TaxTMI 
TaxTMI 
2025 (9) TMI 1121
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....the Trust under Section 12AB of the Act. 2. Grounds raised by the assessee are as under: "1. In law and in the facts and circumstances of the appellant's case, the order passed by the ld. CIT(Exemption), Ahmedabad Rejecting application for registration of the trust u/s. 12AB of the Income Tax Act, 1961 is ab initio void being bad in law. 2. In law and on the facts and circumstances of the case of appellant, the ld. CIT(Exemption), Ahmedabad has erred in holding that objects of the appellant are restricted to benefit of a particular religious community or caste i.e., "Lunawada Nagar caste" even when the provisions of section 13(1)(b) of the Act will be applicable to the appellant. 3. In law and on the facts and ....
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....an to Nagar brothers. To perform Sevapuja in the temple and to take care of the temple and its related properties. (2) To keep necessity utensils for marriage ceremony and caste food on auspicious and inauspicious occasions and to let them use on rent without payment, repairing the house for Dandi-Sanyasis and sagihin works for the descent of Dandi- Sanyasis. (Municipal survey no. 1407). 3) Physical, mental, spiritual, economic, social, religious moral etc. improvement of Vishnagara Nagar caste of Lunavada (4) To provide financial assistance to Lunawada Nagar caste students for educational purposes." 4. The Ld. CIT(E) has noted these objectives to be for the benefit of the Lunawada Nagar Caste and noting that a....
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....trust or institution for a period of five years; or ^95[(B) if he is not so satisfied, pass an order in writing,-- (I) in a case referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (v) of clause (ac) of sub-section (1) of section 12A rejecting such application and also cancelling its registration; (II) in a case referred to in sub-clause (iv) or in item (B) of sub-clause (vi) of sub-section (1) of section 12A, rejecting such application, after affording a reasonable opportunity of being heard;] ^95[(c) where the application is made under item (A) of sub-clause (vi) of the said clause or the application is made under sub-clause (vi) of the said clause, as it stood immediately before its amendm....
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....) of clause (b); and (iii) one month calculated from the end of the month in which the application was received in case of clause (c).] (4) Where registration or provisional registration of a trust or an institution has been granted under clause (a) or clause (b) or clause (c) of sub-section (1) or clause (b) of sub-section (1) of section 12AA, as the case may be, and subsequently,- (a) the Principal Commissioner or Commissioner has noticed occurrence of one or more specified violations during any previous year; or (b) the Principal Commissioner or Commissioner has received a reference from the Assessing Officer under the second proviso to sub-section (3) of section 143 for any previous year; or ....
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....jectives or separate books of account are not maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives; or (c) the trust or institution has applied any part of its income from the property held under a trust for private religious purposes, which does not enure for the benefit of the public; or (d) the trust or institution established for charitable purpose created or established after the commencement of this Act, has applied any part of its income for the benefit of any particular religious community or caste; or (e) any activity being carried out by the trust or institution,- (i) is not genuine; or (ii) is not being carried out i....
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.... violation defined in the Explanation 2 to Section 12AB(4) mentions six violations. The violation which has been invoked in the present case is Clause (d). On reading Clause (d) of the Explanation what emerges is that the specified violation occurs only when the income of the trust is "applied" for the benefit for a particular religious caste or community. It is pertinent to note that the specified violations in Clause (d) uses the word " applied ",which means that only when a trust is found to have utilized its income for the benefit of particular religious caste or community, then only it can be said that there is a specified violation which has occurred for cancelling the provisional registration/registration of the Trust. Section 12AB(4....