Gulabchandmulchand Shree Parshwanath Trust Vs CIT (Exemption) (ITAT Surat)
The assessee appealed against the order dated 29.01.2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad, rejecting its application for registration under Section 12AB of the Income-tax Act, 1961, and cancelling its provisional registration. The assessee challenged the rejection of registration, cancellation of provisional registration, invocation of Section 13(1)(b) despite claiming to be a religious-cum-charitable trust, and the finding that it had committed specified violations under the Explanation to Section 12AB(4).
The assessee had filed an application in Form 10AB under Section 12A(1)(ac)(iii) on 09.07.2023, and additional details were submitted on 25.10.2023. On examining the trust deed, the Commissioner observed that one of the trust’s objects, contained in Clause (F), namely, “To set up or to be helpful to educational institutions for that sort of upliftment of the group of people following Jainism”, was charitable in nature but restricted to the benefit of the Jain community. The Commissioner treated the assessee as a composite trust and, relying on the Supreme Court decisions in CIT vs. Palghat Shadi Mahal Trust and CIT vs. Dawoodi Bohara Jamat, held that Section 13(1)(b) was applicable. On that basis, the Commissioner concluded that the assessee was not eligible for exemption under Section 11, rejected the application for registration under Section 12A, and cancelled the provisional registration.
