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January 14, 2023

An item of general public usefulness is one that benefits a certain segment of the population.

by CA Shivam Jaiswal in Income Tax

An item of general public usefulness is one that benefits a certain segment of the population.

fact and issue of the case

1. The brief facts of the case are that the assessee is a religious Trust created for the purpose of carrying on social, charity, religious and educational activities. The applicant made application for registration of the trust under section 12AA of the Act on 27 March 2019. However, Ld. CIT(Exemption) rejected the application filed by the assessee for the reason that the trust is established for the benefit of a particular community namely “Rajput” and not for general public. The Ld. CIT(Exemption) rejected the assessee’s

2. The assessee is in appeal before us against the order passed by Ld. CIT(Exemption).

Observation of the court

1. By way of the above submission, the assessee submitted that Ld. CIT(Exemption) never questioned the genuineness of the activities of the Trust. He has only observed that “the objects of the Trust show that the Trust is established for the benefit of a particular community”. Further, the assessee submitted that insufficient opportunity of hearing was granted by Ld. CIT(Exemption). The assessee submitted that in the order CIT(Exemption) mentioned that he was in receipt of the submission dated 18-09-2019 in reply to his notices. However, no show cause notice was issued in response to the written submission filed with CIT (Exemption), proposing to reject the assessee’s application and no opportunity was given to the assessee to rebut the same. In absence of any show cause notice issued by CIT (Exemption), the assessee was unable to place the above judicial precedents before Ld. CIT(Exemption) for his consideration, which directly support the case of the assessee as a response to the reasons for which the application was rejected by CIT (Exemption). In response, DR placed reliance on the observations made by CIT (Exemption) in the order.

2. We have heard the rival contentions and perused the material on record. In our view, in the interest of justice, we are restoring the file to the CIT (Exemption) for fresh adjudication, after giving due opportunity of hearing to the assessee to present its case on merits. The DR has also not objected to the same.

3. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 11-11-2022

Conclusion

The tribunal has ruled in favour of the assessee and dismiss the appeal

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