assessee with a reasonable opportunity of being heard before passing the order. 7. In the result, the appeal of the assessee is treated as allowed for statistical purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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