2025 (5) TMI 1784

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....of the case is that the assessee filed Form 10AB for registration of the Trust u/s. 12AB of the Act. From the perusal of the objects of the Trust, the Ld. CIT(E) found that many objects are for the benefit of a particular religious community or caste "Vaishnav Sadhu (Bava Vairagi)". Hence a show cause notice dated 24-08-2023 was issued as follows: "Please refer to your application filed in Form 10AB for registration u/s. 12A(1)(ac)(iii) of the Act. For further seeking required details for granting registration u/s. 12AB, notice was issued on 11.07.2023 and 11.08.2023. In response to the same, you have filed/submitted certain details/documents on 16.08.2023 2. In this respect, your attention is drawn toward the Objects/Motives of the Tru....

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....lled for the reasons discussed in the notice." 3. In response, the assessee filed its reply dated 28-08-2023 as follows: "Our Trust is registered under Gujarat public trust act on 02/02/1995 we have agreed with you our object of the trust deed as for the cast Shri Vaishnav Sadhu (Bava Vairagi) Gyati. But To Our Activities is Purely Religious for all Gyati As You see in our Audited Balance-Sheet For Such Situation Of Trust Deed We have Clarified that our Trust is Constituted in 1995 on that time No Any Income tax section violate the benefit of section 11 and Sec 12 and Sec 13. Than sec 13(1)(b) and the sec 13(1)(c) enforce and the violate the sec 11 and sec 12, Immediately we have to apply joint charity commissioner for Amendment of deed ....

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....hereof if the trust or institution is created or established for the benefit of any particular religious community or caste. Therefore, the provision of sec 13(1)(b) of the Act is applicable only in a case of charitable trust/institution created or established after commencement of this Act, if the trust/institution is created or established for the benefit of any particular religious community or caste Various courts have held that the provisions of sec 13(1)(b) of the Act is not applicable in the case of a religious trust. The provision of sec 13(1)(b) of the Act is applicable to a charitable trust, has been settled by the Hon'ble Supreme Court in the case of CIT vs. Palghat Shadi Mahal Trust, reported in 120 Taxman 889, wherein in ....

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....f 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 sec 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-tru....