Indian Kanoon - Search engine for Indian Law

3. We find that appellant was formed on 19.07.2022 by way of written trust deed duly registered with Sub-Registrar and its objects were Religious & charitable. Appellant applied for provisional registration u/s 12A(1)(ac)(vi) vide application dated 18.1.2023 and was thus granted provisional registration on 25.01.2023 in terms of section 12A(1)(ac)(vi). At PB 14-27 the copy of Written Trust Deed dated 19.07.2022 settled by Mr. Mohmmad Arif, which contains Religious & Charitable objects of education, religious, relief to the poor and other charitable purposes, is provided. Then at PB 113-117, 111-112 is the provisional registration Application u/s 12A(1)(ac)(vi) dated 18.1.23 &Provisional Registration Certificate u/s 12AB(1)(c) dated 25.01.2023. Thereafter, the appellant applied for regularization of provision registration u/s 12A(1)(ac)(iii) on 27.09.2023 and PB 1-10 is the copy of application for registration u/s 12A(1)(ac)(iii) of the Act. As per ld. Counsel of assessee, during the course of proceeding for grant of registration, queries raised were replied by the assessee along with several evidences / bills/ vouchers / photographs and list of beneficiaries and that the trust was formed for religious- cum for charitable purposes and detailed explanation was furnished regarding the charitable activities undertaken by the appellant Trust. At PB 121 is appellant's submissions dated 19.12.2023, furnishing copy of Trust Deed, provisional registration certificate u/s 12A, audit report, copies of bills / vouchers/ photographs/ list of beneficiaries, to the ld.CIT(E). Further on record at PB 11-13 is the copy of audited financial statements. PB 28-33 is the copy of annual activity report. PB 34, 35-88, 89-108, 109-110 are the copies of Acknowledgment of return of income for AY 23-24, Full copy of return of income, Form 10BB, Form 10. PB 118-120, 122-123, 126-127 are the copies of the notices dt. 7.11.23, 18.1.24, 8.2.24 issued by Ld. CIT(E).

8. It was submitted that the applicant erroneously relied on Section 13(1)(b) to argue that the provision applies only to trusts established exclusively for charitable purposes. However, the restriction under Section 13(1)(b) applies equally to composite trusts involved in both religious and charitable activities when their benefits are restricted to a particular religious community or caste. It was submitted that there is violation of public trust doctrine. The trust deed's objectives and subsequent actions contradict the fundamental principle that charitable trusts must serve the public at large and not a specific religious or caste group. This violation further disqualifies the applicant from registration under Section 12AB. It was also submitted that there is lack of bona fide effort to address ld. CIT's Concerns. The applicant's repeated delays, partial submissions, and failure to respond to specific queries indicate a lack of bona fide effort to comply with procedural requirements. The ld. CIT acted within the framework of natural justice by providing adequate opportunities to the appellant. Reliance is also made on DIT (Exemptions) v. Bharat Diamond Bourse [(2003) 126 Taxman 365 SC to contend registration under Section 12AB was denied for failure to substantiate genuineness and the decision emphasized the requirement to establish genuine charitable activities. Further reliance was made on CIT v. Dawoodi Bohra Jamat [supra] to submit that decision reiterated the principle that benefits must be for the public at large and not confined to a specific community or group.

9. We find that the Ld. CIT(E) denied the registration u/s 12AB(1)(b)(ii)(B) on the ground that there were doubtful receipts as PAN of 93% of donors were not provided and thus, identity of the donors and genuineness of donations could not be proved. In this context reading of the said clause (b) of section 12AB(1) of the Act establishes at this stage what is material is to examine genuineness of the activities and compliance of other laws and objective assessment of objects of the trust. At page PB 28-33 is the activity report showing the charitable activities and at PB 124-125, 125A are the submissions about the utilization of the donations for the charitable purposes. It is sufficiently established from PB 14-27, the Trust Deed, that same has clauses showing the religious and charitable objects of the Trust. Thus as for the purpose of clause (b) of section 12AB(1) of the Act this all material was supposed to be examined by ld. CIT(E) u/s 12AB(1)(b) of the Act and give a finding if the conditions as prescribed u/s 12AB(1)(b) of the Act stand complied with regard to genuineness of the claimed religious and charitable activity.

13. As with regard to alleged specified violation as basis to cancel the provisional registration, we have considered the copy of assessee's trust deed available at pages 14 to 27 of the paper book. We find that in the Aims & Objectives of the Trust, it is mentioned that the Trust shall be charitable trust and having partly religious activities in terms of the tenets of Islam. The 'general objects' certainly are indicative of conducting activities which may be religious activities. However, when the objects under the head, 'Education', 'Relief to poor' and 'other objects' are considered, the same show that there is no discrimination on the basis of religion, caste and creed. They intent to provide benefit to people of all case and religions in the field of education etc and including environmental sustenance. The activities under these heads are completely charitable in nature with the beneficiaries being not distinct on the basis of religion. As with regard to such composite objects the reliance of ld. AR on the decision of the Hon'ble Supreme Court in the case of CIT vs. Dawoodi Bohara Jamat in Civil Appeal No.2492 of 2014 dated 20.02.2014 ha to be sustained. Further, we find that the coordinate Benches in the decisions Shree Dandhavya Chhasath Prajapati Samaj vs. CIT (E) ITA no. 505/Ahd/2022 order dated 16.10.2024, Sunni Muslim Jamat Aamena Madressa Ebdatgah Waqf Committee vs. CIT(E), 161 taxmann.com 555 (ITAT, Surat) and Jaiatul Baaat Tankaria Versus CIT(E) [2024]160taxmann.com 358 9Ahm), have followed the aforesaid decision of the Hon'ble Supreme Court in Dawoodi Bohara Jamat case to hold that registration under section 12AB of the Act cannot be denied, where objects are composite.