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2006 (9) TMI 214 - AT - Income TaxDenial of registration u/s 12A(a) - Charitable Or Religious Trust - benefit of people belonging to Vaish community - Object clause of the Trust conflicts with the provision of section 13(1)(b) - HELD THAT:- Relying on this decision of Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association [1971 (9) TMI 8 - SUPREME COURT], Hon'ble Allahabad High Court in the case of Surji Devi Kunji Lal Jaipuria Charitable Trust [1990 (8) TMI 132 - ALLAHABAD HIGH COURT] has held that trust created for giving medical aid, social welfare and upliftment of poor members of Vaish community is, therefore, for religious and charitable purposes. For instance, the objects; for which the assessee trust in the present case is established, as indicated in object clauses 3(1) and 3(2), no doubt are for the benefits of a particular community, viz., Vaish. Nevertheless, as per object clause 3(4), it was also established to run schools, colleges, hospitals etc. for the benefit of public at large. In this situation, if the registration applied for u/s 12A is not granted to it for violation of provisions of section 13(1)(b) and it is ultimately found that the assessee-trust actually accomplished the objects as indicated in clause 3(4) only for the benefit of public at large without there being any activity undertaken as per object clauses 3(1) and 3(2), it would be deprived of any benefits which otherwise were available to it under section 11 or section 12. This certainly is not the legislative intention as reflected in the scheme laid down in sections 11, 12, 12A, 12AA and 13. On the contrary, the phraseology of section 13, as already discussed, makes it explicitly clear that the said provisions become operative or relevant only at the stage of assessment when the Assessing Officer is required to examine the claim of the assessee for benefits u/s 11 or section 12 while computing the total income of the assessee of the relevant previous year. The application of section 13 thus falls within the exclusive domain of the Assessing Officer and the provisions contained therein can be invoked by him while framing the assessment and not by the CIT while considering the application for registration u/s 12AA. Thus, we are of the view that the action of the learned D.I. (Exemption) in refusing to grant registration to the assessee trust on the ground of violation of the provisions of section 13(1)(b) was not justified especially when he had not doubted either the genuineness of the activities of the assessee-trust or the nature of its object being charitable. In that view of the matter, we set aside his impugned order and direct that registration applied for by the assessee-trust u/s 12A be granted to it. In the result, the appeal of the assessee is allowed.
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