Trust with Mixed Religious & Charitable Objects Granted Registration Under Section 12A

The Tribunal allowed the appeal, directing the CIT(E) to grant registration under Section 12A to the trust with mixed religious and charitable objects. The Tribunal emphasized that such mixed objects do not disqualify a trust from registration, and the extent of charitable activities is not a criterion for registration under Section 12A. The Tribunal held that the trust's objects were genuinely charitable, rejecting the CIT(E)'s concerns about meager or nil activities as irrelevant to the registration process.

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Issues Involved:
1. Whether the inclusion of both religious and charitable objects disqualifies a trust from registration under Section 12A of the Income Tax Act, 1961.
2. Whether the meager or nil charitable activities carried out by the trust since its formation disqualify it from registration under Section 12A.

Issue-wise Detailed Analysis:

1. Inclusion of Both Religious and Charitable Objects:
The primary ground for rejection by the CIT(E) was that the trust had mixed objects, including both religious and charitable purposes, which purportedly disqualified it from registration under Section 12A. The CIT(E) emphasized the first page of the trust deed, which mentioned activities such as bible training classes alongside other charitable activities. The CIT(E) concluded that registration under Section 12A is permissible only if the trust is created wholly for charitable or wholly for religious purposes, but not for both.

However, the Tribunal observed that the objects of the trust were not purely religious but mixed, and cited precedents to support the eligibility of such trusts for registration. The Tribunal referenced the case of Rehoboth Mission Vs. Director of Income Tax (Exemption), where it was held that a trust could be for both religious and charitable purposes and still qualify for registration. The Tribunal also cited the Hon'ble Jurisdictional High Court's judgment in CIT Vs. Social Service Centre, which stated that if the primary purpose of an institution is charitable, ancillary religious activities do not disqualify it from being a valid charity.

The Tribunal concluded that the CIT(E)'s observations lacked legal strength and that there is no bar for granting registration to a trust with mixed activities. Consequently, the Tribunal directed the CIT(E) to grant registration to the trust, subject to any conditions deemed necessary.

2. Meager or Nil Charitable Activities:
The second ground for rejection was that the charitable activities carried out by the trust since its formation in 2015 were either meager or nil, making it premature to grant registration under Section 12A. The Tribunal analyzed the provisions of Sections 12A and 12AA, which focus on the genuineness of the trust's objects rather than the extent of its activities.

The Tribunal referenced the Supreme Court's decision in M/s. Ananda Social and Educational Trust Versus The Commissioner Of Income Tax & Anr., which clarified that registration under Section 12A can be sought by a trust regardless of whether it has already undertaken activities. The term "activities" in Section 12AA includes proposed activities, and the Commissioner must consider whether the trust's objects are genuinely charitable and whether its proposed activities align with those objects.

The Tribunal concluded that the CIT(E)'s rejection on the basis of meager or nil activities was contrary to law, as there is no requirement for a trust to have carried out significant activities before seeking registration. The Tribunal set aside the CIT(E)'s order and directed the CIT(E) to grant registration to the trust, with the liberty to impose any conditions as per law.

Conclusion:
The Tribunal allowed the appeal filed by the assessee, setting aside the CIT(E)'s order and directing the CIT(E) to grant registration under Section 12A, subject to any conditions deemed fit. The Tribunal emphasized that mixed objects, including both charitable and religious purposes, do not disqualify a trust from registration, and that the extent of activities carried out by the trust is not a criterion for registration under Section 12A.

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