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Income Tax Appellate Tribunal, MUMBAI BENCH “J”, MUMBAI
This appeal by the assessee trust is directed against the order of the Director of Income Tax (Exemptions), Mumbai ( in short ‘DIT(E)’) passed under section 12AA(1)(b)(ii) r.w.s. 12A of the Income Tax Act, 1961 (in short ‘the Act’), rejecting the assessee’s application or grant of registration under section 12AA of the Act.
2. In the instant appeal, the assessee has raised the following grounds:-
“1. That on facts and in the circumstances of the case and in law the Ld. Director of Income Tax (Exemptions) has erred in rejecting the application for registration of the appellant truest u/s.12A of the I.T. Act, 1961.
That the registration application has been rejected by the ld. Director of Income Tax (Exemptions) for the wrong reasons and due to erroneous interpretation & application of term religious & charitable purposes and is contrary to the provisions of section 12A.
That appellant craves the leave to amend, alter, substitute and or to raise new or additional grounds of appeal
at the time of hearing.”
3. This appeal was earlier fixed for hearing on various dates and none appeared on behalf of the assessee. On certain dates when the Bench did not function, the matter was adjourned through Notice Board. When the case was finally fixed for hearing today i.e. on 04/01/2016, none was present on behalf of the asessee, but the Ld. Departmental Representative appearing for the Revenue was present.
4.1 The case was heard with the assistance of the Ld. Departmental Representative appearing for the Revenue and is disposed off on the basis of the material on record. The Ld. CI(A) while rejecting the assessee’s application for registration under section 12AA(1)(b)(ii) of the Act, has held as under:-
“3. As per the provisions of Section 12AA(1)(b), a trust is to be granted registration if the Commissioner is satisfied about the objects of the trust and the genuineness of its activities. Both these requirements are cumulative and not alternative. It is seen from perusal of Trust Deed that the applicant trust has mixed charitable and religious objects such as building and management of places" of worship, temples, renovation of temples, service of idols for installation, consecration and worship, gifts to idols already installed, erection and management of Upasrays, Bhojanshalas, Ambilshalas, Saduvrat etc. It is now well settled that where there is an admixture of charitable and religious objects, a trust may get disqualified on the ground that it is for the benefit of a particular religious community. Reliance is placed in this regard on the judicial precedents in the cases of State of Kerala v. M.P. Shanti Verma Jain 231 ITR 787 (SC) and Gulam Mohidin Trust v. CIT 248 ITR 587 (J&K). It is notable that both sections 11 and 12 use the expression "charitable or religious purposes" which cannot be read or interpreted to mean "charitable and religious purposes". The purpose of seeking registration is to avail of exemption under Sections 11 and 12. Given its mixed objects, the applicant will not be able to have the benefit of exemption under Section 11 and 12. In other words, in view of the mixing up of charitable and religious objects, the grant of registration under Section 12A would be nothing more than an exercise in futility because the applicant will be hit by Section 13(1)(b) and thereby lose exemption.
It is important to point out that Hon'ble Madhya Pradesh High Court in the case of Shri Dhakad Samaj Dharamslutla Bhawan Trust v. CIT, 302 ITR 321 (MP) has held that since Section 11 of the LT. Act, 1961 provides for exemption to the trust registered under the Act, it is primarily the purpose of Section 11 that will dominate or prevail over other considerations. It clearly shows that in the course of registration proceeding u/s. 12AA of the Act, what is to be analyzed in respect of the objects of the trust is that these should be such that exemption under Section 11 is allowable. In the present case, since exemption under Section 11 would not be permissible to the applicant trust in view of its mixed charitable and religious objects, its application for registration is liable to be rejected. In this connection, the applicant has submitted that the object clauses referred to above can in no way be said to be religious in nature and are purely of charitable nature. In support of its contention, the applicant has placed reliance on an unreported decision of the Hon'ble ITAT , Nagpur Bench dated 11.10.2012 in in the case of Shiv Mandir Devsttan Panch Committee Sanstan Nagpur v. CIT-1. Nagpur wherein while allowing the appeal of the assessee and directing the CIT to grant approval to it under Section 80G(5)(vi) of the Act, it was held that Hinduism is not a religion but a way of life of a civilized society and that expenses incurred for worshipping of Lord Shiva, Hanuman, Goddess Durga and for maintenance of temple cannot be regarded to be for religious purpose. The submissions of the applicant have been considered but the same are not acceptable. In the first place, the word 'Hindu' or 'Hinduism' is nowhere used in the Trust Deed of the applicant. In view of this vital distinguishing feature, the decision relied upon by the applicant dealing with object of worship of Hindu Gods and Goddesses will
not come the rescue of the applicant. Secondly, the Trust Deed of the applicant makes specific mention of building and management of Upasrays, Ambilshalas, Saduvrat etc. which are well recognized as lain religious institutions. It is important to note that Jainism is recognized as one of well known religions in India vide para 11 of the aforesaid decision of the Hon'ble Tribunal relied upon by the applicant. Finally, the decision cited by the applicant above was rendered in the context of grant of approval u/s.80G(5)(vi) whereas the present application has been filed for registration as a public charitable trust u/s. 12A. Thus, in view of the above discussion in regard to its mixed charitable and religious objects, I am unable to satisfy myself about the charitable character of objects of the applicant trust which is a condition precedent for grant of registration. As the applicant trust has failed to comply with the- mandatory requirements prescribed uls.12AA read with Rule 17 A, its application for grant of registration is rejected.” 4.2 Taking into account the submissions of the Ld. Departmental Representative appearing for the Revenue in support of the impugned order of the Ld. DIT(E) and the material on record, we find that the assessee has not been able to rebut or controvert the findings of the Ld. DIT(E) in the impugned order rejecting its application for registration. In this view of the matter, we find no reason to interfere with the findings rendered by the Ld. DIT(E) in his order u/s. 12AA(1)(b)(ii) r.w.s. 12A of the Act dated 18/01/2013. Consequently, the grounds raised at S.Nos. 1 to 3 are rejected.
In the result, the assessee’s appeal is dismissed.
Order pronounced in the open court on 06/01/2016