TMI Blog2014 (12) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been held that in certain cases activities of the trust may contain elements of both religious and charitable and thus, both the purposes may be overlapping - when the religious activity carried on by a particular section of people would be a charitable activity for or towards other members of the community or also public at large. A trust/institution having charitable and religious objects will be eligible for exemption u/s 11 unless hit by restrictions imposed u/s 13(1)(a) or 13(1)(b) of the Act - DIT(E) has not brought any material on record to show that provisions of section 13(1)(a) or 13(1)(b) applies to the assessee, denial of registration u/s 12AA for alleged violation of section 11(1)(a) is not justified - applicability of section 13 of the Act can be looked into by the AO at the time of assessment proceedings and not by DIT(E) while exercising power u/s 12AA of the Act – thus, the order of the DIT(E) is set aside and direct him to grant registration to the appellant trust u/s 12AA of the Act – Decided in favour of assessee. - ITA No. 1232/Hyd/2014 - - - Dated:- 3-12-2014 - Shri B. Ramakotaiah And Shri Saktijit Dey,JJ. For the Petitioner : Shri C. P. Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration. We direct accordingly. 3. In pursuance to the directions of ITAT, ld. DIT(E) revived the proceeding afresh. As mentioned by ld. DIT(E) on going through the objects of the trust deed, he found that out of the 40 object clauses, objects at S. Nos. xvii, xxv, xxvii, xxviii, xxxiii, xxxiv xl are of religious nature. He, therefore, was of the view that as assessee is having both charitable and religious objects, whereas as per section 11(1)(a) for availing exemption a trust or institution can either be charitable or religious it cannot be granted registration. Accordingly, he issued a show cause notice to assessee to explain why the trust should be granted registration as it is having mixed objects. In response to the show cause notice, assessee filed a detailed reply clarifying its position by stating that object clauses referred to by ld. DIT(E), are only ancillary or incidental to the main objects which is charitable. Even otherwise also, they cannot be considered to be for the benefit of any particular religious community, caste or creed. It was submitted, the activities provided in the clauses referred to is taken up as incidental and ancillary to attainment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (E) after considering the submissions of assessee, however, did not find merit in the same. Relying upon certain decisions ld. DIT(E), ultimately, concluded that as assessee is having mixed objects i.e. both charitable and religious, it cannot be granted registration u/s 12A of the Act. 5. The learned AR reiterating the submissions made before ld. DIT(E) submitted that appellant trust cannot be said to be for the benefit of particular religion, community or creed, hence, the objects mentioned in the trust deed, cannot be interpreted in a manner to say that they are for the benefit of a particular religion or community. It was submitted that the teachings of veda and Upanishads or teachings of yoga are not confined to a particular religion or community. Ld. AR submitted that neither section 12A nor section 11 prohibit a charitable trust or institution from having mixed objects i.e. both charitable and religious, therefore, ld. DIT(E) is not justified in denying registration to appellant trust. In support of such contention, learned AR relied on the following decisions: 1. Kasyapa Veda Research Foundation Vs. CIT, 11 ITR 468 (Trib.) (Cochin) 2. Vanita Vishram Trust Vs. Chief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation centers, spiritual centers, places of worship and prayer halls of any religion and public in general. xxv. To undertake or to extend assistance for the research of subjects related to spirituality and related ancient books of any religion. xxvii. Education in particular, Cultural and Spiritual concerning the Supreme values of life as spoken ,to by the Vedas and Upanishads, Quran and Bible and other scriptures viz. Truth, Non-violence, austerity, universal brotherhood or friendship, Security and Safety, fearlessness, love, peace, compassion, character and dedication, with the sole object of transforming the people at large for the welfare of all the living beings especially human beings. xxviii. To propagate, preach and teach the intricacies and the true consequences of sanathana Dharma with the object of securing charturveidha purushardha viz., Dherme, Ardha, Kama, Moksha which are really essential requisites for the removal of evil and renewal of good to the persons and devotees who visit the Tapovanam and participate in the activities of the truth which is really for the benefit and welfare of the General Public of a section thereof. xxxiii. For propagation and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(1)(b) of the Act. On the contrary, these clauses, if at all they can be called to be of religious nature, are for the benefit of general public, hence, can be considered to be in the nature of any other object of general public utility as engrained in the definition of charitable purpose u/s 2(15) of the Act. Law is well settled that any other object of general public utility is of the widest connotation as the word general in said expression signifies a whole class. Hence, advancement of any object of benefit to the public or a section of the public as distinguished from benefit to an individual or a group of individual would be a charitable purpose. The expression any other object of general public utility would prima facie include all objects which promote the well being of the general public. It cannot be said that a purpose would cease to be charitable even when public welfare is intended to be served. Considered in the aforesaid perspective, there cannot be any doubt that the main object of the appellant trust is charitable in nature as it is for the benefit of general public. Even, ld. DIT(E) also accepts this position, though he observes that some of the object c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed u/s 13 of the Act. The word or between charitable and religious as used in section 11(1)(a) is not disjunctive but conjunctive in nature, therefore, it is necessary to read that income derived from property held under trust wholly for charitable or religious purposes or both are exempt. The Hon ble Supreme Court in case of CIT Vs. M/s Dawoodi Boharh Jamat, Civil Appeal No. 2492 of 2014 observed, in certain cases activities of the trust may contain elements of both religious and charitable and thus, both the purposes may be overlapping. More so, when the religious activity carried on by a particular section of people would be a charitable activity for or towards other members of the community or also public at large. Feeding animals or cow may be a religious activity for a particular community but may be charitable for others. Similarly, feeding poor people or giving water to thirsty may be religious for some but charitable for others. Analysing the objects of the trust by keeping the aforesaid principles in view, hon ble Apex Court finally held as under: 41.Therefore, the objects of the trust exhibit the dual tenor of religious and charitable purposes and activities. Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e covered by clause (b). What is intended to be excluded from being eligible for exemption under Section 11 is a trust for charitable purpose which is established for the benefit of any particular religious community or caste. 46. Such trusts with composite objects would not be expelled out of the purview of Section 13(1)(b) per se. The Section requires it to be established that such charitable purpose is not for the benefit of a particular religious community or caste. That is to say, it needs to be examined whether such religious-charitable activity carried on by the trust only benefits a certain particular religious community or class or serves across the communities and for society at large. (Sole Trustee, Loka Shikshana Trust v. CIT, (1975) 101 ITR 234 (SC)). The section of community sought to be benefited must be either sufficiently defined or identifiable by a common quality of a public or impersonal nature. (CIT v. Andhra Chamber of Commerce, 55 ITR 722). 47. This Court in CIT v. Palghat Shadi Mahal Trust, (2002) 9 SCC 685 the muslim residents of Kerala constituted a trust for the purpose of constructing and establishing at Palghat-a-Shadi Mahal and other institution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant for a particular religious community. The objects, as explained in the preceding paragraphs, do not channel the benefits to any community if not the Dawoodi Bohra Community and thus, would not fall under the provisions of Section 13(1)(b) of the Act. 50. In that view of the matter, we are of the considered opinion that the respondent-trust is a charitable and religious trust which does not benefit any specific religious community and therefore, it cannot be held that Section 13(1)(b) of the Act would be attracted to the respondent-trust and thereby, it would be eligible to claim exemption under Section 11 of the Act. 12. In case of The Society of Presentation Sisters and others Vs. ITO, 318 ITR(AT)287, the Hon ble Third Member while concurring with the view expressed by Hon ble Accountant Member, held as under: It is clear from plethora of authorities where after considering the provisions of section 11(1)(a) that so far as the aforesaid provision is concerned, no distinction is made between charitable and religious purposes. A charitable institution can have religious purposes; whereas a religious institution may be partly charitable. Most of the decisions were give ..... X X X X Extracts X X X X X X X X Extracts X X X X
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