The Commissioner Of Income Tax- Exemption, Jaipur v. Shri Baba Balak Nath Seva Sansthan, Shivank

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 60/2025 The Commissioner Of Income Tax- Exemption, Jaipur. ----Appellant Versus Shri Baba Balak Nath Seva Sansthan, Shivank 69/12, NewSanganer Road, Near Dhanwantri Hospital, Mansarovar, Jaipur-302015, Rajasthan. ----Respondent For Appellant : Mr. Aditya Doda on behalf of Mr. Shantanu Sharma HON'BLE THE CHIEF JUSTICE MR. K.R. SHRIRAM HON'BLE MR. JUSTICE MANEESH SHARMA 08/09/2025 Order 1.This appeal filed under Section 260A of the Income Tax Act,1961 (for short ‘the Act’), raises a grievance against an orderdated 15[th] October 2024, passed by the Income Tax AppellateTribunal (ITAT). By the said order, the ITAT has allowed twoappeals filed by the assessee, who is respondent before us.2.Following substantial questions of law have been proposed in the appeal: “1.Whether in the facts and circumstances of the case andin law, the Learned ITAT was justified in holding that theassessee trust is entitled to registration u/s 12A of the Act1961. Despite the fact that the specific objects 03 and 06 inthe trust deed relate to activities such as development andsale of products from small cottage industries, handicrafts,carpentry, food processing etc., which are primarily in thenature of business trade and commerce and do not fall intothe purview of definition of charitable purpose u/s 2(15) of theAct and as further interpreted by the Hon’ble Supreme Courtin the case of ACIT (Exemptions) v/s Ahmedabad UrbanDevelopment Authority (Civil Appeal No.21762/2017,judgment dt. 19.10.2022) Taxmann.com 278(SC)?in law, the Learned ITAT was justified in holding that theassessee trust is entitled to registration u/s 12A of the Act1961. Despite the fact that the specific objects 03 and 06 inthe trust deed relate to activities such as development andsale of products from small cottage industries, handicrafts,carpentry, food processing etc., which are primarily in thenature of business trade and commerce and do not fall intothe purview of definition of charitable purpose u/s 2(15) of theAct and as further interpreted by the Hon’ble Supreme Courtin the case of ACIT (Exemptions) v/s Ahmedabad UrbanDevelopment Authority (Civil Appeal No.21762/2017,judgment dt. 19.10.2022) Taxmann.com 278(SC)? 2.Whether on the facts and circumstances of the case andin law, the Learned ITAT was justified in not deciding the issuewhether the specific objects in trust deed are of businessnature or not and merely allowed the registration of the Trustu/s 12AB of the Act 1961 on the basis of claim of the appellanttrust that no activity related to these objects were carried outby the assessee? 3.Whether on the facts and circumstances of the case andin law, the Learned ITAT was justified in not appreciating thefact that the Trust was doing the activities beyond the objectsspecified in the MOA/deed of assessee trust?” 3.The assessee is a registered charitable trust whoseapplications for registration under Section 12AB of the Act wererejected. The applications were disallowed on two grounds,namely, object Nos.3 and 6 of the deed of the applicant relate toactivities which, according to the Income Tax Officer, arecommercial/business in nature and secondly, the activities carriedout by the assessee were not in accordance with the objects of thetrust. 3.Whether on the facts and circumstances of the case andin law, the Learned ITAT was justified in not appreciating thefact that the Trust was doing the activities beyond the objectsspecified in the MOA/deed of assessee trust?” 3.The assessee is a registered charitable trust whoseapplications for registration under Section 12AB of the Act wererejected. The applications were disallowed on two grounds,namely, object Nos.3 and 6 of the deed of the applicant relate toactivities which, according to the Income Tax Officer, arecommercial/business in nature and secondly, the activities carriedout by the assessee were not in accordance with the objects of thetrust. 4.The ITAT has come to a factual finding that the objectsmentioned in the deed are not in the nature of business orcommercial and secondly, the trust has not carried out any suchactivity. The ITAT has also come to a factual finding that thestatement of income and expenditure account for the last fiveyears also does not indicate that any such activity has ever beencarried out. It is settled law that if the authority is coming to afinding that the objects in the deed are commercial or business innature, then they should also give a finding that the dominantintention of the trust or the institution is profit making. That is notthe case and that is also not reflected from the income andexpenditure account. 5.As regards the alleged activities carried out by the assesseenot to be in accordance with the objects of the trust, there is a factual finding that the events were organized by one Ms. RituAgarwal, as mentioned in the pamphlet and the ITAT came to afactual finding that it cannot be stated that any activity wasconducted by the assessee trust against its objectives. 6.In the circumstances, no substantial question of law arises.Appeal dismissed. 7.Pending application, if any, also stands dismissed. (MANEESH SHARMA),J (K.R. SHRIRAM),CJ KAMLESH KUMAR-RAHUL/1