2023 (5) TMI 785 - AT - Income Tax

Exemption u/s 11 - grant of registration u/s 12AA rejected - private religious trust or public trust - Assessee trust exists solely for a particular sect of the Hindu religion - CIT(E) held for provisions of section 11 the beneficiaries of the trust must be public at large and accordingly, private religious trusts are not entitled for exemption of income, thus denied grant of registration u/s12AA - HELD THAT:- In this case, the assessee trust namely, Arulmigu Aathi Karumapuram Sellandiamman Kudipaattukarakal Seva Trust existed for the purpose of Poruleentha Kula Vellala Gounder, which is a sub sect of Vellala Gounder community, established exclusively for them. Therefore, once the assessee trust is established for the purpose of particular subcaste, it is only for the benefit of that sub-caste and thus, it is a private religious trust and registration u/s 12AA of the Act cannot be granted.

Six temples are under the control of the Hindu Religious & Charitable Endowments Department, Tamil Nadu and it is fully maintained by the Government of Tamil Nadu. Therefore, the argument of the ld. Counsel for the assessee that the assessee trust was doing services to other six temples and is open to public at large cannot be accepted. Therefore, registration u/s 12AA of the Act cannot be granted to the assessee trust.

The assessee trust does not come under the purview of charitable trust or under the purview of public religious trust. It is only a private religious trust. Therefore, registration under section 12AA of the Act cannot be granted to the assessee trust.

Activities of the Trust are to receive contribution from the members and not from any outsider and the expenditure is only to manage and protect their temple - If the assessee is running on the basis of mutuality, it can carry its activities and nobody will object. However, no 12AA registration can be granted to the assessee trust, being a private religious trust.

Receipts of the trust do not come within the definition of income under section 2(24) - The income has to be determined depending upon the receipt, what are the expenditure incurred, what is the source of income and it has to be decided after considering entire details. It cannot be predetermined by the assessee that the receipts derived by the assessee cannot be an income within the meaning of section 2(24) of the Act.

Violation of Article 14 and Article 19(c) of the Constitution of India - We find that Article 14 as well as Article 19(c) has no application to the facts of the present case. In this case, whether the assessee is entitled for grant of registration u/s12AA of the Income Tax Act or not has to be determined as per the conditions stipulated under the Income Tax Act. The above mentioned two Articles nowhere correlated to grant of registration u/s 12AA.

Neither the State Government nor the Central prohibit forming a trust or association and it is not the policy of either of the Government - If the assessee wanted grant of registration under section 12AA of the Act, the assessee has to satisfy certain conditions stipulated under the Income Tax Act. In this case, the assessee has failed to satisfy the conditions as required u/s 12AA for grant registration as a public religious trust for the reason that the assessee trust existed only for the benefit of a particular sub sect and not general public at large. Decided against assessee.