National Real Estate Development Council Vs CIT (Exemption) (ITAT Ahmedabad)
The assessee appealed against the order dated 21.02.2024 passed by the Commissioner of Income-tax (Exemption), Ahmedabad, rejecting its application for registration under Section 12AB of the Income-tax Act, 1961. The application had been filed on 21.08.2023 in Form No. 10AB under Rule 17A of the Income-tax Rules, 1962. The Commissioner, after examining the Memorandum of Association and documents furnished by the applicant, concluded that the trust’s objects were confined to the benefit of the members of the National Real Estate Development Council Gujarat (NREDC-Gujarat) and were not for the benefit of the public at large. The Commissioner also held that the trust functioned as an association for protecting the business interests and welfare of its members, that its membership was limited to persons engaged in real estate-related activities, and that it did not include representatives of customers’ interests. Invoking Section 13(3), the Commissioner rejected the application under Section 12A and cancelled the provisional registration earlier granted to the assessee. The Commissioner relied upon CIT vs. Truck Operators Association, 9 taxmann.com 267, to support the conclusion that the trust’s activities were not charitable for the purpose of general public utility.
Before the Tribunal, the assessee contended that the trust’s objects benefited a section of the public and that, for an object to qualify as one of general public utility, it was not necessary that it should benefit the whole of mankind or every person in a State or country. It submitted that benefit to a section of the public was sufficient. The Departmental Representative supported the order of the Commissioner.
