Loading judgment…
No AI summary yet for this case.
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI SOUNDRARAJAN K., JM
O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the orders of the Commissioner of Income Tax (Exemption), Kochi, both dated 28.11.2023 passed u/s. 12AA of Income Tax Act, 1961 (hereinafter "the Act").
Brief facts of the case are that the appellant trust is formed with the object of providing food and drinking water to the pilgrims visiting Sabarimala Temple. The appellant trust has obtained provisional registration u/s. & 62/Coch/2024 Sree Dharma Sastha Harihara Seva Charitable Temple Trust 12A(1)(ac)(vi) in Form 10AC dated 07.11.2022 under the new regime. Subsequently it has filed Form 10AB u/s. 12A(1)(ac)(iii) for regularisation of 12A registration on 23.05.2023. The Commissioner of Income Tax (Exemption) refused to grant registration u/s. 12A of the Act solely on the ground mainly because the appellant trust is providing food to Sabarimala pilgrims by holding that the appellant trust is a religious trust. Even otherwise there is no bar under the statute that religious trust cannot be granted registration u/s. 12A of the Act as held by the ITAT, Pune Bench in the case of Diocese of Pune (CNI) vs. CIT, dated 31.03.2015 wherein it was held as under:
11. The Hon'ble Supreme Court in Dawoodi Bohra Jamat, (2014) 364 ITR 31 (SC) had observed that the objects of trust as declared in the Trust Deed would govern its right of exemption under sections 11 and 12 of the Act. The Hon'ble Supreme Court also recognized the creation or establishment of trust for either religious or charitable or both religious and charitable purposes. By looking at the objects of the trust, it had to be determined whether the objects were wholly religious or wholly charitable or both religious and charitable and it was held that on consideration of the objects of the trust, the religious and charitable purposes and activities of the trust could be determined. It was further held that section 11 of the Act allows such trust with composite objects to claim exemption from tax as a religious and charitable trust, subject to provisions of section 13 of the Act. Though the objects of the trust were based on religious tenets but where the activities of the trust for both charitable and religious were not exclusively meant for a particular religious community, then it would not fall under the provisions of section 13(1)(b) of the Act and it was further held that where the assessee was charitable and religious trust, which did not benefit any specific religious community and hence, it could not be held that the provisions of section 13(1)(b) of the Act would be attracted to the assessee trust and therefore, it would be eligible to claim exemption under section 11 of the Act. The relevant observations of the Hon'ble Supreme Court are as under:-
(i) that determination of the nature of the trust as wholly religious or wholly charitable or both charitable and religious under the Act is not a question of fact. It is a question which requires examination of the legal effects of the proven facts and documents, that is, the legal implication of the objects of the assessee-trust as contained in the trust deed. It is only the objects of a trust as declared in the trust deed which would govern its right of exemption under section 11 or 12. It is the analysis of these objects in the backdrop of fiscal jurisprudence which would illuminate the purpose behind creation or establishment of the trust for either religious or charitable or both religious and charitable purpose.
Therefore, the High Court had erred in refusing to interfere with the observations of the Tribunal in respect of the character of the trust on the grounds that they were pure findings of fact. (ii) That the objects of the assessee-trust were not indicative of a wholly religious purpose but were collectively indicative of both charitable and religious purposes. Although objects (c) and (f) which provided for activities completely religious in nature and restricted to the specific community of the assessee-trust were objects with religious purpose only, the fact that the other objects traced their source to the Holy Quran and resolved to abide by the path of godliness shown by Allah would not be sufficient to conclude that the entire purpose and activities of the trust were purely religious in colour. The objects reflected the intent of the trust as observance of the tenets of Islam, but did not restrict the activities of the trust to religious obligations only and for the benefit of the members of the community. The provision of food to the public on religious days of the community, the establishment of Madars as and organisations for dissemination of religious education and rendering assistance to the needy and poor for religious activities would reflect the essence of charity. The activity of providing for food on certain specific occasions and other religious and auspicious events of the Dawoodi Bohra community did not restrict the benefit to the members of the community. Neither the religious tenets nor the objects as expressed limited the service of food on these occasions to members of the specific community. The establishment of Madarsas 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 2(15) of the Act. Similarly, assistance by the assessee-trust to the needy and poor for religious activities would not divest the trust of its altruist character. Therefore, the objects of the trust exhibited the dual tenor of religious and charitable purposes and activities. Section 11 of the Act allowed such trust with composite objects to claim exemption from tax as a religious and charitable trust subject to the provisions of section 13. The Activities of the trust under such objects would, therefore, be entitled to exemption accordingly. In re : trustees of the tribune [1939] 7 ITR 415 (PC) and In re : South Place Ethical Society; Barralet v. Attorney General [1980] 3 All ER 918; [1980] 1 WLR 1565; 54 Tax Cas 446 applied. (iii) That the objects of the assessee-trust were based on religious tenets under the Quran according to the religious faith of Islam. The activities of the trust though both charitable and religious were not exclusively meant for a particular religious community. The objects did not channel the benefits to any community if not the Dawoodi Bohra community and thus, would not fall under the provisions of section 13(1)(b) of the Act. The assessee-trust was a charitable and religious trust which did not benefit any specific religious community and, therefore, it could not be held that section 13(1)(b) of the Act would be attracted to the assessee-trust and thereby, it would be eligible to claim exemption under section 11 of the Act."
In view of the above said proposition laid down by the Hon'ble Supreme Court, the objects of the trust are to be looked into and those objects can be either charitable or religious in nature or both charitable or religious in nature. The question which arises for consideration before us is whether the trust whose objects were religious as well as charitable would be entitled for registration under section 12A of the Act. Looking at the & 62/Coch/2024 Sree Dharma Sastha Harihara Seva Charitable Temple Trust objects of the trust, we find that one of the objects of the assessee trust was to provide Ambulance facility to people at large. The object Nos. 2, 6 and 7 of the Trust, were admittedly relating to Christian community. However, other object Nos. 3, 4, 5 was to provide Ambulance facility to people at large, to establish and administer educational institutions for needy and deserving Christian students in particular and others in general, to establish hostels, libraries, etc. for Christian boys and girls in particular and other deserving & needy boys and girls in general. The objects of the assessee trust thus, reflect the activities to be carried on for the purpose of Jain religion and also for the purpose of public at large. In view thereof, it could not be held that the same are meant for the benefit of only Jain religious community. We reverse the findings of the Commissioner in this regard.
Now, coming to the second issue of grant of registration under section 12A of the Act, where the trust was both charitable and religious. The Hon'ble Gujarat High Court in Chandra Charitable Trust case (supra) had laid down that even where the objects of the trust were not only to propagate the Jainism or help and assist maintenance of temples, Sadhus, Sadhvis, Shraviks and Shravaks, and other goals as set out in the trust deed, the trust was a charitable as well as religious trust and section 13(1)(b) of the Act would not be applicable. Similar proposition has been laid down by the Hon'ble Gujarat High court in CIT v. Barkate Saifiyah Society [1995] 213 ITR 492 (Guj), wherein it was held that the exclusion from exemption under section 13(1)(b) of the Act applies only to charitable trust and charitable institution and if the trust was charitable as well as religious in nature, the assessee would be entitled to exemption under section 11 of the Act.
Similar proposition has also been laid down by the Hon'ble Supreme Court in Dawoodi Bohra Jamat case (supra) while holding the trust eligible to claim exemption under section 11 of the Act. In the totality of the above said facts and circumstances, we hold that the assessee is a charitable religious trust and the provisions of section 13(1)(b) of the Act would not be applicable. In view thereof, we direct the Commissioner to grant registration to the assessee under section 12A of the Act as charitable religious trust. The grounds of appeal
raised by the assessee are allowed.
15. In the result, the appeal of the assessee is allowed.”
3. In view of the above decision the orders passed by the Commissioner of Income Tax (Exemption) cannot be sustained in the eyes of law. Therefore, the matter is remanded back to the file of the Commissioner of Income Tax (Exemption) with the Direction that the applications may be disposed of de novo after affording reasonable opportunity of hearing to the assessee and on being satisfied that the appellant trust has satisfied the other conditions precedent for grant of registration.
& 62/Coch/2024 Sree Dharma Sastha Harihara Seva Charitable Temple Trust 4. Since the issue of registration is restored back to the file of CIT(A) on the lines indicated therein, the issue of grant of approval u/s. 80G is also restored to the Commissioner of Income Tax (Exemption) for de novo disposal.
In the result, the appeals filed by the assessee are allowed for statistical purposes.