HIRALAL BHAGWATI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) . This petition under Article 226 of the Constitution of India, is filed by the Trustees of the Gujarat Law Society Karmachari Kalyan Nidhi, Ahmedabad.

(2.) The short facts leading to the present proceedings are as under :- Respondent-Commissioner of Income Tax (hereinafter referred to as "C.I.T.") considered the application dated 21.7.1981 of the Gujarat Law Society Karmachari Kalyan Nidhi (hereinafter referred to as "The Trust") submitted under Section 12A(a) of the Income Tax Act, 1961 (hereinafter referred to as "The Act"), and vide letter dated 21.4.1982 (Annexure `E') informed the said trust that the same has been registered under Section 12A(a) of the Act. For the assessment year 1985-'86, the Trust was denied the exemption and benefit under Section 80G(5) of the Act by an order dated 10.2.1989 by the Income Tax Officer (hereinafter referred to as "I.T.O."). Notices dated 10.2.1989 were issued by the I.T.O. under Section 148 of the Act for the assessment year 1984-'85, and under Section 274 read with Sections 273(2)(b), 271(1)(a) and 271(1)(c) of the Act for the assessment year 1985-'86. Respondents, though served, have filed no reply and, therefore, uncontroverted averments made in the petition are required to be accepted.

(3.) The Trust was settled by Petitioner No.2 by executing a Deed of Trust dated 21st July, 1981, vide Annexure `B'. The Rules and Regulations of the Trust framed by the settler and the Trustees on 21st July, 1981 are at Annexure `C'. The Trust was registered as a Public Charitable Trust with the Office of the Charity Commissioner under the provisions contained in the Bombay Public Trusts Act, 1950, vide registration No.CH/4648/Ahmedabad, for which a certificate of registration was issued on 28th January, 1982, vide Annexure `D'. The petitioners submitted an application on 9.3.1982 for being registered under Section 12A(a) of the Act, which was entered at No.G.137/IV in the Register of Applications under Section 12A(a) maintained by the C.I.T. after making all necessary enquiries whether the Trust is a Public Charitable Trust or not. The letter issued by the C.I.T. on 21st April, 1982 in response to the application dated 9.3.1982 for the aforesaid purpose is placed on record vide Annexure `E'. It is in view of the registration Annexure `E', the petitioners addressed a letter dated 17.2.1988 vide Annexure `F' with relevant record to the concerned I.T.O. for being recognized under Section 80G of the Act so that the Trust can avail of the benefit of exemption under Section 80G of the Act. It is in response to this application the concerned I.T.O., vide letter dated 26.2.1988, Annexure `G', communicated that "the object of the Trust is to help by giving financial aid to the employees of the Gujarat Law Society, in cases of death of an employee during his / her services, illness or permanent disability which incapacitates the employee to discharge his / her duties", and held that the objects of the Trust are not for general public utility and hence, the Trust is not entitled to get exemption under Section 80G of the Act.