TaxTMI 
TaxTMI 
2024 (11) TMI 1640
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....eal:- 1. The Ld. CIT(E) has erred in points of law and or on facts on the following aspects in refusing to grant the regular registration for five years and in cancelling the provisional registration. a) The Ld. CIT(E) has erred in applying all tests of public charitable trust despite his observation in the SCN that the appellant trust is a composite trust. Therefore, the order is passed in contradiction of ground realities. b) The Ld. CIT(E) has erred in not considering the submission made by reply letter dt: 18.03.2024 in response to dt: 14.03.2024 though it is stated by him in para 6.3 of the order that reply letter dt: 18.03.2024 is reproduced as under (i.e. in the order). c) The Ld. CIT(E) has erred ....
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....12A(1)(ac)(iii) of the Act.. The applicant had previously been granted provisional approval under Form 10AC on 27.05.2021, for the assessment years 2021-22 to 2023-24, under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A. In response to the application, Ld. CIT(E) issued notices, requesting additional information and documents. The applicant replied to these notices on 29.12.2023, providing the requested details. Upon reviewing the applicant's objectives, as outlined in its constitution, Ld. CIT(E) noted that the primary purpose of the trust was to benefit the members of the "Shri Kalol Sthanakvasi Jain Mitra Mandal" through social, economic, and religious activities. The trust's objectives included promoting unity....
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....hich do not fall within the legal definition of a charitable trust. The applicant cited several judicial precedents, including rulings from the Supreme Court in Ahmedabad Rana Caste Association and CIT vs. Dawoodi Bohra Jamat, to support its case. However, Ld. CIT(E) distinguished these cases, noting that the Rana Caste Association case was based on the Income Tax Act of 1922, which had different provisions from the current Act, particularly with regard to the eligibility of trusts for exemption under sections 11 and 12. The applicant's case, which involved a trust formed for the benefit of a particular community (the Chauhan community), was not deemed to meet the charitable requirements of the current law. Ld. CIT(E) also referred to a rul....
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....tent of forming an income-generating association. Thus, Counsel for the assessee argued, the trust does not function as a professional or trade-based organization, and the concept of an "association" in the traditional sense does not apply. The Counsel for the assessee further pointed out that the name of the trust-Kalol Sthanakvasi Jain Mitra Mandal-should not be interpreted as restricting membership to only individuals of the Jain Sthanakvasi faith. Rather, the trust was established by the Jain Mitra Mandal but is open to any individual of Kalol origin who resides in Ahmedabad. The Counsel for the assessee referred to a clause in the trust's constitution, which states that the membership is open to all individuals of Kalol origin, reg....
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....ich was Khoja Shia Ishna Ashari Samaj and thus, section 13(1)(b) would be applicable and dismissed application for grant of final registration. The Ahmedabad Tribunal held that provisions of section 13(1)(b) of the Act can be invoked only at time of assessment and not at time of grant of registration under section 12A of the Act. Therefore, in view of aforesaid legal position, matter was to be restored to file of CIT (Exemptions), for de-novo consideration. While passing the order, the Tribunal made the following observations: 7. We have heard the rival contentions and perused the material on record. In the case of Bhojalram Leuva Patel Seva Samaj Trust v. CIT (Exemptions) [2024] 162 taxmann.com 270 (Ahmedabad - Trib), the ITAT hel....
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....ct can be invoked only at the time of assessment and not at the time of grant of registration under Section 12A of the Act. 12. 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 (Gujarat)/[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....