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TMI Blog2024 (12) TMI 1159X X X X Extracts X X X X X X X X Extracts X X X X ..... T] wherein it was held that trading bodies have been held to be constituted with a view to advance an object of general public utility because their primary or predominant purpose was to promote and protect industry, trade and commerce and are eligible for exemption u/s 11. Thus, we find that the assessee association fulfils the conditions requisite to fall within the charitable purpose as defined in section 2(15) of the Act, dehors any other infirmity in the eligibility qualifications of the assessee, which would have alleged by the Ld. CIT(E), we therefore, are of the considered view that the order of Ld. CIT(E) cannot be sustained, we, therefore, reverse the same and direct to grant the registration u/s 12AB. Assessee appeal allowed. - Shri Ravish Sood, JM And Shri Arun Khodpia, AM For the Assessee : Shri R. B. Doshi, CA For the Revenue : Shri S. L. Anuragi, CIT-DR ORDER PER ARUN KHODPIA, AM: The captioned appeal of the assessee is directed against the order of Commissioner of Income Tax (Exemption), Bhopal dated 29.08.2024, rejecting the assessee s application for grant of registration u/s 12AB under the new provisions of Income Tax Act, 1961 (in short the Act ). 2. The groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mar Patel Vishwavidyalaya vs CIT in TAXC No. 187 of 2024 dt. 09.09.2024 ii) CIT vs Chhattisgarh Urology Society (2018) 303 CTR 299 (Chhattisgarh), relevant finding at para no. 11. iii) Pragatisheel Chhattisgarh Satnami vs. CIT(E) in ITA no. 106/RPR/2018 vide order dt. 21.09.2022, relevant finding at para no. 8. iv) Swayam Sidhha Foundation Society vs CIT in ITA no. 93 312/RPR/2023 dated 22.01.2024, relevant finding at, para no. 10. 7. Allegation of benefit to steel manufacturers only i) Condition in sec. 13(1)(b) cannot be looked into at the time of registration. Reliance on: Shree Vimalnath Jain Shwetamber Mandir Trust vs CIT in ITA no. 50/RPR/2018, dt. 16.01.2019, para 5. Bhagwan Mahavir Purusharth Prerna Nidhi Nyas vs CIT (2012) 144 TTJ 379 (Jai.). Kul Foundation vs CIT (2015) 43 CCH 1 15 (Pune). ii) Steel manufacturers are a section of society a) Law requires benefit to a section of public as against specified individuals. No benefit derived by any specified individuals. All steel manufacturers included. b) Section of public means people who are knit together by a common quality of public or impersonal nature. c) Reliance on: - CIT vs Andhra Chamber of Commerce (1965) 55 ITR 72 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were to encourage fraternity, feelings of cooperation and mutual help among the members of the confederation to encourage adoption and promotion of fair business practices according to an ethical code of fair business practices etc. The revenue generated by the assessee included membership fee, receipts from conventions, sponsorship income and promotional income. The AO was of the view that the assessee was involved in commerce activities for a fee or cess, either directly or indirectly and that fundamental requirement of charity was that the benefit should be for the public and not confined to selective individuals which in the case of assessee was only for the benefit of a limited group of persons i.e. members and real estate professionals. The AO also observed that assessee received substantial amount from holding conventions. Hon'ble Tribunal held as under: - i) Vide para 7, it observed that it was the allegation of the Department that assessee was catering to a limited group of people and not for the benefit of general public at large. Hon'ble Tribunal considered the ratio of decision in Ahmedabad Rana Cast Association vs CIT (1971) 82 ITR 704 (SC) wherein it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness. Federation of Trade Association of Pune vs CIT (2022) 192 LTD 138 (Pune) Vide para 3, Hon'ble Tribunal considered the objects of association and observed vide para 4 that it was setup to promote, develop and protect interest of trade and commerce and also to foster feeling of unity and cooperation among the persons engaged in trade and commerce. Vide para 5, it noted the ratio of decision in Andhra Chamber of Commerce (1965) 55 ITR 722 (SC) wherein it was held that public is vitally interested in promotion of trade, commerce and industry and therefore, it falls within the scope of advancement of any other object of general public utility . Builders Association of India vs DCIT in ITA No. 550/Mum/2012 , (2015) 43 CCH 615 (Mum. Trib.) Vide para 2, Hon'ble Tribunal noted the objects of the association. Vide para 3, it noted that it received amount towards contribution by center for holding exhibition and conference, contribution for programs seminars, awards and sponsorship and training. It noted that exhibitions and conferences and seminars were for the benefit of its members and to meet out such expenses members used to contribute. Regarding programs, seminars etc., i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected the application of the assessee and also cancelled the provisional approval u/s 12AB dated 07.02.2024 in terms of provisions of Section 12AB(1)(b)(ii)(B) of the Act. The relevant observations of the Ld. CIT(E) are culled out as under: The assessee has applied in Form 10AB for registration u/s 12AB under the new provision of Income Tax Act, 1961. Consequently, opportunity letters were issued to the assessee and various documents/details were called for; to process the said application and to verify the objects and activities of the assessee. The assessee has submitted various details time to time. 2- The association is established under Madhya Pradesh Non-Trading Corporation Act, 1962 with the Registrar of Firms Societies, MP, Bhopal on 27th May, 1981. As per the Memorandum of Association submitted by the assessee, the Association is created to achieve 07 Nos. of objects. On going through the objects it is observed that the objects are intended to facilitate manufacturers of Steel Re-rollers and people of similar business in achieving various business ends. some of the objects of the association as mentioned in its Memorandum of Association are as under: (i) To organize an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen business bonds under one roof.. Comment of the undersigned on above reply: --The event named All India Steel Conclave - a 2-days residential conclave held on 25th- 26th March 2023, was organized by the assessee in partnership with CGSIMA MSP at Mayfair Hotel Resorts, Raipur. -- The aim of the event as submitted by the assessee was to give awareness to the Steel Manufacturers, Iron Ore Miners, Coal Traders and all their members about the new technology in the steel industry. --lt also aimed to bringing Steel manufacturers, end-users, iron ore miners, coal traders, and Ferro alloy supplier's on one networking platform and strengthen business bonds under one roof. --Thus, the event was organized for promotion of business needs of the steel manufacturers and was in no way intended to achieve any charitable purpose. --The summary of event expenses submitted by the is as under: Chhattisgarh Steel Re-Rollers Association Summary of the Event expenses FY 2022-23 S.No Summary of the expenses Amount 1 Advertisement Expenses 1663709 2 Branding expenses 241192 3 Co-partner expenses-Knowledge and marketing partner 2665620 4 Diary Expenses 110679 5 File expenses 29500 6 Food expenses 8076 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rollers and people of similar business. (ii) To foster feelings and spirit of brotherhood, amongst its members as well as others. (iii) To submit the difficulties demands, requirements of the members to the concerned Departments whether Government or Semi Government of local bodies, and Government undertakings I. e. Bhilai Steel Plant, SAIL, Bharat Refractory Plant, etc. (iv) To decide mutually the business dispute amongst the members. (v) To provide members as far as possible all the amentitles and recreations. (vi) To help and give co-operation to Social, Educational and charitable institutions. (vii) To do all such other lawful things as are Installed to the Educational Improvement of the above objects. Provided that the Association shall not support with Its funds, or endeavour to impose on, or procure to be observed by its members or others, any regulation or restriction which, if on object of the Association, would make It a Trade Union. 8. While making the reference of the aforesaid objects of the assessee association, we find that the association is established for the purpose to organize and unite the manufactures of steel Re-Rollers and people of similar business and cert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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