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2015 (8) TMI 183 - PUNJAB & HARYANA HIGH COURT

2015 (8) TMI 183 - PUNJAB & HARYANA HIGH COURT - TMI - Registration under Section 12AA declined - Whether the educational society run by the particular community is debarred for registration under Section 12AA even if it is carrying out charitable activities which benefit the community at large including persons belonging to other religion? - Held that:- Memorandum of Association and the objective of the trust have not been into consideration in a proper perspective. A perusal of the same would .....

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ide a well rounded education and high academic standard and to develop responsible citizenship in the students and to encourage appreciation of national and cultural heritage.

A perusal of the information supplied in the reply to the show cause notice would go on to show that less than 10% of the students of a particular community were studying in the last year and for the earlier period, the percentage was even less. In such circumstances, the reasoning given that the appellant was o .....

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elief of the poor pertaining to education and the advancement of any other object of general public utility. The purpose to provide education to the children would fall very much within the charitable purpose and predominant purpose of the appellant has to be seen. See Commissioner of Income-Tax Vs. Jodhpur Chartered Accountants Society [2002 (4) TMI 28 - RAJASTHAN High Court] and Ahmedabad Rana Caste Association Vs. CIT [1971 (9) TMI 8 - SUPREME Court] - Decided in favour of assessee. - ITA No. .....

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t;) declined to grant registration under Section 12AA of the Act on the application filed by the appellant. The order dated 26.2.2014 (Annexure A/2) passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as "the Tribunal") in ITA No.329 (Asr)/2013 for the assessment year 20012-13 upholding the order of the Commissioner is also subject matter of challenge. The reasoning given by the authorities as per impugned orders is that the appellant had only .....

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munity at large including persons belonging to other religion?" The facts as per record would go on to show that the appellant society is registered with the Registrar of Societies under the Societies Registration Act, 1860 since 15.3.1976. On the strength of Memorandum of Association dated 22.3.2002 (Annexure A/4) it filed an application for registration as a charitable institution under Section 12AA of the Act on 30.10.2012. A show cause notice was issued on 21.3.2013 to the appellant tha .....

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hat though the school was run by members of Christian society yet it was totally secular and no special emphasis was being given to students of Christian families or Christian staff employed. The percentage of students belonging to the said religion were also very small. The data showing the percentage was also attached with the said reply. The CIT rejected the said application as noticed vide impugned order dated 26.4.2013(Annexure A/1) on the reasoning that the purpose and objectives of the tr .....

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ity, the order of the CIT was upheld. In our opinion, the said reasoning is totally unjustified and the Memorandum of Association and the objective of the trust have not been into consideration in a proper perspective. A perusal of the same would go on to show that the purpose of association apart from the imparting of education to the children of a particular religion was also to provide sound education to persons belonging to other communities regardless of caste, creed, colour or distinction .....

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quot;PURPOSE The purpose of this Association is to run and manage the schools called Alexandra Schools, Amritsar for the purpose of imparting, education, primarily to children of Christian Minority Community, for when it was founded that is to provide a sound education on a "Christian" basis to every girl/boy who voluntarily joins the Schools, in Christian atmosphere of love and service to all, regardless of caste, creed, colour or distinction of any kind in order to produce enlightene .....

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l the Truth of God and his/her work as revealed in Jesus Christ. iii) To share this truth and understanding through instruction, personal relationship and the total programme of the schools. iv) To help each child discover and develop his/her potential as and individual by encouraging enquiry and creativity. v) To provide a well-rounded education and high academic standard and to develop responsible citizenship in our students. vi) To encourage appreciation of our national and cultural heritage .....

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essee in order to satisfy himself about the genuineness of activities of the trust and after making such inquiries to pass the said orders. Admittedly in the reply to the show cause notice factum of additional information regarding the percentage of Christian children studying the school had been furnished which has now been appended with the present writ petition wherein the following details have been given:- Year Total students Christian Student Non-Christian Student 2009-10 914 42 872 2010-1 .....

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Section 12AA of the Act read as under:- "Procedure for registration. 12AA. (1) The [Principal Commissioner] or Commissioner, on receipt of an application for registration of a trust or institution made under clause (a)[or clause (aa) of sub-section (1)] of section 12A, shall- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiri .....

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ven a reasonable opportunity of being heard. [(1A) All applications, pending before the [Principal Chief Commissioner or] Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the [Principal Commissioner or] Commissioner and the [Principal Commissioner or] Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.] (2) Every order .....

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subsequently the [Principal Commissioner or] Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard.]" A pe .....

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l not apply in relation to the income of any trust or institution unless various conditions are fulfilled. The said sections provide that income from property held for charitable purposes shall not be included in the total income of the previous year of the person in receipt of the income. The objects of the society have already been reproduced above which go on to show that society was to provide sound education to persons regardless of caste, creed, colour or distinction of any kind and help t .....

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Commissioner of Income-Tax Vs. Jodhpur Chartered Accountants Society [2002] 258 ITR 548 while placing reliance upon the judgment of the Apex Court in Ahmedabad Rana Caste Association Vs. CIT [1971] 82 ITR 704 (SC) upheld the order of the authorities to grant registration and rejected the argument that the Society was to benefit only a particular set of professionals and it was held that the association would organise seminars, conferences and workshops to educate the people of commercial laws, t .....

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activities. It was held that by establishment of Madarsa or institution for imparting religious education, it could not be said that it was only for the benefit of a particular religion as such. Clause whereby it was provided that the help was to be provided to the needy for religious activities would not be sufficient to conclude that it was only purely religious in color and intent of the trust had to be seen and the purpose of religious and charity would overlap. Relevant observations read as .....

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l as religious purpose. Further, while providing food and fodder to animals especially cow is religious activity for Hindus, it would be charitable in respect to non-Hindus as well. Similarly, service of water to the thirsty would find mention as religious activity in sacred texts and at the same time would qualify as a charitable activity. xxx xxx xxx 40. Further, establishment of Madarsa or institutions to impart religious education to the masses would qualify as a charitable purpose qualifyin .....

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