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5. The brief facts relating to the issue are that, the assessee filed an application in Form No.10A for grant of registration under section 12A of the Act. The assessee Trust was set up by Trust Deed dated 03.09.2012. The assessee was called upon to furnish the information regarding the charitable activities carried on by the Trust along with evidence. In reply, the assessee mentioned about its proposed activities and did not say anything about the activities actually carried out so far. The CIT further noted that even though the objects of the applicant Trust were by and large charitable, two objects vide serial Nos.22 and 23 appearing in the object clause in the Trust Deed, were for the benefit of Jain community. The assessee was show caused as to why the application for the registration under section 12A of the Act should not be rejected in view of the two items of the object clause attracting the provisions of section 13(1)(b) of the Act. In reply, the assessee explained that the activities as per serial No.22 of the object clause, does not confer any benefit on any particular community and hence, would not attract the provisions of section 13(1)(b) of the Act. In respect of the second object clause i.e. serial No.23, the assessee explained that the object was not for the promotion of any one religion, Kul Foundation but was for the promotion of educational and social standards of the Jain community. Reliance was placed on the ratio laid down by Hon'ble Madras High Court in CIT Vs. Shri Gujrathi Mandal (1999) 240 ITR 293 (Mad) and the Hon'ble Supreme Court in State of Kerala Vs. M.P. Shanti Verma Jain (1981) 231 ITR 787 (SC) wherein, it was laid down that section 13(1)(b) of the Act is applicable only when the dominant object of the Trust was propagation of a particular religion and serving its followers. The assessee, without prejudice to the above contention, submitted that if it was desirable, the clauses could be modified subject to the powers conferred in the Trust Deed. With regard to the activities not having been commenced, the contention of the assessee was that an application for registration under section 12A of the Act could not be rejected merely on this ground. Reliance was placed on the ratio laid down by the Hon'ble Gujarat High Court in CIT Vs. Kutchi Dasa Oswal Moto Parivar Ambama Trust (2013) 29 taxmann.com (Guj).

6. The CIT noted that though other objects in the Trust Deed were general in nature, however, the object in particular in item No.23 could not be said to be general in nature since it was meant specifically for the benefit of Jain community. The CIT distinguished the case laws relied upon by the assessee and pointed out that the facts of the case in hand are different from the judicial propositions laid down by the various courts. The CIT vide para 3.1.2 observed as under:-

"3.1.2 For the reasons stated supra it has to be held that the appellant being a charitable trust and yet as by virtue of item (23) of the object clauses it specifically intend to benefit a specific religious community, the provisions of section 13(1)(b) are clearly attracted. As per section 13(1)(b), the benefit of sections 11 & 12 cannot be extended to a charitable Trust or Institution which has been established for the benefit of any specific religious community or case. When the benefit of sections 11 & 12 cannot Kul Foundation thus be extended to the applicant Trust in view of the item (22) of the object clauses, no purpose would be served by granting it registration u/s.12A which is an in-principle recognition of entitlement of such benefits."

15. The assessee before us, as per the objects of the Trust Deed, had been created in order to establish and start educational institutions and also to provide incidental activities relating to education. Where the principal object of any Trust or Institution is in the field of education, the said Trust or Institution can be said to have been engaged in carrying out charitable activities. However, in the case of the assessee as per object vide serial Nos. 22 and 23 of the Kul Foundation Trust Deed, the assessee enlisted certain objects for the promotion of educational and social standards of Jain community. The CIT in view of the serial Nos.22 and 23 of the object clause, was of the view that the dominant object of the Trust was for the promotion of a particular religion and serving its followers and as such, was violated the provisions of section 13(1)(b) of the Act.

Kul Foundation "6. We have considered the rival submissions and also perused the relevant material on record. It is observed that any trust or institution seeking to avail the benefit of the provisions of ss. 11 and 12 is required to apply for registration under s. 12A. The procedure for registration is prescribed in s. 12AA and as per the provisions of sub-s. (1) of that section, the CIT [Director of IT (Exemption) in the present case] is empowered to satisfy himself about the object of the trust and about the genuineness of the activities of the trust or institution before granting the registration under s. 12A. Once the CIT has not doubted the genuineness of the activities of the assessee nor doubted its charitable object, he cannot refuse to grant registration under s. 12A. In the present case, the registration, however, was refused by the Director of IT (Exemption) on the ground that as per the object clause Nos. 3(1) and 3(2), the assessee trust was established for the benefit of people belonging to Vaish community only which was clearly in violation of s. 13(1)(b). However, as held by Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association (supra), an object beneficial to the section of the public is an object of general public utility and to serve a charitable purpose, it is not necessary that the object should be to benefit the whole of mankind or all persons in a particular country or State. Explaining further, it was observed by the Hon'ble apex Court that it is sufficient if the intention is to benefit a section of the public as distinguished from a specified individual. Relying on this decision of Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association (supra), Hon'ble Allahabad High Court in the case of Surji Devi. Kunji Lal Jaipuria Charitable Trust (supra) has held that trust created for giving medical aid, social welfare and upliftment of poor members of Vaish community is, therefore, for religious and charitable purposes. To the similar effect is another decision of Hon'ble Allahabad High Court in the case of CIT vs. Pt. Ram Shanker Misra Trust (1996) 222 ITR 252 (All) wherein it was held that expenditure incurred by a trust for the benefit of one community is an expenditure incurred on a public charitable object. The proposition propounded by Hon'ble Supreme Court as well as by Hon'ble Allahabad High Court in the aforesaid judgments clearly shows that the objects of the assessee trust as indicated in object cls. 3(1) and 3(2) of its trust deed were of charitable nature and since the powers of the CIT/Director of IT (Exemption) conferred under s. 12AA were confined to satisfy himself about the genuineness of the activities of the trust as well as nature of its object being charitable, we are of the view that he was not justified in refusing to grant registration to the assessee trust under s. 12A merely on the ground that the said objects were violative of the provisions of s. 13(1)(b). As held by Lucknow Bench of Tribunal in the case of St. Don Bosco Educational Society vs. CIT (2004) 84 TTJ (Lucknow) 805 : (2004) 90 ITD 477 (Lucknow), the CIT under s. 12AA is empowered to satisfy himself only about the object of the trust and about the genuineness of the activities of the trust and such power Kul Foundation does not extend to eligibility of the trust/institution for exemption under s. 11 r/w s. 13 which falls within the domain of the AO. To the similar effect is the decision of Delhi Bench of Tribunal in the case of Aryan Educational Society vs. CIT (2005) 94 TTJ (Del) 462 : (2005) 93 ITD 546 (Del) wherein it was held that so long as the provisions of ss. 11, 12 and 12A are complied with, the exemption cannot be denied merely because there is any violation of the provisions of s. 13.