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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” : HYDERABAD
Before: SHRI A.MOHAN ALANKAMONY & SHRI S.S.GODARA
PER S.S.GODARA, J.M. : This assessee’s appeal arises from the CIT(Exemptions)- Hyderabad’s order dated 28-09-2020 passed in case No.CIT(E)/Hyd/25(01)/12A/2019-20, involving proceedings u/s.12AA(1)(b)(ii) of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.
Coming to the assessee’s sole substantive grievance that the CIT(E) has erred in law and on facts in declining Section 12AA registration, we note that his detailed discussion to this effect reads as under:
“The assessee filed e-application in Form No.10A seeking registration u/s.12Aof the Income Tax Act, 1961 ('the Act' in short) on 03.01.2020.
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A notice dated 03.03.2020 was issued to the applicant, to the address mentioned in Form 10A, to appear and produce its original Memorandum of Association (MoA)/Trust Deed for verification and to furnish a detailed reply on specific points on 19.03.2020. Document Identification Number was generated through ITBA vide Document No.ITBA/COM/S/91/2019-20/1026169530(1) on 05.03.2020. The notice sent through speed post was returned unserved by the postal department with remarks "no such trust in the address, hence returned to sender". Another notice sent vide letter dated 11.03.2020 posting the case for hearing on 07.04.2020 was also returned unserved with remarks "left". However, Sri S.A.Turab, Founder Trustee attended for hearing and the hearing on 19.03.2020 and the case has been adjourned to 08.05.2020 for furnishing certain documents. Considering lockdown, one more notice was issued to the assessee, vide this office letter dated 20.05.2020 posting the case for hearing on 04.06.2020. In the said notice, the assessee has been informed that the information may be submitted through speed post/e-mail. Document Identification Number was generated through ITBA vide Document No.ITBA/COM/S/91/2020-21/1027144717(1) on 23.05.2020. Again the notice sent through speed post was returned unserved. However, Sri Mohd.Asgar Lalani, Member of the assessee trust attended for hearing along with Sri HariBabu, CA and AR of the assessee on 05.06.2020. They requested time for carrying amendments to the trust deed. Accordingly, the hearing has been adjourned to 07.07.2020. The assessee submitted certain documentary evidence through ITBA. 3. No charitable activities: As seen from the documents filed by the assessee, the assessee submitted that they carried out the activities of payment of school fees for the students, printing of books, establishment of library etc. However, there is no documentary evidence like place, beneficiaries, bills & vouchers, Photographs etc. to substantiate the same. 4. Mixed Objects: As seen from the Form 10A filed online, the assessee has applied for registration u/s. 12A of the Act as a "Religious cum charitable" Trust. Also, the objects of the assessee contain both religious and charitable Objects For the sake of ready reference, the religious objects as contained in the MoA are reproduced below: 2) To establish various research units to study and carryout research on different schools of thought to maintain and promote religious harmony and better understanding among all communities.
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5) To establish libraries, reading rooms, documentary centres and archives on different cultures and religions and to hold exhibitions of books. 6) To hold religious and educational seminars, conferences and symposia. 8) The advancement, support or propagation of religion of Ahlebait (e.s) of Holy Prophet Mohammad (s.a. wa) and its tenets. 9) To form and conduct logical, religious and educational classes for training gentle and civilized persons, to perform religious services and logical discussions and delivering religious speeches and a logical vindication on Islamic principles and Jafari theology. 12) To organize various ceremonies of the Imams of the Shia IthnaAshari specially the Last Awaited Saviour and to honor and glorify them. 13) To organize, Sponsor, promote, establish, conduct, encourage and undertake construction of training centers for the purpose of promotion 01 religious and worldly knowledge and experience to the inmates. 15) To hold and arrange Majlis, Niyaz, Sabil and propagation of Shia religious knowledge and to provide assistance and encouragement in such work. As seen from the above, the assessee's objects involve religious nature also. 4.1 Exemption is applicable for a trust/society which is created wholly for charitable purposes or wholly for religious purposes. It means the activity of a trust has to be wholly charitable to be eligible for exemption or wholly religious to be eligible for exemption. In other words, a trust with part charitable objects and part religious objects will not be eligible for exemption. Since the objects of the assessee trust involve both charitable and religious objects, the assessee is not eligible for registration u/s.12A of the Act”.
Suffice to say, it has already come on record that the CIT(E) has declined the impugned registration to the assessee for the reason that its objects are an ad-mixture of religious as well as charitable in nature (supra). We therefore hold that the CIT(E)’s impugned order is not sustainable in light of CIT Vs. Barkate Saifiyah Society 213 ITR 492 (Guj) and CIT Vs.
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Chandra Charitable Trust 294 ITR 86 (Guj) holding that such an assessee is very much entitled for the impugned registration even if its objects are both charitable as well as religious in nature. We therefore treat the assessee as eligible for the impugned registration and direct the CIT(E) to proceed as per law to this effect.
This assessee’s appeal is allowed in above terms.
Order pronounced in the open court on 16th November, 2021
Sd/- Sd/- ( A. MOHAN ALANKAMONY ) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 16-11-2021 TNMM
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Copy to : 1.Al Hadi Trust, Flat No.1, 1st Floor, No.22-7-455/3, Purani Haveli, Hyderabad. 2.The CIT(Exemptions)-Hyderabad. 3.Addl.CIT(E)-Hyderabad. 4.D.R. ITAT, Hyderabad. 5.Guard File.