Indian Kanoon - Search engine for Indian Law

3. The brief facts in this case are that the assessee is a charitable trust formed with objective assisting and contributing for the objects of relief to the poor, education, medical relief, prevention of environment, pollution etc. The assessee has been registered as a Charitable Trust on 31st August, 2013 with the Charity Commissioner, Pune under Registration No.E-6691 on November 25, 2013.

4. At the time of hearing, the Ld. AR of the assessee submitted that the Ld. CIT refused to grant registration u/s.12AA of the Act to the assessee-trust on perusal of the objects of the Trust as incorporated in the Trust deed. That according to the Ld. CIT, some of the objects in the 'objects' clause in the Trust deed are not charitable in nature and therefore, registration u/s.12AA of the Act was not granted to the assessee. The Ld.CIT further has based his decision on the decision of the Hon'ble Delhi High Court in the case of Daulat Ram Public Trust Vs. CIT, 112 Taxman 128 (Delhi)/244 ITR 514. The Ld. AR of the assessee further contended that the decision of the Delhi High Court (supra.) on which Ld. CIT has placed his reliance, deals with the allowability of exemption u/s.11 of the Act and not with regard to the issue of granting registration u/s.12AA of the Act and therefore, this case law is not applicable to the case of the assessee.

A.Y.2014-15

5. Per contra, Ld.AR of the assessee placed reliance on the decision of the Co-ordinate Bench of the Tribunal, Chandigarh in the case of Bhai Gurudas Educational Trust Vs. Commissioner of Income tax, Patiala [2017] 82 taxmann.com 236 ( Chandigarh-Trib.). In this case, it was observed by the Tribunal that Ld. CIT has picked up one object out of the total ten objects which were listed for the purpose for which the Trust was created and treating that one object as not charitable, has rejected the application of the assessee for registration u/s.12AA of the Act. In this backdrop, it was held by the Chandigarh Bench of the Tribunal that merely because one of the objects of the Trust appears to be not charitable, it cannot be a ground for holding the objects of the Trust as being not in the nature of charity and refusing to grant registration u/s.12AA."

5.1. In the case of Yogiraj Charity Trust Vs. CIT [1976] 103 ITR 777 (SC), it was held that "if the primary or dominant purpose of a trust is charitable, another object which by itself may not be charitable but which is merely ancillary or incidental to the primary or dominant purpose would not prevent the Trust from being a valid charity."

6. On the other hand, the Ld. DR has placed strong reliance on the order of the Ld. CIT and stated that if some of the objects in the "objects clause" of the Trust deed are not charitable in nature, it was open to the assessee to amend the "objects clause" of the Trust Deed and re-apply for registration u/s.12AA of the Act.

9. Further, it is also open to the Revenue Authority at the time of assessment to verify the activities of the Trust to examine whether they will get exemption u/s.11 of the Act or not and do the needful as per law.

We have also observed that the Hon'ble Delhi High Court decision (supra.) to which the Ld. CIT has placed his reliance deals with the issue of exemption and not with the issue of granting registration u/s.12AA of the Act and are substantially distinguishable in facts with that of the case of the assessee herein. We rather take guidance from the decision of the Hon'ble A.Y.2014-15 Supreme Court in the case of Yogiraj Charity Trust (supra.) that if the predominant objects of a trust is charitable in nature then other objects cannot be judged individually whether they are charitable or not meaning thereby if the totality of objects is charitable the requirements of the law are complied with.