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2021 (10) TMI 963 - AT - Income TaxNon granting registration u/s 12A - denial of registration as object of the trust is only for the benefit of worker/employee of the company who has created the trust and does not appear to be for the general charitable cause - As argued activities of the Appellant are charitable in nature and conducted to support the activities of International Center For Research On Women which is the its self a section 25 company under companies act 1956 and engaged in charitable activities - HELD THAT:- In the case of Hiralal Bagwati [2000 (4) TMI 14 - GUJARAT HIGH COURT] the trust was created for the benefit of employees of the 16 institutions with the object of providing aid in case of sickness and disablement. The Hon’ble High Court following the decision of Hon’ble Supreme Court in the case of Ahmedabad Rana caste Association [1971 (9) TMI 8 - SUPREME COURT] held that an object beneficial to a section of the public is an object of general public utility. The registration of the assessee trust cannot be rejected merely on the ground that it is for the benefit of a restricted group of employees of the company ‘ICRW’. However, we find some merit in the argument of the Ld. DR that trust has been engaged in discharging the statutory obligation of the company “ICRW’ of making gratuity payment to their employees. But in this regard the competent authority has not examined the activities actually carried out by the trust, sources of funds and how the same are distributed to the employees, whether by way of creating the trust, the company is getting some benefit of saving of money, whether any activity of welfare of the employees other than making gratuity payment has been carried out by the trust etc. The assessee has also not filed any information with regard to its activities before us. Therefore, examining those issues need enquiry at the end of the Ld.CIT(E) - We restore this issue back to the Ld. CIT(E) for re-examination of the application of the assessee trust as per the provisions of the law, in the light of the decision in the case of Ahmedabad Rana caste Association (supra) and the decision of the Hon’ble High Gujrat of in the case of Hiralal Bhagwati (supra) - Appeal of the assessee is allowed for statistical purposes.
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