MADARSA MAZAHIR ULOOM (WAQF),SAHARANPUR vs. CIT(EXEMPTION), LUCKNOW

The present appeal has been filed by the assessee against the order of ld. CIT(Exemption), Lucknow dated 25.09.2017.

Following grounds have been raised by the assessee:

The assessee institution was established on 09.11.1866. The assessee got registered with Sunni Central Board of Waqfs on 17.10.1990. The ld. AR submitted that the assessee institution is a charitable cum religious institution and has not been established for the benefit of any particular religious community or caste. The main object of the institution is to Madarsa Mazahir Uloom impart Islamic education as well as modern education and spread religious awareness to everyone who desires to study the Islamic education.

As per the Income Tax Act, trusts and Institutions established for Charitable and religious purposes are entitled for exemptions. The Trust must be carrying on charitable activity covered under the provisions said Act. The eligible trust is required to make an application for grant of exemption u/s. 12A and 12AA of Income Tax Act, 1961. The exemption is governed by section 11 and 12 r.w.s. 13 of Income Tax Act, 1961. Exemption u/s. 11 is available only to trust/institution which holds the property in trust wholly for charitable purpose or religious purpose. The trust must have been created wholly for charitable purpose or wholly for religious purposes but not for the benefit of a particulars religious community or caste. The objects of the trust must be charitable covered within the meaning of section 2(15). It was submitted that the similar issue was settled by the Hon’ble Supreme Court in CIT Vs. Dawoodi Bohara Jamat (364 ITR 31). The Hon’ble Supreme Court held that where assessee trust is formed with both religious and charitable objects, in terms of section 13(1(b), its claim for registration under section 12AA can be denied only in a case when such objects are carried out for benefit of a particular religious community or caste. Hence, the matter is being referred to the file of ld. CIT(E) to verify whether the trust is involved for charitable purposes at large or only for the benefit of a few and accordingly take a decision in accordance with the provisions of the Act.