CIT Exemption Vs Jamiatul Banaat Tankaria (Gujarat High Court)
The Revenue filed an appeal under Section 260A of the Income-tax Act, 1961 against the order dated 06.03.2024 passed by the Income Tax Appellate Tribunal, Ahmedabad, in ITA No. 58/Ahd/2023. The appeal proposed substantial questions of law on whether the Tribunal had correctly interpreted the Supreme Court decision in Dawoodi Bohara Jamat in holding that Section 13(1)(b) could not be applied to deny registration under Section 12AB, and whether the Tribunal had failed to consider the amendments introducing the procedure for registration under Section 12A, including the Explanation below Section 12AB(4) treating application of income for the benefit of a particular religious community as a specified violation for cancellation of registration.
The assessee-trust had applied on 06.06.2022 for registration under Section 12AB in Form No. 10AB. During scrutiny of the application, the Commissioner of Income Tax (Exemptions), Ahmedabad, found that one of the trust’s objects was for the benefit of a particular religious community or caste and, on that basis, held that the assessee was not entitled to exemption under Section 13(1)(b). Consequently, the Commissioner denied registration under Section 12A. The assessee challenged the rejection before the Tribunal, which allowed the appeal and directed the Commissioner to grant registration under Section 12A. The Revenue then preferred the present appeal before the High Court.
