2024 (6) TMI 801

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.... the assessee-trust, on 15/06/2022 in Form No. 10AB under Rule 17A of the I.T. Rules, 1962. The ld CIT(E ) observed that Rule 17A(1) of the Income Tax Rules prescribes the different forms to be filed for making application under various sub-clauses of clause (ac) of sub-section (1) of section 12A of the Act for registration of a charitable or religious trust on institution which stipulates as under. "17A.(1). An application under sub-clause (i) or sub-clause(ii) or sub- clause(iii) or sub-clause(iv) or sub-clause(v) or sub-clause(vi) of clause (ac)of subsection (1) of section 12A for registration of a charitable or religious trust or institution (hereinafter referred to as 'the applicant') shall be made in the following Form, namely: 1. Form No, 10A in case of application under sub-clause (i) or (vi) of clause (ac)of sub-section (1) of section 12A to the Principal Commissioner or Commissioner authorised by the Board; or 2. Form No. 10AB in case of application under sub-clause (ii) or (iii) or (iv) or (v) of clause (ac) of sub-section (1) of section 12A to the Principal Commissioner or Commissioner under the said clause." 4. The ld CIT(E ) refer....

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.... of section 44AB for such period; (i) where the income of the applicant includes profits and gains of business as per the provisions of sub-section (4A) of section 11 and the applicant has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of such business relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up and self-certified copy of the report of audit as per the provisions of section 44AB for such period; (j) self-certified copy of the documents evidencing adoption or modification of the objects; (k) note on the activities of the applicant." 5. Therefore, a notice was issued to the assessee on 07/11/2022, with a request to furnish detailed note on the activities actually carried out by the trust as well as certain details/documents as mentioned therein. The above-mentioned inquiry about the actual activities of the trust   is necessary in view of the mandatory provisions of the   procedure....

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....herwise charitable in nature, is/are for the benefit of any particular religious community or caste: "i.e. SUNNI MUSLIMS. Objective and Purpose of trust: The clause (6.1) & (6.4)) stipulates as "(6.1) To make all the possible efforts in the interest of the Sunni community brothers, prosperity and for the social, economic and religious education and knowledge, and (6.4) to maintain and preserve the affection, sentiment and association among all the Muslim people of the community". 7. Therefore, ld CIT(E ) noted that it is essential to analyse as to whether the provision of section 13(1 )(b) of the Act, is applicable to the assessee. Section 13(1) (a) of the Act stipulates that provisions of section 11 and 12 would not apply to an assessee, where any part of the income from the property held under a trust for private religious purposes which does not ensure for the benefit of the public. Therefore, the provision of section 13(1)(a) of the Act is applicable only when any part of income is from the property held under a trust for private religious purposes which does not ensure for the benefit of the public. 8. Further section 13(1)(b) of the Act, stipulates that provisi....

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....for the benefit of any particular religious community or caste." Further, the Hon'ble Supreme Court in the said case of CIT vs Dawoodi Bohara Jamat (supra), which was composite in nature, after analysing the various objects of the trust, held that two of its objects provide   for the   activities completely religious in nature and restricted to the specific community of the assessee trust are objects with religious purpose only. However, the Hon'ble Apex Court held that other four objects of the assessee trust was charitable in nature and finally held that the 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 and hence the trust would be eligible to claim exemption u/s 11 of the Act. In concluding para the Hon'ble Apex Court held has under: "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 Ac....

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.... and to accept the gift of the immovable and the movable assets." 14. The ld Counsel therefore contended that objects Nos. 4, 5 and 6 above, are not restricted to the caste "SUNNI MUSLIMS" and these objects are for other general public/persons. 15. On the other hand, learned Commissioner of Income Tax - Departmental Representative (ld. CIT-DR) for the Revenue relied on the findings of the ld. CIT(E). 16. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(E) and other material brought on record. We note that ld CIT(E ) denied the registration mainly on the reason that assessee, is not a religious trust, but it is religious cum charitable trust and ld CIT(E ) also gone through the objects, which are in the nature of charitable but the same is restricted to benefit of a particular religious community or caste "SUNNI MUSLIMS" and therefore the provision of section 13(1)(b) of the Act, would be applicable to the assessee and therefore the assessee would not be eligible for exemption u....