Fund founded for welfare of Delhi Police should be treated as charitable in its objects

Delhi Police Welfare and Recreational Club Fund vs. CIT (ITAT Delhi)

We have gone through the record in the light of the submissions made on either side. Insofar as the nature of activity of promotion of  welfare and recreational activities of the police personnel, by its nature, is concerned, Ld. CIT(E) does not dispute whether it falls in the purposes of section 2(15) of the Act. Only objection is that the aims & objects of  standing order No. 270 of Commissioner of police, Delhi clearly establish that the primary objective of the appellant club is to provide benefit to its members of Delhi police personnel only and not to public at large or general public and, therefore, it violates the provisions of section 2 (15) of the Act. This is the sole basis for rejection of the request of the assessee for registration section 12A of the Act. Precisely this is the argument of the Ld. DR also.

 In AP Police Welfare Case (supra), Hon’ble Andhra Pradesh High  Court considered a similar question in the light of the decision reported  in Oppenheim vs. tobacco securities trust Co Ltd (1951) 1 All ER 16, IRC v. City of Glasgow Police Athletic Association (1953) 1 All ER 747 (HL), and Ahmedabad Rana Caste Association vs. CIT (1971) 82 ITR 704 (SC) and held that insofar as public employment is concerned and in particular the government formed by, for and of the people is the employer, even it is to be taken in a restrictive sense, and the employer is the representative of the public or the people -in the ultimate analysis, it is the public that is the employer; qui facit per alium facit per se, and so, to the service rendered by the employees in the public employment, the beneficiaries  are the public. On this test the court reached a conclusion that AP Police Welfare Association which is a charitable in its objects, as is quite apparent from the very objectives laid down under the rules framed thereunder, is a body that would constitute “a section of the public” and so, the fund founded for the benefit of such section should be treated as charitable in its object, attracting thereby the exemption from the exigibility to tax.

We accordingly, following the same, hold that the appellant, the Delhi Police Welfare And Recreational Club Fund is charitable in its objects and is a body that constitutes a section of the public, and so, the fund founded for the benefit of such section should be treated as charitable in its objects, attracting thereby the exemption from the exigibility to tax.

FULL TEXT OF THE ORDER OF ITAT DELHI

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