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Facts
The assessee, Haji Pir Mohmad Yusuf Waqf, filed an application for registration of the trust under section 12AB of the Income-tax Act. The Ld. CIT(E) rejected the application, finding that the trust's objects were confined to the benefit of the Muslim community and not the public at large. The CIT(E) issued notices and show cause notices, and based on the assessee's reply and evidence, concluded that the objects primarily benefited Muslims, violating Section 12AB(4) of the Act.
Held
The Tribunal perused the materials on record and found that the nature of the trust's activities was 'Religious'. The objects were for the benefit of the Muslim community, including specific categories like Muslim students and patients. Since the appellant failed to provide corroborative evidence that expenditure was not confined to these specific groups, the Tribunal found no infirmity in the CIT(E)'s order.
Key Issues
Whether the rejection of the trust's application for registration under Section 12AB was justified when its objects were primarily for the benefit of the Muslim community, but also included broader societal benefits like education and healthcare.
Sections Cited
12AB, 2(15), 12A, 12AB(4), 13(1)(b)
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Before: SHRI DINESH MOHAN SINHA & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by assessee emanates from the order passed by the Ld. Commissioner of Income-tax (Exemptions), Ahmedabad [in short, ‘Ld.CIT(E)’] rejecting application filed for registration of the trust under section 12AB of the Income-tax Act, 1961 (in short, ‘the Act’) dated 23.11.2024.
Grounds of appeal
raised by the assessee are as under:
1. The Ld. CIT(E) was not just and proper on the facts of the case and in law in rejecting the application of the trust for registration/s 12A.
2. Prayer 2.1 The rejection order may be recalled and registration u/s 12A may be directed to be allowed to the appellant 2.2 Personal hearing may be granted. 2.3 Any other relief that your honours may deem fit may be granted.
3. The appellant craves leave to add, amend, alter or delete any or all of the above grounds of appeal.”
Haji Pir Mohmad Yusuf Waqf 3. Facts of the case in brief are that assessee had filed an application for registration in Form-10AB u/s 12A(1)(ac)(iii) of the Act. The Ld. CIT(E) issued three notices on 25.07.2024, 06.11.2024 and 14.11.2024 calling for various details. In response to the said notices, the assessee filed some details, on perusal of which, the Ld. CIT(E) found that the objects of the applicant- assessee was confined for the benefit of the Muslim community and not for the benefit of the public at large. Hence, he issued a show cause notice and required the assessee to explain as to how the objects fall under the category of charitable purposes u/s 2(15) of the Act. He issued further notice asking assessee to furnish evidence to satisfy that it has not incurred any expenditure for the benefit of any particular religious community/caste. The applicant replied that while the objects of the trust are oriented towards the needs of Muslim community, they fulfil critical societal purpose such as education, health care and poverty alleviation which ultimately benefit society as a whole. The CIT(E) considered reply of the assessee and found that the objects of the applicant are for the benefit of Muslim/Muslim student/Muslim patient only and are not for the benefit of public at large. After discussion of provisions of Section 12AB(4) and decisions in cases of CIT vs. Dawoodi Bohra Jamat (2014) Civil Appeal No.2492/2014 (SC) and CIT vs. Bayathkutchhi Dasa Oswal Jain Mahajan Trust (2016) 74 taxmann.com 199 (Guj), he observed that granting provisional registration by CPC does not establish that the applicant is established or working for public at large. He also stated that the applicant has Haji Pir Mohmad Yusuf Waqf filed application for registration under the new provisions w.e.f. 01.04.2021. It was incumbent upon the applicant to prove with corroborative evidence that it has not incurred any expenditure toward the objects under dispute which are confined to the “Muslim, Muslim student, Muslim patient”. Therefore, there is specific violation under clause (d) below Explanation to Section 12AB(4) of the Act. Hence, the application in Form-10AB u/s 12A(1)(ac)(iii) of the Act and the provisional registration were cancelled.
Aggrieved by the order of Ld. CIT(E), the assessee-trust has filed present appeal before the Tribunal. The Ld. AR of the assessee-trust reiterated the submissions made before Ld.CIT(E). He submitted that though the objects are for addressing needs of the Muslim community, they are for education, healthcare and poverty alleviation which benefit the society as a whole. He, therefore, requested that the application for registration u/s 12A may be allowed.
On the other hand, Ld. CIT-DR for the revenue supported the order of Ld. CIT(E). He submitted that the trust is for the benefit of Muslim community only which is evident from the objects of the trust. He referred to page-6 of the CIT(E) order from which it is evident that it is for the benefit of Muslim student/Muslim patient and poverty alleviation of Muslim community. He submitted that Section 11 does not apply to the case of the appellant, which is clearly spelt in Section 13(1)(b) of the Act. He, therefore, argued that the order
We have heard both the parties and perused the materials on record. It is seen from Form-10AB enclosed with the Form-36 that the nature of activities of the trust as evident from column is “Religious”. We further find from the objects of the trust that it was for (i) help to the Muslim Yatim Khana and religious Institution; (ii) help to the poor Muslims; (iii) help to the Muslim students; (iv) help to the Sarwajanik hospital or Dawakhana or Muslim patient and (v) help to poor Muslim for Katan Latan. The appellant has not filed any details with corroborative evidences that it has not incurred expenditure towards objects which are confined for benefit of “Muslims/Muslim student/Muslim patient”. Therefore, in absence of necessary details with supporting evidences, we do not find any infirmity in the order passed by Ld.CIT(E). Hence, the grounds are dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced in accordance with Rule 34 of ITAT Rules, 1963 on 15/10/2025 in the open court.
Sd/- Sd/- (DINESH MOHAN SINHA) (BIJAYANANDA PRUSETH) �याियक सद�य/JUDICIAL MEMBER लेखा सद�य/ ACCOUNTANT MEMBER सूरत /Surat �दनांक/ Date: 15/10/2025 Dkp Outsourcing Sr.P.S*