Hamza Welfare Trust Vs CIT (Exemptions) (ITAT Bangalore)
Assessee-trust applied for permanent registration u/s 12AB & approval u/s 80G. CIT(E) rejected application (27.12.2024), holding that Trust had not commenced substantial activities, only received donations & constructed a mosque building. Hence, assessee should file a fresh application as a religious trust, not charitable. Assessee appealed, explaining that it was in process of creating infrastructure for orphanages, health centres, schools etc. as per its objects.
Assessee’s Arguments
- Activities had commenced—donations were received & a building was under construction to house charitable programs.
- “Commencement of activities” is not defined in section 12A/12AB; even preparatory steps like building infrastructure qualify.
- Mere existence of a mosque in premises does not make the trust purely religious.
- Alternatively, if treated as religious, CIT(E) should have granted registration in that category rather than outright rejection.
Tribunal’s Findings/Decsion
- Trust deed objects included orphanages, education, healthcare, vocational training, libraries, food & medicine distribution etc.—primarily charitable.
- Construction of infrastructure (including temporary mosque) is part of preparatory phase; cannot be sole ground to brand trust as religious.
- CIT(E) failed to identify any religious activity apart from existence of temporary mosque.
- Even if religious, rejection was not justified; CIT(E) could have granted registration under religious category.
- CIT(E)’s rejection set aside.
- Matter remanded to CIT(E) to reconsider application afresh after granting assessee an opportunity of hearing.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
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