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TMI Blog2025 (3) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... family members of the deceased employees are part of 'public' and there is no relationship of employee and employer between the Appellant and the family members of deceased employees. Even otherwise, the ratio laid down in the case of Ahmedabad Rana Caste Association [1971 (9) TMI 8 - SUPREME COURT] and Harilal Bhagwati [2000 (4) TMI 14 - GUJARAT HIGH COURT] are applicable to the case in hand. Thus, in our opinion, the CIT(E) committed error in holding that 'the activities of the appellant are restricted only to family members of the ex- employees, thus, the Assessee is not a 'public charitable Trust'. No dissolution clause in the trust deed of the Assessee - From the plain reading of the above Clauses, though the trustees have power to transfer and hand over the trust to any other trust/society/Association/Institution, is no mentioning regarding the dissolution of the trust and the fate of net asset of the trust in case of dissolution. It is true that the net asset of the trust can be transferred to any entity since, as per the above Clause in the trust deed, the trustees have absolute right to transfer and hand over the Trust to any other trust/society/association/institution o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... becomes necessary to do so in the interest of justice. 7. That each ground of appeal is independent and without prejudice to other grounds of appeal raised herein." 3. Brief facts of the case are that, the Appellant filed an application in Form No. 10AB on 29/09/2022 seeking registration under Sub Clause (iii) of Clause (ac) of Sub Section (1) of Section 12A of the Income Tax Act, 1961 ('Act' for short), which has been rejected vide order dated 29/03/2023. Aggrieved by the said order dated 29/03/2023, the Assessee preferred an Appeal before the Tribunal in ITA No.344 and 345/CHD/2023 and the Chandigarh Bench of the Tribunal vide order dated 27/02/2024, remanded the matter to the file of the CIT(E) to decide the application afresh by providing adequate opportunity to the Appellant. After the remand order by the Tribunal, once again Ld. CIT(E) rejected the application for registration u/s 12AB of the Act vide order dated 02/07/2024, consequently, also rejected the grant of approval u/s 80G of the Act vide order dated 02/07/2014. Aggrieved by the orders of the Ld. CIT(E) dated 02/07/2024, the Assessee preferred the captioned Appeals on the Grounds mentioned above. 4. The Ld. Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing education directly or indirectly, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled; C promoting livelihood enhancement projects, d. eradicating hunger, poverty, and malnutrition including by providing financial assistance by way of school fee, scholarships to needy children and providing financial help in obtaining healthcare facilities and medical facilities; e. promoting health care including preventive health care and sanitation; f. promoting availability of safe drinking water: g. training to promote rural sports, nationally recognized sports, Paralympics sports and Olympic sports; h. o do all other acts and things as are conducive or helpful in the advancement and fulfilment of the principal and other objects above mentioned; i. to issue appeals and applications for money and funds in furtherance of the said objects and to accept gifts/grants/funds/subscription of cash and securities/immovable and moveable property, j. for such other charitable purposes or purpose of public utility as the Trustees may think fit; k. All the activities of the Trust shall be as far as pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity staying in Ahmedabad". It is common ground that the word " old rules" do not represent the correct translation of the original word in Gujarati which is Riwaj meaning custom. The learned judges of the High Court also, who are conversant with that language, have proceeded on the basis that the correct rendering of the aforesaid word is custom or usage. That is why according to the High Court the definition comprises two classes of members of Rana caste residing in Ahmedabad, one class consisting of those who are natives of Ahmedabad while the other class consists of such persons who are admitted by the Rana caste according to the old custom or usage of the community. The reason which prevailed with the High Court for treating the second class as not being united with the first class by a common characteristic or attribute was that its members have to be accepted by the community according to the old custom or usage and that the entry of the members of this class into the Rana caste residing in Ahmedabad was dependent on the decision of the caste to (1) 55 I.T.R. 722. (2) 6 I.T.R. 427. Admit them. We are altogether unable to concur in the approach or the conclusion of the High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsidiary or allied companies. It was held by the House of Lords by a majority that though the group of persons indicated was numerous, the nexus between them was employment by particular employers and accordingly the trust did not satisfy the test of public (1) [1945] Ch. 123. (3) [1951] A.C. 297. (2) 27 T.C. 431. 75O benefit requisite to establish it as charitable. This is what Lord Simonds observed - "A group of persons relationship which takes a group nexus between them is their personal relationship to a single propositus or to several propositi, they are neither the community nor a section of the community for charitable purposes". The personal element of personal relationship which takes a group out of section of the community for charitable purposes is of the nature which is to be found in cases of the aforesaid type. We cannot possibly discover a similar element of personal nature in the members of the Rana community who settle in Ahmedabad and have been accepted by the Rana community of that place as members of that community. As regards the acceptance of such persons as members of the community or caste, according to custom and usage, it is well known that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers: (a) To start, abolish, discontinue, and restart any charity/charitable organization or institution for the benefit of the general public and impose conditions to its subscription or donations made therein. (h) To transfer and hand over the Trust to any other trust/society/association/institution on such terms and conditions as the Trustees shall in their absolute discretion think fit and proper." 12. From the plain reading of the above Clauses, though the trustees have power to transfer and hand over the trust to any other trust/society/Association/Institution, is no mentioning regarding the dissolution of the trust and the fate of net asset of the trust in case of dissolution. It is true that the net asset of the trust can be transferred to any entity since, as per the above Clause in the trust deed, the trustees have absolute right to transfer and hand over the Trust to any other trust/society/association/institution on such terms and conditions as the Trustees shall in their absolute discretion think fit and proper. However, after the amendment to provision of Section 115TD of the Act, which has been inserted by Finance Act, 2016 w.e.f. 01/06/2016, the relevance of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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