There is nothing in language of section 13(1)(b) to suggest that an institution of mixed objects is precluded from getting registration under section 12AA

Only a trust which is for religious purpose is excluded and debarred from registration under section 12AA; a trust whose object is charitable as well as religious is not debarred from registration.

CASE LAWS DETAILS

DECIDED BY: ITAT, HYDERABAD BENCH `B’, HYDERABAD, IN THE CASE OF: Rehoboth Mission v. DIT (Exemp), APPEAL NO: ITA No. 352/Hyd/2010, DECIDED ON May 26, 2010

FACTS

The grievance of the asessee in this appeal is with regard to rejecting the application for registration u/s12AA of the Income tax Act, 1961 (the Act) on the reason that the assessee society’s objects are mixed one as charitable and religious activities.

HELD
We have gone through the provisions of sec.13(1)(b) of the Act. There is nothing in the language of this provision to suggest that an institution of mixed objects is precluded from getting registration u/s 12AA of the Act. It is also seen from the objects of the trust in question that the assessee is carrying on no non-charitable or non-religious activities. We place reliance on the judgement of ACIT v. Barkate Saifiyah Society 213 ITR 492 (Guj) and CIT v. Chandra Charitable Trust 294 AITR 86 ( Guj), wherein it was held that a trust can either be for religious purposes or for charitable purposes or it can be for both. Only a trust which is for religious purpose is excluded and debarred from registration u/s 12AA of the Act. A trust whose object is charitable as well as religious is not debarred from registration.

RELEVANT EXTRACTS:

6. We have gone through the provisions of sec.13(1)(b) of the Act. There is nothing in the language of this provision to suggest that an institution of mixed objects is precluded from getting registration u/s 12AA of the Act. It is also seen from the objects of the trust in question that the assessee is carrying on no non-charitable or non-religious activities. We place reliance on the judgement of ACIT v. Barkate Saifiyah Society 213 ITR 492 (Guj) and CIT v. Chandra Charitable Trust 294 AITR 86 ( Guj), wherein it was held that a trust can either be for religious purposes or for charitable purposes or it can be for both. Only a trust which is for religious purpose is excluded and debarred from registration u/s 12AA of the Act. A trust whose object is charitable as well as religious is not debarred from registration. Further, in the case of New Life in Christ Evangelistic Association v. CIT & Others 246 ITR 532 (Mad), wherein it was held that for granting or refusing registration u/s 12A in relation to such trust, the only condition precedent is that an application for registration should be made in time and the accounts of the institute should be audited. No enquiry about objects of the trust can be made u/s 12A of the Act. We have gone through all the judgements cited by the learned counsel for the assessee. The facts of the case in the case considered by the Gujarat High Court squarely apply to the facts of the case on hand. The department has not brought any contrary decision to our notice. In our opinion, in the circumstances under consideration, the DIT(E) should not have rejected the application of the assessee for registration u/s 12AA of the Act on this reason. Commenting on the Honourable Gujarat High Court decision, the DIT(E) has observed that the Hon’ble High Court has introduced a new concept known as “charitable religious trust.” According to him, trust has to be either wholly religious or wholly charitable. Otherwise, it is not entitled for registration and the Hon’ble Gujarat High Court did not consider the word “or” which has been employed u/s 11(1)(a) and sec.12 of the Act and the Hon’ble High Court has interpreted sec.13(1)(b) of the Act. We are unable to agree with the DIT(E) as to how and why the judgement of the Hon’ble Gujarat High Court is not applicable to the facts of the present case. There is no such bar since there is no jurisdictional High Court’s judgement on this issue, to the contrary and this observation of the DIT(E) is unwarranted. Consequently, we direct the DIT(E) to grant registration to the assessee society subject to fulfillment of other conditions, if any.

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