Indian Kanoon - Search engine for Indian Law

St. Joseph Academy vs. DIT(Exemption) (2015) 153 ITD 669 (Hyd.) (Trib.) Assessee-society filed application seeking registration u/s 12AA from DIT(E) in prescribed form. On perusal of details furnished by assessee, DIT(E) found that one of main aims and objects of assessee society was benefit of Christian minority community in particular and others in general. Thus, assessee society was established mainly for benefit of one particular community and same therefore, could not be considered as public charitable institution. DIT(E) held that specific stipulation made in relevant rules and regulations for appointing Principal for schools and colleges, only from particular community, again was sufficient to show that assessee society was established for benefit of particular community. Assessee society was not held eligible for registration u/s.12AA. Application filed by assessee for registration was rejected. Held, if registration applied for u/s 12AA was not granted for violation of principles of S.13(1)(b), and if it was ultimately found that assessee trust actually accomplished objects only for benefit of others in general, without there being any activity undertaken for benefit of Christian minority community in particular, assessee would be wrongly deprived of any benefits, that otherwise were available u/s 11 or S.12. Wordings in S. 13, made it explicitly clear that statutory provisions became operative or relevant only at stage of assessment when AO was required to examine claim of assessee for benefits u/s 11 or S. 12 while computing total income of assessee of relevant previous year. As per Tribunal in case of Aryan Education Society V/s. CIT, so long as provisions of Ss. 11, 12 and 12A were complied with, exemption could not be denied merely because there was any violation of provisions of S. 13. Action of D.I.T(E) in refusing to grant registration to assessee trust on ground of violation of provisions of S. 13(1)(b) was not justified especially when he had not doubted either genuineness of activities of assessee trust or nature of its object being charitable. Impugned order was set aside and registration applied for by assessee trust u/s. 12AA must be granted to it Bhai Mansa Singh Ji Welfare Society vs. CIT (2016) 156 ITD 0117 (Chd.) (Trib.) The assessee society made an application for registration u/s 12AA of the Act. As per the Ld. CIT, the amended object 'to run the society for benefit of poor & general public at large to provide medical aid, education institutions, scholarships, sports, blood donation camps, other facilities & activities on the teachings of Bhai Mansa Singh Ji' was against the spirit of sec. 13(1)(b) of the Act. Thus, application for registration was rejected. It was held that the objects were not confined towards any particular sect or biradari. It has been clearly mentioned that the society had to work for the benefit of poor and general public at large and these activities are to be based in consonance with the teachings of Bhai Mansa Singh Ji. It is not a case that the charity has to be done for the followers of Bhai Mansa Singh Ji only. Further, the provisions of section 13(1)(b) of the Act can be invoked only at the time of making assessment of the entity registered under section 12AA of the Act. At the stage of granting registration under section 12AA of the Act, the learned Commissioner of Income Tax should not get carried away by the provisions of this section.

Diocese of Pune (CNI) vs. CIT (2015) 42 ITR (Trib.) 0348 (Pune) decision dated 31.03.2015 Assessee trust was created vide Deed of Trust and was registered vide Certificate of Registration issued by Asst. Charity Commissioner. Commissioner requisitioned assessee to furnish certain documents and details of charitable activities carried out by assessee trust in last three years, proof of filing of return of income. Commissioner held that objects of assessee were not charitable in strict sense of term and, instead, were religious as same were meant for benefit of specific religious community. Prime thrust of trust was to provide for benefit of particular religious community. Consequently, application moved by assessee seeking grant of registration u/s 12A was rejected. CIT held that activities carried on by trust were meant for members of specific community and thus assessee was established for benefit of specific religious community attracting provisions of S. 13(1)(b). Therefore no purpose would be served by granting registration u/s 12A. Held, perusal of objects of trust reflected that though some of objects were for benefit of Christian community in particular, others were strictly not for Christian community in particular, but both for purposes of Christian community and other public at large. Objects of trust must be looked into and those objects could be either charitable or religious in nature or both charitable or religious in nature. Apparently, one of objects of assessee trust was to provide ambulance facility to people at large. Some were admittedly relating to Christian community. However, other objects were to provide ambulance facility to people at large, to establish and administer educational institutions for needy and deserving Christian students in particular and others in general, to establish hostels, libraries, etc. for Christian boys and girls in particular and other deserving & needy boys and girls in general. Objects of assessee trust thus, reflect activities to be carried on for purpose of specific religion and also for purpose of public at large. It could not be held that assessee was meant for benefit of only specific religious community. Findings of CIT were reversed.

Umaid Charitable Trust vs. UOI & Ors. 307 ITR 226 (2008) (Raj.)(HC) The line of distinction between religious purposes and charitable purposes is very thin and no water-tight compartment between the two activities can be very well established. Unless objective of the charitable trust in question itself is for spending its income for a particular religion and it is so found in the trust deed, the IT Department cannot reject the renewal of the trust as charitable trust under s. 80G merely because one particular expenditure is for an activity which may be termed as spending for a particular religion. In the present case, it was held that the repair and renovation of Lord Vishnu's temple does not necessarily mean that expenditure in question was for a particular religion only. All people who have faith in Lord Vishnu's temple belong to different sects and have faith in different religions and also visit such temple of Lord Vishnu. The Revenue has not shown that entry in the said temple was restricted to the persons of one particular community or sect practicing one religion. Hinduism is not one particular religion and different sects following Hindu philosophy do visit temples of Lord Vishnu, be that Jains, Sikhs, Brahmins, etc. There is no water-tight compartment between different castes or sects following one particular religion. Freedom of religion is guaranteed in the Constitution of India under Art. 25. Therefore, taking such a pedantic and narrow approach, it cannot be said that character of the charitable trust is lost if one particular expenditure is made for repair and renovation of Lord Vishnu's temple.

9. From the discussion made above, it is clear that the objects of the Trust/Society are not charitable in nature as they are for the benefit of the particular religious community. Therefore, the provisions of section 13(1)(b) are attracted and society cannot be held as charitable within the meaning of sec. 2(15) of the I.T. Act. Based on the material available on record, I am satisfied that the objects of the Society are not charitable and therefore registration to the society is refused."

There is no dispute with regard to the fact that as per definition of 'Charitable purpose' under section 2(15) includes relief of the poor, education, medical relief (preservation of environment (including watersheds, forests and wildlife) and reservation of monuments or places or objects or artistic or historic interest) and the advancement of any other object of General Public Utility. During the course of hearing, the ld. Counsel for the assessee submitted that 'Jainism' is the philosophy and preservation of symbol of such philosophy would definitely come into the embrace of the word 'Charitable'. During the course of hearing, the ld. D/R could not refute the fact that clauses 16 of the objects which provides that without any discrimination of the caste or creed to help economically poor, old, ailing, handicap, poor students and clause 17 provides for help for hospitalization of ailing persons, medicines, cold water, night shelter and Dharamshala etc. In our considered view, both these objects definitely fall under the category of Charitable purpose and cannot be construed as solely for the benefit of a particular religious community. Keeping these objects in view and respectfully following the judgment of the Hon'ble Supreme Court in the case of CIT vs. Dawoodi Bohara Jamat, 364 ITR 31 (SC), the order of ld. CIT (Exemption) is set aside and we hereby direct the ld. CIT (Exemption) to grant registration to the assessee trust."