9911796707
TMI Blog2014 (12) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 remitted the matter back to the file of ld. DIT(E) with the following directions: "9. In the case before us, the Trust approached the DIT(E) for registration within two months of its creation/formation, and therefore, two objects of the trust for which it was formed will have to be examined by the authority. The registration authority should consider the genuineness of the aims and objects of the applicant society seeking registration u/s 12AA of the Act with a charitable objective. At this stage, commencement of the charitable activity cannot be the criteria, since the trust is yet to commence its activities. In spite of that, the assessee trust in the present case, did furnish the list of donors and also details of the application of the funds till the date of the enquiry by the DIT(E). In these circumstances, we are of the opinion that impugned order is not sustainable and it deserves to be set aside. Therefore, we set aside the same. Appeal of the assessee is consequently allowed, with a direction to the DIT(E) to examine the aims and objects of the assessee trust and grant registration u/s 12AA of the Act, since he has not examined the objects, which prima-facie indic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gautham Buddha etc. all speak of the same. A synthetic teaching of these tenets of life addresses the concept of universal enhancement of values of human life and not just benefit only a particular religion or community. Even the veda pravachanam cannot be treated as religious activity. It was submitted that every teaching that modulates physical, emotional and spiritual behavior of the human being shall have some basis, but the problem comes only when the privilege as in the case of traditional caste system is extended to a particular group or community. It was submitted that the term 'veda' itself means knowledge and not religion, therefore setting up vedic pathasalas is not a religious activity. It was submitted that producing devotional movies, TV Serials relating to vedic scriptures etc., and propagation of tenets of various religious teachings and the teachings of various gurus is not for the benefit of a particular religion or community but for the moral education of the people of all sections in the society. It was submitted by appellant trust that Hon'ble Supreme Court in case of CIT, Ujjain Vs. Dawoodi Bohara Jamat, Civil Appeal No. 2492 of 2014 arising out of SLP(c) No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has not commenced its activities. Ld. DIT(E) never raised any issue with regard to mixed objects of the appellant trust. In fact, perusal of the order passed by the Tribunal would show that while setting aside the order of ld. DIT(E) Tribunal has clearly mentioned that prima-facie objects of the appellant trust were of charitable nature. However, in the proceeding initiated afresh, ld. DIT(E) has found a new reason to deny registration to assessee by stating that as per section 11(1)(a) of the Act, a Trust or institution should have been established either for religious or charitable purpose and it cannot have mixed objects. Ld. DIT(E) again refused registration on the ground that assessee is having mixed objects i.e. both religious and charitable. 8. Be that as it may, before proceeding to decide the validity of such reasoning of ld. DIT(E), it needs to be mentioned, as per section 12AA, ld. CIT has to satisfy himself about the object of the trust and genuineness of the activities of the trust or institution. On going through the impugned order of ld. DIT(E), it is absolutely clear, he accepts the fact that objects of the trust are charitable in nature. Specific objection o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chings in Vedas and Upanishads, Quran and Bible and other scriptures for spreading the message of 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. Therefore, it cannot be treated to be for the benefit of a particular religion or community. Similarly, propagating, intricacies and true consequences of sanathana dharma is also for the benefit of general public and cannot be confined to a particular religion or community. Producing/developing films or programmes on vedic scriptures, yoga and preaching of various gurus of various religions is also for uplifting the moral standards of general public and enhancing human values irrespective of religion, community, caste and creed. Similarly construction/maintenance/ management of community halls, meditation centers, spiritual centers, places of worship and prayer halls is not confined to any particular religion or community, but for the benefit of general public. 10. Thus, on careful reading of the object clauses in general and specifically clauses on which ld. DIT(E) has raised concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and religious objects, further the religious objects are for the benefit of particular religion. After perusing the objects we are inclined to hold that they cannot be considered to be for the benefit of a particular religious community, rather, in our view, the object clauses specifically referred to by ld. DIT(E) are for the benefit of the general public and not confined to any particular religious class or community. Reverting back to the issue whether having objects of both charitable and religious nature disentitles from availing exemption u/s 11. Let us examine the said provision which reads as under: "11. (1) [(a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of [fifteen] per cent of the income from such property;" According to ld. DIT(E) the words 'charitable or religious' appearing in the aforesaid provision would mean, a trust or institution can either have charitable or religio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us trust eligible for claiming exemption under Section 11, it becomes relevant to test it on the anvil of Section 13. 43. Thus, the second issue which arises for our consideration and decision is, whether the respondent-trust is a charitable and religious trust only for the purposes of a particular community and therefore, not eligible for exemption under Section 11 of the Act in view of provisions of Section 13(1)(b) of the Act. 44. In the instant case, the Tribunal has found on facts after analysing the objects of the trust that the respondent trust is a public religious trust and its objects are solely religious in nature and being of the opinion that Section 13(1)(b) is solely meant for charitable trust for particular community, negated the possibility of applicability of Section 13(1)(b) of the Act at the outset. The High Court has also confirmed the aforesaid view in appeal and observed that Section 13(1)(b) would only be applicable in case of income of the trust for charitable purpose established for benefit of a particular religious community. In our considered view, the said view may not be the correct interpretation of the provision. 45. From the phraseology in clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities of trust in its objects to the said community would render the trust as ineligible for claiming exemption under similar provisions of Kerala Agricultural Income Tax Act, 1950. The Court observed as follows: "...The Deed of Trust and the rules run into more than thirty pages out of which six pages of the Trust Deed narrate the philosophy of Jain Dharma. The objects of the Trust clearly show that the Trust is meant for propagation of Jain religion and rendering help to the followers of Jain religion. Even medical aid and similar facilities are to be rendered to persons devoted to Jain religion and to non- Jains if suffering from ailments but the medical aid could be given to them only if any member of the families managing the Trust, shows sympathy and is interested in their treatment. The Tribunal, in our opinion, was right in its conclusion that the dominant purpose of the Trust in the present case was propagation of Jain religion and to serve its followers and any part of agricultural income of the Trust spent in the State of Kerala also could not be treated as allowable item of the expenses." 49. In the present case, the objects of the respondent-trust based on religious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion are partly charitable or religious trusts established after April 1, 1962. Therefore, on account of language of the statute in section 11, there is prohibition from income derived from property held for charitable or religious purposes. According to him, income under both charitable and religious purposes cannot be combined together and the assessee has to choose either of the charitable activities or religious activities, but not both. I had to state that in my humble opinion, there is no statutory provision to support proposition of law, stated by the learned Judicial Member. The learned Judicial Member, like the revenue authorities, misconstrued the legal implication of the word 'or' in section 11(1)(a). 13. The principle of law emerging from the aforesaid decisions are 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. As in the present case, ld. 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), in our ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
