TMI Blog2018 (10) TMI 1896X X X X Extracts X X X X X X X X Extracts X X X X ..... so observe that the expression charitable purpose has been defined in Sec. 2(15) of the Act to mean to include relief of poor, education, medical relief, etc. as well as advancement of any other objects of general public utility. The Director has denied exemption solely on the ground that assessee-trust s objects are not for the benefit of the general public, but only for its specific Members/employees of Bank of India.The aforesaid proposition sought to be raised by the Director is quite untenable and is directly contrary to the observations in the case of Ahmedabad Rana Caste Association [ 1971 (9) TMI 8 - SUPREME COURT] Hon'ble Andhra Pradesh High Court in the case of Andhra Pradesh Police Welfare Society [ 1983 (3) TMI 19 - ANDHRA PRADESH HIGH COURT] the plea of the assessee for registration u/s 12A of the Act has to be upheld and on account of distinction in facts, in our view, the Director erred in relying on the decision of the Hon'ble Bombay High Court in the case of Zenith Tin Works Charitable Trust [ 1974 (7) TMI 29 - BOMBAY HIGH COURT] to deny registration u/s 12A of the Act to the assessee-trust. A perusal of the impugned order reveals that referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployees of the bank and bank is not bound to provide any benefit or welfare of the employees who have already retired from the service-and hence above benefits are extended to them under the scheme. d. that the DIT(E) is not required to go in to the future activities of the Trust. e. that the trust is genuine and is solely providing the medical assistance i.e. for charitable purpose and by no stretch of imagination it can be stated to be for non charitable purpose. 5. The DIT(E) erred in not granting the regular registration u/s.12A / 12AA as a Charitable Trust though the trust is not for the employees of the bank but those who have retired from the bank and have no connection with bank. The trust is for the charitable object. 3. As a perusal of the Grounds of appeal reveal, the sum and substance of the grievance of the assessee is the denial of registration by the Director of Income-Tax (Exemptions) (in short the Director ) u/s 12A of the Act. Before proceeding with the merit of the controversy, it was noted that there was a delay in filing of appeal by 927 days. The appellant has made an application for condonation of delay dated 27.11.2013 wherein it is canvassed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y last drawn received from a retired employee/ spouse of the deceased retired employee and contribution received from Bank's Central Welfare Committee. The trust is earning interest on the fixed deposits. The trust applies its funds entirely towards reimbursement of Insurance Premium, Domiciliary Medical Expenses and Hospitalization Expenses to the members of the scheme. f) While the process of filing the appeal was under examination, officer looking after it and monitoring the fund got transferred on account of promotion. Some of the officers have also been retired on superannuation. Consequently from the March 2011 till November 2013 the matter regarding filling of the appeal could not be finally discussed and hence there is genuine and bonafide delay on the part of the trust for preferring such appeal before the Appellate Authority against order of the Hon'ble DIT(E). g) We may submit that the aforesaid Trust are being managed by the department officials along with other related assigned duties to them and hence there is no full-fledged officer/ employee to look after the Trust Management and its administration. h) As a result of the above, there is a delay of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apers are required to be sorted before the year end i.e. March. Hence Shri. Sanjay P Walimbe could not look into matter relating to order received from Director of Income Tax (Exemption). 6) Mr. Sanjay P. Walimbe was then transferred to Kolhapur Zone on promotion in April, 2011 and no new dedicated officer was appointed to look after affairs of the trust. He, therefore, could not give charge to next person. 7) Some where in October, 2011, Mrs. Manisha Bhide, an officer was allocated to look after trust affairs over and above her usual office work. 8) Since nobody handed over charge to her, she was not aware of receipt of rejection order received from Director of Income Tax (Exemption). 9) Somewhere in first week of November, 2013, the trust received a notice dated 31st October, 2013 from Assessing Officer on taking up scrutiny assessment of A.Y. 2011-12. In the said notice, the A O asked to furnish Certificate of Registration under section 12A (Query No. 4). Immediately Mrs. Manisha Bhide searched for the said document but could not found. She then talked to Mr. Sanjay Walimbe and realized that order rejecting the application for registration of trust u/s 12A has been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , starting from March, 2011 when the impugned order was received and till November, 2013, the matter relating to filing of appeal could not attain finality. In this context, the learned representative not only referred to the averments made in the Affidavits, but also to the Paper Book wherein is placed a copy of inter-office memorandum of the Bank depicting the transfer of the concerned employee who was looking after the affairs of the Trust in the month of April, 2011. It has also been explained that the factum of non-filing of the appeal against the denial of registration came to be highlighted in October, 2013 when the then honorary office bearers were appearing before the Assessing Officer in connection with the assessment proceedings for Assessment Year 2011-12. When the Assessing Officer asked for a copy of the Certificate of Registration u/s 12A of the Act, it came to light that the impugned order of the Director rejecting the application for registration has not been appealed against. Thereafter, assessee took steps and filed the appeal. The learned representative vehemently pointed out that the assessee-trust is comprised of former employees of Bank of India, which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of the assessee in filing the appeal promptly. The length of the delay is not paramount and rather, the quality of the explanation is paramount to decide as to whether or not the delay deserves to be condoned. The Hon'ble Supreme Court in the case of N. Balakrishnan vs M. Krishnamurthy (supra) observed that length of delay is no matter, acceptability of the explanation is the only criteria . In fact, in the case of Baburao Deorao Wankhede vs Sewa Sahakari Sanstha Anr. (supra) the Hon'ble Bombay High Court was dealing with delay in filing of Writ Petition by almost 10 years. Though the Hon'ble High Court observed that there was an inordinate delay, but considering the interests of justice the Hon'ble High Court condoned the delay. In coming to such a conclusion, the Hon'ble High Court referred to and relied upon the judgment of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs Mst. Katiji Ors., 167 ITR 471 (SC). Considering the reasons averred, whose bona fide are not in dispute, the delay in filing of the appeal deserves to be condoned. We hold so. 8. At the time of hearing, both the parties also made arguments with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Welfare Society, 148 ITR 287 (AP) wherein the judgment of the Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association (supra) has been relied upon to uphold the grant of exemption u/s 11 of the Act to an entity which was constituted for the benefit of the members of police department and their families. Therefore, in our view, the objection raised by the Director is inconsistent with the legal position and thus deserves to be set-aside. 10. The Director relied upon the judgment of the Hon'ble Kerala High Court in the case of CIT vs Ernakilam District Cement Dealers Association, 253 ITR 198 (Ker) to canvass that in the absence of any intention to benefit the general public or any section of the general public, the exemption under Section 11/12 of the Act cannot be allowed. We have perused the decision of Hon'ble Kerala High Court. In the case before the Hon'ble Kerala High Court, the assessee was an association which was formed for the common benefit of its members who were traders in cement. The association had earned certain income by rendering clearing and handling services to its members and exemption u/s 11 of the Act was sought on such inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble High Court also noted a specific clause in the Trust Deed which authorised the Trustee to utilise the corpus of the Trust property or any part thereof for any one or more objects of the Trust and in such proportion as they may in their absolute discretion think fit. The presence of the aforesaid clause in the Trust Deed was interpreted to mean that the Trustees could, if they thought it fit in their absolute discretion, spend not merely the entire income, but even the entire corpus of the Trust over any particular object of the Trust including the object of welfare of its employees, which could not be said to be an object of public nature. In our considered opinion, the fact-situation in the instant case stands on a different footing. Pertinently, the matter before the Hon'ble High Court in the case of Zenith Tin Works Charitable Trust (supra) was of a private enterprise inasmuch as the Settlors therein were interested in a private enterprise called Zenith Tin Works Pvt. Ltd. On the contrary, the Trust before us is in terms of a Scheme formulated by a public sector bank for medical assistance of its retired employees and their dependent spouse. Ostensibly, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any analogy between public employment and private employment. Surely, in the case of private employment, such nexus being personal, is conspicuous. But, in so far as public employment is concerned and in particular the Governments formed by, for and of the people is the employer, even if it is to be taken in a restrictive sense, and the employer is the representative of the public or the people. In the ultimate analysis, it is the public that is the employer; qui facit per alium facit per se and so, to the service rendered by the employees in the public employment, the beneficiaries are the public. Testing, therefore, from that angle, the nexus which exists in case or private employment and which is of personal nature, cannot be said to be so in case of public employment. If that be so, in our judgment, the nexus in the case of public employment is its impersonal nature. 12. Therefore, following the aforesaid decision of the Hon'ble Andhra Pradesh High Court in the case of Andhra Pradesh Police Welfare Society (supra), the plea of the assessee for registration u/s 12A of the Act has to be upheld and on account of distinction in facts, in our view, the Director erred in rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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