1. This appeal by the applicant is directed against the order of CIT, Jodhpur, dt. 17th January, 2000, whereby he rejected the applicant's application for registration under s. 12A of the IT Act, 1961.
2. The facts, in brief, as ascertainable from the materials on record, are that the assessee is a Chartered Accountants Society of Jodhpur, registered under the Rajasthan Society Registration Act, 1958. The applicant's society has its objects as contained in cl. 3 of its constitution mentioned below : (1) Sadasyo ko ankekshan, lekha, pratyaksh wa apratyaksh karo, yavasaik kanunon tatha anya sambandhit kanunon tatha vishayon par dnyan ka prasar karna tatha usaki jankari karvana.
(2) Sadosyon ko Charterd Accountant profession sambandhi dnyan evam jankari karvana jiske liye samay-samay par seminar, goshthiye, sabhaye, wa karyshalao aadi ka ayojan karna.
(3) Sadasyon ke liye profession sambandhit pustakalay ki yavastha karna.
(4) Sadasyon tatha profession ke hiton mein aavashyak prativedan, suzhav, dnyapan, kendriya evam rajya sarkar, adhdrsarkari, gair sarakari sansthaon, nigam, yaktiyo, adhikariyo evam dnyayalayo aadi ke samaksha prastut karna tatha unke sammukh sadasyo tatha profession ke hito ka paksh prastut karna va karvana.
(5) Sabhi karya karna wa karvana jisase sanstha ke uparokta uddeshyon ki purti hi sake.
3. The assessee filed its application for registration under s. 12A of the IT Act, 1961, on 1st July, 1999, stating that this society was formed with the predominant object of dissemination of knowledge and education of commercial laws, tax laws in advancement of an object of general public utility. The learned CIT rejected the application that the main objects of the society were for the benefit of its members only. It was also pleaded by the applicant before the learned CIT that the applicant had only applied for registration and at this stage there was no issue of exemption under s. 11. The learned CIT held that in view of its objects the applicant-society does not fall within the category denoted by the words "advancement of any other object of general public utility" contained in s. 2(15) of the IT Act. He also observed that to fulfil the aforesaid requirement it must be intended to benefit a section of a public as distinguished from specified individuals and that the members of the applicant institution do not constitute a section of a public but are merely specified individuals, who are members of the institute of chartered accountants residing in Rajasthan Accordingly the learned CIT did not grant registration to the applicant vide his impugned order.
4. We have heard the arguments of both the sides and also perused the record.
5. The learned authorised representative of applicant has contended that the applicant is a society of chartered accountants residing within the area of operation of the society. He has referred to p. 4 of the paper book and contended that the applicant-society was registered under the Rajasthan Society Act, 1958. He has also referred to pp. 2 and 3 of the paper book containing audited accounts of the society wherein loss has been shown. He has referred to pp. 24 and 25 of the paper book containing an interim order of the Hon'ble Rajasthan High Court passed in D.B. Civil Writ Petition No. 4018/1998 and contended that the applicant-society has filed a public interest litigation writ petition to challenge service tax which is for the benefit of the public at large and not only for the members alone. He has contended that through this writ petition the applicant has sought stay from the Hon'ble High Court in respect of all chartered accountants in the State of Rajasthan. He has contended that on winding up or liquidation of the society the assets of the society will not go to the members but to any other registered society. He has contended that it is a public society and has in this regard referred to letter dt. 8th/9th July, 1999, placed at p. 16 of the paper book. He has contended that the learned CIT has mentioned this society as being of "specified individuals" which in fact is not correct, as the term 'specified individuals' is differentiable from the term 'group of individuals'. The learned authorised representative has specifically referred to the society's object No. 4 and contended that the said object speaks for society's activities to be conducted not only for the members of the society alone but also for the benefit of the profession itself.
6. He has contended that the profession of chartered accountants is similar to legal profession and anything done for education, or knowledge of profession also falls within object of general public utility. He has contended that the membership of the applicant-society is given to a class of persons of the state and not to specified persons. He has contended that acts of applicant-society are of public nature, and he has in this regard also referred to the application of CIT as placed at pp. 17 and 18 of the paper book. He has contended that the activities of general public utility fall within the object of charity. To support his view the learned authorised representative has cited the following decisions : (2) Addl. CIT vs. Madras Jewellers & Diamond Merchant Association (1980) 129 ITR 214 (Mad); (3) CIT vs. A. P. Bankers & Pawnbrokers Association (1988) 170 ITR 476 (AP); (8) CIT vs. Ahmedabad Rane Caste Association (1983) 140 ITR 1 (SC); and 7. As against this, the learned Departmental Representative of Revenue has contended that s. 12AA of IT Act, 1961, provides that the CIT shall on satisfying himself about objects of the trust or institution and the genuineness of its activities grant registration to the society and if not so satisfied he will refuse the registration to the society. He has contended that the learned CIT has examined the object of the society and found the same to be not satisfying as being for a charitable purpose. He has contended that "charitable purpose" has been defined in s. 2(15) of the IT Act. He has contended that the objects of the applicant society as contained in its constitution do not have even the remotest nexus with the objects/purposes prescribed in s. 2(15). He has also referred to cl. (4) of the applicant-society's constitution as available on p. 9 of the paper book and contended that the membership is available only to those who are members of the institute of Chartered Accountants of India and are practising within the society's area of operation, i.e. Rajasthan and not to those chartered accountants who are not for the time being in profession, though they obtained the requisite qualification for the purpose. He has contended that mere registration under Rajasthan society Act is not sufficient for an applicant to qualify for registration under s. 12A of the IT Act. He has contended that mere filing of writ against service/profession tax by way of public interest litigation does not make the Society a charitable one. He has contended that the membership of the applicant-society is not to the public at large and the benefits of the activities of the applicant are restricted to chartered accountant members of the institute. He has also contended that the clause in the applicant's constitution regarding transfer of assets of society on dissolution also does not make the society charitable. He has also contended that in the deed it is not mentioned as to what activities they will carry on to achieve objects mentioned in the deed.
He has also contended that in Jodhpur there is only one branch of the institute of chartered accountants and it is not understandable as to what activities this Jodhpur branch will undertake that may make the society as a charitable one. He has also contended that the cases of Bar Councils are different and distinguishable from the case of applicant-society inasmuch as their activities are also for the benefit of public at large. The learned authorised representative of assessee-applicant has, in rejoinder, contended that the requirement of s. 2(15) is fulfilled by the education which the applicant-society will impart in respect of accountancy and he has referred to sub-cls. (1) to (3) of cl. (3) of the constitution placed on p. 8 of the paper book. He has also contended that the sub-cl. (4) of cl. (3) of the constitution pertains to general public utility object.
8. We have considered the rival contentions and perused, the relevant materials on record to which our attention has been drawn during arguments, as also the cited decisions, copies of which have been furnished on record. In (1994) 147 ITR 720 (Raj) (supra) the Rajasthan High Court held a Bar Council of Rajasthan to be entitled to exemption of tax liability under s. 11 of the IT Act. The Hon'ble Court also observed that the primary or dominant purpose of the Bar Council was the advancement of an object of general public utility. The distinguishing feature of the Bar Council, as noted in the judgment, also included its function to promote and support measures for law reforms, to organise the legal aid to the poor, to spread legal literacy and to provide legal assistance to the poor. In this context the Bar Council was held to have had object of a charitable nature as its functions, including the aforesaid ones, constituted activities of general public utility. The applicant-society, though does not seem to have such functions as mentioned above as being for the benefit of the public at large yet the applicant-society has its objects for the benefit of its members which may indirectly, in the ultimate analysis, be beneficial to the society at large and also for the benefit of the profession. In (1971) 82 ITR 704 (SC) (supra) the Hon'ble Supreme Court has held that : "....... an object beneficial to a section of the public is an object of general public utility. To serve a charitable purpose it is not necessary that the object should be to benefit the whole of mankind or all persons in a country or state. It is sufficient if the intention to benefit a section of the public as distinguished from a specified individual is present. The section of the community sought to be benefited must be sufficiently definite and identifiable by some common quality of a public or impersonal nature." 9. The applicant-society, in our considered opinion, does fall squarely within the import of the above quoted observation of the Hon'ble apex Court. The applicant-society has all its objects expressly and in unequivocal terms to be for the benefit of its members as also for profession of the members and to undertake various activities required for the achievement of its said objects. The objects of the applicant-society do embrace, within its fold a group of individuals of a particular class of society, being though the chartered accountants who are members of the applicant-society, yet nevertheless a section of the public. The members of the applicant-society being chartered accountants and residing in Rajasthan may not, in our opinion, be termed as specified individuals and should, more appropriately, be termed as specified class of individuals or specified category of individuals inasmuch as the membership of the applicant-society as prescribed in the constitution of the applicant does not mention as being obtainable by some specified person or persons but by specified class or category of individuals identifiable on definite basis/qualification, and are determinable. As such considering all the facts and circumstances of the case as also the objects of the applicant-society and the legal position emanating from various judicial pronouncements cited during arguments and referred to above we are of the considered opinion that the applicant-society does qualify for grant of registration under s. 12A of the IT Act inasmuch as its objects as elaborated/detailed in object clause of its constitution do declare the same to be speaking for the benefit of chartered accountants/members of this society and residing within the area of operation of the applicant and also for the profession of chartered accountants and as such falling within the purport of s. 2(15) of the IT Act, 1961. In that view of the matter we find the order of the learned CIT, Jodhpur, dt. 17th January, 2000, to be not tenable and not justified. We, therefore, reverse the order of the learned CIT and direct him to grant registration to the applicant-society under s. 12A of the IT Act, 1961.