TaxTMI 
TaxTMI 
2011 (4) TMI 1005
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....at the applicant-trust is established for the benefit of a particular religious community or caste and, thus, hit by section 13(1)(b) of the Act. Explanation (2) below sub-section (7) of s. 13, which provides an exception to s. 13(1)(b) for scheduled castes, backward classes, scheduled tribe or women and children, would not be applicable in the instant case as the word 'minority' cannot be categorized as either scheduled caste or backward community; viz. Jains and Christians are a minority community, but are neither backward nor a scheduled caste. He, accordingly, rejected the assessee's application for grant of registration without examining the other issues that may arise, including consideration of the reasons for condoning the delay in making the application. Aggrieved, the applicant is in appeal. 3. Before us, like contentions stood raised by either side. The ld. CIT had misconstrued the word 'minorities' to mean a religious minority or with reference to a religious community, which would, even otherwise, include people of different communities, viz. Muslims, Christians, Sikhs besides Zoroastrians (Parsis), etc. Secondly, even so, s. 13 only provides for satisfaction of con....
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....; Explanation 2 - A trust or institution created or established for the benefit of Scheduled Castes, backward classes, Scheduled Tribes or women and children shall not be deemed to be a trust or institution created or established for the benefit of a religious community or caste within the meaning of clause (b) of sub-section (1)." 4.2 The issues, as apparent from the foregoing, that arise for our consideration, are:- (i) Whether the provision of section 13(1)(b) is applicable to the assessee? and (ii) Whether, even if so, would the same have the effect of denial of registration u/s. 12A? 4.3 At the very outset, however, we may clarify that even if both the questions are answered in favour of the appellant-trust, the matter shall have to be remanded back to the file of the competent authority for examination of the assessee's application on merits, of course in a time bound manner. This is for the reason that, as afore-noted, there is no finding by the ld. CIT in respect of the satisfaction or otherwise of the conditions of s. 12A(b). The same is necessary for either the grant or the rejection of registration under the Act, which cannot be presum....
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....e of the trust could be applied only for their benefit. The same is integral to, and forms a part of the objects and activities of, the trust. Now, when the entire income of the trust is to be excluded from the purview of s. 11, so as to be taxable (i.e., assuming application of s. 13(1)(b)), what is the purpose of granting registration u/s. 12A to such a trust? The same, i.e., clause (9), read in conjunction with the preamble, as well as the object clauses, defines the character or the status of the trust. We are, therefore, of the view that even though s. 13 only restricts the application of ss. 11 and 12, the same impinging on the denominational character of the trust, as well as the fact that s. 13(1)(b) extends to the entire income of the trust (irrespective of the extent of application for the benefit of a particular religious community or caste), the same [s. 13(1)(b)], where applicable, could validly lead to denial of registration u/s. 12A of the Act. 4.5 We may now address the first question afore-mentioned. In this regard, we find that s. 13(1)(b) deals with the trusts for charitable purposes or charitable institutions, i.e., it has no application in the case of a r....
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....ust'. A public trust, it may be clarified, is one which inures for the benefit of any recognisable and identifiable cross-section of the public, and it would not matter whether the cross-section is one identified by a bond of religion, community or caste, i.e., such a trust would still qualify to be a public charitable trust. However, the Act provides an exception by denying exemption, as a matter of public policy, to communal or sectarian trusts, laying the criterion of 'for the benefit of a particular religion or caste', evidently with a view to discourage sectarianism. In other words, a trust to which s. 13(1)(b) applies, is no less a public charitable trust, though disqualified for the exemption status of its income under the Act on account of it inuring for the benefit of the members of the public drawn on the lines of religious identity or affinity, or caste. 4.7 The question that would follow next is whether the 'specified' beneficiaries fall to be covered u/s. 13(1)(b) of the Act. In this regard, the assessee states that the ld. CIT has misconstrued the word 'minorities', stated in its preamble, as well as in the 'beneficiaries' and the 'object' clause of the trust deed.....
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....iplied. A document has to be read as a whole, and purposively. Even the National Minorities Commission, constituted as an autonomous body to oversee minority interests, has defined five religious denominations, viz. Muslims, Sikhs, Christians, Buddhists and Zoroastrians, as minorities in India (vide its Notification dated 23/10/1993). Reading the deed harmoniously, holistically and reasonably, which it must, we are of the view that the word 'minorities' in the trust deed is with reference to 'religious minorities' only. In fact, if that was not so, there is no question of it being accorded the status of, or created as a, religious trust, besides a charitable one, i.e., wholly for religious and charitable purposes. Further, the assessee's own argument that people of different religious denominations would stand to be covered by the term 'minorities', i.e., those residing in Tellicherry Municipality and its suburbs (to which the objects of the trust extend), itself abundantly clarifies that the import and purport of the said word is with reference to religious minorities. 4.8 In sum, even as it is for the trust deed to spell out in clear terms the meaning, import and scope of t....