TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 727
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....the Income Tax Act, 1961 on the ground that in the case of your appellant trust objects, which are in the nature of charitable is restricted to benefit of a particular religious community or caste and therefore as per the provision of sec 12(1)(b) would be applicable and therefore the your appellant assessee trust would not be eligible for exemption u/s 11 of the Act. 2. That your appellant trust craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal." ITA No. 668/Ahd/2023 (A.Y. 2023-24) "1. That the learned Commissioner of Income Tax (Exemptions), Ahmedabad has erred in law and on facts in refusing to grant approval u/s 80G of the Income Tax Act, 1961 on the ground that activities have not commenced till filing of the application in form no. 10AB. 2. That your appellant trust craves leave to add, to amend, alter or withdraw any or more grounds of appeal on or before the hearing of appeal." We shall first deal with ITA No. 667/Ahd/2023 (A.Y. 2023-24) 3. The brief facts of the case are that the assessee filed application for registration of Trust under Section 12AB of the Act on 21.12.2022 in Form No. 10AB. ....
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....bmitted that in the aforesaid decision, the Gujarat High Court observed that the "Leuva Patel Community" consists mainly of agriculturists and therefore, such community cannot be dubbed as a "religious community". Accordingly, the arguments of the Counsel before us were two folds: Firstly , the assessee is not a religious community and Secondly, the Ld. CIT(E) erred in invoking the provisions of Section 13(1)(b) of the Act at the time of grant of registration under Section 12AB of the Act, and the provisions of Section 13(1)(b) could only be invoked at the time of assessment, when the assessee's claim of exemption under Sections 11 & 12 of the Act is under scrutiny. 6. In response, Ld. D.R. placed reliance on the observations made by Ld. CIT(E) in the order rejecting grant of registration under Section 12AB of the Act. 7. We have heard the rival contentions and perused the material on record. 8. In the case of CIT, Rajkot-II vs. Leuva Patel Seva Samaj Trust 42 taxmann.com 181 (Gujarat), the assessee a public charitable trust, applied for registration under Section 12AA of the Act. The CIT(E) rejected the said application holding that the trust was for benefit of "Leuva Patel C....
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....egistration is accorded or not." 5. In view of the above conclusive opinion of a Division Bench of this Court, we do not see any reason to interfere. Tax Appeal is, therefore, dismissed." 9. We observe that in the case of Jamiatul Banaat Tankaria 160 taxmann.com 358 (Ahmedabad - Trib.), the ITAT held that where objects of assessee-trust were primarily charitable rather than favouring any specific religious community, CIT(E) was not justified in denying registration under Section 12A, by invoking Section 13(1)(b) as said provisions would be attracted only at time of assessment and not at time of grant of registration. In the case of Malik Hasmullah Islamic Educational and Welfare Society 24 taxmann.com 93 (Luck.), the ITAT held that since provisions of Sections 11, 12 and 13 are intended for exercise of jurisdiction by an Assessing Officer in an assessment proceedings, Commissioner is not competent to invoke such provisions for purpose of declining registration under Section 12AA. In the case of St. Joseph Academy 50 taxmann.com 216 (Hyderabad - Trib.), the ITAT held that provisions of Section 13 can be invoked by Assessing Officer while framing assessment and not by Commission....
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....t to test it on the anvil of Section 13. 10. In view of the above judicial precedents, looking into the facts of the instant case, we are of the considered view that the provisions of Section 13 of the Act can be invoked only at the time of assessment and not at the time of grant of registration under Section 12A of the Act. Our view is further supported by the decision of the Hon'ble jurisdictional High Court in the case of CIT (Exemptions) v. Bayath Kutchhi Dasha Oswal Jain Mahajan Trust [2016] 74 taxmann.com 199/243 Taxman 60 (Guj.)/[2017] 8 ITR-OL 494 (Guj.) wherein on the issue of denial of grant of registration u/s 12A of the Act by invoking Section 13(1)(b) of the Act, it was categorically held that the provisions of Section 13 would be attracted only at the time of assessment and not at the time of grant of registration. The relevant finding of the Hon'ble High Court at para 8 of his order is as under: "8. Thus, very premise for the Commissioner to come to the conclusion that the objects of the trust were confined for the benefit of a religious community, is incorrect. Thereafter to suggest that the activities were carried out only for such purposes would be ent....