Bombay H.C : The said public trust is also registered with IT Department under s. 12(a) of the IT Act.

High Court Of Bombay : Nagpur Bench

Tax Practitioners Benevolent Fund vs. CIT

Sections 2(15), 80G

R.M. Lodha & K.J. Rohee, JJ.

Writ Petn. No. 922 of 2003

29th September, 2003

Counsel Appeared

C.J. Thakar, for the Petitioner : A.S. Jaiswal, for the Respondent

JUDGMENT

R.M. Lodha, J. :

Heard. Rule. Returnable forthwith. Mr. A.S. Jaiswal, advocate, waives service for sole respondent. By consent, rule is heard finally at this stage. Tax Practitioners Benevolent Fund is the petitioner before us. It is a public charitable trust registered under the Bombay Public Trust Act, 1950, having registration No. E-1484 (N). Inter alia, the said public trust has been constituted to provide assistance to necessitous persons or tax practitioners or their widows, children and dependant and carry on any other act for the advancement of general public utility without distinction of sex, colour, caste, creed or religion.

The said public trust is also registered with IT Department under s. 12(a) of the IT Act. On 9th Sept., 1988 the petitioner-trust applied for exemption in the prescribed form under s. 80G of the IT Act before the CIT and placed before it the objects of the petitioner-trust, inter alia, providing for financial assistance for maintenance, education or any other similar purpose to necessitous persons, wives and children of persons who are or have been in practice of taxation and support to the relatives or other dependant of a person who has been in practice of taxation and who has died without leaving a widow or child. The said application seeking exemption under s. 80G of the IT Act has been rejected by the ITO (Hq) (Tech) for CIT-I, Nagpur, by order dt. 21st Jan., 2002 giving rise to the present petition.

The objects of the trust in trust deed dt. 21st Oct., 1997 provide, inter alia thus: “(A) To provide financial assistance for maintenance, education or any other similar purpose to necessitous person being (i) Persons who are or have been in practice of taxation, or (ii) Wives and children of persons who are or have been in practice of taxation, or (iii) Widows and children of deceased persons who have been in practice of taxation, or(iv) Relatives or others who were dependant for support on a person who has been in practice of taxation and who has died without leaving a widow or child, or (B) Do any other act for the advancement of general public utility without distinction of sex, colour, caste, creed or religion, and other charitable objects.” While rejecting the application made by the petitioner under s. 80G, it was observed by the concerned ITO that none of the objects at (A) were charitable in nature inasmuch as the trust is meant for the benefit of a specific group of people i.e., tax practitioners and their relatives and the objects stated at (B) are vague.

In assailing the aforesaid order dt. 21st Jan., 2002, one of the contentions advanced before us by the counsel for petitioner is that another public charitable trust viz., The Chartered Accountants’ Benevolent Fund having identical objects for the benefit of necessitous person, chartered accountants, or their widows, children and dependants, exemption has been granted under s. 80G of the IT Act.

The averments made in para 7 of the writ petition reads thus : “It may be noted that in respect of another trust viz., “The Chartered Accountants’ Benevolent Fund”, New Delhi, which has got exactly identical objects with the only difference that the petitioner-trust is for the benefit of tax practitioners and their dependants while the said another trust is for the benefit of chartered accountants and their dependants, has been granted exemption certificate under s. 80G by the IT Department. A true copy of the memorandum of association and Rules and Regulations of the said “The Chartered Accountants‘ Benevolent Fund” is filed herewith and is marked as Annex.-8.”

10. In reply-affidavit filed on behalf of the respondent, the exemption granted to the Chartered Accountants’ Benevolent Fund under s. 80G by the Director of IT (Exemption), New Delhi, is not disputed.

11. However, it is submitted that the grant of exemption to Chartered Accountants’ Benevolent Fund does not entitle the petitioner to exemption as in the opinion of the respondent the objects of the petitioner do not fall within the prescribed parameters. Para 5 of the reply-affidavit reads thus : “5. The respondent further submits that on enquiry it is found that the Chartered Accountants’ Benevolent Fund, New Delhi, has been granted exemption under s. 80G by the Director of IT (Exemption), New Delhi. The initial exemption was granted for the period 19th Dec., 1985 to 31st Dec., 1986. The exemption has been renewed from time to time and the last order of renewal is passed on 13th Sept., 2000 renewing the approval till 31st March, 2003. The respondent submits that the grant of exemption to the Chartered Accountants’ Benevolent Fund does not entitle the petitioner to exemption as in the opinion of the respondent the objects of the petitioner do not fall within the prescribed parameters.”

12. The petitioner has placed on record the Memorandum of Association and Rules and Regulations of the Chartered Accountants’ Benevolent Fund. The objects of the Chartered Accountants’ Benevolent Fund as reflected therefrom read thus: “The objects for which the fund is established is to provide financial assistance for maintenance, education or any other similar purpose to necessitous person, being : (a) persons who are or have been members of the Institute, whether subscribers to the fund or not; or (b) wives and children of persons who are or have been members of the Institute, whether subscribers to the fund or not; or (c) widows and children of deceased persons who have been members of the Institute, whether subscribers to the fund or not; or (d) relatives or others who were dependant for support on a person who has been a member of the Institute, whether subscriber to the fund or not; and who has died without leaving a widow or child.”

13. If the objects of the Chartered Accountants’ Benevolent Fund as noted above justify the grant of exemption under s. 80G of the IT Act to the Chartered Accountants’ Benevolent Fund, a charitable trust, we hardly find justification in refusing the petitioner—Tax Practitioners Benevolent Fund, having similar objects the grant of exemption under s. 80G. Sec. 80G of the IT Act does not contemplate different yardstick and different parameters being applied to the different trusts having similar objects and similar purpose. It is not open to the IT Department to apply different norms to different trusts having similar objects seeking grant of exemption under s. 80G. Close comparison of the objects of the petitioner—Tax Practitioners Benevolent Fund, and the objects of the Chartered Accountants’ Benevolent Fund would show that the objects are not only similar but virtually identical to provide financial assistance for maintenance, education or any other similar purpose to necessitous persons. In the case of the Chartered Accountants’ Benevolent Fund, the said provision for financial assistance for maintenance, education or any other similar purpose to necessitous persons is meant for the persons who are or have been members of the Institute of Chartered Accountants of India while the objects of the Tax Practitioners Benevolent Fund is to provide financial assistance for maintenance, education or any other similar purpose to necessitous persons who are or have been in practice of taxation. It is true that exemption under s. 80G to the Chartered Accountants’ Benevolent Fund has been granted by the Director of IT (Exemption), New Delhi, while the petitioner’s application for grant of exemption under s. 80G has been rejected by the office of the CIT-I, Nagpur, but the different officers under the IT Act authorised to consider the application for grant of exemption under s. 80G has to apply the same norms, yardstick and parameters while considering the applications under s. 80G and the similar persons cannot be treated differently merely because the officers happen to be different having different territorial jurisdiction. Sec. 2(15) of the IT Act defines charitable purpose including relief of the poor, education, medical relief and the advancement of any other object of general public utility. If by applying the said definition to the Chartered Accountants’ Benevolent Fund having objects noted above, the Director of IT (Exemption), New Delhi, was satisfied to grant exemption to the Chartered Accountant’s Benevolent Fund under s. 80G of the IT Act, it is difficult to fathom the reasoning of the present respondent while considering the same definition under s. 2(15) of the IT Act, 1961, to say that all the objects of the petitioner-trust stated at (A) are not charitable in nature inasmuch as the trust is meant for the benefit of a specific group of people i.e., tax practitioners and their relatives and the objects stated at (B) are vague. If the objects to provide financial assistance for maintenance, education or any other similar purpose to necessitous persons who are or have been members of the Institute of the Chartered Accountants of India was not found to be an object meant for the benefit of the specific group of people i.e., members of the Institute of Chartered Accountants of India by the Director of IT (Exemption), New Delhi, while considering the application made by the Chartered Accountants’ Benevolent Fund for exemption under s. 80G, it is difficult for us to accept the reasoning of the present respondent for the self-same objects of the petitioner—Tax Practitioners Benevolent Fund, the objects are for benefit of specific group of people i.e., tax practitioners and their relatives. Thus, we are satisfied that the order dt. 21st Jan., 2002 passed by the office of the CIT-I, Nagpur, is unsustainable and the application made by the petitioner for grant of exemption under s. 80G needs reconsideration in accordance with law.

16. Consequently we allow the writ petition in part, set aside the order dt. 21st Jan., 2002 passed by the office of CIT-I, Nagpur, and restore the petitioner’s application under s. 80G of the IT Act, 1961, for reconsideration by the concerned authorities in accordance with law. The respondent is expected to take fresh decision on petitioner’s application under s. 80G as directed above expeditiously and preferably within four months from the date of receipt of this order. No costs.

[Citation : 266 ITR 561]

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