2020 (12) TMI 26 - KARNATAKA HIGH COURT - Income Tax

Head Note / Extract:
Exemption u/s 11 - tribunal directing CIT(E) to grant registration u/s 12-AA holding that class of beneficiaries are undoubtedly public or a wide section of public - assessee is having mixed objects, some of which are charitable and some of which are religious - Whether ingredients of section 12-AA were not satisfied in the case of the assessee - HELD THAT:- In 'RAMCHANDRA SHUKLA VS. SHRI MAHADEOJI', AIR [1969 (10) TMI 76 - SUPREME COURT] has held that in Hindu system there is no line of demarcation between religion and charity is regarded as part of the religion. In CIT vs. Barkate [1993 (11) TMI 13 - GUJARAT HIGH COURT] by placing reliance on aforesaid decisions of the Supreme Court held that the words 'trust for charitable purpose' would include even trust for advancement of religion. It may be noted that if the object of the trust is partly religious and partly charitable, so long as no part of income or corpus is utilized for a purpose, which is not either charitable or religious, a trust is entitled to exemption under Section 11(1)(a) of the Act and such a trust is entitled for registration under Section 12AA of the Act. We are in agreement with the view taken by High Court of Gujarat. The decision relied upon by the revenue in case of SHERVANI CHARITABLE TRUST [2006 (8) TMI 631 - ALLAHABAD HIGH COURT] has no application to the facts of the case as in the aforesaid case only 1/3rd of the income was to be spent on charitable objects and remaining income was to be spent on maintenance and support of members of the settlors family. Therefore, in the aforesaid case it was held that the assessee is not entitled to the benefit of exemption, which admittedly is not a case here. substantial questions of law framed by a bench of this court are answered against the revenue