QASMI TRUST,SRINAGAR vs. INCOME TAX OFFICER WARD- (EXEMPTIONS), JAMMU

ITA 620/ASR/2026Status: DisposedITAT Amritsar29 September 2026AY 2026-276 pages
AI SummaryDismissed

What were the facts?

The assessee, Qasmi Trust, filed an appeal against the order of the Commissioner of Income Tax (Exemption) [CIT(E)] dated 09/03/2026, which rejected its application for renewal of registration under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961. The assessee had previously been granted provisional registration. The CIT(E) rejected the renewal on two grounds: (1) the trust's objects were restricted to a particular community, inconsistent with Section 2(15), and (2) a founder trustee was investigated for activities detrimental to national fabric, raising doubts about the trust's genuineness. The assessee, established in 1992, claims to run educational institutions in backward areas. The CIT(E) noted the assessee runs Darul Uloom Qasmia (Madrassa) for 270 students, teaching subjects like Hafiz, Maulviyat, and Mufti, funded by religious offerings. The assessment year in dispute is 2026-27.

What did the Tribunal hold?

The Tribunal held that the assessee's application for renewal of registration under Section 12A(1)(ac)(ii) was rightly rejected. The Tribunal found that the assessee's note on its charitable activities corroborated the CIT(E)'s observations. The Tribunal noted that the assessee runs a Hanafee madrasa teaching specific Islamic branches of learning (Fiqah and Hadith) to 270 students, with courses like Hafiz, Maulviyat, and Mufti, funded by religious offerings. It found no evidence of secular subjects or other charitable activities like relief of the poor or general public utility. The Tribunal relied on Section 13(1)(b), which denies exemption to trusts established for the benefit of any particular religious community or caste, and noted that the assessee was established after the Act's commencement. The Tribunal distinguished the case from CIT v. Dawoodi Bohara Jamat by stating that the objects of spread of education of Fiqah and Hadith are faith-specific and the note confirms this in practice. The Tribunal also referred to CIT v. Palghat Shadi Mahal Trust, where the Supreme Court held Section 13(1)(b) attracted if the object confined benefits to one community. The Tribunal dismissed the grounds raised by the assessee, finding no reason to interfere with the CIT(E)'s findings.

What were the issues?

1. Whether the assessee trust's objects, specifically the spread of education in Fiqah and Hadith, are for the benefit of a particular religious community, thereby attracting the provisions of Section 13(1)(b) of the Income Tax Act, 1961, and consequently warranting the rejection of its application for renewal of registration under Section 12A(1)(ac)(ii)? Assessee's Contention: The assessee argued that its charitable objects include the spread of education of Fiqah and Hadith, relief of the poor, and advancement of any other object of general public utility, thus not being limited to any particular religious community. It also contended that the individual mentioned by the CIT(E) was a settlor, not a founder trustee. Revenue's Contention: The revenue, relying on the CIT(E)'s order, argued that the objects of the trust are restricted to a particular community, inconsistent with Section 2(15). The revenue also pointed to the investigation of a founder member for activities tarnishing the national fabric, rendering the trust's objects and intentions doubtful. The revenue further submitted that the application for approval under Section 12A(1)(ac)(ii) was rightfully rejected.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(ii),Section 2(15),Section 13(1)(b),Section 12AB(1)(b)(ii),Section 12AB(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.

Before: SH. SAKTIJIT DEY, HON’BLE & SH. GIRISH AGRAWAL, HON’BLE

Hearing: 28.09.2026Pronounced: 29.09.2026

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This is an appeal filed by the assessee against the order of rejection of renewal of an application u/s 12A(1)(ac)(ii) of the Act, dated 09/03/2026, passed by Ld. CIT (E) Chandigarh.

2.

Assessee had sought renewal of its registration under Section 12A(1)(ac)(ii) of the Act against the provisional registration granted to it in Form No. 10AC vide order dated 07.09.2024 for the period from assessment year 2025-26 to 2027-28. The said application seeking renewal of provisional registration has been rejected. Qasmi Trust 2 Assessment Year: 2026-27

2.

1 While rejecting, ld. CIT(E) observed that the objects of the assessee trust are no

The order continues below.

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