2015 (7) TMI 1024

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....2014 is however, filed with a delay of 417 days. It was explained that since the DIT(E) passed a common order, being unknown to the proceedings/procedures, assessee-society preferred a common appeal. Later on it has come to know that two appeals are to be filed separately. Accordingly, assessee preferred a separate appeal to be filed for different sections. Therefore, the second appeal on the issue of 80G was preferred with a delay of 417 days. Considering the explanation of assessee, the condonation requested was granted and accordingly this appeal is also admitted. 3. Briefly the facts are, assessee claiming itself to be a charitable trust created vide registered deed with a registration No. 722/09, filed application seeking registration u/s. 12AA of the Act before the Ld. DIT(E) in the prescribed manner on 18-12-2012. In the course of scrutiny, the DIT(E) has issued a questionnaire on 06-03-2013 asking assessee-society to furnish details on specific points, to produce all original documents of trust and also Books of Accounts and bills and vouchers for verification. After going through the aims and objects of the society, the DIT(E) noticed that society has both charitable an....

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....the revised objects of the society for perusal. It was requested that registration may be granted to assessee-society as the objects are charitable in nature. 6. Ld. CIT-DR however, relied on the orders of the DIT(E). 7. We have considered submissions of the parties and perused the impugned order of Ld. DIT(E) as well as other materials on record. At present, as the assessee-society amended those objects which the DIT(E) considered as religious in nature, the objection of DIT(E) has no merit. Because of the strike at the relevant point of time, assessee could not furnish a revised Memorandum of Association but that could not prevent the DIT(E) in granting registration u/s. 12AA. As per Section 12AA, Ld. CIT/DIT has to satisfy himself about the object of the trust and genuineness of the activities of the trust or institution. On going through the impugned order of the Ld. DIT(E), it is absolutely clear that he accepts the majority of the objects are charitable in nature. Specific objection of Ld. DIT(E) is with reference to three objects which in his view violates the provisions contained in Section 11. The object clause which Ld. DIT(E) considers to be of religious nature are....

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....n the mischief of Section 13(1)(a) or 13(1)(b) of the Act. On the contrary, these clauses if at all they can be called to be of religious nature are for the benefit of general public, hence, can be considered to be in the nature of any 'other object of general public utility' as engrained in the definition of 'charitable purpose' u/s. 2(15) of the Act. Law is well settled that 'any other object of general public utility' is of the widest connotation as the word 'general' in said expression signifies a whole class. Hence, advancement of any object of benefit to the public or a section of the public as distinguished from benefit to an individual or a group of individuals would be a charitable purpose. Considered in the aforesaid perspective, there cannot be any doubt that the main object of assessee- trust is charitable in nature, as it is for the benefit of general public. The Hon'ble Supreme Court in the case of Addl. CIT Vs. Surat Art Silk Cloth Manufacturers Association [121 ITR 1 (SC)] and a number of other decisions held that if the primary purpose and predominant objects of a trust are to promote welfare of the general public, the purpose would be c....

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....he Act. The word 'or' between charitable and religious as used in section 11(1)(a) is not disjunctive but conjunctive in nature, therefore, it is necessary to read that income derived from property held under trust wholly for charitable or religious purposes or both are exempt. The Hon'ble Supreme Court in case of CIT Vs. M/s Dawoodi Boharh Jamat, Civil Appeal No. 2492 of 2014 observed, in certain cases activities of the trust may contain elements of both religious and charitable and thus, both the purposes may be overlapping. More so, when the religious activity carried on by a particular section of people would be a charitable activity for or towards other members of the community or also public at large. Feeding animals or cow may be a religious activity for a particular community but may be charitable for others. Similarly, feeding poor people or giving water to thirsty may be religious for some but charitable for others. Analysing the objects of the trust by keeping the aforesaid principles in view, hon'ble Apex Court finally held as under: "41.Therefore, the objects of the trust exhibit the dual tenor of religious and charitable purposes and activities. Section 11 of the A....

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....(b). What is intended to be excluded from being eligible for exemption under Section 11 is a trust for charitable purpose which is established for the benefit of any particular religious community or caste. 46.Such trusts with composite objects would not be expelled out of the purview of Section 13(1)(b) per se. The Section requires it to be established that such charitable purpose is not for the benefit of a particular religious community or caste. That is to say, it needs to be examined whether such religious-charitable activity carried on by the trust only benefits a certain particular religious community or class or serves across the communities and for society at large. (Sole Trustee, Loka Shikshana Trust v. CIT, (1975) 101 ITR 234 (SC)). The section of community sought to be benefited must be either sufficiently defined or identifiable by a common quality of a public or impersonal nature. (CIT v.Andhra Chamber of Commerce, 55 ITR 722). 47.This Court in CIT v. Palghat Shadi Mahal Trust, (2002) 9 SCC 685 the muslim residents of Kerala constituted a trust "for the purpose of constructing and establishing at Palghat-a-Shadi Mahal and other institutions for the educational, ....

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....eligious community. The objects, as explained in the preceding paragraphs, do not channel the benefits to any community if not the Dawoodi Bohra Community and thus, would not fall under the provisions of Section 13(1)(b) of the Act. 50.In that view of the matter, we are of the considered opinion that the respondent-trust is a charitable and religious trust which does not benefit any specific religious community and therefore, it cannot be held that Section 13(1)(b) of the Act would be attracted to the respondent-trust and thereby, it would be eligible to claim exemption under Section 11 of the Act." 12. In case of The Society of Presentation Sisters and others Vs. ITO, 318 ITR(AT)287, the Hon'ble Third Member while concurring with the view expressed by Hon'ble Accountant Member, held as under: "It is clear from plethora of authorities where after considering the provisions of section 11(1)(a) that so far as the aforesaid provision is concerned, no distinction is made between charitable and religious purposes. A charitable institution can have religious purposes; whereas a religious institution may be partly charitable. Most of the decisions were given under the 1961 Act. E....