CIT Vs Salej Rotary Seva Foundation (Gujarat High Court)
The Gujarat High Court dismissed the Revenue’s appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal allowing registration under Section 12AB to the respondent trust. The Revenue proposed substantial questions of law contending that the Tribunal had wrongly relied upon the decision in CIT Exemption Vs. Bayath Kutchhi Dasha Oswal Jain Mahajan Trust and had incorrectly treated the issue as relating to benefit of a particular religious community or caste, whereas the registration had been denied on the ground that the trust’s objects were not for the benefit of the public at large and were primarily confined to its members.
The respondent trust had applied to the Commissioner of Income Tax (Exemption) for registration under Section 12AB. The Commissioner rejected the application after examining the objects of the trust, holding that certain objects were primarily intended for the benefit of the trust’s members and their family members. According to the Commissioner, the trust functioned as a welfare association or union, collected fees from its members, and the activities undertaken amounted to services rendered to members rather than charitable activities for the public at large. The Commissioner therefore concluded that the trust was not entitled to registration under Section 12AB.
