TaxTMI 
TaxTMI 
2015 (11) TMI 990
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....e very essence of charity, which is necessary for getting the status of being charitable as is required in view of section 2(15) of the Act; b) The AO as well as the Joint Commissioner of Income-tax has reported that the main aims and objects of the society is to promote the inherited culture and festivals and this does not fall within the ambit of section 2(15); c) On page No.7 of the Memorandum and Articles of Association of the assessee society, it is noticed that the Resolution No., date of meeting, etc., are blank. Thus, the Memorandum and Articles of the assessee society are incomplete and fructuous, as the assessee failed to file an explanation; d) A perusal of the Income & Expenditure Statement for the financial years 2010-11, 2011-12 and 2012-13 demonstrates that the assessee society has made huge expenditure on account of Dussehra festival, Ekadashi expenses, Hanuman Jayanti and religious social programmes. The expenditure as a percentage of total expenses is more than 50% and as these expenditure incurred are for religious activities, it cannot be treated as charitable. Thus, the assessee is not entitled to registration; and e) The Dissolution clause is not i....
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....15) of the Act and not in the other categories.' She relied on section 13(1)(b) of the Act and submitted that the benefit u/s 11 is to be denied if the trust or institution is created or established for the benefit of any particular religious community or caste and, hence, the CIT was right in denying exemption. She relied on the judgment of the Hon'ble Supreme Court in the case of CIT, Ujjain vs. Dawoodi Bohara Jamat. In our view, this decision is in favour of the assessee. The Hon'ble Supreme Court held as follows:- "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. Therefore, advancement of any object of benefit to the public or a section of the public as d....
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.... Further, establishment of Madarsa or institutions to impart religious education to the masses would qualify as a charitable purpose qualifying under the head of education under the provisions of section 2(15) of the Act. The institutions established to spread religious awareness by means of education though established to promote and further religious thought could not be restricted to religious purposes. The Madarsa as a Mohommedan institution of teaching does not confine instruction to only dissipation of religious teachings but also contributes to the holistic education of an individual. Therefore, it cannot be said that the said object would embody a restrictive purpose of religious activities only. Similarly, assistance by the respondent-trust to the needy and poor for religious activities would not divest the trust of its altruist character. [Para 40] Therefore, the objects of the trust exhibit the dual tenor of religious and charitable purposes and activities. Section 11 shelters such trust with composite objects to claim exemption from tax as a religious and charitable trust subject to provisions of section 13. The activities of the trust unde....
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.... caste. [Para 45] The 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. 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. [Para 46] In the present case, the objects of the respondent trust are based on religious tenets under Quran according to religious faith of Islam. As already noticed that the perusal of the objects and purposes of the respondent-trust would clearly demonstrate that the activities of the trust though both charitable and religious are not exclusively meant for a particular religious community. The objects, as explained in the preceding paragraphs, do not channel the benefits to any community if not the Dawoodi Bohra Community and th....
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....n view of the change in law in the State of Haryana and, accordingly, it got itself reregistered. Thereafter, the certificate of registration along with Memorandum of Association was filed with the Department along with a letter dated 20.6.2014. Thus, the submission of the CIT, DR that these documents are not before the CIT is factually incorrect. 11. Coming to the other objections of the ld.CIT for grant of registration, we find that the Dissolution Clause as per the amended regulations reads as follows:- "3. Its assets and liabilities shall be first used to liquidate and liabilities and the left over properties/assets, if any shall be considered for transfer to any other society established with identical aims and objectives or to District Collector for use thereof in the General Public interest." 12. A perusal of this clause demonstrates that the requirement of law is fulfilled. Thus, in view of the amended clause, the rejection of registration on this ground is not valid. Regarding the blank left by not filling the Resolution No., and date by the promoters, we find that in the later registration documents such gaps are not there. The registration is to be conside....
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....d observances might extend even to matters of food and dress. * No material or evidence has been brought on record by the department which may prove that any person coming, worshipping and maintaining the temple has to follow a particular code of ethical rules and has to carry out the prescribed rituals and observances, ceremonies and modes of worship. The entry is not restricted to a particular group of persons. Any body whether want to worship or not and want to maintain or not can come to the temple and avai l of all the facilities available to the public at large . * Therefore, these objects cannot be regarded to be the religious objects. Until and unless the activities for which the trust is established, involve the activity religious purpose, it cannot be said that the assessee has not complied with the condition No. (iii ) enumerated under section 80G(5). [Para 11] * Even all the building maintenance expenses, free food expenses and festival, prayer and daily expenses cannot be regarded to be the one incurred for religious object, even if the object is regarded to be religious one. It is not denied that in the building the assessee was carrying yog....
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....s. 4(3)(i) of the Act of 1922 in respect of the first two assessment years and under s. 11 for the assessment year 1962- 63. The ITO proceeded on the view that the objects for which the respondent association was constituted contained certain clauses which permitted the respondent to apply the income to purposes which were not wholly charitable. The AAC maintained the order of the ITO. But the Income-tax Appellate Tribunal took an entirely contrary view and held that the respondent was entitled to the exemption claimed by it. Upon a reference made at the instance of the Commissioner of Income-tax, Gujarat, the Appellate Tribunal referred the following question for the opinion of the High Court: "Whether, on the facts and in the circumstances of the case, the income of the assessee-trust is exempt under s. 4(3)(i) of the Indian I.T, Act, 1922, and s. 11 of the I.T. Act, 1961?" Before the High Court the controversy centred around sub-cls. (4) and (5) of cl. 3 of the memorandum of association of the respondent-association as well as sub-cl. (4) of cl. 8. The High Court after considering the entire matter at length in the light of the prevailing case law has found tha....