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TMI Blog1984 (11) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... t, at an earliest opportunity, an institution in the name of Leuva Patel Nutan Kelwani Mandal at Rajkot, to admit the children of the Leuva Patel community and to construct a hostel and to manage it. (2) In order to achieve the aim, to start schools and educational institutions' and to manage them and to take on hand such other activities. 5. Funds. The funds for this institution shall be raised by the following means : (1) By membership fee. (2) By accepting presents, etc. (3) By accepting donations. (4) By obtaining deposits in accordance with the prevailing law. (5) By raising loans. (6) Membership. A person of the Leuva Patel community, who is major, i.e., above the age of 18 years, shall be eligible for membership." 4. On 24-1-1977, the assessee filed its return, wherein it claimed that its income was exempt under section 11 of the Income-tax Act, 1961 (' the Act '), on the ground that it was not created/established for the benefit of any particular religious community or caste. The ITO, however, did not accept the assessee's contention as he was of the view that the assessee's case was hit by the provisions of section 13(1)(b) of the Act. In the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Being aggrieved by the order of the AAC, the revenue came up in appeal before the Tribunal and urged that since the provisions of section 13(1)(b) were applicable in the assessee's case, the AAC was not justified in holding that the assessee was entitled to exemption under section 11. Even though the AAC had accepted the assessee's claim for deduction of rasoda expenses and miscellaneous expenses, the revenue had not preferred any appeal against the said order of the AAC. The Tribunal, vide its order dated 18-10-1980, in IT Appeal No. 2180 (Ahd.) of 1979, remitted the matter back to the ITO in the following manner : " 5. After hearing the parties, we find that without further enquiry and investigation into the history, traditions and affiliations of the group of people covered by the trust, it is not possible to say that the beneficiaries belonged to a particular religious community or caste. The assertion that different persons within the community follow different religions, has not been proved as a matter of fact. In the interest of justice, therefore, we remit the matter back to the ITO to make enquiries into the customs, traditions, etc., of the group of people figurin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur Mandal ? Answer : Dr. C.R. Beldha President Shri Laljibhai Karamsibhai Vekaria Joint Secretary Shri Kantilal Jethabhai Dholaria Treasurer Shri Shivlal Nagjibhai Vekaria Secretary Shri Raghavji Ramjibhai Patel Vice President Question No. 7 : Can you say what religion is being followed by the present workers and office bearers, whose names are given ? Answer : I myself follow Vaishnav religion, Shri Laljibhai follows Hindu religion, Shri Kantilal Dholaria follows Vaishnav religion, Shri Raghavji follows Swami Narayan religion, Shri Shivlal follows Khijda Panthi ' Shivshakti ' Panth. Question No. 8 : Which of the office bearers of your Mandal, own agricultural land and are they carrying agricultural operations ? Answer : There is a joint land in the name of my father. In Dhoraji town, there is agricultural land. The agricultural land is not being transferred in my individual name. Shri Laljibhai has agricultural land in Patidad of Gaondal Taluka. Shri Kantilal has in his name agricultural land in Jalida of Wankaner Taluka and agricultural operations are being carried out on this land. The information that is given, regarding agricultural land and religions of Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz., agriculturists. The ITO, however, once again came to the conclusion that the provisions of section 13(1)(b) would be attracted in the case of the assessee. In doing so, he also considered clauses 2 and 3 of the constitution of the assessee-trust and rejected the assessee's claim for exemption under section 11 as under : " 9. Looking to the provisions of the trust deed and conduct of the assessee-trust, I have come to a conclusion that none else than Leuva Patel are the beneficiaries of the trust. Therefore, the trust is for the benefit of a particular caste community performing Hindu religion in one or another mode. Therefore, the trust is squarely affected by the provisions of section 13(1)(b) of the Act." This time also, out of the assessee's claim for deduction of rasoda expenses and miscellaneous expenses, the ITO allowed Rs. 12,857 and computed the total income of the assessee at Rs. 67,897. 10. Being aggrieved by the order of the ITO, the assessee once again preferred an appeal before the AAC and urged that the provisions of section 13(1)(b) were not applicable to it. It was further submitted that the ITO should have carried out the directions of the earlier order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also urged that the expression ' Hindu ' should not be construed as of a particular religion since it embraces the people who are atheists and did not believe in any religion. He also invited our attention to the statement of the President of the assessee-mandal made before the ITO, more particularly, answers to Question Nos. 1, 2, 3, 4, 7 and 8, and submitted that the income-tax authorities were not justified in holding that the assessee-trust is created/established for the benefit of a particular religious community or caste. Finally, he placed reliance on the aforesaid order of the Tribunal in the case of Shri Rajkot Viswakarma Kelwani Mandal, and submitted that the conclusion arrived at by the Tribunal, in the said order, apply to the facts and circumstances obtaining in the instant case also. He, therefore, submitted that the assessee's claim for exemption under section 11 should be accepted. In this connection, he made reference to the decisions of the Hon'ble Supreme Court and of the Hon'ble Gujarat High Court in the cases of Ahmedabad Rana Caste Association v. CIT [1971] 82 ITR 704, CIT v. Ahmedabad Rana Caste Association [1983] 140 ITR 1 and CIT v. Ahmedabad Rana Caste A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mainly of agriculturists. Such community cannot be dubbed as religious community or caste as has been held by the income-tax authorities. In this view of the matter, the order of the Tribunal in the case of Shri Rajkot Viswakarma Kelwani Mandal (to which one of us was a party) squarely supports the stand taken on behalf of the assessee. Even though the decision in the case of Ahmedabad Rana Caste Association considered the provisions of section 11(1)(a), in our opinion in that case, the Hon'ble Supreme Court has clearly indicated as to how an association of a particular caste has to be considered while applying the provisions of section 11. In other words, the reliance placed by the assessee on the said decision of the Hon'ble Supreme Court and Hon'ble Gujarat High Court is quite apt. For all these reasons, we hold that the provisions of section 13(1)(b) are not applicable to the assessee-trust and that the assessee-trust was entitled to exemption under section 11. The ITO is, therefore, directed to modify the assessment, accordingly. 15. In view of our decision in the appeal filed by the assessee, the appeal filed by the revenue becomes infructuous. Apart from this, it is worthw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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