2023 (6) TMI 178

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.... hence, they are taken up together and disposed of by this common order for the sake of convenience. 3. With the consent of both the parties, the appeal of the assessee in ITA No.1201/Del/2022 for AY 2018-19 is taken up first. 4. Though the assessee has placed several grounds before us, the only effective issue involved in this appeal is as to whether the ld. CIT(E) was justified in rejecting the application seeking registration u/s 12AA of the Act, in the facts and circumstances of the instant case. 5. We have heard the rival submissions and perused the material available on record. We find M/s International Centre for Research on Women (ICRW) is a non-profit organization established with the objective of promoting social and economic development with women's full participation and is incorporated as a company registered u/s 25 of the Companies Act, 1956. The provisions of Payment of Gratuity Act, 1972 are applicable in the case of ICRW and, therefore, to protect the financial interest of its employees, the ICRW set up a trust, namely, 'ICRW Group Group Gratuity Trust' , i.e., the assessee herein. This new trust applied in online seeking registration u/s 12AA of the Act i....

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....re against the giving effect order passed by the ld.CIT(E) on 31.03.2022. We find that the ld.CIT(E) had stated that the judgement of the Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association, reported in 82 ITR 704 (relied upon by the assessee) would not be applicable in the present case as Ahmedabad Rana Caste Association was incorporated for the purpose of management of movable and immovable properties of Rana community of the city of Ahmedabad, doing acts to improve education in the community and to give medical help to the community, etc. However, in the case of the assessee, the trust has been incorporated to discharge the statutory liability of ICRW in the form of gratuity payable to the employees of ICRW. Accordingly, the ld. CIT(E) concluded that the assessee trust was not created for any general welfare of the employees. 7. Similarly, the ld.CIT(E) distinguished the order of the Hon'ble Gujarat High Court relied upon by the assessee in the case of Hiralal Bhagwati vs. CIT, reported in 246 ITR 188 (Guj) as factually distinguishable. The ld.CIT(E) observed that in that case, the trust was created to 'give financial aid to the employees of Gujarat Law Soci....

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....the year ending 31,03.2017. 31.03.2018. 31.03.2019, 31.03.2020 and 31.03.2021 as Annexure-1 2. There is no donation received by the trust since inception, except the contributions for the corpus towards gratuity fund. 3. The trust is formed for the social cause of the employees of International Center For Research on women (ICRW) and the said trust is part of ICRW and is formed for payment of gratuity amount to its employee. There is no further activities carried out by the trust and not involved in any trade or business activities. 4. A detail of source of fund is enclosed as Annexure-2 5. The amount of Rs 20,16000/- was received from ICRW towards setting up of gratuity fund for the employees of ICRW. Since this amount was received for specific purpose and was to be used for retirement fund of employees of ICRW, it was capital receipt in nature , hence it was capitalised as per normal Indian accounting standards. This was the reason that it was shown in balance sheet instead of instead of income and expenditure account, being corpus fund in nature. 6. Your honour has presumed that a public charitable trust can not be an employer, This p....

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....lding elections, etc. The functions of the Council by Section 15(2A) include approving the academic courses and their contents, examining the candidates, regulation and articleship assistance, prescribing qualification for entry of persons in the register, collection of fees from members; the regulation and maintenance and status of the professional qualifications of the members of the Institute, etc. By Section 15A, universities are enabled to impart education on subjects covered by the academic courses of the Institute. However, by Section 15A(2) while awarding degrees or diplomas, their designation should not resemble or be identical to what is awarded by the Institute. The finances are regulated by Section 18. The Council is enjoined to maintain the register under Section 19 and has disciplinary powers by virtue of Section 21A, 21B and 21C of the Act. 195. These provisions of the Act clarify beyond a doubt that the Institute performs statutory functions in the larger public interest of regulating the standards of education, leading up to the profession of Chartered Accountancy and also prescribing standards of professional etiquette, behaviour, and discipline of its me....

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.... in the case of Nashik District Security Guards Board vs. CIT in ITA No.1379/PN/2010 dated 20.02.2015 had, under similar circumstances, decided the issue in favour of the assessee. For the sake of convenience, the relevant operative portion of the said Tribunal order is reproduced hereunder:- "2. The applicant before us is constituted as per the Maharashtra Private Security Guards (Regulation of Employments and Welfares) Act, 1981. The basic object of establishing the assessee Board is to regulate the employment of Private Security Guards in factories and establishments in the State of Maharashtra and for making better provisions for the terms and conditions of their employment and welfare. The objects of the assessee have noted by the Commissioner in para 2 of his order, as under:-- (i) Protect the casual, unorganized Pvt. Guards, from the exploitation by ensuring full and proper payments of wages due to them and provide security of work. (ii) Ensure that the guards are employed properly. (iii) Ensure benefits to the guards in the form of Provident fund, gratuity, bonus, compensation for injury, medical benefits, etc. (iv) Ensure welfar....

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....tatute also provides for establishment of Boards, who are under the superintendence and control of the Government of Maharashtra. In-fact, the statute also provides the manner in which the property, funds and assets of the Board are to be held and applied subject to the provisions and for the purposes of the scheme formulated under the said statute. We are enumerating the aforesaid clauses of the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 only to point out that the legislature has enacted the aforesaid statute not with the purpose of carrying out of any trade, commerce or business or any activity of rendering any services in relation to any trade, commerce or business. Ostensibly, the said objectives are for regulating the employment of private security guards employed in factories and establishments in the State of Maharashtra and for making better provision for terms and conditions of their employment and welfare. Clearly, it is a welfare measure of the Government of Maharashtra and in our view, the activities of the Board cannot be said to be falling foul of the proviso to section 2(15) of the Act, as contended by the Commissioner. We ar....