Building Committee (Society), Barnala v. CIT(E), Chandigarh

ITA 1295/CHANDI/2019 | misc
Pronouncement Date: 18-05-2021 | Result: Allowed

Appeal Details

RSA Number 129521514 RSA 2019
Assessee PAN AADTB5259K
Bench Chandigarh
Appeal Number ITA 1295/CHANDI/2019
Duration Of Justice 1 year(s) 7 month(s) 18 day(s)
Appellant Building Committee (Society), Barnala
Respondent CIT(E), Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 18-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 18-05-2021
Last Hearing Date 09-06-2020
First Hearing Date 15-03-2021
Assessment Year misc
Appeal Filed On 30-09-2019
Judgment Text
- IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH - BENCH A BEFORE S/SHRI N.K. SAINI VICE-PRESIDENT AND RAJPAL YADAV VICE-PRESIDENT ITA NO.1295/CHANDI/2019 BUILDING COMMITTEE (SOCIETY) BARNALA H.NO.B-XI-1252 MOHANLAL COLONY WARD-19 BARNALA PUNJAB. PAN : AADTB 5259 K VS. CIT (EXEMPTION) CHANDIGARH. ( APPLICANT ) ( RESPONENT ) REVENUE BY : SMT. C CHANDRAKANTA CIT DR ASSESSEE BY : SHRI SUDHIR SEHGAL AR / DATE OF HEARING : 15/03/2021 / DATE OF PRONOUNCEMENT: 18/05/2021 / O R D E R PER RAJPAL YADAV VICE-PRESIDENT: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(EXE MPTIONS) CHANDIGARH PASSED UNDER SECTION 12AA(1)(B)(II) OF THE INCOME T AX ACT 1961. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS WHETHER THE CIT (EXEMPTIONS) IS CORRECT IN REJECTING THE APPLICATIO N FILED BY ASSESSEE SEEKING REGISTRATION U/S 12A(A) OF THE INCOME TAX A CT OR NOT? 3. BRIEF FACTS NECESSARY FOR ADJUDICATION OF THE IS SUE ON HAND IS THAT THE ASSESSEE IS A SOCIETY WAS FORMED BY LAWYERS OF DISTRICT BAR ASSOCIATION BARNALA AND STARTED ITS OPERATION SINC E 29.8.2018. AS PER THE OBJECTS OF THE ASSESSEE-SOCIETY IT HAS TO WORK FOR CONSTRUCTION OF ITA NO.1295/CHANDI/2019 2 CHAMBERS TO ITS MEMBERS ITS ALLOTMENT BESIDES ENV IRONMENT PROTECTION VIZ. GROWING TREES AND THAT OF SAVING PEOPLE FROM DRUG ADDICTIVE DISORDER TO SAVE AND EDUCATE GIRL CHILD AND ALSO T O SPREAD LEGAL AWARENESS AMONG THE GENERAL PUBLIC. THE ASSESSEE-S OCIETY FILED AN APPLICATION IN FORM NO.10A ON 12.1.2019 SEEKING REG ISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT 1961. THE LD. CIT(EXEMPTIONS) SOUGHT VARIOUS INFORMATION FROM THE ASSESSEE FOR CO MPLIANCE OF RELEVANT CONDITIONS CONTAINED IN THE PROVISIONS AND FOR SATI SFACTION OF THE COMPETENT AUTHORITY IN RESPECT OF GENUINENESS OF AC TIVITIES AS PER SECTIONS 12AA OF THE ACT. THEY WERE LISTED BY THE LD.CIT(E) IN HIS IMPUGNED ORDER AT PAGE NO.3 TO 5. IN RESPONSE TH E ASSESSEE FILED OBJECTS AND FINANCIAL STATEMENT OF THE SOCIETY. ON PERUSAL OF THESE DETAILS SUBMITTED BY THE ASSESSEE-SOCIETY THE CIT( E) OF THE VIEW THAT THE MAIN ACTIVITY OF THE ASSESSEE WAS TO CONSTRUCT AND ALLOT THE CHAMBERS TO THE MEMBERS OF DISTRICT BAR ASSOCIATION AND THESE ACTIVITIES AND BENEFITS RESTRICTED ONLY TO THE MEMBERS OF DISTRICT BAR ASSOCIATION WHO WERE PROFESSIONALS AND NOT GENERAL PUBLIC. IN OTHE R WORDS IN THE OPINION OF THE LD.CIT(E) THE SOCIETY WAS FORMED FOR SPECIF IC PURPOSE AND FOR THE BENEFIT OF SPECIFIC GROUP OF PROFESSIONAL PEOPLE A ND THEREFORE THE SAME COULD NOT BE SAID TO BE ACTIVITIES CARRIED OUT FOR THE GENERAL PUBLIC PURPOSE. HE FURTHER OBSERVED THAT EVEN FOR THE YEA R ENDING AS ON 31.3.2019 NO EXPENDITURE HAS BEEN DONE ON CHARITABL E ACTIVITIES. ON THIS PREMISE THE LD.CIT(E) REJECTED THE APPLICATION OF THE ASSESSEE FILED UNDER SECTION 12AA INTERALIA HOLDING THAT GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE COULD NOT BE ESTABLISHED; AND THAT THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE FOR ACTIVITIES OF GENERAL PUBLIC IMPORTANCE. ITA NO.1295/CHANDI/2019 3 AGGRIEVED BY ORDER OF THE LD.CIT(E) THE ASSESSEE-S OCIETY IS NOW IN APPEAL BEFORE THE TRIBUNAL. 4. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE REITE RATED SUBMISSIONS MADE BEFORE THE LOWER AUTHORITY. HE FURTHER SUBMIT TED THAT THE ASSESSEE- SOCIETY IS COVERED BY THE EXPLANATION GIVEN UNDER S ECTION 2(15) OF THE ACT OF ADVANCEMENT OF ANY OTHER GENERAL PUBLIC UTI LITY; THAT THE OBJECT OF CONSTRUCTION OF BUILDING FOR LAWYERS BETTER INF RASTRUCTURE FACILITIES FOR LAWYERS AT THE COURTS VIZ. SITTING ARRANGEMENTS FOR THE LITIGANTS MAINTENANCE OF LIFTS AND OTHER BASIC AMENITIES. BE SIDES THAT THE SOCIETY ALSO PLAYING VITAL ROLE FOR GREENING THE ENVIRONMEN T BY PLANTING TREES GARDENS ETC. ASSESSEE ALSO PROVIDES DRUG-DE ADDICTI ON CAMPAIGN AND ALSO SAVES AND EDUCATE NEEDY GIRL CHILD. IT ALSO SPREAD LEGAL AWARENESS AND LITERACY AMONGST THE GENERAL PUBLIC. TO SUPPORT TH IS PLEA THE LD.COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION ITAT DEL HI BENCH IN THE CASE OF ADVOCATE WEFLARE FUND TRUSTEE COMMITTEE VS. CIT (EXEMPTION) IN ITA NO.9334/DEL/2019 WHEREIN IT HAS BEEN HELD THAT SAFEGUARDING THE RIGHTS PRIVILEGES AND INTEREST OF THE ADVOCATES WE RE AMOUNTED TO ADVANCEMENT OF GENERAL PUBLIC UTILITY WITHIN THE ME ANING OF SECTION 2(15) OF THE INCOME TAX ACTS AND THEREFORE THE AS SESSEE-COMMITTEE IS ENTITLED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. HE ALSO RELIED UPON THE DECISION OF HONBLE APEX COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION VS. CIT 82 ITR 704 (SC) AND ALSO OTHER CASE LAWS AS MENTIONED IN THE WRITTEN SUBMISSIONS AT PAG E NOS.2 AND 3. ON MERIT THE LD.COUNSEL FOR THE ASSESSEE FURTHER SUBM ITTED THAT THE SOCIETY IS FORMED BY LAWYERS I.E. MEMBERS OF THE BAR ASSOCIATI ON WHO ARE ENGAGED IN PROFESSIONAL SERVICES. THE LD.CIT(E) HAS IGNORE D THE VITAL OBJECTS OF ITA NO.1295/CHANDI/2019 4 THE SOCIETY. THE OBJECTS OF THE SOCIETY WOULD INDI CATE THAT BESIDES GIVING BENEFIT TO THE LAWYERS OR THE MEMBERS OF THE BAR I T ALSO PROVIDE SERVICES TO THE GENERAL PUBLIC AT LARGE. THE RECEIPTS OF TH E SOCIETY ARE IN THE FORM OF DONATIONS FROM ASSOCIATIONS MEMBERS WELL WISHE RS OR OTHER BODIES. BYE-LAWS FURTHER PROVIDE THAT THE SOCIETY WOULD WOR K ON NO PROFIT AND NO LOSS BASIS AND NOT AN INSTITUTION FOR PROFIT. CONSIDERING ALL THESE THE LD.CIT(A) HAS ERRED IN IGNORING THIS VERY VITAL FAC TOR BEFORE CONSIDERING THE APPLICATION OF THE ASSESSEE-SOCIETY UNDER SECTI ON 12AA OF THE ACT. 6. ON THE OTHER HAND THE LD.DR SUPPORTED ORDER OF THE LD.CIT(E). HE FURTHER SUBMITTED THAT SO-CALLED COMMITTEE WAS FORM ED FOR A SPECIFIC PURPOSE FOR THE BENEFIT OF SPECIFIC GROUP OF PROFES SIONALS AND SUCH ACTIVITIES DO NOT FALL WITHIN THE SCOPE OF EXPRESSI ON ADVANCEMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY AND THERE FORE ASSESSEE NOT ENTITLE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND GONE TH ROUGH THE RECORD CAREFULLY. WE ALSO GONE THROUGH VARIOUS MATERIALS PLACED ON RECORD AND ALSO CASE LAWS CITED. THE ISSUE FOR ADJUDICATION BEFORE US IS THAT WHETHER THE LD.CIT(E) IS CORRECT IN REJECTING THE A PPLICATION OF THE ASSESSEE-SOCIETY SEEKING REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT 1961 ? BEFORE EMBARKING UPON AN INQUIRY O N THE FACTS AND REASONING GIVEN BY THE LD.CIT(E) IN ORDER TO FIND O UT WHETHER THE ASSESSEE SOCIETY IS ENTITLED FOR REGISTRATION WITHI N THE MEANING OF SECTION 12A(A) OF THE ACT WE DEEM IT APPROPRIATE TO BEAR I N MIND THE SCHEME OF THE INCOME TAX ACT FOR ASSESSMENTS OF CHARITABLE IN STITUTION. THEREFORE ITA NO.1295/CHANDI/2019 5 IT IS IMPERATIVE UPON US TO TAKE NOTE OF THE RELEVA NT PART OF THE PROVISIONS VIZ. SECTIONS 2(15). IT READS AS UNDER: SECTION 2(15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR EDUCATION YOGA MEDICAL RELIEF PRESERVATION OF ENVIRONMENT ( INCLUDING WATERSHEDS FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES T HE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE COMMERCE OR BUSINESS OR AN Y ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE COMMERCE OR B USINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATION IRRESPECTIVE OF THE NAT URE OF USE OR APPLICATION OR RETENTION OF THE INCOME FROM SUCH ACTIVITY UNL ESS (I) SUCH ACTIVITY IS UNDERTAKEN IN THE COURSE OF A CTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY; AND (II) THE AGGREGATE RECEIPTS FROM SUCH ACTIVITY OR A CTIVITIES DURING THE PREVIOUS YEAR DO NOT EXCEED TWENTY PER CENT OF THE TOTAL RECEIPTS OF THE TRUST OR INSTITUTION UNDERTAKING SUCH ACTIVITY OR ACTIVITIES OF THAT PREVIOUS YEAR; **** **** 8. SECTION 2(15) OF THE INCOME TAX ACT PROVIDES DEF INITION OF EXPRESSION CHARITABLE PURPOSE. A PERUSAL OF THE ABOVE PROVISION WOULD INDICATE THAT IT CONTAINED TWO PARTS. IN THE FIRST PART THERE ARE FOUR MAIN ACTIVITIES WHICH ARE TO BE CARRIED OUT BY AN I NSTITUTION/TRUST/SOCIETY. THESE ARE - RELIEF OF THE POOR - EDUCATION YOGA - MEDICAL RELIEF - PRESERVATION OF ENVIRONMENT ITA NO.1295/CHANDI/2019 6 THESE ACTIVITIES ARE BEING CONSIDERED AS PER SE CHARITABLE. IN SECOND PART THERE IS ONLY ONE ACTIVITY THAT EMBRACE VARIOUS TYP ES OF WORK UNDERTAKEN BY THE SOCIETY/TRUST NAMELY ADVANCEMENT OF ANY OTH ER OBJECTS OF GENERAL PUBLIC UTILITY. SINCE IN THE APPEAL IN HAND THIS PART IS ALSO INVOLVED WE NEED TO TAKE INTO CONSIDERATION THIS ASPECT ALSO. IN BRIEF THIS ACTIVITY CAN BE TREATED UNCHARITABLE IF HIT BY CONDITIONS PROVID ED IN THE PROVISO TO SECTION I.E. AN ASSESSEE SHOULD NOT CARRY OUT ACTIV ITIES IN THE NATURE OF TRADE COMMERCE OR BUSINESS FOR FEES CESS OR FOR A NY OTHER CONSIDERATION. IN OTHER WORDS IT SHOULD NOT BE CARRIED OUT WITH A PROFIT EMBEDDED INTENTION OR MOTIVE. IF SOME INCIDENTAL PROFIT IS THERE THEN IT IS A SECONDARY CIRCUMSTANCE. SUB-CLAUSE (I) AND (II) FU RTHER PROVIDES GUIDANCE AND CONDITIONS TO FIND OUT WHETHER THIS FI FTH CATEGORY OF ACTIVITY IS BEING CARRIED OUT ON TRADE COMMERCE OR BUSINESS. SECTION 12AA 12AA. (1) THE PRINCIPAL COMMISSIONER OR COMMISSIONE R ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTI TUTION MADE UNDER CLAUSE (A) OR CLAUSE (AA) OR CLAUSE (AB) OF SUB-SEC TION (1) OF SECTION 12A SHALL 48[(A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT (I) THE GENUINENESS OF ACTIVITIES OF THE TRUST O R INSTITUTION; AND (II) THE COMPLIANCE OF SUCH REQUIREMENTS OF ANY O THER LAW FOR THE TIME BEING IN FORCE BY THE TRUST OR INSTITUTION AS ARE MATERIAL FOR THE PURPOSE OF ACHIEVING ITS OBJECTS AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NEC ESSARY IN THIS BEHALF; AND] (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES 49[AS REQUIRE D UNDER SUB- CLAUSE (I) OF CLAUSE (A) AND COMPLIANCE OF THE REQU IREMENTS UNDER SUB-CLAUSE (II) OF THE SAID CLAUSE] HE ITA NO.1295/CHANDI/2019 7 (I) SHALL PASS AN ORDER IN WRITING REGISTERING T HE TRUST OR INSTITUTION; (II) SHALL IF HE IS NOT SO SATISFIED PASS AN OR DER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT : PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY O F BEING HEARD. (1A) ALL APPLICATIONS PENDING BEFORE THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER ON WHICH NO ORDE R HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE T HE 1ST DAY OF JUNE 1999 SHALL STAND TRANSFERRED ON THAT DAY TO THE PR INCIPAL COMMISSIONER OR COMMISSIONER AND THE PRINCIPAL COMM ISSIONER OR COMMISSIONER MAY PROCEED WITH SUCH APPLICATIONS UND ER THAT SUB- SECTION FROM THE STAGE AT WHICH THEY WERE ON THAT D AY. (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY O F SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEI VED UNDER CLAUSE (A) OR CLAUSE (AA) OR CLAUSE (AB) OF SUB-SECTION (1 ) OF SECTION 12A. (3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTE D REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) OR HAS OBTAINED REGIS TRATION AT ANY TIME UNDER SECTION 12A AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT 1996 (33 OF 1996) AND SUBSEQUENTLY THE PRIN CIPAL COMMISSIONER OR COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIE D OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION AS TH E CASE MAY BE HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATIO N OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONAB LE OPPORTUNITY OF BEING HEARD. *** *** *** 9. SECTION 12AA OF THE INCOME TAX ACT PROVIDES THAT ON RECEIPT OF AN APPLICATION FOR REGISTRATION BY THE PR.COMMISSIO NER/COMMISSIONER FROM A TRUST/INSTITUTION UNDER THIS SECTION HE WILL CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ITA NO.1295/CHANDI/2019 8 ORDER TO SATISFY HIMSELF ABOUT; (I) GENUINENESS OF THE ACTIVITIES OF THE TRUST/INSTITUTION (II) COMPLIANCE OF SUCH REQUIREM ENT OF ANY OTHER LAW FOR THE TIME BEING IN FORCE BY THE TRUST OR INSTITUTION AS MATERIAL FOR THE PURPOSE OF ACHIEVING ITS OBJECTS. THE LD.COMMISSIO NER THEREAFTER MAY MAKE SUCH INQUIRY AS HE MAY DEEM NECESSARY IN THIS BEHALF. ONCE HE HAS SATISFIED WITH THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND ALSO SATISFIED WITH THE OBJECTS AND COMPLIANCE OF ANY OTHER LAWS THEN HE WOULD PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION. 10. IN THE CASE ON HAND THE BASIS ON WHICH THE LD. CIT(E) REJECTED THE CLAIM OF THE ASSESSEE IS MAINLY THAT THE PURPOSE FO R WHICH THE SOCIETY WAS FORMED IS FOR THE BENEFIT OF SPECIFIC GROUP OF PROFESSIONALS AND TO CARTER THEIR SPECIFIC PURPOSE WHICH DO NOT COME UN DER THE DEFINITION OF SECTION 2(15) OF THE ACT. WHILE GOING THROUGH THE CONTENTS OF BYE-LAWS OF THE SOCIETY FILED BY THE ASSESSEE IT INTERALIA PROVIDE THAT THE SOCIETY WAS ESTABLISHED FOR THE WELFARE CONSTRUCTION AND A LLOTMENT OF CHAMBERS IN THE DISTRICT COURT COMPLEX BARNALA FOR THE MEMB ERS DISTRICT BAR ASSOCIATION BARNALA. IT FURTHER PROVIDES THAT ALL THE INCOMES EARNINGS WHATSOEVER DERIVED SHALL BE SOLELY UTILIZED AND APP LIED TOWARDS THE PROMOTION OF ITS AIMS AND OBJECTIVES ONLY AS SET FO RTH IN THE MEMORANDUM OF ASSOCIATION AND THAT THE SOCIETY WIL L WORK ON NO PROFIT AND NO LOSS BASIS. BYE-LAWS ALSO PROVIDE SOCIAL WE LFARE ACTIVITIES SUCH AS GROWING OF TREES FOR ENVIRONMENTS DE-ADDICTION DRUG CAMPAIGN WELFARE OF GIRL CHILD AND ALSO PROVIDE LEGAL AWARE NESS AMONG THE GENERAL PUBLIC. THE DOMINANT PURPOSE OF ASSESSEE-SOCIETY I S TO PROVIDE INFRASTRUCTURE FACILITIES TO ITS MEMBERS WHICH ARE NECESSARY TO ENSURE QUALITY SERVICE OF LAWYERS TO THE LITIGATING PUBLIC TO SPREAD LEGAL LITERACY ITA NO.1295/CHANDI/2019 9 PROMOTE LAW REFORMS AND PROVIDE LEGAL ASSISTANCE TO THE LITIGANTS. WHILE CONSIDERING THE APPLICATION OF THE ASSESSEE FOR GRA NT OF REGISTRATION IT APPEARS THAT THE LD.CIT(E) HAS NOT APPRECIATED THES E VERY VITAL OBJECTS. HE SIMPLY CARRIED BY THE ASSUMPTION THAT SINCE SOCI ETY WAS FORMED FOR CONSTRUCTION OF BUILDING FOR ITS MEMBERS BENEFITS OF WHICH ONLY RESTRICTED TO THE MEMBERS AND NOT TO THE GENERAL P UBLIC AT LARGE. IT IS SETTLED PROPOSITION OF LAW THAT FOR THE PURPOSE OF REGISTRATION U/S 12AA OF THE ACT THE THRESHOLD CONDITION I.E. GENUINENES S OF THE ACTIVITIES IS TO BE DECIDED WITH THE OBJECT CLAUSE OF INSTITUTION. HON'BLE APEX COURT IN CASE OF CIT VS. ANDHRA CHAMBER OF COMMERCE - (1965) 55 ITR 722 (SC) HELD THAT AN OBJECT BENEFICIAL TO A SECTION OF THE PUBLIC WAS AN OBJECT OF GENERAL PUBLIC UTILITY AS IN THE CASE OF ASSESSEE WHICH IS WORKING TO CONTROL SUPERVISE AND REGULATE A PROFES SION FOR THE BENEFIT OF LAWYERS COMMUNITY AT LARGE. OPERATIVE PART OF THE J UDGMENT IS AS UNDER:- 'THAT THE EXPRESSION 'OBJECT OF GENERAL PUBLIC UTIL ITY' WAS NOT RESTRICTED TO OBJECTS BENEFICIAL TO THE WHOLE OF MA NKIND. AN OBJECT BENEFICIAL TO A SECTION OF THE PUBLIC WAS AN OBJECT OF GENERAL PUBLIC UTILITY. TO SERVE A CHARITABLE PURPOSE IT WAS NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE WHOLE OF MANKIND OR EVEN ALL PERSONS LIVING IN A PARTICULAR COUNTRY OR PROVINCE. IT WAS SUFFICIENT IF THE INTENTION WAS TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM SPECIFIED INDIVIDUALS. THE SECTION OF THE COMMUNITY SOUGHT TO BE BENEFITED MUST UNDOUBTEDLY BE SUFFICIENTLY DEFINED AND IDENTIFIABLE BY SOME COMMON QUALITY OF A PUBLIC OR IMPERSONAL NATUR E: WHERE THERE IS NO COMMON QUALITY UNITING THE POTENTIAL BENEFICIARI ES INTO A CLASS IT MIGHT NOT BE REGARDED AS VALID.' HON'BLE KERALA HIGH COURT IN SREE ANJANEYA MEDICAL TRUST VS. CIT 382 ITR 399 ALSO HELD THAT THE STAGE FOR CONSIDERATION OF THE RELEVANCE OF THE OBJECT OF THE ASSESSEE AND THE APPLICATION OF ITS F UNDS ARISES AT THE TIME OF ASSESSMENT. IT IS PERTINENT TO OBSERVE THAT THE LD .CIT(E) FAILED TO ITA NO.1295/CHANDI/2019 10 COMPREHEND THE ROLE OF BAR ASSOCIATION IN JUDICIAL DISPENSATION. HE CONSTRUED THE EXISTENCE OF THE ASSESSEE-SOCIETY IN A VERY NARROW MANNER AS IF IT IS A GROUP OF SOME PROFESSIONALS WHO ARE W ORKING FOR THEIR INDIVIDUAL BENEFITS. NO DOUBT INCIDENCE OF BENEFIT S RESTS WITH INDIVIDUAL LAWYERS WHILE PROSECUTING ANY LITIGATION IN THE COU RT BUT ONE HAS TO UNDERSTAND OUR JUDICIAL SYSTEM BEFORE BRANDING SUCH SOCIETY AS A GROUP OF SOME PROFESSIONALS WORKING FOR THEIR BENEFITS ON LY. ATTAINMENT OF JUSTICE FOR ALL THE PARTIES OF THE CASE AND THE SOC IETY AT LARGE IS THE MAIN OBJECT OF OUR JUDICIAL SYSTEM. BAR ASSOCIATIONS AR E VOICES OF VOICELESS. THE BENCH AND BAR ARE THE ESSENTIAL PARTNERS IN JUD ICIAL DISPENSATION AND THEREFORE CONSIDERING THE IMPORTANCE OF BAR AS SOCIATION IN EVERY ADJUDICATING BODY PARTICULAR SPACE IS BEING EARMAR KED AND MAINTAINED FOR BAR ASSOCIATION AND FOR LITIGANTS. HERE AT INC OME TAX APPELLATE TRIBUNAL WE ALSO PROVIDE ROOMS FOR BAR AND FOR LIT IGANTS. THUS WORKING SPACE FOR THE PROFESSIONAL IS AN INTEGRAL P ART OF INFRASTRUCTURE FOR JUDICIAL DISPENSATION. THE LD.CIT(E) FAILED TO COM PREHEND THIS ASPECT IN RIGHT PERSPECTIVE WHILE REJECTING THE APPLICATION O F THE APPELLANT. IN THE PRESENT CASE FOR CONSIDERATION OF APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT THE LD.CIT(E) HAS TO DETER MINE THE CASE OF THE ASSESSEE ON THE BASIS OF THE BYE-LAWS. 11. HAVING REGARD TO OVER ALL FACTS OF THE CASE AND ALSO PERUSAL OF THE BYE-LAWS OF THE ASSESEEE-SOCIETY IT IS CLEAR THAT THE PRIMARY OR DOMINANT PURPOSE OF AN INSTITUTION LIKE THE ASSESSEE SOCIETY IS IN THE FORM OF ADVANCEMENT OF THE OBJECT OF GENERAL PUBLIC UTILITY WITHIN THE MEANING OF S. 2(15) OF THE ACT AND AS SUCH THE ASSESSEE SO CIETY WOULD BE ENTITLED TO REGISTRATION UNDER SECTION 12AA OF THE ACT. WE DIRECT THE LD.CIT(E) ITA NO.1295/CHANDI/2019 11 TO GRANT REGISTRATION TO THE ASSESSEE UNDER SECTION 12AA OF THE INCOME TAX ACT 1961. 12. IN THE RESULT APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE COURT ON 18 TH MAY 2021 AT CHANDIGARH. SD/- SD/- N.K. SAINI (VICE-PRESIDENT) (RAJPAL YADAV) (VICE-PRESIDENT CHANDIGARH; DATED 18/05/2021 !'#$ %&#' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$# % / CONCERNED CIT 4. % ( ) / THE CIT(A) 5. ()* !++ / DR ITAT 6. * - . / GUARD FILE. () * +( / BY ORDER -$/+.(/ $0( ( DY./ASSTT.REGISTRAR) / %$'1/ %23 4 / ITAT CHANDIGARH VK*