Indian Ice Cream Manufacturers Association,, Ahmedabad v. The DIT(Exemption),, Ahmedabad

ITA 2279/AHD/2014 | 2012-2013
Pronouncement Date: 29-04-2015 | Result: Allowed

Appeal Details

RSA Number 227920514 RSA 2014
Assessee PAN AACCI5818F
Bench Ahmedabad
Appeal Number ITA 2279/AHD/2014
Duration Of Justice 8 month(s) 21 day(s)
Appellant Indian Ice Cream Manufacturers Association,, Ahmedabad
Respondent The DIT(Exemption),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 29-04-2015
Date Of Final Hearing 16-04-2015
Next Hearing Date 16-04-2015
Assessment Year 2012-2013
Appeal Filed On 08-08-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD 00 ! ' #$ % & BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER !./ ITA NO.2279/AHD/2014 % ) *)/ ASSESSMENT YEAR: 2012-13 INDIAN ICE CREAM MANUFACTURERS ASSOCIATION A/801 8 TH FLOOR TIME SQUARE BUILDING NR. LAL BUNGALOW CHAR RASTA NAVRANGPURA AHMEDABAD 380 009. PAN: AACCI 5818 F VS DIRECTOR OF INCOME TAX (EXEMPTION) AHMEDABAD. + / (APPELLANT) -. + / (RESPONDENT) ASSESSEE(S) BY : MS.URVASHI SHODHAN REVENUE BY : SHRI T.P. KRISHNA KUMAR SR.DR / DATE OF HEARING : 16/04/2015 / DATE OF PRONOUNCEMENT: 29/04/2015 // O R D E R PER N.S. SAINI ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE DIRECTOR OF I NCOME TAX (EXEMPTIONS) AHMEDABAD DATED 24.6.2014. 2. SOLE GRIEVANCE OF THE ASSESSEE PROJECTED IN THE GROUNDS OF APPEAL TAKEN BEFORE US IS THAT THE DIT(EXEMPTION) ERRED IN NOT ALLOWING REGISTRATION UNDER SECTION 12AA OF THE ACT ON INVAL ID GROUND THAT THE ASSESSEE IS NOT CARRYING ON GENUINE ACTIVITY OF CHA RITABLE NATURE AND ASSESSEES ACTIVITY WILL BE BENEFITED TO MEMBERS AN D NOT PUBLIC AT LARGE. ITA NO.2279/AHD/2014 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT ON 5.1.2 003 IN FORM NO.10A UNDER RULE 11AA OF THE ACT. THE APPLICATION WAS AC COMPANIED BY COPY OF THE CERTIFICATE OF REGISTRATION OF ASSTT. CHARIT Y COMMISSIONER AND COPY OF OBJECTS OF THE TRUST. 4. THE DIRECTOR OF INCOME TAX (EXEMPTIONS) OBSERVED THAT IT IS NOTED THAT THE MAIN OBJECTS OF THE ASSESSEE-TRUST WAS TO ENCOURAGE PROTECT AND PROMOTE INTEREST OF MANUFACTURES OF ICE-CREAM A ND FROZEN DESSERT TO PROMOTE EXPANSION OF MARKET FOR ICE-CREAM AND FR OZEN DESSERT AND TO PROMOTE AND IMPROVE AND QUALITY AND VARIETY OF ICE- CREAM AND FROZEN DESERT AND TO TAKE ALL SUCH STEPS AS MAY BE CONSIDE RED EXPEDIENT FOR THAT PURPOSE INCLUDING PROVISION OF LEGAL TECHNICA L AND OTHER PROFESSIONAL ADVICE AND ASSISTANCE. HE OBSERVED TH AT FROM A READING OF THE ABOVE OBJECTS SHOWS THAT THE ASSESSEE IS NOT CA RRYING ON GENUINE ACTIVITY OF CHARITABLE NATURE SINCE THE ASSESSEE I S AN ASSOCIATION ALLOWING BENEFIT ONLY TO THE MANUFACTURERS OF ICE C REAM AND NOT THE GENERAL PUBLIC. IF THE ASSESSEE WAS ALLOWED REGIS TRATION U/S.12A IT WILL BE ABLE TO OBTAIN DONATIONS FROM PUBLIC THE SAME W OULD BE UTILIZED ONLY FOR THE BENEFIT OF ITS MEMBER OF THE ASSOCIATION. THE INCOME OF THE ASSOCIATION WOULD BE TAX FREE EVEN THOUGH THE BENEF IT WAS NOT GIVEN TO PUBLIC AT LARGE AND THE ACTIVITIES WERE ALSO NOT OF GENERAL PUBLIC UTILITY. HE OBSERVED THAT AT BEST IT WAS ONLY A MUTUAL SOCI ETY AS DECIDED IN THE CASE OF MAHAVRAO SCINDIA ENCLAVE RESIDENT WELFARE S OCIETY 52 SOT 125 AND THEREFORE THE REGISTRATION UNDER SECTION 12AA CANNOT BE ALLOWED TO A MUTUAL BENEFIT SOCIETY. 5. THE AR OF THE ASSESSEE RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE PLA STIC MANUFACTURERS ASSOCIATION VS. CIT 150 CTR 97 (GUJ) AND SUBMITTED THAT THE CASE OF THE ASSESSEE IS EXACTLY SIMILAR TO THE CASE OF GUJA RAT STATE PLASTIC MANUFACTURES ASSOCIATION AND THE HONBLE GUJARAT H IGH COURT IN THAT ITA NO.2279/AHD/2014 3 CASE HELD THAT THE APPLICATION FOR REGISTRATION MAD E BY THE PETITIONER ASSESSEE WAS ALLOWABLE AND THAT THE REJECTION OF T HE SAME WAS NOT ON VALID GROUND. HE THEREFORE SUBMITTED THAT FOLLOW ING THE DECISION OF THE HONBLE GUJARAT HIGH COURT THE TRIBUNAL SHOULD ALL OW THE APPEAL OF THE ASSESSEE. 6. ON THE OTHER HAND THE DR VEHEMENTLY ARGUED AND SUPPORTED THE ORDER OF THE DIT(EXEMPTIONS). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RE CORD. WE FIND THAT SIMILAR ISSUE CAME UP BEFORE THE HONBLE GUJARAT HI GH COURT IN THE CASE OF GUJARAT STATE PLASTIC MANUFACTURERS ASSOCIATION (SUPRA) WHEREIN THE ASSESSEE WAS DENIED REGISTRATION UNDER SECTION 12A OF THE ACT ON THE GROUND THAT THE OBJECTS OF THE ASSOCIATION WERE AIM ED AT BENEFITING THE TRADERS ENGAGED IN A PARTICULAR TRADE NAMELY MANU FACTURERS OF PLASTIC GOODS. WE FIND THAT THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE PLASTIC MANUFACTURERS ASSOCIATION (SU PRA) HAS RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF ADDITIONAL CIT VS. SURAT ART SILK CLOTH MANUFACTURERS ASSOCIATION 121 ITR 1 (SC) WHEREIN IT WAS HELD THAT IF DOMINANT OR PRIMARY PUR POSE OF THE ASSESSEE WAS TO PROMOTE COMMERCE AND TRADE IN ART SILK YARN RAW SILK COTTON YARN ART SILK CLOTH SILK CLOTH AND COTTON CLOTH A S SET OUT IN VARIOUS CLAUSES OF THE OBJECTS OF THE ASSOCIATION IT COULD NOT BE SAID THAT IT WAS NOT FOR CHARITABLE PURPOSE. IT WAS FURTHER OBSERV ED THAT EVEN IF SOME ACTIVITIES HAVE BEEN UNDERTAKEN IN THE COURSE OF CA RRYING OUT PRIMARY PURPOSE OF TRUST OR INSTITUTION IT WOULD NOT CEASE TO BE A TRUST OR INSTITUTION FOR CHARITABLE PURPOSES. IT WAS THERE FORE HELD THAT PREDOMINANT OBJECT OF THE ACTIVITY OF THE ASSOCIATI ON WAS PROMOTION OF COMMERCE AND TRADE IN A PARTICULAR INDUSTRY WHICH W AS CLEARLY AN OBJECT OF GENERAL PUBLIC UTILITY. HONBLE HIGH COURT FUR THER OBSERVED THAT THE SAME PRINCIPLE WERE REITERATED BY THE HONBLE SUPRE ME COURT IN THE ITA NO.2279/AHD/2014 4 CASE OF CIT VS. BAR COUNSEL OF MAHARASHTRA 130 ITR 28 (SC) AND IN THAT CASE ALSO PRIMARY AND DOMINANT PURPOSE WAS AD VANCEMENT OF A PARTICULAR PROFESSION NAMELY LEGAL PROFESSION. INSPITE OF THAT IT WAS HELD BY THE APEX COURT THAT THE OBJECT WAS OF GENER AL PUBLIC UTILITY. IN THE OPINION OF THE COURT HAVING REGARD TO THE OBLI GATORY FUNCTIONS ENJOINED ON THE STATE BAR COUNSEL UNDER THE ADVOCAT E ACT 1961 THE BAR COUNCIL COULD BE REGARDED AS A BODY INTENDED TO ADVANCE THE OBJECT OF GENERAL PUBLIC UTILITY. THE HONBLE GUJARAT HI GH COURT THEREAFTER WENT ON TO OBSERVE THAT THE RULE 3 STATES THAT THE GUJARAT STATE PLASTIC MANUFACTURERS ASSOCIATION WAS ESTABLISHED WITH A V IEW TO PROTECT GENERAL INTEREST OF PLASTIC MANUFACTURERS AND TO EN COURAGE ALLIED INTEREST AND FORM COOPERATION AMONGST THEM; TO RESO LVE ANY DISPUTE BETWEEN THE MEMBERS OF THE ASSOCIATION AND OTHER PE RSONS; TO DO ALL SUCH WORK DIRECTLY OR INDIRECTLY FOR FULFILLING THE ABOVE OBJECTION OF THE ASSOCIATION. IT WAS ALSO STATED THAT THE ASSOCIATI ON WILL NOT DO ANY ACT FOR ITS PROFIT WILL FULFILL THE OBJECTS OF THE ASS OCIATION AND THAT ITS FUNDS RESERVE FUND ETC. WILL BE USED FOR THE GENERAL AND EXTRAORDINARY OBJECT OF THE ASSOCIATION. THE HIGH COURT OBSERVED THAT IN THE CONTEXT OF THE OBJECTS SPECIFIED IN THE CONSTITUTION AND IN THE LI GHT OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE ABOVE TWO CASES WE HAVE NO HESITATION IN HOLDING THAT THE RESPONDENT HAS COMMI TTED AN ERROR IN LAW IN REJECTING THE APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT. 8. WE FIND THAT IN THE PRESENT CASE ALSO AS NOTED BY THE DIRECTOR OF INCOME TAX (EXEMPTIONS) AHMEDABAD THE OBJECT OF T HE ASSESSEE WAS TO ENCOURAGE PROTECT PROMOTE INTEREST OF MANUFACT URERS OF THE ICE- CREAM AND FROZEN DESSERT AND TO PROMOTE EXPANSION O F MARKET FOR ICE- CREAM AND FROZEN DESSERT AND TO PROMOTE AND IMPROVE QUALITY AND VARIETY OF ICE-CREAM AND FROZEN DESSERT AND TO TAKE ALL SUCH STEPS AS MAY BE CONSIDERED EXPEDIENT FOR THAT PURPOSE INCLUD ING PROVISION OF LEGAL TECHNICAL AND OTHER PROFESSIONAL ADVICE AND ASSISTANCE. THUS THE OBJECT OF THE ASSESSEE WAS OF GENERAL PUBLIC UTILIT Y AND HENCE CHARITABLE ITA NO.2279/AHD/2014 5 IN NATURE. THEREFORE THE FOLLOWING THE DECISION O F THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE PLASTIC MAN UFACTURERS ASSOCIATION (SUPRA) WE SET ASIDE THE ORDER OF THE DIRECTOR OF INCOME- TAX (EXEMPTIONS) AHMEDABAD AND DIRECT HIM TO GRANT REGISTRATION TO THE ASSESSEE UNDER SECTION 12AA OF THE ACT. THUS THIS GROUND OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 9. BEFORE PARTING WITH THE ORDER WE WOULD LIKE TO STATE THAT THE DECISION WHICH HAS BEEN FOLLOWED BY THE DIT(EXEMPTI ON) IN HIS ORDER IS OF AGRA BENCH OF THE TRIBUNAL. AS WE ARE FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT WHICH WAS RENDER ED AFTER FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN OUR CONSI DERED VIEW WE ARE NOT REQUIRED TO DEAL WITH THE SAID DECISION OF THE AGRA BENCH OF THE TRIBUNAL. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY THE 29 TH APRIL 2015 AT AHMEDABAD. SD/ SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER