An-Nauman Educational Religious Social Charitable & Welfare Trust Vs CIT (ITAT Bangalore)
In a significant ruling, the Bangalore ITAT held that teaching Arabic language, Islamic studies and running a Madarasa do not automatically make a trust a “religious trust.” The Tribunal directed grant of registration u/s 12AB and approval u/s 80G to a trust whose dominant object was imparting education.
The Commissioner of Income Tax (Exemptions) had treated the assessee trust as a religious trust mainly because it proposed to impart Islamic/Arabic education and establish an Arabic Madarasa. On that basis, the 80G approval was rejected.
Before the Tribunal, the assessee argued that Arabic is a language and not a religion, and academic teaching of Quranic or Islamic texts amounts to education and not religious worship or propagation. Reliance was placed on Supreme Court rulings including Dawoodi Bohra Jamat v. CIT and Loka Shikshana Trust, as well as Tribunal decisions holding that teaching Islamic studies and Arabic constitutes educational activity.
The ITAT carefully examined the trust deed and found that the dominant objectives were establishment of educational institutions, scholarships, libraries, professional courses and public welfare activities. The Tribunal noted that there was no evidence whatsoever to show that the trust was conducting religious worship, rituals, ceremonies or propagation activities.
