Gogha Bhavnagar Vadnagara Nagar Gnati Sahayak Paisa Fund, Bhavnagar v. The CIT(Exemp.), Ahmedabad

ITA 182/AHD/2015 | misc
Pronouncement Date: 25-10-2016 | Result: Allowed

Appeal Details

RSA Number 18220514 RSA 2015
Assessee PAN ACTOF1922A
Bench Ahmedabad
Appeal Number ITA 182/AHD/2015
Duration Of Justice 1 year(s) 9 month(s) 4 day(s)
Appellant Gogha Bhavnagar Vadnagara Nagar Gnati Sahayak Paisa Fund, Bhavnagar
Respondent The CIT(Exemp.), Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 25-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 25-10-2016
Date Of Final Hearing 26-09-2016
Next Hearing Date 26-09-2016
Assessment Year misc
Appeal Filed On 20-01-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI MANISH BORAD ACCOUNTANT MEMBER ITA NO. APPELLANT VS. RESPONDENT 181/AHD/2015 SVA GULABRAI GOVINDRAM DESAI & SVA VITHHALRAI MAHIPATRAM MEHTA SMARAK VIDYOTTEJAK FUND BHAVNAGAR. VS CIT(EXEMPTIONS) AHMEDABAD. 182/AHD/2015 GOGHA BHAVNAGAR VADNAGARANAGAR GNATI SAHAYAK PAISA FUND BHAVNAGAR. VS CIT(EXEMPTIONS) AHMEDABAD. 183/AHD/2015 THE BHAVNAGAR NAGAR GYMKHANA BHAVNAGAR. VS CIT(EXEMPTIONS) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI RAHUL OZA AR REVENUE BY : SHRI KISHAN VYAS CIT - DR / DATE OF HEARING : 26/09/2016 / DATE OF PRONOUNCEMENT: 25/10/2016 / O R D E R PER RAJPAL YADAV JUDICIAL MEMBER PRESENT THREE APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEES AGAINST SEPARATE ORDERS OF THE LD.COMMISSIONER OF I NCOME-TAX (EXEMPTION) AHMEDABAD DATED 27.11.2014. COMMON GRIEVANCE OF AL L THE ASSESSEES IS THAT THE LD.COMMISSIONER HAS ERRED IN REJECTING THEIR AP PLICATIONS FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX A CT 1961. ITA NO.181/AHD/2015 & 2 ANRS. 2 2. WITH THE ASSISTANCE OF LD.REPRESENTATIVES WE HA VE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT FACTS ON ALL VITAL POINTS ARE COMMON IN ALL THREE CASES THEREFORE FOR FACILITY OF REFERENCE WE TAK E FACTS FROM ITA NO.181/AHD/2015 IN THE CASE OF SVA GULABRAI GOVINDR AM DESAI & SVA VITHHALRAI MAHIPATRAM MEHTA SMARAK VIDYOTTEJAK FUND . 3. BRIEF FACTS OF THE CASE ARE THAT ALL THREE APPEL LANTS HAVE FILED THEIR APPLICATIONS IN FORM NO.10A ON 5.5.2014 FOR GRANT O F REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT 1961. IN ORDER TO VERIFY GENUINENESS OF ACTIVITIES ALL THE TRUSTS THE LD.COMMISSIONER HAD WRITTEN LETTERS TO THE APPELLANTS ON 5.8.2014 REQUIRING THEM TO FURNISH DE TAILED NOTE ON THE ACTIVITIES ACTUALLY CARRIED OUT BY THE TRUSTS AS WELL AS SUBMI TTING DOCUMENTS/ DETAILS MENTIONED IN THE NOTICE. THE LD.COMMISSIONER CALLE D FOR FOLLOWING DETAILS: 1. COPY OF PAN CARD OF TRUSTEES WITH DETAILS OF CIRCLE/WARD WHERE THEY ARE FILING RETURN OF INCOME. 2. COPY OF BANK ACCOUNT SINCE INCEPTION OF TRUST OR LAST THREE YEARS. 3. CERTIFIED COPY OF TRUST DEED/M.O.A. IF IT IS NOT IN ENGLISH THEN CERTIFIED ENGLISH TRANSLATION ALSO. 4. COPY OF AUDITED ACCOUNTS OF LAST THREE YEARS O R FROM THE INCEPTION OF TRUST. 5. PLEASE GIVE DETAILS OF PREMISES OF TRUST WHETH ER PREMISES OWNED BY THE TRUST OR RENTED. 6. PLEASE GIVE DETAILS AS TO HOW THE TRUST GENERA TES FUNDS FOR ACHIEVING THE OBJECT OF TRUST. 7. PLEASE SUBMIT EVIDENCES THAT THE CORPUS AMOUNT HAS BEEN TRANSFERRED TO THE TRUST/INSTITUTION. 8. PLEASE SPECIFY THAT THE TRUST IS IN RECEIPT O AMOUNTS MENTIONED IN FIRST PROVISO TO SECTION 2(15) OF THE I.T.ACT. 9. PLEASE SUBMIT LIST OF MAIN OBJECTS OF THE TRU ST. 10. PLEASE SUBMIT DOCUMENTARY EVIDENCES OF ACTUAL C HARITABLE ACTIVITIES CARRIED OUT BY THE TRUST FROM THE DATE OF INCEPTION OF TRUST TILL DATE. 11. PLEASE SPECIFY THE CLAUSE IN TRUST DEED REGARDI NG REVOCABILITY OR IRREVOCABILITY. 12. COPY OF CERTIFICATE OF UNDERTAKING? 13. COPY OF CERTIFICATE U/S. 13(1) (C) OF THE I.T.A CT? 14. DECLARATION U/S. 11(5) OF THE I.T.ACT? 15. PLEASE SPECIFY THE CLAUSE IN THE TRUST DEED WH ICH SAYS THAT BENEFICIARIES WOULD BE WITHOUT DISCRIMINATION ON THE BASIS OF CASTE CR EED RELIGION OR SEX. 16. FURTHER IT IS SEEN THAT AS PER TRUST DEED THE DISSOLUTION CLAUSE IS NOT PROPER / NOT THERE. ITA NO.181/AHD/2015 & 2 ANRS. 3 4. AFTER PROVIDING AN OPPORTUNITY OF HEARING TO THE APPELLANTS THE LD.COMMISSIONER HAS REJECTED THEIR APPLICATIONS. F INDING RECORDED BY THE LD.COMMISSIONER IN ALL THE CASES ARE ALMOST VERBATI M SAME EXCEPT MENTIONING NAMES OF THE ASSESSEES. FINDING FROM PARA-3 UPTO T HE END READS AS UNDER: 3. IN RESPONSE TO THE ABOVE REFERRED LETTER THE A PPLICANT TRUST VIDE ITS LETTER DATED 19.08.2014 SOUGHT FOR AN ADJOURNMENT. ON A GIVEN DATE NEITHER APPLICANT TRUST NOR HIS AUTHORIZED REPRESEN TATIVE ATTENDED THE OFFICE NOR SOUGHT ANY ADJOURNMENT. THEREFORE WITH A VIEW TO GIVE ONE MORE OPPORTUNITY OF BEING HEARD ONE MORE LETTER WIT H REMARKED FINAL OPPORTUNITY DATED 20.10.2014 ISSUED TO THE APPLICAN T TRUST. IN RESPONSE THERETO APPLICANT TRUST VIDE ITS LETTER DATED 05.1 1.2014 SOUGHT FOR AN ADJOURNMENT. ACCORDINGLY THE CASE WAS REFIXED FOR H EARING ON 17.11.2014. ON A GIVEN DATE SHRI Y. B. OZA CA OF T HE APPLICANT TRUST ATTENDED THE OFFICE AND FILED THE PART DETAILS CALL ED FOR. 4. ON PERUSAL OF THE DETAILS/DOCUMENTS SUBMITTED BY APPLICANT TRUST IT IS REVEALED FROM THE OBJECTS OF THE TRUST THAT OBJECTS ARE FOR THE BENEFIT OF A PARTICULAR COMMUNITY I.E. 'SHREE GOGHA VADNAGAR N AGAR GNATI'. SOME OBJECTS OF THE TRUST DEED ARE AS FOLLOW: (A)' TO PROVIDE FEE FACILITY AND NOTEBOOKS TO THE S TUDENTS O/''SHREE GOGHA VADNAGAR NAGAR GNATI'. 4.1 THE ABOVE OBJECTS OF THE TRUSTS SHOW THAT THE T RUST IS ESTABLISHED FOR THE BENEFIT OF A PARTICULAR COMMUNITY AND NOT FOR G ENERAL PUBLIC. THEREFORE IT IS CONCLUDED THAT THE TRUST IS CREATED FOR THE BENEFIT OF A PARTICULAR COMMUNITY WHICH DOES NOT ENDURE FOR THE BENEFIT OF THE PUBLIC AND THUS HIT BY SECTION 13(L)(B) OF THE ACT . 5. FURTHER ON VERIFICATION OF THE DETAILS SUBMITTED BY THE APPLICANT TRUST IT IS REVEALED THAT THE TRUST IS CREATED FOR THE BE NEFIT OF 'VADNAGAR NAGAR COMMUNITY'. SR. NO. 15 OF APPLICANT TRUST'S R EPLY IS AS UNDER. 'THE TRUST IS CREATED FOR BENEFIT OF VADNAGAR NAGAR COMMUNITY AND SINCE IT IS CREATED BEFORE COMMENCEMENT OF I.T. ACT 2961 SUCH CLAUSE IS NOT NECESSARY TO BE INCORPORATED IN THE TRUTS DEED. IT IS CLARIFIED THAT THE TRUST DOES NOT INTEND TO APPLY FOR RECOGNISATIO N U/S. 80G.' 6. THE SUBMISSION OF THE APPLICANT TRUST HAS BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE IN VIEW OF THE FOLLOWING FACTS . ITA NO.181/AHD/2015 & 2 ANRS. 4 (I) THE TRUST IS CREATED WHOLLY FOR THE BENEFIT OF PARTICULAR COMMUNITY I.E. 'SHREE GOGHA VADNAGAR NAGAR GNATI' A ND NOT FOR GENERAL PUBLIC. SHREE GOGHA VADNAGAR NAGAR GNATI IS VERY SMALL COMMUNITY. SO -IT IS ESTABLISHED FOR A VERY FEW PEO PLE AND NOT IN LARGE PUBLIC INTENT. THEREFORE IT CANNOT BE SAID TO BE A CHARITABLE TRUST. (II) PROVISIONS OF SECTION 13(L)(B) ARE NOT CONNECT ED WITH GRANT OR REFUSAL OF REGISTRATION. AS PER THE SETTLED LAW PRO VISIONS OF SEC.13 ARE TO LOOKED INTO FOR ASSESSMENT YEAR TO ASSESSMENT YEAR WHILE EXAMINING THE CASE FOR GRANTING EXEMPTION ON YEAR TO YEAR BAS IS. PROVISIONS OF SEC.13 ARE FORFEITURE OF EXEMPTION FOR ONLY THAT YE AR IN WHICH THEY ARE VIOLATED. THEREFORE IN MY VIEW THE PROVISIONS OF S ECTION 13(L)(B) MEANS THAT IF THE TRUST WAS REGISTERED U/S 12AA UNDER INC OME TAX ACT AT ANY TIME BEFORE THE COMMENCEMENT OF THIS ACT I.E.01/04/ 1961 THEN DURING ASSESSMENT PROCEEDINGS TRUST CAN NOT BE DENIED EXE MPTION U/S 13(L)(B) OF THE ACT. IT DOES NOT MEAN THAT IT CAN BE GRANTED REGISTRATION NOW ALSO EVEN THOUGH IT IS FOR A SPECIFIC CASTE/ COMMUNITY. 7. THEREFORE IT IS CONCLUDED THAT THE TRUST IS CRE ATED FOR THE BENEFIT OF A PARTICULAR COMMUNITY I.E. SHEE GOGHA VADNAGAR NAGAR COMMUNITY AND HENCE THE SAME IS NOT FOR GENERAL PUBLIC. THER EFORE IT IS CONCLUDED THAT THE TRUST IS CREATED FOR THE BENEFIT OF A PART ICULAR COMMUNITY WHICH DOES NOT ENDURE FOR THE BENEFIT OF THE PUBLIC AND T HUS HIT BY SECTION 13(L)(B) OF THE ACT. IT CANNOT BE SAID TO BE CHARIT ABLE TRUST. THEREFORE THE GENUINENESS OF ACTIVITIES OF THE TRUST ARE NOT FOUND VERIFIABLY. 8. IN VIEW OF THE ABOVE FACTS THE APPLICATION FILE D IN FORM NO.10A FOR THE APPROVAL U/S 12AA OF THE INCOME-TAX ACT IS REJE CTED. 5. THE LD.COUNSEL FOR THE ASSESSEE WHILE IMPUGNING THE ORDERS OF THE LD.COMMISSIONER CONTENDED THAT ISSUE IN DISPUTE IS SQUARELY COVERED BY THE DECISION OF ITAT AHMEDABAD RENDERED IN THE CASE OF SHIYA DAWOODI BOHRA JAMAT VS. CIT (2011) 133 ITD 271 (AHD). HE POINTE D OUT THAT THE LD. COMMISSIONERE HAS REJECTED THE APPLICATIONS OF THE APPELLANTS FOR THE REASON THAT THESE TRUSTS WERE CONSTITUTED FOR LIMITED SECT ION OF THE SOCIETY AND THEY ARE NOT MEANT FOR GENERAL PUBLIC. ACCORDING TO TH E LD.COUNSEL FOR THE ASSESSEE ITAT HAS RELIED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT ITA NO.181/AHD/2015 & 2 ANRS. 5 IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION 82 ITR 704. IN THIS DECISION THE HONBLE COURT HAS OBSERVED THAT IF BE NEFIT TO A SECTION OF SOCIETY IS BEING GIVEN THEN IT IS TO BE CONSIDERED AS SUFF ICIENT TO ALLOW EXEMPTION UNDER SECTION 11 BECAUSE THAT BENEFIT WAS NOT REST RICTED TO CERTAIN INDIVIDUALS. HE ALSO RELIED UPON THE ORDER OF THE ITAT RAJKOT B ENCH IN THE CASE OF RANPARIYA SOLANKI SUKHADIYA PARIVAR TRUST VS. CIT ( EXEMPTION) RENDERED IN ITA NO.467/AHD/2015. THEREAFTER HE MADE REFERENCE TO THE ORDER OF THE ITAT D BENCH IN THE CASE OF SHRI SHREE VASUPUJYA SWAMI JAIN DERASAR TRUST VS. CIT RENDERED IN ITA NO.470/AHD/2007 AND R AJKOT BENCH OF THE TRIBUNAL IN THE CASE OF RAJKOT VISHA SHRIMALI JAIN SAMAJ VS. ITO 109 TTJ (RAJKOT SB) 286. HE PLACED ON RECORD COPIES OF THE SE DECISIONS. 6. ON THE OTHER HAND THE LD.DR CONTENDED THAT THE ASSESSEES HAVE EXTENDED THEIR BENEFIT TO A LIMITED SECTION OF PUBL IC AND THEREFORE THEY ARE DIRECTLY HIT BY PROVISIONS CONTAINED IN SECTIONS 1 3(1)(B) OF THE ACT. THEY CANNOT BE GRANTED REGISTRATION. IN SUPPORT OF HIS CONTENTION HE RELIED UPON THE DECISIONS IN THE CASE OF BUXAR DIOCEASAN SOCIET Y VS. CIT 62 TAXMANN.COM 91 (PATNA-TRIB.). 7. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. THERE IS NO DISPUTE WITH REGARD TO THE POSITION THAT ALL THE APPELLANTS ARE NOT RELIGIOUS TRUSTS. THEY ARE CHAR ITABLE TRUST. IT IS ALSO NOT IN DISPUTE THAT THEY HAVE EXTENDED BENEFIT UNDER THE T RUSTS TO LIMITED SECTION OF THE SOCIETY. IN THIS BACKGROUND IT IS PERTINENT T O TAKE NOTE OF RELEVANT PART OF SECTION 13 OF THE INCOME TAX ACT 1961. IT READS A S UNDER: 13. (1) NOTHING CONTAINED IN SECTION 11 [OR SECTIO N 12] SHALL OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT THEREOF ITA NO.181/AHD/2015 & 2 ANRS. 6 (A) ANY PART OF THE 10INCOME FROM THE PROPERTY HELD UNDER A TRUST FOR PRIVATE RELIGIOUS PURPOSES WHICH DOES NOT ENURE FOR THE BENEFIT10 OF THE PUBLIC; (B) IN THE CASE OF A TRUST FOR CHARITABLE PURPOSES OR A CHARITABLE INSTITUTION CREATED OR ESTABLISHED AFTER THE COMMEN CEMENT OF THIS ACT ANY INCOME THEREOF IF THE TRUST OR INSTITUTION IS C REATED OR ESTABLISHED FOR THE BENEFIT10 OF ANY PARTICULAR RELIGIOUS COMMU NITY OR CASTE; 8. AS FAR AS SUB-CLAUSE (A) OF SECTION 13(1) IS CON CERNED IT IS NOT APPLICABLE IN THE PRESENT CASE BECAUSE ASSESSEES A RE NOT RELIGIOUS TRUSTS. ALL THE ASSESSEES ARE REQUIRED TO BE EXAMINED UNDER CLA USE (B) OF SECTION 13(1) OF THE INCOME TAX ACT 1961. BEFORE CONSTRUCTING MEAN ING OF THIS CLAUSE AND ITS IMPACT UPON FACTS OF THE PRESENT CASE WE WOULD LIKE TO CONSIDER RATIO OF LAW LAID DOWN IN THE DECISIONS WHICH WERE RELIED UP ON BY THE LD.COUNSEL FOR THE ASSESSEE. FIRST DECISION REFERRED BY THE LD.CO UNSEL FOR THE ASSESSEE IS OF ITAT AHMEDABAD BENCH IN THE CASE OF SHIYA DAWOODI BOHRA JAMAT VS. CIT (SUPRA). IN THIS CASE REGISTRATION TO THE TRUST W AS REJECTED BY THE LD.COMMISSIONER ON THE GROUND THAT TRUST WAS NOT FO R THE BENEFIT OF GENERAL PUBLIC WITHIN THE MEANING OF SECTION 13(1)(A) /13(1 )(B) OF THE ACT. TRIBUNAL AS A MATTER OF FACT HELD THAT ASSESSEE WAS CHARITAB LE TRUST AND IT WAS NOT A PRIVATE RELIGIOUS TRUST. DISTINCTION BETWEEN THE F ACTS OF THE PRESENT CASE VIS-- VIS IN THE CASE OF SHIYA DAWOODI BOHRA JAMAT VS. CI T IS THAT THE ASSESSEE IN THE PRESENT CASE FALL IN SECTION 13(1)(B) AND NOT I N SECTION 13(1)(A) OF THE ACT. APPELLANTS ARE CHARITABLE TRUST NOT RELIGIOUS. THE REFORE BASIC FACTS ARE DIFFERENT. NEXT JUDGMENT REFERRED BY THE LD.COUNSE L FOR THE ASSESSEE IS OF HONBLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE ASSOCIATION VS. CIT (SUPRA). ON THE STRENGTH OF THIS DECISION AN EFFORT WAS MADE TO CANVASS THAT IF BENEFIT IS BEING GRANTED TO A PARTI CULAR SECTION OF THE SOCIETY THEN ALSO IT IS TO BE CONSIDERED FOR THE BENEFIT OF GENERAL PUBLIC AND THE STATUS AS A RELIGIOUS TRUST WOULD BE CONSIDERED QUA THAT TRUST. WE HAVE PERUSED THE DECISION OF THE HONBLE SUPREME COURT AND WE FIND THAT THE OBSERVATION OF ITA NO.181/AHD/2015 & 2 ANRS. 7 THE HONBLE COURT IS ALTOGETHER IN DIFFERENT CONTEX T. THE ASSESSMENT YEARS INVOLVED WERE 1960-61 TO 1962-63. THE HONBLE SUPR EME COURT HAS OBSERVED THAT UNDER THE ACT OF 1922 A TRUST FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE WAS ENTITLED TO EXEMPT ION. BUT UNDER THE ACT OF 1961 A CHARITABLE TRUST WHICH IS CREATED FOR SUCH BENEFIT ON OR AFTER FIRST DAY OF APRIL 1962 WOULD BE DISENTITLED TO EXEMPTION. IT IS WORTH TO TAKE NOTE OF THE FOLLOWING FINDING OF THE HONBLE SUPREME COURT: SECTION 4(3) (I) TO THE EXTENT IT IS MATERIAL IS I N THE FOLLOWING TERMS :- '4(3) ANY INCOME PROFITS OR GAINS FALLING WITHIN T HE FOLLOWING CLASSES SHALL NOT BE INCLUDED IN TOTAL INCOME OF THE PERSON RECEIVING THEM (I)SUBJECT TO THE PROVISIONS OF CLAUSE (C) OF SUBSE CTION (1) OF SECTION 16 ANY INCOME DERIVED FROM PROPERTY HELD UNDER TRUST O R OTHER LEGAL OBLIGATION WHOLLY FOR RELIGIOUS OR CHARITABLE PURPO SES IN SO FAR AS SUCH INCOME IS APPLIED OR ACCUMULATED FOR APPLICATION TO SUCH RELIGIOUS OR CHARITABLE PURPOSES AS RELATE TO ANYTHING DONE WITH IN THE TAXABLE TERRITORIES AND IN THE CASE OF PROPERTY SO HELD IN PART ONLY FOR SUCH PURPOSES THE IN- COME APPLIED OR FINALLY SET APART FOR APPLICATION THERETO: PROVIDED THAT.....................' THE OPERATIVE PART OF S. 11 (1) (A) OF THE INCOME T AX ACT 1961 IS IN SIMILAR TERMS. THERE ARE CERTAIN POINTS OF DIFFEREN CE BETWEEN THE PROVISIONS OF THE TWO ACTS. SOME OF THEM MAY BE NOT ICED. IN THE 1922 ACT A CHARITABLE PURPOSE INCLUDED RELIEF OF THE POO R EDUCATION MEDICAL RELIEF AND ADVANCEMENT OF ANY OTHER OBJECT OF GENER AL PUBLIC UTILITY. SECTION 2(15) OF THE ACT OF 1961 INTRODUCE S THE FOLLOWING QUALIFYING WORDS TO GENERAL PUBLIC UTILITY ' NOT I NVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFIT'. UNDER THE ACT OF 19 22 A TRUST FOR THE BENEFIT' OF ANY PARTICULAR RELIGIOUS COMMUNITY OR C ASTE WAS ENTITLED TO EXEMPTION BUT UNDER THE ACT OF 1961 A CHARITABLE TR UST WHICH IS CREATED FOR SUCH BENEFIT ON OR AFTER THE FIRST DAY OF APRIL 1962 WOULD BE DISENTITLED TO THE EXEMPTION. IN THE PRESENT CASE T HE TRUST WAS CREATED PRIOR TO FIRST APRIL 1962 AND THEREFORE NO QUESTION ARISES OF ITS NOT BEING ENTITLED TO THE EXEMPTION IF OTHER CONDITIONS WERE SATISFIED EVEN THOUGH IT WAS CREATED FOR THE BENEFIT OF THE RANA C ASTE OF AHMEDABAD. ITA NO.181/AHD/2015 & 2 ANRS. 8 9. IN THE ABOVE CASE THE QUESTION REFERRED BY THE TRIBUNAL TO THE HONBLE HIGH COURT FOR OPINION IS: WHETHER O THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE THE INCOME OF THE ASSESSEE TRUST IS EXEMPT U/S.4(3) 1 OF THE INCO ME TAX ACT 1922 AND SECTION 11 OF THE INCOME ACT 1961. THE OBJECTS AND PURPOSE OF THE TRUST WERE THE MANA GEMENT OF THE MOVABLE AND IMMOVABLE PROPERTY OF RANA COMMUNITY OF CITY OF AHMEDABAD. THE AO DENIED THE BENEFITS OF SECTION 4 (3)(1) OF 1992 ACT AND 11 OF THE 1961 ACT ON THE GROUND THAT BENEFICIARIES WERE NOT THE PUBLIC AND CLASS OF COMMUNITY SOUGHT TO BE BENEFITED WAS VERY VAGUE AND ILL-DEFINED. THAT ITAT OBSERVED THAT THE BENEFICIARIES PROPOUND ED IN THE CONSTITUTION OF THE TRUST WERE RANA COMMUNITY I.E. THE NATIVES OF AHMEDABAD ONLY AND OTHER COMMUNITY MEMBERS ACCEPTED BY THE CO MMUNITY AS PER OLD RULES OF THE COMMUNITY AND STAYING IN AHMEDABAD. A CCORDING TO THE ITAT IT WAS A WELL DEFINED CROSS SECTION OF THE PUBLIC OF A HMEDABAD. TRIBUNAL ALLOWED THE BENEFIT OF SECTION 4(3)(1) OF 1922 ACT AND 11 OF THE 1961 ACT. AT THE INSTANCE OF REVENUE ABOVE QUESTION WAS REFERRE D TO THE HONBLE HIGH COURT FOR OPINION. THE OPINION WAS GIVEN AGAINST T HE ASSESSEE AND MATTER TRAVELLED TO THE HONBLE SUPREME COURT. IN THIS BA CKGROUND HONBLE SUPREME COURT OBSERVED THAT SECTION OF THE COMMUNIT Y SOUGHT TO BE BENEFITED MUST BE SUFFICIENTLY DEFINED AND IDENTIFIABLE BY SO ME COMMON QUALITY OF A PUBLIC OR IMPERSONAL NATURE WHERE THERE WAS NO COMM ON QUALITY UNITING THE POTENTIAL BENEFICIARIES INTO A CLASS THE TRUST MIG HT NOT BE REGARDED AS VALID. IN THIS CASE HONBLE COURT FOUND COMMON QUALITY UNITI NG THE POTENTIAL BENEFICIARIES IN THE CONSTITUTION OF THE ASSESSEE T RUST IS THE FACTUM OF THEIR BELONGING TO THE RANA COMMUNITY OF AHMEDABAD. THES E ASPECT WERE NEITHER PLEADED BEFORE LD.CIT(E) NOR CONSIDERED IN THE IMPU GNED ORDER. MOREOVER ITA NO.181/AHD/2015 & 2 ANRS. 9 UNDER 1922 ACT A TRUST FOR THE BENEFIT OF PARTICULA R COMMUNITY HAS ALSO ENTITLED FOR EXEMPTION. THIS ASPECT HAS ALSO NOT B EEN EVALUATED BY LD.CIT(E). IT IS ALSO PERTINENT TO OBSERVE THAT SCOPE OF INQUI RY FOR GRANT OF REGISTRATION IS ALTOGETHER DIFFERENT THAN GRANT OF BENEFIT U/S.11(A ) OF THE I.T.ACT. LD. CIT(E) SHOULD CONFINE HIMSELF TOWARDS THE SCOPE OF INQUIRY FOR THE PURPOSE OF SECTION 12A VIOLATION OF SECTION 13(1)(B) IS TO BE SEEN AT THE TIME OF ASSESSMENT IN EACH YEAR. THESE ARE SOME OF UNANSWERED QUESTION A MONGST OTHERS WHICH WE WILL REFER IN THE LATER PART GOAD US TO SET ASIDE THESE ISSUES TO THE FILE OF LD.CIT(E) FOR FRESH ADJUDICATION. 10. NEXT DECISION REFERRED BY THE LD.COUNSEL FOR TH E ASSESSEE WAS OF ITAT RENDERED IN ITA NO.467/AHD/2015 (SUPRA). IN THIS C ASE AGAIN THE ASSESSEE HAS DEMONSTRATED THAT BENEFITS UNDER THE TRUST DEED WER E NOT RESTRICTED FOR THE SPECIFIC COMMUNITY BUT WAS FOR THE GENERAL PUBLIC. THE TRIBUNAL HAS SET ASIDE THE ISSUE TO THE FILE OF THE LD.CIT(EXEMPTION) FOR RE-EXAMINING OF THE MATTER AFTER CONSIDERING THESE FACT. SIMILARLY IN THE CA SE OF SHREE VASUPUJYA SWAMI JAIN DERASAR TRUST VS. CIT THE TRIBUNAL HAS REMITTE D THE MATTER FOR RE- EXAMINATION. 11. AS FAR AS DECISIONS RELIED UPON BY THE LD.DR IS CONCERNED THIS ALSO ALTOGETHER IN DIFFERENT FACTUAL BACKGROUND AND NOT DIRECTLY APPLICABLE TO THE FACTS OF THE PRESENT CASE. NOW WE ARE LEFT WITH O RDER OF THE ITAT (RAJKOT SMC BENCH). IN THIS CASE ITAT HAS OBSERVED THAT SECTION 13(1)(B) WILL BE APPLICABLE IN THOSE CASES WHERE TRUST HAS BEEN ENA CTED AFTER 1961 ACT. IT IS ALSO PERTINENT TO TAKE NOTE OF THE FOLLOWING OBSERV ATIONS: 5. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CA REFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AS PER MY CONSIDERED VIEW AN OBJECT OF PUBLIC UTILITY NEED NOT BE AN OBJECT I N WHICH THE WHOLE OF THE PUBLIC IS INTERESTED IT IS SUFFICIENT IF THE W ELL-DEFINED SECTION OF PUBLIC BENEFITS BY THE OBJECT. THE EXPRESSION 'OBJE CT OF GENERAL PUBLIC ITA NO.181/AHD/2015 & 2 ANRS. 10 UTILITY' AS APPEARING IN SECTION 2(15) IS NOT REST RICTED TO OBJECTS BENEFICIAL TO THE WHOLE MANKIND. AN OBJECT BENEFICI AL TO A SECTION OF THE PUBLIC IS AN OBJECT OF GENERAL PUBLIC UTILITY. AS P ER MY CONSIDERED VIEW TO SERVE A CHARITABLE PURPOSE IT IS NOT NECESSARY THAT THE OBJECT SHOULD BE TO BENEFIT THE WHOLE OF MANKIND OR EVEN ALL PERS ONS LIVING IN A PARTICULAR COUNTRY OR PROVINCE. IT IS SUFFICIENT IF THE INTENTION IS TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FR OM SPECIFIED INDIVIDUALS. FURTHERMORE AN OBJECT WHICH IS BENEFI CIAL TO A SECTION OF THE PUBLIC IS AN OBJECT OF GENERAL PUBLIC UTILITY. IN ORDER TO SERVE A CHARITABLE PURPOSE IT IS NOT NECESSARY THAT THE JO B SHOULD BE TO BENEFIT THE WHOLE OF MANKIND OR ALL PERSONS IN A COUNTRY OR STATE. IT WILL BE MORE THAN SUFFICIENT IF THE INTENTION IS TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM SPECIFIED INDIVIDUAL. THE SEC TION OF THE COMMUNITY SOUGHT TO BE BENEFITED MUST BE SUFFICIENT LY DEFINITE AND/OR IDENTIFIABLE BY SOME COMMON QUALITY OF PUBLIC OR IM PERSONAL NATURE. THE PERSONAL ELEMENT OR PERSONAL RELATIONSHIP WHICH TAKES A GROUP OUT OF A SECTION OF THE COMMUNITY FOR CHARITABLE PURPOS E IS OF THE NATURE WHICH IS TO BE FOUND IN CASES WHERE THE NEXUS BETWE EN THEM IS THEIR PERSONAL RELATIONSHIP TO A SINGLE PROPOSITUS OR TO SEVERAL PROPOSITI. I THEREFORE DO NOT FIND ANY MERIT IN THE CONCLUSION OF THE LOWER AUTHORITIES TO THE EFFECT THAT SINCE THE ASSESSEE T RUST IS CREATED FOR THE BENEFIT OF PARTICULAR COMMUNITY BEING THE VISHA SHR IMALI JAIN SAMAJ WHICH IS A SMALL COMMUNITY BENEFIT OF SECTION 11 S HOULD BE DENIED. 6. WITH REGARD TO NON-APPLICATION OF PROVISIONS OF SECTION 13(1)(B) I FOUND THAT THE ASSESSEE TRUST WAS INCORPORATED ON 1.9.60 PRIOR TO THE COMING INTO FORCE OF I.T. ACT 1961. THE PROVISIONS OFSECTION 13(1)(B) ARE THEREFORE NOT APPLICABLE TO THE ASSESS EE TRUST. DOCUMENTARY EVIDENCE WITH REGARD TO INCORPORATION O F THE ASSESSEE TRUST ON 11.8.1960 WAS VERY MUCH BEFORE THE AO. TH E LEGAL ISSUE EVEN THOUGH RAISED FOR THE FIRST TIME BEFORE THE CIT(A) IS LIABLE TO BE ACCEPTED IN VIEW OF THE VERDICT OF HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT229 ITR 38 3 WHEREIN IT WAS HELD THAT WHERE ADDITIONAL GROUND RAISES A PURELY L EGAL PLEA WHICH GOES TO THE VERY ROOT OF THE MATTER THE SAME DESER VES TO BE ADMITTED. WHETHER PROVISIONS OFSECTION 13(1)(B) ARE APPLICABL E TO THE ASSESSEE IS PURELY A LEGAL ISSUE. AS THE ENTIRE FACTS RELATING TO INCORPORATION OF THE ASSESSEE TRUST WERE ALREADY ON RECORD I DO NOT FIN D ANY MERIT IN THE ACTION OF THE CIT FOR DECLINING TO ACCEPT THE LEGAL GROUND AND TO ADJUDICATE THE SAME. FROM THE ASSESSMENT ORDER ITSE LF I FOUND THAT ON PAGE NO. 2 IT HAS BEEN CLEARLY MENTIONED THAT THE SAID TRUST WAS INCORPORATED IN SY 2016. THIS FACT WAS ALSO MENTION ED IN THE COPY OF MEMORANDUM AND ARTICLES OF TRUST SUBMITTED TO THE A O. THE AO HAS ITA NO.181/AHD/2015 & 2 ANRS. 11 NOT CONTROVERTED THIS FACT WHICH IS ALREADY ON RECO RD. I THEREFORE DO NOT FIND ANY MERIT IN THE ACTION OF THE LOWER AUTHORITI ES FOR DECLINING THE EXEMPTION CLAIMED UNDER SECTION 11 BY INVOKING PRO VISIONS OF SECTION 13(1)(B) OF THE I.T. ACT. 12. THE LD.COUNSEL FOR THE ASSESSEE POINTED OUT TO US THAT A BARE PERUSAL OF SECTION 13(1)(B) WOULD INDICATE THAT THIS CLAUSE IS APPLICABLE FOR EXEMPTION OF APPLICABILITY OF SECTIONS 11 AND 12 IN THOSE CASES OF TRUST FOR CHARITABLE PURPOSES WHO HAVE BEEN CREATED OR ESTABLISHED AFTE R COMMENCEMENT OF THIS ACT. ALL THE ASSESSEE-TRUSTS HAVE BEEN ESTABLISHED PRIOR TO 1961. THEREFORE SECTION 13(1)(B) IS NOT APPLICABLE UPON THEM. IN O RDER TO VERIFY THIS CLAIM WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE ASSESS EES HAVE ALLEGED THAT THE TRUST SVA GULABRAI GOVINDRAM DESAI & SVA VITHHALR AI MAHIPATRAM MEHTA SMARAK VIDYOTTEJAK FUND HAS CREATED VIDE TRUST DEED DATED 25.5.1954. PHOTO- STATE COPY OF FIRST PAGE OF REGISTRATION HAS BEEN P LACED ON PAGE NO.4 OF THE PAPER BOOK. IT IS IN GUJARATI. SIMILARLY BHAVNAG AR NAGAR GYMKHANA WAS ALLEGED TO BE CREATED ON 20.3.1958. GOGHA BHAVNAGA R VADNAGAR GNATI SAHAYAK PAISA FUND HAS BEEN STATED TO BE CREATED ON 21.2.1954. THE LD.COMMISSIONER (EXEMPTION) HAS NOT CONSIDERED THES E CASES WITH THIS ANGLE AND HAS NOT VERIFIED THESE FACTS. THEREFORE WE DE EM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDERS AND RESTORE THESE ISSUES TO THE FILE OF THE LD.COMMISSIONER. THE LD.COMMISSIONER SHALL EXAMINE THE DATE ON WHICH THESE TRUSTS HAVE BEEN ESTABLISHED OR CREATED. IF THEY ARE CREATED PRIOR TO 1961 THEN THE LD.COMMISSIONER HAS TO CONSIDER AS TO HOW SECTION 13(1)(B) WOULD BE CONSIDERED FOR DENYING THE EXEMPTION. THE LD.CO MMISSIONER (EXEMPTION) SHALL RE-ADJUDICATE THE APPLICATIONS OF THE ASSESSE ES AFRESH. THE ASSESSEES WILL BE AT LIBERTY TO SUBMIT ANY FRESH EVIDENCE IN SUPPO RT OF THEIR CLAIM. THE LD.COMMISSIONER SHALL GRANT DUE OPPORTUNITY OF HEAR ING TO THE ASSESSEE BEFORE DECIDING THE APPLICATIONS. OUR OBSERVATION WILL NO T CAUSE ANY PREJUDICE TO THE ITA NO.181/AHD/2015 & 2 ANRS. 12 STAND OF BOTH PARTIES. THE APPLICATIONS ARE TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW. 13. IN THE RESULT APPEALS OF THE ASSESSEES ARE ALL OWED. ORDER PRONOUNCED IN THE COURT ON 21 ST OCTOBER 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANTN MEMBER (RAJPAL YADAV) JUDICIAL MEMBER