TMI Blog2020 (3) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... s' of the trust. We are of the considered opinion that the respondent- trust is charitable and religious trust which does not give benefit to any specific religious community only, and therefore, it cannot be held that Section 13(1)(b) of the Act could be attracted to the respondent- trust, and thereby, it would be entitled to get registration under Section 12A of the Act. - Decided in favour of the assessee - R/TAX APPEAL NO. 899 of 2008 - - - Dated:- 10-1-2020 - MR. J.B.PARDIWALA and MR. BHARGAV D. KARIA JJ. Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 MRS SWATI SOPARKAR(870) for the Opponent(s) No. 1 ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. This Tax Appeal filed under Section 260A of the Income Act, 1961 (for short the Act ) is at the instance of Revenue and it is directed against the order dated 16.10.2007 passed by the Income Tax Appellate Tribunal, Rajkot Bench, Rajkot in the ITA No.195/Rjt/2006, whereby the Tribunal has allowed the appeal preferred by the assessee. 2. By order dated 2nd April, 2009, this appeal is admitted on the following substantial question of law: 2(A) Whether the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rust is to benefit the Sindhi Community after meeting their needs, if any, fund remains the same would be utilized for the benefit of non -sindhi community. Secondly, as per clause 20 of the 'will' out of the five trustees, four trustees should be from Sindhi community and one permanent trustee from non -sindhi community. If the trustee board is less than five trustees, then in any case, one trustee should be from non -sindhi community. Hence, the benefit primarily accrue to the members of the Sindhi Community. 3.4 It was further held that the Income of the trust would lose exemption in case the trust or institution is created or established for the benefit of any particular religious community or caste. Sindhi Community constitute a separate religious community. Sindhi Community is not covered within exception as per Explanation 2 of Section 13 of the Act, hence, do not fall under the exemption provided under Section 13(1)(b) of the Act. 3.5 The assessee trust therefore being aggrieved by the order of rejection passed by CIT preferred an appeal before the Income Tax Appellate Tribunal (for short Tribunal ). The Tribunal vide its order No. ITA No.195/Rjt/2006 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit under Section 11 12 therefore, the registration under Section 12A was validly rejected as the case of the assessee trust was not fulfilling the provision of Section 13(1) of the Act. 5. The substantial questions of law falling for our consideration is no longer res -integra in view of the decisions of the Apex Court and of this Court. Even otherwise, we are convinced with the reasons assigned by the Tribunal while allowing the appeal preferred by the assessee. 6. The Supreme Court in the case of Commissioner of Income Tax, Ujjain vs. Dawoodi Bohara Jamat [2014 Lawsuit (SC) 450] has observed thus: 41. Thus, the second issue which arises for our consideration and decision is: whether the respondent Trust is a charitable and religious trust only for the purposes of a particular community and therefore, not eligible for exemption under Section 11 of the Act in view of the provisions of Section 13(1)(b) of the Act? 42. In the instant case, the Tribunal has found on facts after analysing the objects of the Trust that the respondent Trust is a public religious trust and its objects are solely religious in nature and being of the opinion that Section 13( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the object would not validly amend the object of the trust deed and since the object confined the benefit to only the Muslim community, it would be covered by the restriction under Section 13(1)(b) of the Act even though it functioned for public benefit. Thus, therein the object sufficiently defined or expressly stated beneficiary class and restricted the activities of the trust to a specific community. 46. Further, in State Of Kerala v. M.P Shanti Verma Jain State Of Kerala v. M.P Shanti Verma Jain, this Court has held that propagation of religion and restriction of benefits of activities of trust in its objects to the said community would render the trust as ineligible for claiming exemption under similar provisions of the Kerala Agricultural Income Tax Act, 1950. The Court observed as follows: (SCC p. 67, para 5) 5. The deed of trust and the rules run into more than thirty pages out of which six pages of the trust deed narrate the philosophy of Jain Dharma. The objects of the Trust clearly show that the Trust is meant for propagation of Jain religion and rendering help to the followers of Jain religion. Even medical aid and similar facilities are to be rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ostels, training centers for creating awareness in the common people and to make the education available for the public. It would also engage in imparting training in computers. As per clause 4.3, the trust would engage in doing all activities for medical help and to establish and administer dispensaries, hospitals and laboratories etc. It would also help the patients by supplying medicines and financial assistance. Likewise in clause 4.4 the trust could engage in rural development schemes. As per clause 4.5, the trust would engage in literary and cultural activities by making efforts for the development and protection of Indian culture. Clause 4.6 which pertains to other included activities such as running cow shelters, to provide food, cloth and financial help for economically weaker persons, to help during natural or other calamities, to serve humans and animals etc. 8. Thus, very premise for the Commissioner to come to the conclusion that the objects of the trust were confined for the benefit of a religious community, is incorrect. Thereafter to suggest that the activities were carried out only for such purposes would be entering in the realm of granting exemptions in term ..... X X X X Extracts X X X X X X X X Extracts X X X X
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