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Shree Vile Parle Ghoghari Versus Director of Income Tax (E)

2016 (9) TMI 1031 - ITAT MUMBAI

Application of the trust for registration u/s.12A rejected - obligation on the trustees on applying income / funds of the applicant trust solely for charitable purposes - Held that:- On appraisal of the all mentioned objects we found nowhere commercial in nature. So far as the clause 9 of the Act is concerned it speaks about the discretion of the trustees only to select any object of the trust. The trustees have no discretion to apply the income outside the object which is not within the scope o .....

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to be looked into by the Assessing Officer while completing the assessment in the hand of the assessee at the relevant time. The said violation of the trust if any on account of provision u/s.13(1)(b) of the Act are not required to be considered by the authority while granting registration u/s.12A of the Act. In view of the said circumstances we are of the view that the rejection of the application of the assessee is wrong and against the law and facts, therefore, the order passed by the author .....

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assessee has filed the present appeal against the order dated 21.06.2013 passed by the Director of Income Tax (Exemptions), Mumbai [hereinafter referred to as the DIT(E) ] relevant to the A.Y. 2014-15 wherein the DIT(E) rejected the application moved by the appellant u/s.12AA(1)(b)(ii) r.w.s. 12A of the Income Tax Act, 1961 ( in short the Act ). 2. The assessee has raised the following issues: 1. The Director of Income Tax (Exemption) erred in holding that the applicant trust has mixed charitab .....

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nters for needy members of society or providing mediclaim insurance will not fall in the head of medical relief so as to constitute charitable purpose and giving assistant to needy for residential accommodation etc., is housing finance activity which will not be covered under the charitable head of relief of poor because the needy may not necessarily be poor. 4. The Director of Income Tax (Exemption) erred in holding that the trust was partly for non-charitable / commercial objects. 5. The Direc .....

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the benefit of a particular religious community or cast is in breach of section 13(1)(b) of the I.T.Act. 7. The Director of Income Tax (Exemption) erred in holding that a trust cannot be for charitable and religious purpose and therefore not entitled for exemption u/s.11 and that the applicant has been constituted as public charitable and not as religious trust. 3. The brief facts of the case are that the appellant filed an application for registration u/s.12A of the Act in the prescribed Form .....

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ed by the learned representative of the parties and perused the record. The learned representative has argued that the authority considered the object 1(b), 1(i), 3(a), 3(b), 3(e), 3(i) and 3(j) as commercial, therefore, the authority has rejected the present application. It is argued that the above said objects leads to the establishment of nursing home, family planning centres, provision of mediclaim insurance at subsidised rates, giving business advances to the needy for enabling them to be s .....

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come on any object which is not wrong because clause 9 gives discretion to the trustee only to suggest any of the object of the trust and no income is require to be expended beyond the object of the trust, therefore the assessing authority, has wrongly declined the exemption. 5. The other ground which has been taken by the assessing authority to reject the application is that the object as mentioned in the clause 13(1)b of the Act speaks about the benefit of any particular religious community or .....

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ct of the trust. The specific provision which have been considered by the authority is liable to be scribed before discussion. 1(b). To establish, to maintain or assist public health centres, nursing homes, family planning centres and / or a hospitals with a view to cater to the needy members of the society. 1(i). To provide mediclaim insurance at subsidized rates either in part or full. 3(a). To set up or give grant to Orphanages, old age home. 3(b). To give assistance to widows, orphans, aged, .....

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in Samaj, for Tapascharya done according to Jain Religion and as approved by Board of Trustees. 7. On appraisal of the above mentioned objects we found nowhere commercial in nature. So far as the clause 9 of the Act is concerned it speaks about the discretion of the trustees only to select any object of the trust. The trustees have no discretion to apply the income outside the object which is not within the scope of trust. No doubt this clause speaks about the discretion to use their discretion .....

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to Jain religion and as approved by Board of Trustees. The said object has yet to be achieved and since the object has yet to be achieved the purpose of the trust has not been fulfilled. In support of these contentions the representative of the assessee has placed reliance on the finding held in [2015] 54 taxmann.com 143 (Pune-Trib.) in the ITAT Pune Bench in case of Kul Foundation Vs. Commercial of Income Tax - 1, Pune on similar facts. The para 16 of the said order has been discussed as under: .....

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the assessee. We find no merit in the order of CIT in observing that the said benefit being provided to the Jain community would attract the provisions of section 13(1)(b) of the Act and the assessee therein would not be entitled to the claim of deduction under sections 11 and 12 of the Act and consequently, there was no merit in allowing the registration under section 12A of the Act. The allowability of the deduction under sections 11 and 12 of the Act is to be looked into by the Assessing Offi .....

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