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Facts
The assessee, Renewed Hope Community Trust, filed an application for registration under Section 12AB of the Income-tax Act, 1961. The CIT(E) rejected the application and cancelled the provisional registration, citing concerns about the charitable nature, genuineness of activities, and potential benefit to a specific religious community.
Held
The Tribunal held that the provisions of Section 13 of the Act can be invoked only at the time of assessment, not at the time of granting registration. The CIT(E) erred in invoking Section 13(1)(b) for denying registration.
Key Issues
Whether the denial of registration based on the trust's objectives and alleged benefit to a specific religious community was appropriate at the stage of registration, or if it should be considered at the assessment stage.
Sections Cited
12A, 12AB, 13(1)(b), 2(15)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRI SUNIL KUMAR SINGH, JM
PER PRASHANT MAHARISHI, AM:
ITA No. 4542/Mum/2023 is filed by Renewed Hope Community Trust (assessee /appellant) for A.Y. 2022-23, against the order of CIT (Exemption), Pune, dated 23rd October, 2023, wherein the application of the assessee in
On the issue of the assessee for the benefit of particular religious community, it was submitted that the objective of the trust are carried on without any distinction between any religions. Apart from being a Christian association assessee’s, focus on charity of public at large. The learned CIT referred to clause no. 3 of the object and found that it
The learned Authorized Representative furnished a 221 pages paper book containing the details of donations, bank statements, the expenditure, invoices and activity report of the trust. Therefore, it was submitted that the assessee is carrying on genuine charitable activities. It further relied upon the decision of the Hon'ble Supreme Court in case of CIT v. Dawoodi Bohra jamat [2014] 364 ITR 31(SC) and also the decision of co-ordinate bench in Diocese of Pune (CNI) Vs. CIT 42 ITR (Tribunal) 348 stating that though the objects of the trust are based on Christianity, the activities of the trust are not meant for any particular religious community but for the public at large. It was further submitted that the decision of the Pune Tribunal also supports the case of the assessee.
The learned Departmental Representative vehemently supported the order of the learned CIT (Exemption) and stated that assessee has failed to prove the genuineness of the activities and further it violates the conditions of Section 13(1)(b) of the Act as it is existing for the benefit of a particular religious community and caste. Therefore, the assessee is not entitled to the registration
As per the details furnished before us at page no. 146 to 151 of the Paper Book coupled with invoices of expenditure at page no.152 to 207. We find that the activities of the assessee are for Children and in different villages of Panvel district. The assessee is providing teaching , food, cloth, books, medical and sanitary pads. These activities are carried on footpaths of district Panvel. Looking at the photographs and notes on the activity it is apparent that assessee is carrying on activities for which it deserves registration. However, it is for Ld CIT (E) to satisfy himself about the genuineness , he is directed to reconsider this aspect by examining these details. Necessarily, this aspect needs to be verified u/s 12AB (1) (b)(i) (A) of the Act .
On the issue that trust exists for benefit of a particular community i.e. Christianity, According to section 13 (1) (b) of The act in the case of a trust for charitable purposes or a charitable institution created or established after the commencement of this Act, any income thereof if the trust or institution is created or established for the benefit of any particular religious community or caste. Some of the
"9. We observe that in the case of Jamiatul Banaat Tankaria [2024] 160 taxmann.com 358/205 ITD 673 (Ahmedabad - Trib.), the ITAT held that where objects of assessee-trust were primarily charitable rather than favouring any specific religious community, CIT(E) was not justified in denying registration under Section 12A, by invoking Section 13(1)(b) as said provisions would be attracted only at time of assessment and not at time of grant of registration. In the case of Malik Hasmullah Islamic Educational and Welfare Society [2012] 24 taxmann.com 93/138 ITD 519 (Lucknow), the ITAT held that since provisions of Sections 11, 12 and 13 are intended for exercise of jurisdiction by an Assessing Officer in an assessment proceedings, Commissioner is not competent to invoke such provisions for purpose of declining registration under Section 12AA. In the case of St. Joseph Academy [2014] 50 taxmann.com 216/[2015] 153 ITD 669 (Hyderabad - Trib.), the ITAT held that provisions of Section 13 can be invoked by Assessing Officer while framing assessment and not by Commissioner while considering application for registration under Section 12AA. In the case of Dawoodi Bohara Jamat [2014] 43 taxmann.com 243/268 CTR 1/364 ITR 31/222 Taxman 228 (SC), the Hon'ble Supreme Court made the following observations: "40. Further, establishment of Madarsa or institutions to impart religious education to the masses would qualify as a charitable purpose qualifying under the head of education under the provisions of Section
Therefore respectfully following the above decision of the coordinate bench, we restore to the file of CIT (exemptions), for de novo consideration, on merits, after giving due opportunity of being heard and decide issue of grant of registration afresh.
In the result, Appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 22.07.2024.
Sd/- Sd/- (SUNIL KUMAR SINGH) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated: 22.07.2024 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, True Copy//
Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai