TMI Blog2017 (6) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income Tax (Exemption) dated 04th October 2016. The assessee has raised the following grounds of appeal :- 1. For that the Ld. CIT(A) grossly erred under the facts and circumstances of the case in refusing and rejecting application seeking registration u/s 12AA. Your appellant reserves the right to add, alter or amend any grounds of appeal on or before the date of hearing. 2. Briefly stated the facts are that, the assessee had made an application in Form No. 10A seeking registration u/s 12AA of the Income Tax Act, 1961 (hereinafter referred to as the Act). However, the Ld. CIT rejected the application on the ground that object and activities of the application trust/ society are for the benefit of particular religious community. 3. Only effective ground is against rejection of application u/s 12AA of the Act. Ld. Counsel for the assessee reiterated the submissions as made in the written brief, the submissions made by the Ld. Counsel are reproduced as under:- The application made U/s 12AA for registration of 'Religious Charitable Trust' made by the Assessee Trust to CCIT (Exemptions) on 13.04.2016. In response to said application, a le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanatory notes to the Finance Act 2014 wherein the reasons behind the insertion of the said provision is discussed. Further in para9, the CIT has mentioned that after introduction of section 12AA(1), it has become imperative to examined the clause of 13(1)(b) at the stage of registration also. But this is only his opinion but not provided anywhere in the law which is very clearly spelled. Section 12AA(4) is only an enabling provision to cancel the Registration where the Registration has been granted. Thus by no stretch of imagination, it may binder in granting of fresh registration.Furthermore provisions of this sub section is only applicable where it is noticed that the activities of the trust of the trust or the institution are being carried out in a manner that the provisions of section 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (4) of section 12AA to refuse Registration U/s 12AA(1). Further, the Ld. CIT is not empowered to look into the issue whether the assessee has violated the provisions of section 13(1)(b) of the Act. As per provisions of section 13(1), it is amply clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not only to propagate Jainism or help and assist maintenance of temples, Sadhus, Sadhvis, Shraviks and Shravaks, and other goals are also set out in the trust deed, the trust was a charitable as well as religious trust and section 13(1)(b) of the Act would not be applicable. CIT Vs. Barkate Saifiya Society (1995) 213 ITR 492 (Guj) Gujarat High Court held that the exclusion from exemption under section 13(1)(b) of the Act applies only to charitable trust and charitable institution and if the trust was charitable as well as religious in nature, the assessee would be entitled to exemption under section 11 of the Act. BhagwanMahavirPurusharthPrerna Nidhi Nyas v. CIT (2012) 067 DTR 0185 (Jp) Jaipur Tribunal held that Section 13(1)(b) does not say that condition mentioned shall apply to section 12AA which is applicable for registration. Section 13(1) refers to the previous year and registration is not for a particular previous year. If conditions of section 13(1)(b) are violated then exemption under section 11 shall not be given. The basic purpose is not to allow exemption of income if the trustees make some violation in some particular year but such violatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, which are not relevant in this case. The points of distinction of these cases are as follows: Agrawal Sabha-[2014] 223 Taxman 353 (Allahabad)- In this case the dominant object underlying constitution of trust was though charitable in nature but for benefit of only Agarwal community i.e. specified group of individuals. Further, no religious objects were there. In the present case, the Trust is having both religious and charitable objects and they are not meant specifically for any specific community or group of individuals but for the benefit of general public. Section 13(1) (b) does not apply on religious and charitable Trusts. Gowri Ashram - [2013] 356 ITR 328 (Madras)- In this case, assessee society was formed with an object to provide accommodation and facilities for performance of marriages and other auspicious functions to members of a particular community i.e. specified individuals, it could not be regarded as society formed with a charitable purpose within meaning of section 2(15). In present case Trust is formed for both Religious as well as Charitable Purposes And all the Charitable Purposes are for General Public not for specific grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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