TaxTMI 
TaxTMI 
2014 (11) TMI 1220
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.... the assessee, the Ld.CIT noticed from the object clause of the Memorandum of Association that while some of the objects could not be prime-facie considered as charitable, one of the objects was of a religious nature. The prima-facie non charitable objects according to Ld.CIT are as under : "3(a) ". . . . . . . . . . . through expansion of production of goods and services for domestic and overseas market thereby raising living standard of society at large." 3(f) "To provide for arbitration in respect of settlement of disputes arising in the course of trade, services, vocations, industry or other business matters of the community and to secure the service of experts if found necessary or desirable". 2.1 Similarly, the prima-facie religious object of the society according to him is as under : 3(b) "To encourage, conduct and support activities leading to Universal Spiritual Upliftment as preached by Tirthankar Bhagwants". 2.2 He further noted from the details of the activities furnished by the assessee society that the same were mainly intended for the benefit of the members of Jain Community. Further, a few activities also did not appear to be in consonance with the objects. H....
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....haritable and some of its activities predominantly aimed at benefitting a particular religious community, he held that the condition of "satisfaction" prescribed in section 12AA as to the objects of a trust or institution as well as the genuineness of the activities is not satisfied. He accordingly rejected the request for grant of registration u/s.12A of the I.T. Act. 4. Aggrieved with such order of the CIT the assessee is in appeal before us with the following grounds : "1. On the facts and in the circumstances of the case the Ld CIT has erred in holding that objects of the trust are not charitable including and particularly the object reproduced herebelow: "3(f) To provide for arbitration in respect of settlement of disputes arising in the course of trade, services, vocations, industry or other business matters of the community and to secure the service of experts If found necessary or desirable." 2. On the facts and in the circumstances of the case the Ld CIT has erred in holding that following object clause is prima-facie religious:- "3 (b) To encourage, conduct or support activities leading to Universal Spiritual upliftment as preached by Tirthankar Bhagwants" 3. O....
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....cket Tournament he submitted that various Benches of the Tribunal have considered this aspect and have held that registration cannot be rejected on these reasonings. According to him, the observation of the CIT that charitable trust if established for the benefit of a specific religious community or caste, provisions of section 13(1)(b) gets attracted is not correct. 6.1 Referring to the decision of the Hon'ble Supreme Court in the case of CIT Vs. Dawoodi Bohra Jamat reported in 364 ITR 31 he submitted that the Hon'ble Supreme Court in the said decision has held that the objects of the trust are not benefitting a particular religious community, despite the fact that the objects clearly reflect the intention of the trust of observing tenets of Islam. However, these objects do not restrict only and for the benefit of the members of the community. 6.2 Referring to the decision of the Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association Vs. CIT reported in 82 ITR 704 he submitted that the Hon'ble Apex Court in the said decision has held that an object beneficial to a section of public is an object of general public utility. The section of public must be definite and ....
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....gious community. Further, according to him, settlement of dispute cannot be considered as an object of general public utility. He has also observed that conducting the JPL Cricket Tournament activity organized with a view to unite the members is not in consonance with the objects of the trust and this activity is again organized for uniting Jain Community. In view of the above, the Ld.CIT held that if a charitable trust is established for the benefit of a specific religious community or caste, provisions of section 13(1)(b) are attracted. 8.1 We find the Hon'ble Supreme Court in the case of CIT Vs. Andhra Chamber of Commerce reported in 55 ITR 722 has held that an object beneficial to a section of the public is an object of general public utility. The expression "General Public Utility", however, is not restricted to objects beneficial to the whole of mankind. To serve a charitable purpose, it is not necessary that the object should be to benefit the whole of mankind or even for persons living in a particular country or province. It is sufficient if the intention is to benefit a section of the public as distinct from specific individuals. 8.2 We Find the Hon'ble Supreme Court in ....
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....urposes to benefit a particular religious community may be a valid charitable trust, under section 13(1)(b) such trust would not be entitled to exemption and, consequently, the income would be exigible to tax under the Act. The phrase "charitable purpose" is expansive and inclusive. The expression "charitable purpose" is defined in the dictionary clause of the Act under section 2(15) 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. The expression "any other object of general public utility" is of the widest connotation. The word "general" in the expression means pertaining to a whole class. Therefore, 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. The expression would prima facie include all objects which promote the wellbeing of the general public. It cannot be said that a purpose would cease to be charitable even when public welfare is intended to be served. If the primary purpose and the predominant object of a trust are to promote the....
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....and CIT v. ANDHRA CHAMBER OF COMMERCE [1965] 55 ITR 722 (SC) relied on. 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. Unlike the phrase "charitable purpose", "religious purpose" is not defined under the Act. A religious purpose would be one relating to a particular religion and broadly would encompass objects relating to observance of rituals and ceremonies, propagation of tenets of the religion and other allied activities of the religious community. In certain cases, the activities of the trust may contain elements of both : religious and charitable and thus, both purposes may overlap. This is 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 and also the public at large. The objects of the assessee-trust as mentioned under the trust deed were to arrange for nyaz and majlis (lunch and dinner) on religious occasions of the birth anniversary and urs mubarak of awliya-e-quiram and saints of the Dawoodi Bohra community, to arrange for lu....
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....d in the trust deed which would govern its right of exemption under section 11 or 12. It is the analysis of these objects in the backdrop of fiscal jurisprudence which would illuminate the purpose behind creation or establishment of the trust for either religious or charitable or both religious and charitable purpose. Therefore, the High Court had erred in refusing to interfere with the observations of the Tribunal in respect of the character of the trust on the grounds that they were pure findings of fact. (ii) That the objects of the assessee-trust were not indicative of a wholly religious purpose but were collectively indicative of both charitable and religious purposes. Although objects (c) and (f) which provided for activities completely religious in nature and restricted to the specific community of the assessee-trust were objects with religious purpose only, the fact that the other objects traced their source to the Holy Quran and resolved to abide by the path of godliness shown by Allah would not be sufficient to conclude that the entire purpose and activities of the trust were purely religious in colour. The objects reflected the intent of the trust as observance of the ....