TaxTMI 
TaxTMI 
2026 (9) TMI 1175
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....der Section 80G(5) of the Income Tax Act, 1961 ignoring the fact that Section 80G(5B) of the Income Tax Act, 1961 is applicable for trusts which are charitable in nature and not on the trusts which are purely religious in nature or religious cum charitable in nature wherein the object (1) of Trust Deed explicityly determines the trust to be religious cum charitable in nature. 2. Whether on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal has erred in directing CIT (Exemptions) to grant registration under Section 80G(5) of the Income Tax Act, 1961 ignoring the fact that provisions of section 80G(5B) of Income Tax Act, 1961 cannot override substantial provisions of section 80G(5) r.w.s 2(15) of Income Tax Act, 1961 that defines charitable object, which stands further clarified by Hon'ble Supreme Court of India n the case of Upper Ganges Sugar Mills Ltd. Reported in [1997] 93 Taxman 645 (SC) ?" 3. Similar questions of law are considered by the Co-ordinate Bench of this Court in Tax Appeal No.1049 of 2024 in case of The Commissioner of Income Tax (Exemption) Versus Pranam Charitable Trust and the Tax Appeal preferred by the Revenue was dis....
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....om 35 held that the provisions of Section 13 of the Act would be attracted only at the time of assessment since the quantum of expenses made for religious and common purposes can be determined from Profit and Loss accounts only and not at the time of granting registration u/s. 12A of the Act following Jurisdictional High Court decision in the case of CIT v. Bayath Kutchhi Dasa Oswal Jain Mahajan Trust and by observing as follows: "5. Learned Senior Standing Counsel Ms. Maithili Mehta for the Appellant revenue submitted that the order of ITAT is erroneous because the ITAT has erred by misinterpreting the decision of Hon'ble Supreme Court in Dawoodi Bohara Jamaat (supra) and has wrongly noted that the Hon'ble Supreme Court has held that Section 13(1)(b) would apply only at the time of grant of exemption u/s 11 and not at the time of grant of registration u/s 12A of the Act. Further, the ITAT has not considered the fact that decision of Hon'ble Supreme Court in Dawoodi Bohara Jammat (supra) was rendered in case of a composite trust/institution i.e. a trust which was both charitable as well as religious trust. 6. We have noticed that the ITAT has decided t....
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....ction 11, and not at the time of grant of registration under section 12A of the Act. 8. Our view is further supported by the decision of the Hon'ble jurisdictional High Court in the case of CIT v. Bayath Kutchhi Dasa Oswal Jain Mahajan Trust, (2017) 8 ITR-OL 494 (Guj) wherein on the issue of denial of grant of registration u's 12A of the Act by invoking section 13(1)(b) of the Act, it was categorically held that the provisions of section 13 would be attracted only at the time of assessment and not at the time of grant of registration. The relevant finding of the Hon'ble High Court at para 8 of his order is as under. "8. Thus, very premise for the Commissioner to come to the conclusion that the objects of the trust were confined for the benefit of a religious community, is incorrect. Thereafter to suggest that the activities were earned out only for such purposes would be entering in the realm of granting exemptions in terms of section 13 of the Act, which would be the task of the Assessing Officer to be undertaken at the time of assessment on the basis of material that may be brought on record." 9. Even otherwise, we have gone through the obje....
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....cable in the facts of the present case. 11. In view of the above, we hold that the objects of the trust are not wholly for the benefit of a particular religious community, but are largely charitable in character for general public at large, and for the purpose of granting registration under section 12A, the provision of section 13(1)(b) cannot be referred to, which is to be applied only when granting the exemption to the trust. 12. The order of the ld. CIT (Exemption) denying grant of registration is accordingly set aside, and the Ld. CIT (Exemption) is directed to grant the assessee-trust registration under Section 12A of the Act. 13. In the result, the appeal of the assessee is allowed." 7. In view of the findings recorded by the Tribunal, supported by decision of this Court in case of Commissioner of Income-tax (Exemptions) v. Bayath Kutchhi Dasha Oswal Jain Mahajan Trust (2017) 8 IRT-OL 493 (GUJ)/[2016] 74 taxmann.com 199/243 Taxman 60 (Gujarat) that the objects of the trust are not holly for the benefit of a particular religious community, but are largely charitable in character for general public at large and for the purpose of granting reg....