TMI Blog2011 (4) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... (1)(b)], where applicable, could validly lead to denial of registration u/s. 12A of the Act - registration stands rightly denied by the ld. CIT in the instant case, and his order is accordingly upheld - assessee's appeal is dismissed - IT APPEAL NO. 137 (COCH.) OF 2009 - - - Dated:- 29-4-2011 - N. VIJAYAKUMARAN, SANJAY ARORA, JJ. C.R. Harish for the Appellant. T.J. Vincent for the Respondent. ORDER Sanjay Arora, Accountant Member This is an Appeal by the Assessee arising out of the Order by the Commissioner of Income-tax, Kannur ('CIT' for short) u/s. 12AA(1)(b)(ii) of the Income-tax Act, 1961 ('the Act' hereinafter) dated 15.1.2009. 2. The brief facts of the case are that the appellant is a Trust, constituted vide trust deed dated 30.5.2003 as a charitable and religious trust, only for charitable and religious purposes. It applied for registration u/s. 12A of the Act on 21.7.2008. On examination of its case for the purpose, it was observed by the ld. CIT, the competent authority under the Act, that clause 11(z) of the trust deed read as:- "To engage into any other activities which the trust deems beneficial to the minorities and other backward classe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclude from the total income of the previous year of the person in receipt thereof- (a) any part of the income from the property held under a trust for private religious purposes which does not enure for the benefit of the public; (b) in case of a trust for charitable purposes or a charitable institution created or established after the commencement of this Act, any income thereof if the trust or institution is created or established for the benefit of any particular religious community or caste; (c) in the case of a trust for charitable or religious purposes, or a charitable or religious institution, any income thereof- (i) if such trust or institution has been created or established after the commencement of this Act and under the terms of the trust or the rules governing the institution, any part of such income enures, or (ii) if any part of such income or any property of the trust or the institution (whenever created or established) is during the previous year used or applied, directly or indirectly for the benefit of any person referred to in sub-section (3); (d) Explanation 2 - A trust or institution created or established for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations mainly to provide shelters for the homeless poor and to improve the standards of life and education of the minorities and backward classes in Tellicherry Municipality and its suburbs." Clause (9) of the Deed specifies the beneficiaries of the Trust, and reads as: "Beneficiaries: the beneficiaries of this trust are the financially poor minorities and other backward classes in Tellicherry Municipality and its suburbs." Similarly, the said words appear in sub-clauses (c), (j), (m), (n), (u) and (z) of clause 11, which is titled: 'OBJECTS OF THE TRUST'. No doubt, there are other object clauses which do not bear reference to these words, but that is inconsequential in view of clause (9) of the trust deed, identifying the beneficiary target group. Further, it is true that sec. 13 only specifies the conditions subject to which ss. 11 and 12, which operate to exclude the income from the property held under trust from the total income of the person in receipt thereof, would be applicable. So, however, we have already found that the beneficiaries are specified, so that the income of the trust could be applied only for their benefit. The same is integral to, and forms a part of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said case [Barkate Saifiyah Society (supra)], though not cited before us, in detail, and find it to be distinguishable. The object clause in the said case read as under:- "(i) to help the poor and needy. (ii) medical relief. (iii) provision of education. (iv) to carry out religious activities." That is, one of the four objects was religious in nature, while the other three, charitable, so that it could not possibly be said on its basis that the charitable activities inure for any particular religious community or caste, so as to be hit by s. 13(1)(b). In the present case, on the other hand, we find that all the sub-clauses of clause 11, which states the various aims and objects of the trust, are charitable objects, i.e., as would fall within the meaning and scope of s. 2(15) of the Act. The beneficiaries are defined, both under the Preamble as well as per Clause (9) of the trust deed. In view of the denominational character of the trust, so defined, it could not, therefore, be said that s. 13(1)(b) would not apply on account of it being a 'composite trust'. A public trust, it may be clarified, is one which inures for the benefit of any recognisable and identifiable cros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ategories excluded from the operation of the section per Explanation 2 thereto. We have also gone through Articles 25 to 30 of the Constitution of India, which deal with protection of minority rights. The word 'minority', as conceived therein, extends to any religious, linguistic or cultural minority. There is no reference to conservation or promotion of any language or particular culture in the object clauses of the trust deed. As such, there is no basis to contend that the trust inures for all minorities, howsoever construed. Considering so, every person would be in minority in some respect or other, and the word would loose all its significance. E.g. Tamil-speaking people would be in minority in Tellicherry, a town in Kerala. Would that mean that the trust is established for the benefit of Tamil-speaking, or other linguistic minorities resident thereof? And, particularly in the absence of any reference to tamil language, or any language for that matter, or languages itself, in the trust deed. This is only intended to serve as an example, which could be multiplied. A document has to be read as a whole, and purposively. Even the National Minorities Commission, constituted as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne religious community would be sufficient to attract the provision of s. 13(1)(b) and, resultantly, the attendant disqualification. It would be a travesty and a perversity to not hold so, considering the language and the legislative intent conveyed thereby. Of course, there is a saving clause by way of Explanation 2 to the provision, so that where the target group or beneficiaries are limited to those specified therein, the satisfaction of section 13(1)(b) notwithstanding, its mandate would not apply. However, as afore-stated, and as found by the Revenue, to no challenge by the assessee, the same is not applicable in the present case. As rightly stated by the ld. CIT, the word 'minorities' would include religious groups or denominations which do not fall under the excepting classes of Explanation 2. 4.9 The appellant has relied on two decisions in support of its case, to which, therefore, it would be incumbent on us to advert to. In the case of CIT v. Red Rose School [2007] 163 Taxman 19 (All.), the school was found to be not in disagreement or breach of any public policy, while it has been so in the present case, i.e., as expressed per the clear statutory prescription of s. 13( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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