Telangana Corrugators Development Trust is a Public Charitable Trust Eligible for Tax Exemption: ITAT [Read Order]

State Govt Employees - Sports Goods - India - IGST - Taxscan

Hyderabad bench of ITAT ruled that Telangana Corrugators Development Trust is a public charitable trust eligible for Tax Exemption. It is held so in the case of Telangana Corrugators Development Trust versus Commissioner of Income Tax (Exemptions) while allowing the appeal of Assessee.

After the division of Andhra Pradesh state, state of Telangana was formed as result of this Andhra Pradesh Corrugated Box Manufacturing Association changed to this Assessee- society and it filed an application in Form No.10A and in Form No.10G seeking registration under Section 12AA of the Income Tax Act and approval u/s 80G of the Act respectively.

CIT (E) on verification of original trust deed went into the following objective clauses of the assessee and observed that they are for the mutual benefit of Corrugated Box Manufacturers Association Members. Accordingly, the authority held that assessee cannot be considered as a public charitable trust and rejected the application for registration u/s 12AA as well as u/s 80G of the Act.

Now the matter carried to this tribunal by Assessee and contended that assessee is only formed out of the said organization on bifurcation of the State and since the assessee is also carrying on the very same activity, it should not have been denied registration u/s 12AA of the Act.

Assessee relied on the decision of the Coordinate Bench of this Tribunal at Chennai in the case of M/s. Tamil Nadu Small & Medium Industries Mutual Association and other decisions in order to press the contentions.

The bench relied on various cases of High Court and also endorsed the decision in case of Jodhpur Chartered Accounts Society case (Supra), the Rajasthan High Court held that to serve a charitable purpose, it is not necessary that the objects should cover the entire mankind or all persons in a country or State, and even if a section of public is given benefit, it cannot be said that it is not a trust for charitable purpose in the interest of the public.

Likewise, bench calls for the decision of Supreme Court in the case of Ahmedabad Rana Caste Association vs. CIT have held that the objects of such an institution are charitable in nature. By applying the same the bench directed the CIT (Exemptions) to grant registration u/s 12AA of the Income Tax Act.

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