Shree Navsari Machhi Samaj, Navsari v. The CIT,, Valsad

ITA 893/AHD/2010 | misc
Pronouncement Date: 09-07-2010 | Result: Allowed

Appeal Details

RSA Number 89320514 RSA 2010
Assessee PAN AACTM0382K
Bench Ahmedabad
Appeal Number ITA 893/AHD/2010
Duration Of Justice 3 month(s) 15 day(s)
Appellant Shree Navsari Machhi Samaj, Navsari
Respondent The CIT,, Valsad
Appeal Type Income Tax Appeal
Pronouncement Date 09-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 09-07-2010
Date Of Final Hearing 02-07-2010
Next Hearing Date 02-07-2010
Assessment Year misc
Appeal Filed On 25-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI G.D.AGRAWAL VICE-PRESIDENT (AZ) AND SHRI MUKUL SHRAWAT JUDICIAL MEMBER AND DATE OF HEARING : 02/07/2010 DRAFTED ON: 05/ 07/2010 ITA NO.893/AHD/2010 ASSESSMENT YEAR : - SHREE NAVSARI MACHHI SAMAJ C/O.DAHYABHAI RANCHHOLDJIBHAI TANDEL NANDANVAN VIJALPORE NAVSARI VS. THE CIT SURYPRAKASH CHAMBER DHARAMPUR ROAD VALSAD PAN/GIR NO. : AACTM 0382 K (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI D.K. PARIKH A.R. RESPONDENT BY: SHRI SAMIR TEKRIWAL SR. D.R. O R D E R PER SHRI MUKUL SHRAWAT JUDICIAL MEMBER : AT THE OUTSET IT WAS INFORMED THAT THE APPEAL WAS BELATEDLY FILED. THE DELAY IS ABOUT ONE YEAR AND FOUR MONTHS. IN T HIS REGARD THE EXPLANATION WAS THAT THE TRUST IS BEING RUN BY FISH ERMEN THEREFORE NOT AWARE ABOUT THE COMPLEXITIES OF THE REFUSAL OF THE REGISTRATION U/S.12A OF THE I.T. ACT 1961 BY THE LD. COMMISSIONER. IT WAS PLEADED THAT THE OFFICER-BEARERS OF THE TRUST BEING FISHERMEN WERE N OT CONVERSANT HENCE DID NOT RESPOND PROMPTLY. ONLY ON ENQUIRY FROM TH E TAX CONSULTANT IT WAS INFORMED THAT TRUST HAS RECEIVED SOME COMMUNICA TION AND ONLY THEREAFTER THE NECESSARY ACTION WAS TAKEN. IN SUPP ORT A DECISION OF HON'BLE SUPREME COURT IN THE CASE OF N.BALAKRISHNA N VS. ITA NO .893/AHD/2010 SHREE NAVSARI MACHHI SAMAJ VS. CIT-VALSAD - 2 - M.KRISHNAMURTHY REPORTED AS (1998) 7 SUPREME COURT CASES 123 AND COLLECTOR LAND ACQUISITION VS. MST.KATIJI & ORS. 6 2 CTR 23(SC) WAS CITED WHEREIN IT WAS OBSERVED THAT A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL BY LATE. HENCE IT WAS DIRECTED THAT A MERITORIOUS MATTER SHOULD NOT BE THROWN-OUT AT THE VERY THRESHO LD BECAUSE BY REFUSING THE CONTENTION MAY CAUSE DEFEAT OF JUSTICE. CONSID ERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS BY FOLLOWING THE CITED PRECEDENTS WE HEREBY CONDONE THE DELAY AND PROCEED TO DECIDE THIS APPEAL AS UNDER. 2. THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WHICH HAS EMANATED FROM THE ORDER OF LEARNED COMMISSIONER OF INCOME-TAX VALSAD 29 TH AUGUST-2008. AS PER GROUNDS OF APPEAL AS MANY AS FIVE GROUNDS HAVE BEEN RAISED. HOWEVER THE ONLY ISSUE PERTAINED TO THE REJECTION OF APPLICATION FOR REGISTRATION U/S.12A O F THE I.T. ACT 1961. 3. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE SHRI D.K. PARIKH HAS STATED THAT THE ONLY REASON GIVEN BY THE LD. COMMISSIONER FOR REJECTION OF REGISTRATION WAS THAT THE TRUST IN QUE STION WAS NOT MEANT FOR GENERAL PUBLIC BUT ONLY FOR THE BENEFIT OF MACHHI SAMAJ OF NAVSARI. IN THIS CONTEXT PARAGRAPH NO.5 OF THE IMPUGNED ORDER O F THE LEARNED CIT- VALSAD IS WORTH REPRODUCTION. 5. IN RESPONSE TO THE ABOVE NOTICE THE TRUST FILE D THE REQUIRED DOCUMENTS ON 29.8.2008. ON VERIFICATION O F THE ACTIVITY REPORT OF THE TRUST IT IS OBSERVED THAT TH E TRUST IS NOT FOR GENERAL PUBLIC BUT ONLY FOR THE BENEFIT OF MACHHI SAMAJ OF NAVSARI. ITA NO .893/AHD/2010 SHREE NAVSARI MACHHI SAMAJ VS. CIT-VALSAD - 3 - 4. THE CONTENTION BEFORE US IS THAT THE TRUST WA S CREATED FOR THE BENEFIT OF FISHERMEN OF NAVSARI. IT IS NOT FOR A PARTICUL AR COMMUNITY OR FOR A PARTICULAR RELIGION. THE TRUST HAS A VERY SMALL C ORPUS IN THE FORM OF DEPOSITS TO BE UTILIZED FOR THE EDUCATION OF CHILDR EN OF FISHERMEN. THEREFORE IT WAS PLEADED THAT ONCE THE OBJECT IS T O GIVE BENEFIT TO A SECTION OF A PUBLIC AND THE OBJECTS ARE FOR THE GEN ERAL PUBLIC UTILITY THEREFORE ELIGIBLE FOR REGISTRATION U/S.12A OF THE I.T. ACT 1961. IN SUPPORT A VEHEMENT RELIANCE WAS PLACED ON THE DECI SION OF HON'BLE SUPREME COURT IN THE CASE OF AHMEDABAD RANA CASTE A SSOCIATION VS. CIT GUJARAT REPORTED AS 82 ITR 704(SC); THE RELE VANT PORTION OF THE OBSERVATION OF THE APEX COURT READS AS UNDER:- WE MAY USEFULLY REFER TO THE JUDGMENT OF LORD GREEN E M. R. IN IN RE COMPTON : POWELL V. COMPTON. THE MASTER OF THE R OLLS DECLARED THAT NO DEFINITION OF WHAT WAS MEANT BY ' A SECTION OF THE PUBLIC ' HAD SO FAR AS HE WAS AWARE BEEN LAID DOWN. BUT HE INDICATED THAT THE TRUST OF A PUBLIC CHARACTER IS ONE IN WHICH THE BENEFICIARIES DO NOT ENJOY THE BENEFIT WHEN THEY RECEIVE IT BY VIRTU E OF THEIR CHARACTER AS INDIVIDUALS BUT BY VIRTUE OF THEIR MEM BERSHIP OF A SPECIFIED CLASS THE COMMON QUALITY UNITING POTENTI AL BENEFICIARIES INTO THE CLASS BEING ESSENTIALLY AN IMPERSONAL ONE. THIS COMMON QUALITY HE SAID WAS ' DEFINABLE BY REFERENCE TO W HAT EACH HAS IN COMMON WITH THE OTHERS AND THAT IS SOMETHING INTO W HICH THEIR STATUS AS INDIVIDUALS DOES NOT ENTER '. ANDREW L. C . J. ACCEPTED THIS STATEMENT OF LAW WITHOUT HESITATION IN TRUSTEES OF THE LONDONDERRY PRESBYTERIAN CHURCH HOUSE V. COMMISSIONERS OF LNLAN D REVENUE. WHAT HAS TO BE SEEN IN THE PRESENT CASE IS WHETHER THE MEMBERS OF THE RANA CASTE WHO ARE NOT NATIVES OF AHMEDABAD BUT WHO COME TO RESIDE THERE AND ARE ACCEPTED AS MEMBERS OF THAT CA STE ACCORDING TO ITS USAGE AND CUSTOM CAN BE SAID TO HAVE A RELAT IONSHIP WHICH IS AN IMPERSONAL ONE DEPENDENT ON THEIR CONDITION AS M EMBERS OF THE RANA COMMUNITY. WE ARE UNABLE TO COMPREHEND HOW SUC H MEMBERS OF THE RANA CASTE CAN BE REGARDED AS HAVING BEEN INTRODUCED INTO THAT CASTE BY CONSIDERATION OF THEI R PERSONAL STATUS AS INDIVIDUALS. AS A MATTER OF FACT THE PREDOMINANT CONTENT AND REQUIREMENT OF THE CLAUSE DEFINING ' BENEFICIARIES ' IN THE CONSTITUTION OF THE ASSESSEE IS THE FACTUM OF THEIR BELONGING TO THE ITA NO .893/AHD/2010 SHREE NAVSARI MACHHI SAMAJ VS. CIT-VALSAD - 4 - RANA COMMUNITY OF AHMEDABAD. THE COMMON QUALITY TH EREFORE UNITING THE POTENTIAL BENEFICIARIES INTO THE CLASS CONSISTS OF BEING MEMBERS OF THE RANA CASTE OR COMMUNITY OF AHMEDABAD WHETHER AS NATIVES OR AS BEING ADMITTED TO THAT CASTE OR CO MMUNITY UNDER CUSTOM OR USAGE. THE MERE FACT THAT A PERSON OF THE RANA COMMUNITY WHO IS NOT AN ORIGINAL NATIVE OF AHMEDABA D HAS TO PROVE HIS CREDENTIALS ACCORDING TO THE CUSTOM AND U SAGE OF THAT COMMUNITY TO GET ADMITTED INTO THAT COMMUNITY CANNO T INTRODUCE A PERSONAL ELEMENT. IN OPPENHEIM V. TOBACCO SECURITIE S TRUST CO. LTD. THE TRUSTEES WERE DIRECTED TO APPLY CERTAIN I NCOME IN PROVIDING FOR THE EDUCATION OF CHILDREN OF EMPLOYEE S OR ' FORMER EMPLOYEES ' OF A BRITISH LIMITED COMPANY OR ANY OF ITS SUBSIDIARY OR ALLIED COMPANIES. IT WAS HELD BY THE HOUSE OF LORDS BY A MAJORITY THAT THOUGH THE GROUP OF PERSONS INDICATED WAS NUM EROUS THE NEXUS BETWEEN THEM WAS EMPLOYMENT BY PARTICULAR EMP LOYERS AND ACCORDINGLY THE TRUST DID NOT SATISFY THE TEST OF P UBLIC BENEFIT REQUISITE TO ESTABLISH IT AS CHARITABLE. THIS IS WH AT LORD SIMONDS OBSERVED : ' A GROUP OF PERSONS MAY BE NUMEROUS BUT IF THE N EXUS BETWEEN THEM IS THEIR PERSONAL RELATIONSHIP TO A SI NGLE PROPOSITUS OR TO SEVERAL PROPOSITI THEY ARE NEITHE R THE COMMUNITY NOR A SECTION OF THE COMMUNITY FOR CHARIT ABLE PURPOSES.' THE PERSONAL ELEMENT OR PERSONAL RELATIONSHIP WHICH TAKES A GROUP OUT OF A SECTION OF THE COMMUNITY FOR CHARITABLE PU RPOSES IS OF THE NATURE WHICH IS TO BE FOUND IN CASES OF THE AFORESA ID TYPE. WE CANNOT POSSIBLY DISCOVER A SIMILAR ELEMENT OF PERSO NAL NATURE IN THE MEMBERS OF THE RANA COMMUNITY WHO SETTLE IN AHMEDAB AD AND HAVE BEEN ACCEPTED BY THE RANA COMMUNITY OF THAT PL ACE AS MEMBERS OF THAT COMMUNITY. AS REGARDS THE ACCEPTANC E OF SUCH PERSONS AS MEMBERS OF THE COMMUNITY OR CASTE ACCOR DING TO CUSTOM AND USAGE IT IS WELL-KNOWN THAT WHENEVER A QUESTION ARISES WHETHER A PERSON BELONGS TO A PARTICULAR COM MUNITY OR CASTE THE CUSTOM OR USAGE PREVAILING IN THAT COMMU NITY MUST PLAY A DECISIVE AND VITAL PART. THAT CANNOT BE REGARDED AS AN ELEMENT WHICH WOULD DETRACT FROM THE IMPERSONAL NATURE OF T HE COMMON QUALITY. 5. AN INTERESTING QUESTION WAS RAISED IN THE CASE O F CIT VS. BAR COUNCIL OF MAHARASHTRA REPORTED AS 130 ITR 28 (SC ) THAT WHETHER SUCH A COUNCIL COULD BE TAKEN TO BE A BODY INTENDED TO A DVANCE ANY OBJECT OF ITA NO .893/AHD/2010 SHREE NAVSARI MACHHI SAMAJ VS. CIT-VALSAD - 5 - GENERAL PUBLIC UTILITY FALLING WITHIN SECTION 2(15 ) OF THE I.T. ACT 1961 FOR THE PURPOSES OF SECTION 11 OF THE I.T. ACT 19 61. WHILE DECIDING THIS APPEAL IT WAS OBSERVED THAT THE PRIMARY OR DOMINAN T PURPOSE OF A STATE BAR COUNCIL IS THE ADVANCEMENT OF AN OBJECT OF GENE RAL PUBLIC UTILITY WHICH ACCORDING TO THE HON'BLE COURT HAD FALLEN WIT HIN THE MEANING OF SECTION 2(15) OF THE I.T. ACT 1961. 5.1. ALMOST IDENTICAL VIEW HAD ALREADY BEEN EXPRESS ED BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ANDHRA CHAMBER OF COMMERCE REPORTED AS 55 ITR 722 (SC) AND THEREIN ALSO THE PH RASE OBJECT OF GENERAL PUBLIC UTILITY HAS BEEN DELIBERATED UPON AND THEREAFTER IT WAS HELD THAT THAT THE INCOME OF THE CHAMBER OF COMMER CE WAS AFFIXED WITH A LEGAL OBLIGATION WHICH WAS FOR A CHARITABLE PURPO SE AND ALSO FOR THE PURPOSE OF ADVANCEMENT OF OBJECTS OF GENERAL PUBLIC UTILITY. ONCE THE HON'BLE SUPREME COURT HAS LAID DOWN THE LAW THAT IF A PARTICULAR SMALL GROUP OF PERSONS ARE NOT BEING BENEFITED BY THE OB JECTIVE OF THE TRUST OR THE TRUST HAS NOT BEEN CREATED FOR THE BENEFIT OF L IMITED FEW INDIVIDUALS BUT FOR THE PURPOSE OF LARGER INTEREST OF PUBLIC WITHOUT ANY SPECIFICATION THEN IT IS ELIGIBLE FOR THE BENEFITS AS PRESCRIBED UNDER THE ACT. THE REPRESENTATIVE OF THE REVENUE HAS PLACED RELIANCE O N THE COMMENTS OF LD. COMMISSIONER AS REPRODUCED ABOVE. HOWEVER WE ARE NOT CONVINCED THAT A TRUST WHICH WAS CREATED UNDISPUTEDLY FOR THE BENEFIT OF THE FISHERMEN I.E. MACHHI SAMAJ OF NAVSARI WOULD NOT FALL WITHIN THE PHRASE AS PRESCRIBED U/S.2(15) OF THE I.T. ACT 196 1 I.E. FOR THE BENEFIT OF GENERAL PUBLIC UTILITY. WE HEREBY DIRECT THE LEAR NED COMMISSIONER THAT IF ALL THE OTHER CONDITIONS AS PRESCRIBED U/S.12A O F THE I.T. ACT 1961 HAS BEEN FULFILLED BY THE ASSESSEE THEN THE ASSESSEE IS ELIGIBLE FOR THE ITA NO .893/AHD/2010 SHREE NAVSARI MACHHI SAMAJ VS. CIT-VALSAD - 6 - REGISTRATION HOWEVER THE REGISTRATION ON THIS GRO UND MUST NOT BE REJECTED THAT THE TRUST WAS NOT CREATED FOR GENERAL PUBLIC UTILITY. WE ORDER ACCORDINGLY. THUS THE GROUND RAISED BY THE ASSESSEE IS ALLOWED PRO TANTO. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED PRO TANTO. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 9 TH JULY 2010. SD/- SD/- ( G.D.AGRAWAL ) ( MUKUL SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 09/ 07 /2010 T.C. NAIR SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-CONCERNED 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD