TaxTMI 
TaxTMI 
2025 (8) TMI 1599
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....order passed by the learned Commissioner of Income Tax (Exemption), Ahmedabad under section 12AB of the Act, dated 30.03.2024. The Registry has recorded the delay and accordingly, the assessee has filed a petition for condonation of delay, supported by a sworn affidavit of the trustee, and a detailed explanation for the delay. 2.2 In the petition, it has been submitted that upon receipt of the rejection order, the assessee was engaged in the process of consulting multiple Chartered Accountants to seek legal advice in the matter. Subsequently, the appeal preparation was entrusted to a firm of Chartered Accountants in or around September 2024. However, owing to preoccupation with statutory tax audit compliances, return filings, and transfer pricing deadlines, as well as the intervening Diwali holidays, the filing of the appeal was inadvertently delayed. The assessee has specifically affirmed that there was no intention to delay the proceedings or prejudice the interest of the Revenue, and that the delay was neither wilful nor deliberate but occurred due to genuine professional and logistical constraints. In the accompanying affidavit, the trustee has affirmed that the assessee was....
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....a specific religious community or caste. 3.3 Subsequently, a show cause notice dated 14.03.2024 was issued to the assessee referring to clause 3 of the Trust's Constitution, which described the area of operation as limited to the families of the registered 131 villages of Aath Paragana Gurjar Prajapati Samaj, including those residing in other cities or villages of Gujarat such as Ahmedabad, Gandhinagar, and Surendranagar. The assessee was required to explain how such restriction did not violate the bar contained in section 13(1)(b) of the Act and why its application should not be rejected. In reply dated 21.03.2024, the assessee submitted that while the area of operation was described with reference to an identifiable group, the charitable activities were open to the general public and not confined to a specific caste or religion. It was contended that the trust worked for development of the society at large and the said samaj did not constitute a "particular religious community or caste". The assessee placed reliance on decisions of the Hon'ble Gujarat High Court in CIT v. Leuva Patel Seva Samaj Trust [(2014) 221 Taxman 75 (Guj)], to support the contention that the question of ....
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....come Tax Act,1961 read with Rule 17CB of IT Rules and therefore the said direction is required to quashed. Ground No. 3 That your appellant craves liberty to add, amend, alter and delete any grounds of appeal before the final hearing. 4.1 The learned Authorised Representative (AR) appeared on behalf of the assessee trust and vehemently assailed the impugned order passed by the learned CIT(Exemption), Ahmedabad. The learned AR submitted that the assessee trust is not newly constituted, but an old and established organisation with long-standing charitable activities traceable to the year 2007. In support, the AR placed reliance on documentary evidence such as a bank passbook in the name of the Samaj and records evidencing the organisation of a large-scale event namely, the Silver Jubilee Joint Marriage Ceremony of the Samaj held on 04.02.2007. These documents, forming part of the paper book (Annexures 1 and 2), were cited to establish the continuity and genuineness of the trust's existence and operations. 4.2 The AR further submitted that the core charitable objective of the assessee trust is to work for the development of society as a whole, and that its bene....
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.... and religion", the AR submitted that this observation is factually and legally unsustainable. It was pointed out that the word "Gurjar" is a community/surname used by people of diverse religious backgrounds including Jains, Rajputs, and others, and "Prajapati" refers to a caste or occupational group historically associated with pottery and artisan crafts. Thus, it was submitted that the trust does not represent or cater to a homogenous religious denomination and hence cannot be said to be created for the benefit of a particular religious community or caste. 4.6 Further, the AR specifically pointed out that the assessee has placed on record the audited financial statements for the years ended 31.03.2023 and 31.03.2024, which clearly reflect actual application of income on charitable activities. It was submitted that these statements furnish evidence to verify whether the objectives of the trust have been implemented in practice and whether the funds have been applied for the purposes consistent with the objects of the trust. 4.7 Lastly, it was submitted that the learned CIT(Exemption) failed to appreciate the full set of facts and legal submissions placed on record and errone....
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....ste" as per section 13(1)(b). Even otherwise, the question whether section 13(1)(b) is attracted or not is, as held by the Hon'ble Gujarat High Court in CIT v. Leuva Patel Seva Samaj Trust [(2014) 221 Taxman 75 (Guj)], relevant only at the stage of assessment, and not at the stage of registration. 5.3 We also note that in a recent decision of the Coordinate Bench of this Tribunal in the case of Patidar Samaj Trust Khajurdi v. CIT(Exemption) [ITA No. 1919/Ahd/2024, order dated 12.02.2025], a near-identical situation came up for consideration, where the trust was created by the Patidar Samaj and the CIT(Exemption) had rejected registration under section 12A on the ground that some of the objects were for the benefit of a caste. For the sake of clarity we reproduce the operative para of the said decision - "6. We have heard both the parties and perused all the relevant material available on record. Hon'ble Apex Court in the case of Ahmedabad Rana Caste Association (supra) categorically observed that it is sufficient if intention to benefit a section of public as distinguished from a specified individual and that will not go beyond the purview of public connected together a....
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....T(Exemption) that the trust's objects are either religious or that its beneficiaries form a homogenous religious denomination. The rejection order, therefore, lacks proper factual and legal foundation. 5.6 It is also pertinent to note that the assessee trust is an existing trust, which claims to have been in operation and has placed on record audited financial statements for the years ended 31.03.2023 and 31.03.2024. In such cases, particularly where the trust was established prior to 01.04.2021 and has applied for registration under clause (iii) of section 12A(1)(ac), the CIT(Exemption) is not only empowered but duty-bound to examine whether the trust has actually incurred expenditure in furtherance of its stated charitable objects. Such verification is an essential component of the statutory inquiry under section 12AB(1)(b)(ii), which requires satisfaction as to both the genuineness of activities and compliance with applicable laws material to the achievement of its objects. Failure to correlate the stated objects with the actual deployment of funds, despite the availability of financial records, results in a truncated inquiry and renders the order vulnerable to judicial corre....