The Income Tax Appellate Tribunal (ITAT) Surat bench held that charitable activities of trust should not be confined to a particular caste. The trust has two types of objects, one exclusively for assessee caste and second ‘other objects’ which are for the benefit of the public in general, that is open for all sections of society. Thus for verifying this the bench directs readjudication.
Assessee , Mar Baselius Orthodox Syrian Church filed an application for registration of the trust under section 12AB of the Income Tax Ac was filed electronically in Form No.10AB under Rule 17A of the I.T. Rule.
Then after, the CIT(E) did inquiry about the actual activities of the trust.Thereafter CIT(E) held that Section 13(1) (a) of the Act stipulates that provisions of Section 11 and 12 would not apply to an assessee, where any part of the income from the property held under a trust for private religious purposes, which does not ensure for the benefit of the public.
Thus it was observed that assessee trust is created for the benefit of any particular religious community or caste.
Therefore, CIT(E) observed that the assessee’s submission that when the trust has both religious and charitable objects, claim for registration u/s 12A ought to be granted in terms of Section 13(1)(b) of the Act, in view of the decision of the supreme court C in the case of CIT vs Dawoodi Bohara Jamat.
After analyzing various decision of the Various courts the CIT(E) concluded that assessee cannot be granted registration under Section 12A of the Income Tax Act because assessee trust object is confined to particular community
Aggrieved by the order, the assessee filed an appeal before the tribunal.
Before the tribunal Hiren Vepari, Counsel for assessee submitted that objects of trust are purely charitable without discrimination of creed, nationally or place except name.
Further counsel argued that Section 13(1)(b) of the Act did not apply to the assessee, since the school is run by the assessee-trust, which is not confined to a particular caste.
S. M. Keshkamat, Counsel for Revenue supported the decision of lower authorities.
It was determined by the tribunal that assessee trust has two types of objects, one exclusively for assessee caste and second ‘other objects’ which are for the benefit of the public in general, that is open for all sections of society.
Further, the tribunal observed that the argument of assessee that school is run by assessee- trust, which is open for all sections of the society/caste, this fact has not been examined by CIT(E), as there is no reference in the entire order of CIT(E), hence it is a fresh argument which needs examination by CIT(E).
The assessee-trusts have other objects like: to help the poor, to give medical aid and to help the public in general, in case of fire, flood and earthquake.
The tribunal after reviewing the facts and submissions of the both parties, the two member bench of Dr. A. L. Saini, (Accountant Member) and Pawan Singh (Judicial Member) remit the issue back to the file of the CIT(E), to adjudicate the afresh regarding the objects of assessee.
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