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TMI Blog2024 (11) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... Act at the time of grant of registration. In the result, in view of the above observations, the matter is restored to the file of CIT (Exemptions), for de-novo consideration, after giving due opportunity of being heard and with the direction not to disentitle the assessee for grant of registration only on the grounds as mentioned in its order for rejecting the application filed by the assessee trust. Appeal filed by the assessee is allowed for statistical purposes. - SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER For the Appellant: Shri Hardik Vora, A.R For the Respondent: Shri R. N. Dsouza, CIT DR ORDER PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short Ld. CIT(E) ), Ahmedabad, vide order dated 28.03.2024. 2. The Assessee has taken the following grounds of appeal:- 1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has erred in rejecting application for registration u/s 12AB of the Act. 2. On the facts and in circumstances of the case as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant to clarify how this alignment with the statutory provisions of Section 12AB(4) was maintained and requested a response by 29th January 2024. The applicant submitted a reply on the due date, asserting that the Trust aims to benefit all of humanity without discrimination. However, as per CIT (Exemptions), the assessee failed to adequately address the concerns outlined in the show-cause notice regarding the specific objective that sought to provide aid primarily to the Jain community during natural calamities. The notice noted that the trust deed explicitly states that the organization would focus on aiding the Jain community, further specifying that membership was restricted to individuals from the Shri Shwetambar Murtipujak Tapegachcha Jain Samaj. Given this context, CIT (Exemptions) noted that Section 13(1)(b) of the Act applied to the facts of the assessee. Section 13(1)(b) of the Act states that any income from a trust created for the benefit of a specific religious community or caste is excluded from tax exemptions. As per CIT (Exemptions), the Trust's objectives, as documented, did not reflect a broader charitable intent but rather confined its benefits to the Jain co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication for grant of final registration. The Ahmedabad Tribunal held that provisions of section 13(1)(b) of the Act can be invoked only at time of assessment and not at time of grant of registration under section 12A of the Act. Therefore, in view of aforesaid legal position, matter was to be restored to file of CIT (Exemptions), for de-novo consideration. While passing the order, the Tribunal made the following observations: 7. We have heard the rival contentions and perused the material on record. In the case of Bhojalram Leuva Patel Seva Samaj Trust v. CIT (Exemptions) [2024] 162 taxmann.com 270 (Ahmedabad - Trib.), the ITAT held that provisions of section 13(1)(b) can be invoked only at the time of assessment and not at the time of grant of registration under section 12A. 8. Again, in the case of In the case of Jamiatul Banaat Tankaria v. CIT (Exemption) [2024] 160 taxmann.com 358/205 ITD 673 (Ahmedabad - Trib.), the ITAT held that where objects of assessee-trust were primarily charitable rather than favouring any specific religious community, CIT(E) was not justified in denying registration under Section 12A, by invoking Section 13(1)(b) as said provision would be attracted on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f registration only on the grounds as mentioned in its order for rejecting the application filed by the assessee trust. 11. In the result, the appeal filed by the assessee is allowed for statistical purposes. 8. In the case of Shah Gulabchandmulchand Shree Parshwanath Trust, Vapi 165 taxmann.com 731 (Surat-Trib.), the ITAT held that where CIT(E) denied registration under Section 12A to assessee-trust due to one objective benefiting only Jain community, invoking Section 13(1)(b), but overlooked broader charitable objectives since provisions of section 13 can be invoked only at time of assessment and not at time of grant of registration under section 12A, matter would be remanded back to CIT(E) for reconsideration. While passing the order, ITAT made the following observations: 5.1 It is clear from the objects of the assessee-trust that it was not for benefit of only Jain community. The CIT(E) has considered only clause-(F) and not the other clauses for proper appreciation of the issue. The objects also include medical help to the needy patients (clause-G), educational, occupational and medical help (clause- E), welfare activities for upliftment of general public (clause-D) etc. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of registration. The relevant finding of the Hon'ble High Curt at para 8 of his order is as under: 8. Thus, very premise for the Commissioner to come to the conclusion that the objects of the trust were confined for the benefit of a religious community, is incorrect. Thereafter to suggest that the activities were carried out only for such purposes would be entering in the realm of granting exemptions in terms of Section 13 of the Ac, which would be the task of the Assessing Office to be undertaken at the time of assessment on the basis of material that may be brought on record. 11. In the result, in view of the above observations, the matter is restored to the file of CIT(Exemptions), for de novo consideration, after giving due opportunity of being heard and with the direction not to disentitle the assessee for grant of registration only on the ground as mentioned in its order for rejecting the application filed by the assessee trust. 5.2 Since the facts of the present case are similar to the facts of the above case, following the reasons given in the above order, the matter is restored back to the file of CIT(E) for de novo consideration after giving adequate opportunity of he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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