TaxTMI 
TaxTMI 
2018 (10) TMI 1896
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....the Trust u/s.12A / 12AA of the IT Act on the ground that the main object of the Trust is not for general public but for the sole benefit of the employees of the bank and hence the trust cannot be termed as Charitable Trust within the meaning of the provisions of Sec. 2(15) of the act. 4. The DIT (E) failed to appreciate: a. that the members of the scheme are retired employees of the Bank across the country who have paid membership fee which is equivalent to their last Basic Pay drawn, are general public. The average membership fee is Rs. 24,500.00 (approx.) as against members are reimbursed Rs. 2000 every year towards domiciliary medical expenses and also upto Rs. 100000 towards hospitalization expenses/insurance premium during the lifetime of the member and spouse. b. that the benefit to the members of the scheme is not extended to the existing employees of the bank. c. that the retired employees are not the employees of the bank and bank is not bound to provide any benefit or welfare of the employees who have already retired from the service-and hence above benefits are extended to them under the scheme. d. that the DIT(E) is not requ....
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....ng sought from the Bank's Chartered Accountant for filing an appeal against the aforesaid order. d) Presently the Trust is managed by the Bank of India, Terminal Benefits Division at Head Office and the entire management is being done by the Bank employees on honorary basis. Even the trustees of the Trust are not being paid any remuneration for the same. e) The bank of India Retired Employees' Medical Assistance Scheme managed by the Trustees covers retired employees of the Bank who have become member of the scheme and his/her spouse and on the death of member the spouse will continue to be covered under the scheme for reimbursement of medical expenses. Under this scheme the Bank is presently having 10,214 members and such members/ their spouse are extended the medical assistance including hospitalization expenses as and when necessary. This number is increasing periodically. The Corpus of the trust is raised out of one time lump sum contribution equal to 100% of the Basic Pay last drawn received from a retired employee/ spouse of the deceased retired employee and contribution received from Bank's Central Welfare Committee. The trust is earning interes....
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....fficer of Bank of India, I am one of the trustee of Bank of India Retired Employees' Medical Assistant Trust. 2) I, being trustee, am aware of the facts of the trust. 3) The trust had made an application before Director of Income Tax (Exemption) Mumbai for Registration of Trust under section 12A of the Income Tax Act, 1961 on 24th August, 2010. However the said application was rejected by Director of Income Tax (Exemption) as per order passed u/s 12AA(1)(b)(ii) r.w.s. 12A of the Income Tax Act, on 22nd February, 2011. The order was received by trust on 15th March. 2011. 4) The said order was received by Shri. Sanjay P Walimbe, Officer of Bank of India, who was entrusted the work of looking after Registration of Trust, settlement of claims, enrollment of new members of retirement etc. He, being an employee, of Bank was also looking after Pension payments and work of Bank. The person who looks after the work of trust are not paid salary and are doing honorary work. 5) Month of March is always very busy month since all claims related papers are required to be sorted before the year end i.e. March. Hence Shri. Sanjay P Walimbe could not look into....
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.... be provided. It is pointed out that all the Members of the Scheme are retired employees of the Bank. It is also pointed out that the Trust is managed by Bank of India, Terminal Benefits Division of its Head Office and the entire management is looked after by the Bank employees on honorary basis. Even the Trustees do not get any remuneration for looking after the affairs of the Trust. It is pointed out that the corpus of the Trust is raised out of a one-time lump sum contribution equal to 100% of the basic pay last drawn received from a retired employee and the contribution received from the Bank's Central Welfare Committee. The earning of the Trust is primarily by way of interest on fixed deposits which is applied entirely towards reimbursement of insurance premium, domiciliary expenses and hospitalisation expenses of the Members of the Scheme. It was pointed out that after the receipt of the order of the Director of Income-tax (Exemptions), the process of filing of appeal was under consideration and the officer looking after it got transferred on promotion and some of the officers retired on superannuation. Therefore, starting from March, 2011 when the impugned order was received....
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....part of this order. It is explained that the affairs of the Trust are being looked after by the employees of Bank of India on an honorary basis. It is also canvassed that the Trustees of the Trust are also drawn from the employees of Bank of India who are also not paid any remuneration. Ostensibly, the Bank formulated a Scheme for its retired employees for providing financial assistance to meet expenses incurred by such retired employees and/or their dependent spouse. The entire circumstances show that the objects are to provide financial assistance to meet the medical expenses of the former employees of the Bank who become Members of the instant Trust. It is also emerging from record, and there is no controversion to such averments, that the Trust is being manned by the employees of Bank of India on a honorary basis. It is a well-settled proposition that while evaluating the reasons for delay in filing of an appeal, a liberal and practical approach has to be adopted by the authorities exercising judicial/quasi-judicial functions. In the case before us, there is no material to doubt the bona fide of the reasons, though there is lapse on the part of the assessee in filing the appeal....
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.... general public utility. 9. The Director has denied exemption solely on the ground that assessee-trust's objects are not for the benefit of the general public, but only for its specific Members/employees of Bank of India. In our considered opinion, the aforesaid proposition sought to be raised by the Director is quite untenable and is directly contrary to the observations of the Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association vs CIT, 82 ITR 704 (SC). At the time of hearing, the learned representative for the assessee relied upon the aforesaid decision to canvass that an object beneficial to a section of the public would fall within the purview of 'charitable purpose' and it is not necessary that the object should be to benefit the whole of mankind. Furthermore, the Hon'ble Supreme Court in Ahmedabad Rana Caste Association (supra) has observed that "the object would remain charitable if the intention is to benefit a section of the public as distinguished from a specified individual". To the similar effect is the judgment of the Hon'ble Andhra Pradesh High Court in the case of CIT vs Andhra Pradesh Police Welfare Society, 148 ITR 287 (AP) wherein ....
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....he Hon'ble Kerala High Court in the case of Ernakilam District Cement Dealers Association (supra) has been wrongly invoked by the Director in the instant case. 11. Secondly, the Director has also relied upon the judgment of the Hon'ble Bombay High Court in the case of Zenith Tin Works Charitable Trust vs CIT, 102 ITR 119 (Bom.) to say that any object of a Trust to provide for welfare of the employees of the Trust or institution cannot be regarded as a charitable purpose. In this context, we have carefully perused the judgement of the Hon'ble Bombay High Court in the case of Zenith Tin Works Charitable Trust (supra). The relevant facts before the Hon'ble High Court were as follows. It was noticed by the Hon'ble High Court that the assessee-trust before it had multiple objects which were charitable, but one object was to provide for the welfare of the employees of the Trust or any institution conducted by the Trust. According to the Hon'ble High Court, the aforesaid object could not be regarded as an object of public charitable nature, though the other objects were of public nature. In coming to such a decision, the Hon'ble High Court also noted a speci....
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....tax is mostly with reference to the nature and character of the beneficiaries of the trust, viz., the member of the assessee-society, who are the employees of a section of the Government Department. Therefore, the main thrust was, deriving inspiration from the decision in Oppenheim v. Tobacco Securities Trust Co. Ltd., [1951] AC 297; [1951] 1 All ER 31 (HL), that there was no nexus between the propositus and the employees and so it cannot be said to constitute either public or a section of the public. If that be so, the benefit contemplated under the Act cannot be extended. Here we propose to confine ourselves to the question as to whether the members of the assessee-society, who doubtless are the employees of the police department under aegis of the State Government, are entitled to the benefit. So, the immediate question is whether the nexus between the Government, which is said to be the employer and the police personnel, the members of the society, is of personal or impersonal nature. That poses, indeed, an interesting question, which the learned counsel for the assessee, Sri Y. V. Anjaneyulu, very rightly submitted, i.e., there cannot be any analogy between public employment a....