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2015 (9) TMI 186 - ITAT AHMEDABAD

2015 (9) TMI 186 - ITAT AHMEDABAD - TMI - Registration application u/s 12AA(1)(b)(ii) r.w.s. 12A(a) denied - CIT observes the assessee trust to have been set up to serve a particular caste only and not to the whole society - Held that:- the question whether the trust is created or established for the benefit of any particular religious community or caste would be relevant when the income of the trust is being assessed and the question whether such income should be excluded from the total income .....

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The assessee’s sole substantive ground succeeds. - Decided in favour of assessee. - ITA No. 861/Ahd/2012 - Dated:- 20-8-2015 - Shri G. D. Agrawal and Shri S. S. Godara, JJ. For The Assessee : Shri Mukund Bakshi, A.R. For The Revenue : Shri R. I. Patel, CIT-D.R. ORDER PER : S. S. GODARA, JUDICIAL MEMBER:- This assessee s appeal, arises from order of the CIT-III, Baroda dated 27-05-2011 in case no. BRD/CIT-III/Tech/12A(a)/110/60-D/2011- 12/211 in rejecting its registration application, in proceedi .....

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well being of Shri Mevad Maheshwari Samaj (Tower). (3) To put efforts/try to introduce requisite social improvement with an object to save the people from useless or false expenses and old traditionally established customs of Shri Mevad Maheshwari Samaj (Tower). (4) To provide information and spread knowledge the trust shall publish pamphlet, guides, books, booklets and establish library, reading rooms and maintain them. (5) For any type of education or bringing up the trust will establish inst .....

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7) To carry out cultural activities such as a collective circular dance, dram, group marriage as well as sports, tour-picnic discussion meeting and for the encouragement of students to take initiative of prize/trophy distribution. (8) The trust will help the victims of flood, famine, earthquake, and epidemic and other natural calamities or human created problems, accidental problems in whatever nature and to extend assistance to the needy people of maintenance, cloths and dwellings and for any o .....

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ate sentiment of rendering the service to the people of the society. (13) To make foundation/ to erect and maintain the hall-community hall for good-bad occasions/functions of the society and to give the same to the needy people of institutions to use it. (14) To provide information of modern information technology and computer technology etc. to start/open training center/class and organize and arrange exhibition, seminar pertaining to it. (15) For the upliftment of the women to organize traini .....

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pliftment/welfare of Mevad Maheshwar Samaj alone and not to the general public or society as a whole. In the circumstances a letter dated 4.5.2011 was written to the trust to show cause as to why the approval of registration should not be refused to it. The case was fixed for hearing on 16.5.2011. On the date of appointment the trust filed a reply dated 16.5.2011. The contents of the letter is as under: We will do the Activity for general public and we started our Activity with providing help fo .....

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usand) food packet that you can verify from Baroda. Municipal Corporation for which I have no proof but I can give evidence by personal attendance of my samaj member. The trust is registered because of doing more activity for society in organized manner". 4. The reply of the trust has been considered but found untenable and not satisfactory. It may be mentioned here that the trust was established on 16.7.2010 and registered with the Charity Commissioner on the same date. Therefore, the cont .....

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time of earthquake it is to mention here that earthquake in Gujarat occurred on 26.01.2001. Therefore, it is incredible to believe that a trust which was established on 16.07.2010 had donated to Seva Bharti and other institution to the affected people of earthquake. Further, in the letter itself the trust has mentioned that it had no proof for distribution of food packets to the flood victims. 5. From the above discussion and also from the object, of the trust it is clear that the trust has been .....

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of the Act. The application is accordingly rejected. 4. We have heard both sides. The CIT observes the assessee trust to have been set up to serve a particular caste only and not to the whole society. The assessee quotes case law of (2014) 221 Taxman 75 (Guj) CIT vs. Leuva Patel Seva Samaj Trust deciding an identical issue as under:- 2. The question arises in following factual background. The respondent, a Public Charitable Trust had applied for registration under section 12AA of the Income-tax .....

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e benefit of Leuva Patel Community and therefore, would be covered under section 13(l)(b) of the Act. 3. In appeal before the Tribunal, the Tribunal reversed the decision of the Commissioner. The Tribunal referred to several decisions including the decision of the Supreme Court in the case of Ahmedabad Rana Caste Association v. CIT [19711 82 ITR 704. The Tribunal also examined the objects of the trust and observed as under: "7. From the above clauses of the Trust Deed, any adult person afte .....

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hin the provisions of section 13(l)(b) in view of the Explanation 2 to the said section. Apart from this, it was also held that the Leuva Patel community consists mainly of agriculturists. Such community cannot be dubed as religious community or caste as had been held by the Income-tax Authorities. I also found that in the case of dissolution of the trust the accumulated fund or capital will not be distributed for personal benefit but it will be handing over to the other institution having simil .....

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r caste would be relevant when the income of the trust is being assessed and the question whether such income should be excluded from the total income of the trust in terms of section 11 of the Act. Insofar as section 12AA of the Act is concerned, the Commissioner had to take a decision if the trust fulfilled necessary requirements of registration as provided under section 12A of the Act. A Division Bench of this Court in the case of Shantagauri Ramniklal Trust v. CIT [19991 239 ITR 528. in this .....

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