IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER Shri Mukund Bhavan Trust CIT (Exemption), Pune

1105, Raviwar Peth, Mukund Vs.

Bhavan, Pune – 411002 PAN: AAATS5170R (Appellant) (Respondent) Assessee by : Shri V.L. Jain Department by : Shri Mallikarjun Utture, CIT Date of hearing : 05-02-2025 Date of pronouncement : 29-04-2025

O R D E R

PER R. K. PANDA, VP :

This appeal filed by the assessee is directed against the order dated

30.06.2024 of the Ld. CIT(Exemption), Pune cancelling the registration granted u/s

12AB(4) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟).

2. Facts of the case, in brief, are that the assessee Shree Mukund Bhawan Trust was formed in 1930. On verification of various documents viz. income tax returns, financial statements, trust deed etc. available on record, the Ld. CIT(E) noted that in the trust deed it has been categorically mentioned that the trust is a private trust and is set up to impart religious education to a particular caste i.e. Marwari Brahmin and Maheshwari Vaishyas who accept the principle of Varnashrama Dharma. The deed further states that the trust will not benefit any other caste or individual. He analyzed the trust deed and noted certain crucial provisions of trust deed which are as under:

(i) Para 2: The trustee and his legal heirs shall be allowed to use the property of the Trust without any payment of rent (ii) Para 4: Benefit of the Trust is to be given only to Marwari Brahmin and Maheshwari Vaishyas and, in their absence, other Brahmins and Vaishyas may be benefitted.

(iii) Para 7: The Trustees in future shall be a Brahmin or a Vaishya and at least one of the Trustees shall be the legal heir of the settlor.

(iv) Para 9: The trust is a Private Trust”

3. In view of the above explicit provisions in the trust deed he was of the opinion that the trust is not a public charitable trust established with an aim / object of conducting charitable activities for the welfare of the people at large but is a private trust established for the benefit of a particular caste / community. Therefore, he was of the opinion that prima facie the provisions of section 13(1)(a)

and 13(1)(b) of the Act applies to the case of the assessee.

4. He, therefore, issued a show cause notice asking the assessee to explain as to why the registration u/s 12A granted on 25.08.1975 in assessee‟s case should not be cancelled and consequently why the registration granted u/s 12AB r.w.s. 12A(1)(ac)(i) of the Act on 24.09.2021 should also not be cancelled. The relevant part of the notice reads as under:

“5. Accordingly, a notice was issued to the assessee requiring it to show cause as to why the registration u/s 12A of the Income-tax Act, 1961 granted on 25/08/1975 in the assessee's case should not be cancelled and consequently why the registration granted u/s 12AB rw.s 12A(1)(ac)(i) of the Act dated 24/09/2021 should also not be cancelled. The relevant part of the notice is reproduced hereunder for ready reference:

"On verification of documents viz ITRs, financial statements, trust deed etc.

available on record in your case, the following facts are revealed.

1. It has been explicitly mentioned in the Trust Deed that the main purpose of creation of the trust as per the preface mentioned in the initial paragraphs of the trust deed is to facilitate Vedic and religious education to such students who accept the elements of Vamashram.

In general terms the four Varnas are Brahmins (priests and teachers), Kshatriyas (rulers and warriors). Vaishyas (farmers and merchants), and Shudras (laborers and artisans) The four ashramas are Brahmacharya (student), Grihasthashram (householder) Vanaprasthashram (retirement from house hold activities), and Sannyasashram (renouncing material world), which is a materialistic arrangement for one social group to dominate another, and by reinforcing identity based on bodily categories. Thus, the entire concept it