2017 (2) TMI 698 - AT - Income Tax

Tax Tribunal Grants Registration to Trust for Charitable Activities, Emphasizes Public Benefit

Shri Digamber Jain Mandir Godhaji, Versus The CIT (Exemption) Jaipur.

Shri Digamber Jain Mandir Godhaji, Versus The CIT (Exemption) Jaipur. - TMI Issues involved:- Refusal of registration to the assessee under section 12AA of the Income Tax Act, 1961 based on the objects of the trust being for the benefit of a particular religious community.- Interpretation of provisions of section 13(1)(b) and section 2(15) of the IT Act in relation to charitable trusts.- Whether the objects of the trust are genuinely charitable and for the benefit of the public at large or limited to a specific religious community.Analysis:1. Refusal of Registration under Section 12AA:The appeal was against the order of the ld. CIT (Exemption) refusing registration to the assessee under section 12AA. The ld. Counsel for the assessee argued that the trust should be considered charitable, citing various judicial pronouncements to support the claim. On the other hand, the ld. D/R contended that the trust's objects were primarily for the benefit of a specific religious community, making it ineligible for charitable status.2. Interpretation of Section 13(1)(b) and Section 2(15):The ld. CIT based the rejection on the premise that the trust was formed for the benefit of a particular religious community, violating section 13(1)(b) of the IT Act. The Tribunal examined precedents like Agrawal Sabha and Gowri Ashram, which emphasized that trusts benefiting only specific communities do not qualify as charitable organizations under section 2(15). The Tribunal noted that the legislative intent behind charitable purposes is to serve the public at large, not limited groups.3. Genuineness of Charitable Objects:The Tribunal considered the objects of the trust, which included provisions for the economically poor, old, ailing, and students without discrimination of caste or creed. These provisions, such as assistance for hospitalization, medicines, and shelter, were deemed charitable in nature. By referencing the Supreme Court judgment in CIT vs. Dawoodi Bohara Jamat, the Tribunal concluded that the trust's objects did not solely benefit a particular religious community but aligned with charitable purposes under section 2(15).4. Decision and Conclusion:After evaluating the arguments and the trust's objects, the Tribunal set aside the ld. CIT's order and directed the grant of registration to the assessee trust. The Tribunal found that the trust's activities were genuinely charitable and aimed at benefiting the public at large, thereby allowing the appeal of the assessee.In conclusion, the judgment highlighted the importance of ensuring that trust objects align with the definition of charitable purposes under the IT Act to qualify for registration and tax exemptions.