Objects Held Not Charitable as Benefits Limited to Members, Not Public at Large: ITAT Upholds CIT(E) Order Rejecting 12AB Registration [Read Order]
ITAT upheld the rejection of 12AB registration as its objects benefited its Members and not the general public.
![Objects Held Not Charitable as Benefits Limited to Members, Not Public at Large: ITAT Upholds CIT(E) Order Rejecting 12AB Registration [Read Order]](https://images.taxscan.in/h-upload/2025/08/15/2076892-registration-rejected-taxscan.webp "Objects Held Not Charitable as Benefits Limited to Members, Not Public at Large: ITAT Upholds CIT(E) Order Rejecting 12AB Registration [Read Order]")
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the order of the Commissioner of Income Tax (Exemptions) (CIT(E)) rejecting the 12AB registration as its objects were for the benefit of its members and employees or ex-employees only, and not for the public at large. The appellant, Ahmedabad Engineering Manufacturers Association, incorporated on...
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the order of the Commissioner of Income Tax (Exemptions) (CIT(E)) rejecting the 12AB registration as its objects were for the benefit of its members and employees or ex-employees only, and not for the public at large.
The appellant, Ahmedabad Engineering Manufacturers Association, incorporated on 24.10.1959, had been granted registration under section 12AA from 22.11.1980. It applied for provisional registration under section 12AB on 05.04.2022 and later filed Form 10AB on 23.09.2023 seeking final registration under section 12A(1)(ac)(iii).
There was a delay of 114 days in filing the appeal before the Tribunal. The appellant filed an affidavit stating the delay was due to a medical exigency for one of the persons managing the association’s affairs. The Tribunal found this reason genuine and condoned the delay.
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During the registration proceedings, the CIT(E) issued notices on 22.11.2023 and 22.12.2023, and again on 15.03.2024, seeking details regarding the trust’s establishment and activities.
In response, the assessee described its objectives as providing a platform for micro, small, and medium engineering enterprises to raise issues with government departments, arranging social programs for members and their employees, supporting members in industrial crises, and upgrading member’s knowledge through seminars.
The CIT(E), after examining the objects, held that they were intended for the welfare and benefit of members of the association and their employees or ex-employees, and not for the benefit of the general public. The application for registration under section 12A(1)(ac)(iii) was therefore rejected, and provisional registration was cancelled.
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In appeal, the assessee relied on the decision of the jurisdictional High Court in CIT v. Ahmedabad Rana Caste Association (1981), which held that such purposes were covered by the expression “advancement of any other object of general public utility” under section 2(15).
Therefore, the advancement of any object of benefit to the public or a section of the public, as distinguished from an individual or group of individuals, would be a charitable purpose.
The Revenue contended that the objects were limited to a specific group and cited the Punjab & Haryana High Court decision in CIT v. Truck Operators Association (2010).
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The Bench, comprising Suchitra Kamble (Judicial Member) and Narendra Prasad Sinha (Accountant Member), found that the objects were not aimed at the general public but at a specific section of society. It agreed with the CIT(E) that such objects could not be termed charitable under section 2(15).
Accordingly, the Tribunal dismissed the appeal and upheld the CIT(E)’s rejection of 12AB registration.
The appellant was represented by S.N. Divatia along with Samir Vora, while Dr. Darsi Suman Ratnam represented the revenue.
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