The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled that the object of the trust beneficial to a section of the public also amounts to a charitable purpose and exemption as a trust allowable under section 12 AA of the Income Tax Act,1961.
Sri Rajput Yuvak Mandal, the assessee challenged the order of the Commissioner of Income Tax (Exemption), Ahmedabad passed for the assessment year 2019-20.
The assessee is a religious Trust created to carry on social, charity, religious and educational activities. The applicant made an application for registration of the trust under section 12AA of the Act on 27 March 2019. The CIT(Exemption) rejected the application filed by the assessee for the reason that the trust is established for the benefit of a particular community namely “Rajput” and not for the general public.
The assessee relied on the case of Ranpariya Solanki Parivar Trust v Ld. CIT(Exemption) wherein it was held that “an object beneficial to a section of the public is an object of general public utility because to serve a charitable purpose the object doesn’t need to be to benefit the whole of mankind or all persons in a particular country or state. It is sufficient if the intention is to benefit a section of the public as distinguished from a specified individual is present”.
The assessee contended that CIT(Exemption) never questioned the genuineness of the activities of the Trust and alleged that sufficient opportunity fora hearing was not granted. On the other hand,the department relied on the observations made by CIT (Exemption).
A Coram comprising of Ms Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member restored the issue to the file to the CIT (Exemption) for fresh adjudication, after giving due opportunity of hearing to the assessee to present its case on merits. The appeal of the assessee was allowed for statistical purposes.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
