TMI Blog2012 (3) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... or the said registration on an earlier date as well, which stood rejected by the learned Commissioner of Income-tax vide his order dated May 2, 2011 for the reason that object clause 4(a) of the trust deed included an object of a religious nature. That is, the objects of the trust being partly charitable and partly religious, its application for registration under section 12AA of the Act was rejected. The assessee-trust, in view of the said objection by the Revenue, "amended" its object clause 4(a) by deleting the word "Dharmik" (meaning "religious") occurring therein, which was inferred as lending a religious character to the institution. A fresh application under section 12AA of the Act was accordingly made in Form 10A on May 30, 2011. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either wholly charitable or wholly religious in nature, i.e., which operates to preclude the co-existence of charitable and religious objects. Reliance was placed for the purpose on the decision in the case of Addl. CIT v. A.A. Bibijiwala Trust [1975] 100 ITR 516 (Guj), wherein it stands categorically held that so long as no part of the income or corpus of the trust could be utilised for a purpose which is neither charitable nor religious, exemption under section 11(1)(a) of the Act would be available to it. In fact, the registration in the case of another trust, i.e., Shermal Sona Devi Charitable Trust, duly registration under section 12A of the Act, was also sought to be similarly withdrawn on the same ground by the office of the same com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority or before the Bench. The order under section 80G(5)(vi) is essentially consequential. We have heard the parties, and perused the material on record. The impugned order under section 12AA(3), as well as the argument advanced by the learned Departmental representative, which could not be rebutted by the learned authorised representative during hearing in spite of being called upon to do so by the Bench, are without doubt valid. However, that would only imply that the assessee's object clause 4(a), which alone stands objected to by the Revenue on account of the word "Dharmik" specified therein, continues to form part thereof. Restoring, in consequence, the assessee's case to its original position, i.e., of the validity or otherw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. State of Uttar Pradesh [1979] 118 ITR 326 (SC)). It is apparent that the assessee was neither aware of the decision by the hon'ble apex court in relation to the manner in which the amendment is to be carried out, which it sought to do, in fact with alacrity, nor even that it is in law permissible to retain objects bearing charitable and religious nature in its charter, i.e., as held by the higher courts of law. The delay in challenging the denial of registration under section 12A of the Act within the prescribed time in the present case, thus, deserves to be condoned. On the merits, even as clarified during hearing by the Bench, the only prohibition in this regard is contained in section 13(1)(b) of the Act, which excludes a trust o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 3 to the section. As explained by the hon'ble apex court in the case of Upper Ganges Sugar Mills Ltd. v. CIT [1997] 227 ITR 578 (SC), the said Explanation 3 does not require an ascer- tainment whether the whole or substantially the whole of the institution or fund's charitable purpose is of a religious nature ; it only required ascer- taining whether one purpose within the institution's or fund's overall chari- table purpose is wholly, or substantially wholly, of a religious nature, as the object "Dharmik" indeed is. There is nothing in the object clause to restrict the operation of the word "Dharmik", which itself denotes "religious", occurring in the object clause 4(a), which we have found to continue to form part thereof. The argumen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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