TMI Blog2015 (11) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... JM For the Petitioner : Shri Tarun Rohatgi, CA For the Respondent : Ms Sulekha Verma, CIT, DR ORDER Per J. Sudhakar Reddy, AM Both these appeals by the assessee are directed against the orders passed by the CIT, Rohtak, dated 27.6.2014, u/ss 12AA(1)b)(ii) and 80(G), respectively, of the Income-tax Act, 1961 (hereinafter also called the Act ). 2. ITA No.4613/Del/2014 is filed against the order of the CIT, Rohtak, passed u/s 12AA(1)b)(ii) of the Act, wherein the application of the assessee filed in Form No.10A, for registration u/s 12AA was rejected. ITA No.4614/Del/2014 is directed against the rejection of the application of the assessee for registration u/s 80(G) of the Act. 3. The assessee is a society registered with District Registrar of Firms and Societies, Sonepat on 5.3.2008. The ld.CIT rejected the registration for the following reasons:- a) The assessee does not satisfy the very essence of charity, which is necessary for getting the status of being charitable as is required in view of section 2(15) of the Act; b) The AO as well as the Joint Commissioner of Income-tax has reported that the main aims and objects of the society is to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the clause of dissolution and disposal of assets is against the provisions enabling the ld.CIT to grant registration u/s 12AA of the Act. She also pointed out that the dates and the resolution nos. were left blank and all the members of the association signed on these blank dates. Thus, she submits that under such conditions the CIT was right in rejecting the application of the assessee for registration. Referring to the Memorandum registered on 26th day of July, 2013, she submitted that these papers were not before the CIT. She argued that more than 50% of the expenses were made on religious purposes such as celebration of Hindu festival like Dussehra, etc., and under such facts registration u/s 12A cannot be granted. She pointed out that the assessee has admitted that it would fall under the category the advancement of any other object of general public utility specified by section 2, sub section (15) of the Act and not in the other categories. She relied on section 13(1)(b) of the Act and submitted that the benefit u/s 11 is to be denied if the trust or institution is created or established for the benefit of any particular religious community or caste and, hence, the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in colour. The objects reflect the intent of the trust as observance of the tenets of Islam, but do not restrict the activities of the trust to religious obligations only and for the benefit of the members of the community. [Para 38] The activity of providing for food on certain specific occasions and other religious and auspicious events of the Dawoodi Bohra community do not restrict the benefit to the members of the community. Neither the religious tenets nor the objects as expressed limit the service of food on the said occasions only to the members of the specific community. Thus, the activity of Nyaz performed by the respondent-trust does not delineate a separate class but extends the benefit of free service of food to public at large irrespective of their religion, caste or sect and thereby qualifies as a charitable purpose which would entail general public utility. [Para 39] Further, establishment of Madarsa or institutions to impart religious education to the masses would qualify as a charitable purpose qualifying under the head of education under the provisions of section 2(15) of the Act. The institutions established to spread religious awareness by means of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 13(1)(b) 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. The said view may not be the correct interpretation of the provision. [Para 44] From the phraseology in clause (b) of section 13(1), it could be inferred that the Legislature intended to include only the trusts established for charitable purposes. That however does not mean that if a trust is a composite one, that is one for both religious and charitable purposes, then it would not be 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. [Para 45] The 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 relig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... studies d) to cooperate and assist with the others social institutions/organizations having the similar aims and objects. e) to support and help the people at the time of natural calamities. f) to set up old age home for the needy old people. g) to arrange cultural programme, satsang, Yoga and religious programmes for recreation and spiritualism enhancement. h) to seek help and assistance from the Govt State/Central/Local Bodies to achieve the above aims and objects. i) To co-ordinate and take up the matter with govt./administrative authorities/ similar agencies in the public interest. 9. A perusal of the same demonstrates that the objects are charitable in nature and entitled the assessee to registration u/s 12A of the Act. 10. The society was required to get itself re-registered in view of the change in law in the State of Haryana and, accordingly, it got itself reregistered. Thereafter, the certificate of registration along with Memorandum of Association was filed with the Department along with a letter dated 20.6.2014. Thus, the submission of the CIT, DR that these documents are not before the CIT is factually incorrect. 11. Comin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which may prove that these objects relate to a particular religion. No doubt the revenue argued that it relate to Hindu Religion but it is not so. Lord Shiva, H anumanji, Goddess Durga does not represent any particular religion, they are merely regarded to be the super power of the universe. [Para 10] A religion undoubtedly has its basis in a system of beliefs or doctrines which are regarded by those who profess that religion as conducive to their spiritual well being, but it will not be correct to say that religions is nothing else but a doctrine or be lief. A religion may not only lay down a code of ethical rules for its followers to accept, but it might prescribed rituals and observances, ceremonies and modes of worship which are regarded as integral parts of a religion, and these forms and observances might extend even to matters of food and dress. No material or evidence has been brought on record by the department which may prove that any person coming, worshipping and maintaining the temple has to follow a particular code of ethical rules and has to carry out the prescribed rituals and observances, ceremonies and modes of worship. The entry is not restricted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brating festivals such as Dussehra, Ekadashi, etc., cannot be considered as spent for religious purposes. Even otherwise, the Hon ble Supreme Court in the case of CIT (Gujarat)-III vs Ahmedabad Rana Caste Association, 140 ITR 1, held as follows:- Pathak, J.-These appeals by certificate granted by the High Court of Gujarat are directed against the judgment of the High Court delivered on June 29/30, 1972, on the application of s. 4(3)(i) of the Indian I.T. Act, 1922, and s. 11 of the I.T. Act, 1961. The assessment years involved are 1960-61, 1961-62 and 1962-63 (the corresponding accounting periods being the financial years ending March 31, 1960, March 31, 1961, and March 31, 1962 respectively). The ITO held that the respondent was not entitled to the benefit under s. 4(3)(i) of the Act of 1922 in respect of the first two assessment years and under s. 11 for the assessment year 1962- 63. The ITO proceeded on the view that the objects for which the respondent association was constituted contained certain clauses which permitted the respondent to apply the income to purposes which were not wholly charitable. The AAC maintained the order of the ITO. But the Income-tax Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... western country also as a great source for physical and mental health and spiritual attainment. When a large number of people feel that meditation is a great source for physical, mental and spiritual well being, it must be held that these activities are for the advancement of general public utility. Maintaining Samadhi of Guru is also charitable purpose in accordance with Section 2 (15) o the Act and Pooja of such Samadhi reminds people of ideology of Guru, in whose memory pooja is carried out. Organizing bhandara is an activity of providing foods to persons irrespective of any cost or religious. Such bhandara activities are like day meal food scheme of the government. When the government is running such scheme, under those circumstances, it cannot be said that objects of the trust are not charitable. Running gaushala, Piaau and providing dana to birds is also charitable activities. The assessee discharged the burden in this regard by furnishing all necessary details of copy of trust deed pointing out various charitable objects of the trust and expenditures incurred on charitable activities. 16. In the case in our hand, the assessee s charitable activities are not restricted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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