Tribunal orders CIT to register trust under section 12AA citing Supreme Court judgment. Name discrepancy minor.

The Tribunal directed the CIT to allow the registration of the trust under section 12AA, considering the comparability of the trust's objects with those in the Supreme Court judgment and the minor nature of the name discrepancy. The appeal of the assessee was allowed.

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Issues Involved:
1. Denial of registration under section 12AA of the Income Tax Act.
2. Nature of the trust's objects-whether they are charitable, religious, or both.
3. Discrepancy in the name of the settler in official documents.

Issue-wise Detailed Analysis:

1. Denial of Registration under Section 12AA:
The appeal was filed by the assessee against the order of the CIT-III, Thane, dated 13.12.2012, which rejected the application for registration under section 12AA of the Income Tax Act. The CIT's rejection was based on the grounds that the trust's activities were a mixture of religious and charitable purposes, and there was a discrepancy in the settler's name in the trust deed and PAN.

2. Nature of the Trust's Objects:
The CIT examined the objects of the trust and concluded they were religious in nature, benefiting a particular religious community. The assessee argued that the objects were charitable and of general public utility, citing the judgment in the case of Ahmedabad Rana Caste Association, 82 ITR 704. The CIT noted that the trust funds were applied to activities such as Urs Niyaz & Majlis (lunch & dinners) and "Imdad Talim," which included learning the Arabic script, considered by the CIT as religious acts. The assessee contended that learning Arabic was not inherently religious and that providing financial assistance to the Dawoodi Bohra Community constituted general public utility. The Tribunal compared the objects of the present trust with those of the Dawoodi Bohra Jamat, as adjudicated by the Supreme Court in 364 ITR 31, and found them comparable. The Supreme Court had held that the objects of the trust were indicative of both charitable and religious purposes, and such composite objects could claim exemption under section 11 of the Act.

3. Discrepancy in the Name of the Settler:
The CIT also rejected the registration application due to a discrepancy in the settler's name, which was mentioned differently in the PAN and the trust deed. The assessee explained that the variation was due to language differences and was rectifiable. The Tribunal found that the name discrepancy was a minor issue and relied on the settler's passport, which matched the name in the trust deed. The Tribunal emphasized that such minor discrepancies should not obstruct the registration of the trust, which is meant for general public utility.

Conclusion:
The Tribunal directed the CIT to allow the registration of the trust under section 12AA, considering the comparability of the trust's objects with those in the Supreme Court judgment and the minor nature of the name discrepancy. The appeal of the assessee was allowed. The order was pronounced in the open court on 30th December 2014.

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