TMI Blog2012 (11) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... an Ved ORDER PER R.S. PADVEKAR, JM: This appeal is filed by the assessee challenging the order passed by the Director of Income-tax (Exemption) Mumbai, (in short DIT(Exm.) dated 18.12.2009 u/s.12AA(1)(b)(ii) r.w.s. 12A of the Incometax Act, declining to grant the registration to the assessee. The assessee has taken the multiple grounds but the core issue for consideration is whether for the reasons stated in the order the Ld. DIT(Exm.) was justified in refusing the registration to the assessee. 2. As per the facts on record, the assessee Trust was constituted on 12.01.2008. The assessee filed the application for registration u/s.12A of the Income-tax Act on 25.06.2009. The Ld. DIT (Exm.) examined the objects of the Trust and ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a public trust established after 01.04 1961 should confirm to the requirement of section 11. It is also held by the Hon ble Supreme Court in the case of State of Kerala vs. M.P. Shanti Verma Jam (1998) 231 ITR 787 (SC), that to be a public charitable trust, the trust should have been created either wholly for charitable or religious purpose. 6. As regards to the object clause 3(xii) of organizing social and cultural activities and get together, it Is prima facie a vague object. The Supreme Court in Gangabai Charities v. CWT (2001) 250 ITR 666 upheld the decision of the Madras High Court reported in 236 ITR 735 rejecting the claim for exemption on the ground that the trust besides religious objects had also indicated other public charitab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss the condition of registration is fulfilled. A combined reading of Sec.12A and 12AA shows that the Commissioner has to examine about the objects of the trust or institution and the genuineness of its activities in respect of Sec.12A also i.e. as to the conditions for applicability of Sec.11 and Sec.12. It is important to point out that Hon ble Madhya Pradesh High Court in the case of Shri Dhakad Samaj Dharamshala Bhawan. Trust vs. CIT reported in 302 ITR 321 has held, since section 11 of the Income-tax Act, 1961, provides for exemption to the trust registered under the Act, it is primarily the purpose of section 11 that will dominate or prevail over other consideration. It clearly shows that in the registration proceeding u/s.I2AA of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in the case of Calicut Islamic Cultural Society (supra) is as under: 21. The above observations are quoted in N.S. Bindra s Interpretation of Statutes (Ninth Edition, Page No.15). In short, the English language cannot be treated as instrument of mathematic precision. Now the question is can it be said that it is the intention of the Legislature as per the language used in clause (a) to section 11(1) of the Act that save the provisions of sections 60 to 63 of the Act for claiming the income exempt which is derived from the property held under the trust which must wholly for the charitable or wholly religious purposes. If the institution or trust are engaged into the mixed object which are partly religious and partly charitable or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, it is not the case of the Department either that any of the bars provided under section 13 of the Act are applicable to both these assessees as per the interpretation given by the Assessing Officer as well by the CIT (A). As per the provisions of section 11(1)(a) of the Act, it requires that there should be nexus between the property held under the trust wholly for charitable or religious purposes and the income under consideration. The interpretation given by the Assessing Officer as well as by the CIT (A) is that the purpose should be wholly charitable or wholly religious. We are afraid, whether such interpretation can be accepted. In our opinion, said interpretation given by both the authorities is only academic. When the Legislatur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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