JUDGMENT [ENTITY], J.
1. This petition is filed by the petitioner for an appropriate writ, direction or order quashing and setting aside the order dt. 30th January, 1996, Annexure A to the petition passed by the CIT, Gujarat-III, Ahmedabad, respondent herein refusing to register the petitioner-association under [SECTION] of the [ACT] (hereinafter referred to as "the Act") and by directing the respondent to grant certificate to the petitioner in accordance with law.
2. It is the case of the petitioner that it is a registered association of the members who are manufacturers in plastic products. [ACT] of the petitioner association is annexed to the petition. The members of the petitioner association are citizens of India and they are entitled to fundamental rights guaranteed under [SECTION] of the [ACT].
On 15th June, 1988, the petitioners' chartered accountant addressed a letter to the respondent with necessary details requesting him to grant registration under [SECTION] of the Act. By a letter dt. 4th July, 1988, certain queries were raised by the respondent and they were replied by the petitioner. Again, a reminder was sent by the petitioner's chartered accountant requesting the respondent to issue necessary certificate of registration but nothing was done by the respondent. Finally, by an order dt. 30th January, 1996 which is impugned in the present petition, the application for registration of the petitioner association was rejected by the respondent. In the impugned order, it was mentioned that application for registration of the petitioner-association under [SECTION] of the Act was liable to be rejected on various grounds; viz. (i) the date of creation of the association had not been mentioned; (ii) reasons for delay in filing Form No. 10A have not been furnished; (iii) registration certificate of the charity commissioner had not been submitted and (iv) the object of the association were aimed at benefiting the traders engaged in a particular trade, namely, manufacturing of plastic goods. The petitioner-association was, therefore, in the nature of trade association and the object could not be treated as charitable purpose for the benefit of the general public. The association, could not, therefore, be registered as a charitable institution.
Being aggrieved by the above order, the petitioner approached this Court by filing this petition. Rule was issued on 4th October, 1996. The matter is now called for final hearing.
3. Mr. [ENTITY], learned counsel for the petitioner, raised various contentions. He submitted that reasons recorded by the respondent could not be said to be legal and valid. So far as date of creation of association is concerned, it is true that the date was not mentioned, but it could not be mentioned in view of the fact that exact date of creation of association was not known. In the application, however, the year 1969 was mentioned by the association. Again, the exact date of creation of association, according to the petitioner, was not relevant. On what date the association was created has no bearing on the grant of registration under the Act, and the application could not be rejected on that ground. The application ought to have been decided on its own merits as and when it was taken up for consideration.
Regarding second ground, it was submitted that it was also not relevant and ought not to have been considered by the respondent. Even if it is assumed that there was some delay in filing such application, the application could not be rejected on the ground of delay. It was obligatory on the part of the respondent to consider the same and to pass an appropriate order at the time when the application was taken up for consideration. It was submitted that application was filed in the year 1988 and for a number of years, nothing was done by the respondent even though necessary details were supplied to him. In 1995, when the matter was taken up for consideration, it was not open to the respondent to reject the application on the ground of delay without considering the relevant provisions of the Act then in force.
Regarding third ground, it was submitted that the said ground was mis-conceived and ill-founded altogether. When it was not the case of the petitioner-association that it was a trust registered under the [ACT], the question of submitting a registration certificate issued by the Charity Commissioner did not arise at all. The petitioner never wanted registration of the association on the ground that it was a trust registered under the [ACT].
The last ground which weighed with the respondent was that the objects of the petitioner-association were aimed at benefiting the traders engaged in a particular trade, namely, manufacturing of plastic goods. According to the respondent, therefore, the petitioner-association was in the nature of trade association and its object could not be said to be of a charitable purpose for the benefit of general public and hence the provisions of [SECTION] of the Act could not be invoked by the petitioner.
4. Mr. [ENTITY] submitted that an error of law has been committed by the respondent in interpreting the provisions of [SECTION] of the Act. The provisions of [SECTION], material for the purpose of controversy raised in the present petition reads as under :
"[SECTION]A. The provisions of [SECTION] and [SECTION] shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely :
(a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the "Chief CIT or CIT before the 1st day of July, 1973 or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, (whichever is later and such trust or institution is registered under [SECTION]).
5. Reading the section, it is clear that it lays down conditions as to registration of Trust, institution, association etc. It states that the provisions of [SECTION] and [SECTION] would not apply in relation to the income of any trust or institution unless conditions enumerated in [SECTION] are fulfilled. The counsel, therefore, submitted that it is not necessary that the applicant applying for registration under [SECTION] of the Act must necessarily be a trust. Such applicant may be a trust or an Institution, but the registration can be granted to such institution only if conditions laid down in [SECTION] of the Act are satisfied. It was, therefore, not open to the respondent to reject the application of the petitioner on the ground that it was not made by a trust. It was, however, open to him to reject the said application on its own merits if the conditions specified in [SECTION] were not complied with. Mr. [ENTITY] submitted that even on merits, the respondent has committed an error of law in observing that since the objects of the association were to benefit the traders engaged in a particular trade, they cannot be treated as charitable purpose for the benefit of general public.
6. In this connection, our attention was invited to certain decisions of the Hon'ble Supreme Court. In Addl. CIT vs. Surat Art Silk Cloth Manufacturers Association (1980) [SECTION]1 ITR 1 (SC) : TC 23R.195, the question before the Supreme Court was as to what was meant by object of general public utility. There an application was made by Surat Art Silk Cloth Manufacturers Association for registration. Considering the object of the Association in the constitution of the association, the Court held that if the dominant or primary purpose of the assessee was to promote commerce and trade in art silk yarn, raw silk, cotton yarn, art silk cloth, silk cloth and cotton cloth as set out in various clauses of the objects of the association, it could not be said that it was not for charitable purpose. It was also observed that even if some activities have been undertaken in the course of carrying out primary purpose of trust or institution, it could not cease to be a trust or institution for "charitable purposes". It was not necessary that there must be a provision in the constitution of the trust or institution that the activity should be on "no profit no loss basis. Even in absence of express words or specific provision, considering the manner in which activities were undertaken and on the basis of surrounding circumstances, the question can be decided. It was, therefore, held that predominant object of the activity of the association was promotion of commerce and trade in a particular industry which was clearly an object of general public utility.
7. The above principle was reiterated by the Supreme Court in [PRECEDENT]. In that case also, primary and dominant purpose was advancement of a particular profession, namely, legal profession. Inspite of that it was held by the apex Court that the object was of general public utility. In the opinion of the Court, having regard to obligatory functions enjoined on the State Bar Council under the [ACT], the Bar Council could be regarded as a body intended to advance the object of general public utility.
8. Mr. [ENTITY], submitted that various High Courts have also taken a similar view and it was held that even if the activities undertaken by a trust, association or institution benefit one class engaged in a particular trade, business or profession, it cannot be said that such trust, association or institution cannot make application under [SECTION] of the Act.
Relying on objects of the petitioner-association in the [ACT] annexed to the petition, it was urged by Mr. [ENTITY], that the objects enumerated therein are of general public utility. [SECTION] states that the association was established with a view to protect general interest of plastic manufacturers and to encourage allied interest and form co-operation amongst them; that it was to work directly or indirectly for the welfare of the interest of plastic manufacturers class; to make research for the development of plastic industry; to resolve any dispute between the members of the association or the members of the association and other persons; and to do all such work directly or indirectly for fulfilling the above object of the association. It was also stated that the association will not do any act for its profit, will fulfill the object of the association and that its funds, reserve fund, etc. will be used for the general and extraordinary object of the association.
9. In the context of the objects specified in the constitution and in the light of the law laid down by the Hon'ble Supreme Court in the above two cases, we have no hesitation in holding it is clear that the respondent has committed an error of law in rejecting the application for registration under [SECTION] of the Act.
10. Our attention was, however, invited by Mr. [ENTITY], learned counsel for the respondent to proviso to [SECTION] as it stood prior to 1st October, 1991. It read as under :
"Provided that the Chief CIT or CIT may, in his discretion, admit an application for the registration of any trust or institution after the expiry of the period aforesaid".
It was contended that since the application was not filed within the period prescribed by clause (a) and no reasons for delay were furnished, the CIT did not exercise discretion in favour of the petitioner and did not entertain it. No error of law can be said to have been committed by him in rejecting the application.
11. Mr. [ENTITY], in our opinion, however, rightly relied upon the proviso to [SECTION] brought in force w.e.f. 1st October, 1991. The said proviso reads thus :
Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of [SECTION] and [SECTION] shall apply in relation to the income of such trust or institution -
(i) from the date of the creation of the trust or the establishment of the institution if the Chief CIT or CIT is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons :
(ii) from the 1st day of the financial year in which the application is made, if the Chief CIT or CIT is not so satisfied".
Mr. [ENTITY], submitted that even if application was not granted in 1988 when it was made, no order could have been passed in 1995 rejecting the application. According to him, such amendment can be said to be procedural which has retrospective operation and hence the application ought to have been considered by the respondent w.e.f. 1998, when an application was made. He, however, fairly stated that it may not be necessary for this Court to enter into a larger question and the petitioner will be satisfied if a writ is issued by this Court directing the respondent to grant registration w.e.f. 1991 when the law was already amended and the proviso was substituted.
[SECTION]. In view of the said statement, we are not expressing final opinion on interpretation of proviso to [SECTION] and direct the respondent to grant application of the petitioner under [SECTION].
13. For the foregoing reasons, the petition deserves to be allowed and is accordingly allowed. As the application for registration made by the petitioner association was not rejected on the valid grounds and as the point is concluded by the decisions of the Supreme Court, the respondent is directed to grant application of the petitioner. The respondent will grant registration to the petitioner-association under [SECTION] of the [ACT] with effect from the 1st day of the financial year 1991-92. In the facts and circumstances of the case, there shall be no order as to costs.