TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 482
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....sed off by the CIT, Davangere by order dt.28.9.2011, refusing it registration on the ground that the assessee had not fulfilled the conditions for grant of registration. In the said order it was mentioned that some of the objects mentioned in Chapter IV of the Trust Deed are for the benefit of a particular religious community and therefore the provisions of Section 13(1)(b) of the Act, was also invoked by the learned CIT while refusing the assessee registration under Section 12AA of the Act. 2.2 Aggrieved by the order dt.28.9.2011 of the ld. CIT, Davangere, the assessee filed an appeal before the Tribunal raising several grounds. The co-ordinate bench of this Tribunal after hearing of the assessee's appeal including its reliance on the decision of the Hon'ble Apex Court in the case of Ahmedabad Rana Caste Association reported in 140 ITR 1 set aside the order of the ld. CIT and remanded the issue of grant of registration for fresh consideration vide its order in ITA No.1235/Bang/2011 dt.12.9.2012 granting the assessee liberty to put forth all its contentions in this regard. 2.3 Subsequent to the order of the ITAT, Bangalore in ITA No.1235/Bang/2011 dt.12.9.2012, the assess....
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....ts are charitable and even if some of them are considered for the benefit of the community, they are for women and children of the community, which is excepted by explanation (2) to section 13(1)(b) of the Act. 4. Without prejudice to the above, even assuming the trust is for the benefit of a particular religious community in respect of certain objects in view of explanation (2) to section 13, the provisions of section 13(1)(b) of the Act would not apply as these objects of the trust is for the benefit of women and children and the trust is entitled to the benefits of section 11 of the Act and the provisions of section 13(1)(b) of the Act would not apply and the learned CIT ought to have granted the registration under Section 12AA of the Act. 5. The learned CIT is not justified in holding that the ratio of the decision of the Hon'ble Supreme Court in the case of CIT V Ahmedabad Rana Caste Association reported in 140 ITR 1, is distinguishable and would not apply under the facts and in the circumstances of the appellant's case. 5.1 The learned CIT failed to appreciate tht development of a particular community or caste, which is a broad cross section of the general public, b....
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....ngere dt.27.9.2013 rejecting the application for Registration under Section 12AA of the Act dt.28.3.2013, the assessee has preferred this appeal raising the following grounds " 1. The order of the learned CIT (in the form of certificate) under Section 12AA of the I.T. Act, 1961 dated 27.9.2013 once gain refusing to register the trust under Section 12AA of the IT Act, 1961, in so far as it is against the appellant, is opposed to law, equity, weight of evidence, probabilities facts and circumstances of the case. 2. The learned CIT is not justified in holding that the appellant trust is not entitled to grant of registration on the ground that the appellant is in appeal before the Hon'ble ITAT against rejection of application for registration under Section 12AA of the Act, dated 31.1.2013, under the facts and in the circumstances of the appellant's case. 3. The learned CIT (Appeals) failed to appreciate that after rejection for grant of registration under Section 12AA of the Act dt.31.1.2013, the appellant had amended its trust deed to the clarify and remove any doubts that it exists to cater to a particular community and thereafter has applied fresh application for grant of r....
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....erned, we find it relevant that the Hon'ble Apex Court in the case of Dawood Bohara Jamat (supra) has observed as under " 28.The objects of the respondent-trust are not indicative of a wholly religious purpose but are collectively indicative of both charitable and religious purposes. It is expedient to comprehend the objects of the respondent-trust with reference to the construction of the expressions "charitable purpose" and "religious purpose." 29.................................. 30.According to Section 2(15), the expression "charitable purpose" has been defined by way of an inclusive definition so as to include relief to the poor, education, medical relief and advancement of any other object of general public utility. A catena of decisions of this Court which have interpreted the said provision and especially the expression "any other object of general public utility" have observed that the said expression is of the widest connotation. The word "general" in the said expression means pertaining to a whole class. (CIT v. Gujarat Maritime Board, (2007) 14 SCC 704). Therefore, advancement of any object of benefit to the public or a section of the public as distinguished fr....
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....tee, Loka Shikshana Trust v. CIT and Yogiraj Charity Trust v. CIT and CIT v. Andhra Chamber of Commerce,[1965] 55 ITR 722 (SC), it was observed that objects for service and benefit to the general masses would indicate that they are meant for public purpose and thus, would create a public charitable trust. 34.Indubitably, the word 'charity' connotes altruism in thought and action and involves an idea of benefiting others rather than oneself. (Andhra Chamber of Commerce (supra)). It also cannot be lost sight of that the supreme goal of all religions is philanthropy which could be manifested in various forms. It is held that gifts for religious purposes are prima facie gifts for charitable purposes. (Schoales v. Schoales [1930] 2 Ch. 75 (CA); White v. White (1893) 2 Ch. 41 (CA)) 35.Unlike the phrase "charitable purpose", "religious purpose" is not defined under the Act. According to lexicographers, the term religious would mean "of or relating to religion." (Merriam Webster Dictionary, Macmillan English Dictionary). The Shorter Oxford English Dictionary defines the term as follows: "Devoted to religion; exhibiting the spiritual or practical effects of religion, following the requi....
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....ot, the Courts must in general apply the standards of customary law and common opinion amongst the community to which the parties interested belong to. Therefore, it is pertinent to analyse whether the customary law would restrict the charitable disposition of the intended activities in the objects. 39.The provision of food to the public on religious days of the community as per object (a) and (b), the establishment of Madarsa and organizations for dissemination of religious education under object (d) and rendering assistance to the needy and poor for religious activities under object (e) would reflect the essence of charity. The objects (a) and (b) provide for arrangement for nyaz and majlis (lunch and dinner) on the religious occasion of the birth anniversary and Urs Mubarak of Awliya-e-Quiram (SA) and the Saints of the Dawoodji Bohra community and for arrangement of lunch and dinner on religious occasions and auspicious days of the Dawoodi Bohra community, respectively. Nyaz refers to the food a person makes and offers to others on any particular occasion on the occasion of the death of a saint and Majhlis implies a place of gathering or meeting. The activity of providing for fo....
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....would not be covered by clause (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.................. 48................. 49.In the present case, the objects of the respondent-trust are based on religious tenets under Quran according to religious faith of Islam. We have already noticed ....
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....21st May, 1958, was executed by the settlor, Shri Lakshminarain Lath, and who is party of the one part and the trustees of the assessee who are parties of the other part in the said deed. The trustees who were parties to the supplementary deed were Shri Lakshminarain Lath, the settlor of the trust, his son, Shri Narbada Prasad Lath, Shri Mahabir Prasad Poddar and Shri Motilal Lath. Three out of the four trustees, namely, Shri Laxminarain Lath, Shri Narbada Prasad Lath and Shri Motilal Lath, were also parties, as trustees, to the original settlement deed dt. 25th Aug., 1948. Shri Bissessurlal Lath, who was a party to the original settlement deed dt. 25th Aug., 1948, as a trustee, was not a party to the supplementary deed dt. 21st May, 1958. The reason being that in the meanwhile, Shri Bissessurlal Lath had died and in his place, Shri Mahabir Prasad Poddar had been appointed as a trustee and he was a party to the settlement deed dt. 21st May, 1958. 10. The Bombay Bench of the Tribunal, in its order dt. 30th Sept., 1975, has held that amendments introduced in the settlement deed by the supplementary deed were invalid for the reason that the objects of the trust as set out in the orig....
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.... Indian Trusts Act as such are not applicable to public trusts in view of s. 1 of the said Act, the principles underlying them, being based on general principles or rules of English Law, are applied by the Courts to public trusts also (See Phulchand Lakhmichand Jain vs. Hukamchand Gulabchand Jain, AIR 1960 Bom 438 and Kishore Joo vs. Guman Behari Joo Deo, AIR 1978 All 1. In State of Uttar Pradesh vs. Bansi Dhar, AIR 1974 SC 1084, the Supreme Court has observed as under "The next question is whether the Indian Trusts Act, 1882, applies to the present case. The Courts below have argued themselves into an application of s. 83 of the Trusts Act. Shri Dixit rightly objects to this course because that Act relates only to private trusts, public charitable trusts having been expressly excluded from its ambit. But while these provisions proprio vigore do not apply, certainly there is a common area of legal principles which covers all trusts, private and public and merely because they find a place in the Trusts Act, they cannot become 'untouchable' where public trusts are involved. Care must certainly be exercised not to import by analogy what is not germane to the general law of trusts....
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....intention of the settlor and of the trust created by him. It was held by the Rajasthan High Court that it was permissible for the settlor to clarify his intention in creating the trust under the original settlement deed by executing the supplementary deed. Even in the original deed, a discretion had been conferred on the trustees to apply the income of the trust in rendering aid to persons belonging to the L family and it was permissible for the trustees not to apply the income of the trust for the said object and in fact the income of the trust had never been applied for that object. It could not be said that the beneficiaries under cl. 2(vi), namely, persons belonging to the family of L, had an enforceable right to the application of the income of the assessee for the object mentioned in cl. 2(vi), and in these circumstances their consent was not necessary before altering the terms of the trust deed. In any case although the supplementary deed was executed in May, 1958, none of the persons belonging to the family of L had challenged the validity of the same in a Court of law. After the execution of the supplementary deed, it was not open to the trustees to apply the funds of the ....
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.... stick to the instrument as it existed prior to its rectification. The ITO will have to take the instrument as it exists in its actual amended form when it is pressed in service for framing the assessment concerning the relevant assessment year in which such rectified instrument holds the field. The second contention, therefore, fails and is rejected." 6.4 In the light of the aforesaid judgments relied on by the assessee, the ld. CIT ought not to have refused to consider the Deed of Amendment of Trust dt.18.3.2013. As held by the Hon'ble Apex Court, the Deed of Amendment of the Trust binds the Author and Trustees who have to administer the trust in accordance with terms contained in the rectified trust deed that is produced before the authorities below. Therefore, what is before the ld. CIT in the case on hand is the amended objects as contained in the Deed of Amendment dt.18.3.2013 which has amended the objects w.r.e.f. 4.6.2005. 6.5 The Hon'ble Delhi High Court in the case of Jagdamba Charity Trust and Another V. CIT reported in 125 ITR 377 has dealt with the retrospective operations of the deed of Trust. The Hon'ble Delhi High Court observed that " However, we thi....
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....th on the basis of the old deed. Though we are concerned with the asst. yrs. 1966-67 and 1967-68, since the amendment is fully retrospective, it is also not possible for the ITO to say that, in the relevant account years, the trustees held the property subject to the terms of the old deed and not under the terms of the amended deed." 6.6 In the light of the aforesaid position of law as emanate from the judgments referred to and extracted (supra), we hold that the following objects in the Amended Trust Deed dt.18.3.2013 will have to be examined in order for grant of registration under Section 12AA of the Act " 1. The aims and objects of the trust as contained in the Deed of Trust dt.4.6.2005 in Chapter Four shall stand amended and replaced with the following objects with effect from 4.6.2005 and shall be deemed tohave been amended and inserted from that day A. MEDICAL RELIEF. To provide medical relief to the poor, needy, destitute especially women & children irrespective of any case, cred or religion and belonging to all communities by providing the following (1) Establishing and running schools, residential institutions for all persons especially for women and children to p....