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2022 (9) TMI 330 - AT - Income TaxDeduction u/s 11 - benefit of particular religious community or caste - Kedva Patel Community - denial of exemption was for the reason that the assessee trust was found to be created for the benefit of a particular religious community or caste, i.e Kadva Patidar, trigerring Section 13(1)(b) which denies exemption u/s. 11 to such Trusts - HELD THAT:- A bare perusal of the objects reveals that the first two objects clearly are solely for the benefit of Kadva Patels only, arranging accommodation facilities for them and helping the community members during marriages. The rest appear to be for the benefit of all members of society and thus not restricted to a particular community. Going further whether Kedva Patels could be termed as a religious community, we find that the answer is in the negative. The aspect, relating to the origin to Kadva Patel community and the Leuva Patel community was examined in detail by the ITAT, Ahmedabad B Bench in the case of Leuva Patel Nutan Kelwani Mandal [1984 (11) TMI 80 - ITAT AHMEDABAD-B] and it was categorically held that these communities owe their origin to the fact that they were agriculturist and not to any particular religion and therefore cannot be treated as a religious community for invoking section 13(1)(b) of the Act. In the said case the ITO had examined the President of the Leuva Patel Nutan Kelwani Mandal to determine whether they belonged to a particular religious community or caste. Whether it constitutes a caste, in our view, the answer is in the affirmative. There can be no doubt that the Kedva Patels are a caste. Owing their origins to agriculturists, this community clearly represents social stratification with defined occupation, lifestyle and customs, though the same over period of time may have faded. But their cultural characteristics are still defined and have an inherited social lifestyle. AO, in the case of Leuva Patel Nutan (supra), while tracing the historical background of Leuvas, stated that Leuvas and Kedva Patels were agriculturists originating from different sections of Punjab who had migrated to Gujarat and are closed communities having no relations with each other in marriage and dinner. It is but obvious that Kedva Patel is undoubtedly a caste. Even the AO in the case of Leuva Patel Nutan (supra) states so in para 8 of his order, reproduced above mentioning that both Leuva and Kedva Patels are different castes. What emerges from the above deliberation is that two objects of the assessee trust are for the benefit of a particular caste, i.e Kedva Patel, providing boarding and lodging facility and enabling marriages of the members of this caste only. The rest of the objects are clearly for the benefit of public at large, providing medical benefit, assistance to the needy and those in distress during natural calamities, to the public at large without any discrimination in caste or creed. Question whether section 13(1)(b) would apply only to charitable trusts established solely for communal purposes or to those for mixed purposes also, has been considered by the apex court in the case of CIT vs Dawoodi Bohra Jammat [2014 (3) TMI 652 - SUPREME COURT] in which case the Hon’ble apex court found that the trust had both religious and charitable flavor and on the question of applicability of section 13(1)(b) to such trusts went on to hold that it would apply to such mixed trusts also. Thus in the present case also the provisions of section 13(1)(b) will apply, the trust being of charitable character with two of its objects exclusively for the benefit of the Kedva Patel Caste. The assessee trust we hold therefore is not entitled to exemption u/s 11 of the Act on incomes applied for the benefit of the Kedva Patel community ,as per section 13(1)(b) of the Act.The AO is directed to determine the incomes so applied,after verifying all facts giving the assessee a due opportunity of hearing, and deny application of the same for charitable purposes. The AO is directed accordingly to compute the taxable income of the assessee in accordance with law. All decisions relied upon by the Ld.Counsel for the assessee are either distinguishable for the reason that they were rendered on the issue of grant of registration u/s 12A of the Act, which is a totally different proposition, where the provisions of section 13(1)(b) in any case do not get invoked at all. We have also dealt with the issue of nature of the Kedva Patels and found them to be a caste. The decision of the ITAT in the case of Leuva Patel Nutan Kelwani Mandal (supra) which the assessee has relied upon stating that it was established in the said case that both the Leuva and Kedva Patel Community were neither religious communities nor caste, we have noted examined the issue only from the aspect of the community having any connection with a particular religion. Therefore it cannot be said that there was any finding relating to the group of people representing a caste. - Decided against assessee.
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