Case Law Details
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.
The Tribunal made an important distinction between academic instruction and religious worship, observing that systematic teaching of Arabic language and Islamic studies falls within the scope of “education.” It further held that a Madarasa functions as an educational institution and cannot be equated with a mosque, which is a place of worship.
The ITAT also criticized the CIT(E) for not issuing any proper show-cause notice before branding the trust as religious and held that the orders were contrary to principles of natural justice.
Accordingly, the Bangalore ITAT set aside the orders of the CIT(E) and directed the Department to grant registration u/s 12AB as a public charitable trust along with approval u/s 80G.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
These two appeals are filed by the assessee trust against the orders dated 27/09/2025 in which the assessee has been treated as a religious trust and also the 80G approval has been rejected on the ground that the assessee is a religious trust. Both these appeals are heard together and are being disposed of by way of this common order for the sake of convenience.
2. The brief facts of the case are that the assessee is a charitable trust established on 08/04/2013. The primary object of the assessee trust is to establish, set up and run educational institutions. The assessee trust is also imparting religious education on the tenets of Islam in Arabic and governed by the SUNNI-HANAFI sect of school of thought. The assessee trust is also decided to set-up an Arabic Madarasa for imparting Arabic courses after generating funds and creating regular infrastructure such as building. Therefore the assessee trust had filed an application for granting registration u/s. 12AB of the Act and also filed an application for approval u/s. 80G of the Act. Along with the said applications, the assessee had also enclosed the various documents including the financial statements. Before the Ld.CIT(E), the assessee had also appeared on 11/09/2025 and explained the various activities of education and other allied objects. The Ld.CIT(E) without considering the said submissions and documents, had arrived a conclusion that the assessee trust is a religious trust and therefore it is not eligible for approval u/s. 80G of the Act.
3. As against the said proceedings, the assessee is filing these appeals before this Tribunal.
4. At the time of hearing, the Ld.AR filed a written submissions and also furnished the various documents in support of their case. The Ld.AR submitted that the interpretation given by the Ld.CIT(A) is not in accordance with the provisions of the Act since the imparting of Islamic /Arabic instructions are also a part of education and it could not be termed as a religious activity. The Ld.AR in support of this proposition relied on the judgment of the Hon’ble Supreme Court reported in (2014) 364 ITR 31 in the case of Dawoodi Bohra Jamat vs. CIT. The Ld.AR also submitted that when there are mixed objects, the trust could not be termed as a religious trust unless the religious worship is a dominant purpose. The Ld.AR also draw our attention to the trust deed in which the multiple independent charitable activities are listed. The Ld.AR also submitted that there is no evidence with the authorities that the trust is performing religious worship, rituals, ceremonies or propagation in order to treat the trust as a religious trust.
5. The Ld.AR further submitted that use of the words such as Islamic or Arabic or Madarasa would not be a reason to treat the trust as a religious trust. The Ld.AR further submitted that the Ld.CIT(E) had not granted sufficient opportunity by issuing any show cause notice and therefore the order of the Ld.CIT(A) is against the principles of natural justice. The Ld.AR further submitted that when the trust deed is read in a whole, it establishes that the dominant object of the trust is imparting education, establishing institutions, providing scholarships, developing knowledge, operating libraries and offering language, professional and technical courses. The Ld.AR further submitted that the teaching of Islamic studies, Quranic texts or Arabic language is also an academic activity which does not amounts to religious worships or religious activities. The Ld.AR also relied on the judgment of the Hon’ble Supreme Court reported in 101 ITR 234 in the case of Loka Shikshana Trust wherein it was held that the systematic instruction in any branch of knowledge constitutes education. Therefore the Ld.AR submitted that the teaching of Islamic studies, Quranic texts or Arabic language would fall under the category of education and not religion.
6. The Ld.AR also relied on the order of the ITAT Lucknow Bench reported in (2012) 138 ITD 519 in the case of Malik Hasmullah Islamic Educational & Welfare Society vs. CIT wherein the Tribunal had held that teaching Islamic studies and Arabic is an educational activity and therefore the trust is not a religious trust.
7. The Ld.AR further submitted that the trust was established with the objective of serving the general public and not for a closed group and therefore the benefit of education wherein Arabic, Islamic are all educational activities open to all sections of society without any discrimination and therefore the trust is for the public. The Ld.AR submitted that the Ld.CIT(A) had erred in concluding that imparting Islamic religious education is inherently a religious purpose without considering the well established judicial distinction between academic teaching of religious texts which is an education and religious worship, rituals or propagation which is a religious activity. The Ld.AR therefore submitted that the assessee trust is engaged in the educational activity and not in the religious activity. The Ld.AR also submitted that the department has no evidence of religious ceremonies, worship tracks or propagation activities done by the assessee trust and therefore the order of the Ld.CIT(E) is on erroneous assumptions liable to be set aside. The Ld.AR further brought to our notice that the objects are for establishing educational institutions and promote learning among the general public and therefore the use of religious or philosophical content in the educational curriculum does not detract from the trust’s charitable nature.
8. The Ld.AR further submitted that the imparting of Arabic education or establishing an Arabic Madarasa could not be a religious activity since the Arabic is a language not a religious ritual. Teaching the Arabic academically is an educational activity and also submitted that several universities and colleges across India is having separate Arabic departments and the authorities had also not treated them as religious trust merely for teaching Arabic. The Ld.AR further submitted that a Madarasa performs the function of a school i.e. imparting structured learning, teaching languages, moral studies, general subjects or vocational skills and therefore establishing the Madarasa is for education only and not for place for worship. The Ld.AR further submitted that the comparison of the Madarasa with the mosque by the Ld.CIT(E) is not correct since the mosque is the place of religious worship whereas the Madarasa is a school imparting academic instruction. The Ld.AR also submitted that the assessee trust conducts no religious rights but only conducts educational activities and therefore it could not be termed as a religious trust. The Ld.AR further submitted that the Ld.CIT(E) without considering the trust deed as a whole had relied on some words and concluded that the assessee is a religious trust that too without confronting the assessee by issuing any notice. Therefore the Ld.AR submitted that the activities done by the assessee trust is not religious in nature but only an academic one and therefore the trust could not be termed as a religious trust.
9. The Ld.AR further submitted that the Ld.CIT(E) could not deny the approval u/s. 80G of the Act when the trust is not a religious trust and therefore submitted that the applciations for registration u/s. 12AB as a charitable trust and for approval u/s. 80G ought to have been granted by the Ld.CIT(E) and therefore prayed that the orders of the Ld.CIT(E) may be set aside and direction may be given to the Ld.CIT(E) for treating the assessee as a charitable trust instead of religious trust and in consequently grant an approval u/s. 80G of the Act.
10. The Ld.DR submitted that the Ld.CIT(E) had considered the issue in detail while deciding the application for approval u/s. 80G of the Act and therefore submitted that the orders of the Ld.CIT(E) are in order and prayed to confirm the same.
11. We have heard the arguments of both sides and perused the materials available on record.
12. On going through the rejection order passed u/s. 12AB of the Act, the Ld.CIT(E) had simply classified the assessee trust as a religious trust without calling for any objections for treating the said trust as religious trust. Only in the order rejecting the approval sought for u/s. 80G, the Ld.CIT(E) had given the reasons for treating the trust as religious trust and on that score, finally rejected the application for grant of approval u/s. 80G of the Act. In the order rejecting the approval, the Ld.CIT(E) had observed that based on the verification of the submissions, it was observed that the nature of the trust was religious cum charitable. The Ld.CIT(E) further observed that the building for using it as an educational institution is proposed to be constructed in the land belongs to masjid. Further, the Ld.CIT(E) also relied on the objects of the trust and observed that the trust is predominantly religious in nature. The another finding of the Ld.CIT(E) is that the trust is imparting religious education on tenets of Islam and the trust is also running a Madarasa. The Ld.CIT(E) had not accepted the submissions made by the assessee and observed that there is no documentary proof available on record in support of the contention that the trust’s main object is education and allied charitable purposes.
13. We have also perused the trust deed and satisfied ourselves that the trust is not doing any religious activities except to impart the Arabic education which is nothing but a language. Similarly, the tenets of Islam was also taught to the public and not to any particular group of persons. The department is also not having any documentary proof to show that the assessee trust is doing the religious activities such as religious worship, rituals, ceremonies or propagation. When there is no proof to show that the trust is doing these activities, mainly relying on some words in the trust deed, would not be a reason to treat the trust as a religious trust. Nowhere in the trust deed, restricts the imparting of education to a particular group of persons and in fact it serves to the entire public at large. Learning a language is not a religious activity and also owning a Madarasa which is nothing but a place for education, could be treated as religious in nature. We further notice in the trust deed that the assessee trust is carrying on various activities such as relief to the poor, provision of education etc and therefore the trust cannot be treated as carrying out the religious activities. When the Ld.CIT(E) had observed that the trust not yet commenced its activities, we do not know how the Ld.CIT(E) had arrived the conclusion that the assessee trust is a religious trust imparting religious instructions to the public. As already stated, imparting of education in Arabic language and also the Islamic academic instruction could at the best termed as an education and not providing any religious practice. When the assessee trust is not doing any religious worship or rituals, it cannot be presumed that the assessee is doing the religious activities and on that basis, a trust could not be termed as a religious trust.
14. The teaching of Islamic studies, Quranic texts or Arabic language academically does not amount to religious worship or religious activity. When the assessee’s trust deed was examined, we found that the dominant objective is to impart education, establish institutions, providing scholarships, developing knowledge, operating libraries and offering language, professional and technical courses. The above said activities are not for a particular religious community but to all the public in general. We have also gone through the judgment of the Hon’ble Supreme Court reported in 364 ITR 31 cited supra in which the Hon’ble Supreme Court had held that the trust is charitable in nature if its primary or dominant purpose is charitable, even though some objects incidentally refer to religious elements. We have also considered the another judgment cited by the assessee reported in 101 ITR 234 cited supra in which the Hon’ble Supreme Court had held that, systematic instruction in any branch of knowledge constitutes education. In the present case, the systematic instruction in the Arabic language and Islamic studies would fall under the category education and not a religious one. In another order of the ITAT Lucknow Bench reported in (2012) 138 ITD 519 wherein it was held as follows
- Teaching Islamic studies and Arabic is educational
- The trust is not a religious trust
- The presence of religious terminology does not change the charitable character
15. We have also considered the order of the Hyderabad Tribunal reported in (2015) 58 com209 in the case of Shiva Shakthi Shirdi Sai Anugraha Mahapeetam vs. DIT(E) in which the Tribunal had held that, mixed religious references do not convert a trust into a religious trust and the scope and tenor of the objects must be evaluated in entirety. Also held that academic teaching of religious values is charitable and not religious.
16. When we apply the principles laid down by the above judgment of the Hon’ble Supreme Court as well as the orders of the Tribunals, we are of the view that the assessee trust is doing charitable activities and their main dominant purpose is education and also the assessee trust is not doing any religious activity.
17. The academic teaching of religious texts at the best could be termed as an education whereas the religious worship, rituals or propagation could be termed as a religious activity. In the present case, the assessee trust is engaged in the imparting of education and therefore the assessee trust could not be termed as a religious trust. To strengthen the findings of the Ld.CIT(E), the department is not having any evidences to show that the assessee trust is engaged in religious activities such as religious worship, rituals, ceremonies and propagation. Further, relying on the madarasa to term the assessee trust as doing the religious activity is also not correct. The teaching of Arabic and establishing an Arabic madarasa could not be treated as doing the religious rituals. In fact, as rightly argued by the Ld.AR, several universities in India are having Arabic departments and therefore the imparting of education in the Arabic language could not be treated the institution as a religious trust. We have also considered the submissions made by the assessee that the madarasa is performing the function of a school i.e. imparting structured learning, teaching languages, moral studies, general subjects or vocational skills and therefore the madarasa could at the best be treated as educational institution and no religious worship was carried out in that place and therefore the madarasa could not be equated with mosque. Mosque is a place of religious worship whereas madarasa is a school imparting academic instruction. When the dominant purpose is providing education, the other incidental things done by the assessee could not term the assessee as a religious trust.
18. In fact, the Ld.CIT(E) had not issued any show cause notice to contradict the assessee and therefore the impugned order is bad in law. The Ld.CIT(E) had also not given any detailed reasons for treating the assessee as a religious trust while rejecting the application for registration u/s. 12AB of the Act. Only in the order rejecting the approval u/s. 80G, various reasons were given which are also not in accordance with the various judicial precedents and therefore the impugned order treating the assessee as a religious trust instead of charitable trust, is incorrect and liable to be set aside. The consequential rejection order for approval u/s. 80G is also bad in law in view of the various reasons stated in the earlier paras of this order.
19. We therefore set aside both the orders and direct the Ld.CIT(E) to grant the registration u/s. 12AB of the Act to the assessee trust as a public charitable trust and also grant the approval u/s. 80G of the Act. Since the various reasons stated by the Ld.CIT(E) has been dealt with by us in the order, we do not think that the issue needs to be restored to the files of the Ld.CIT(E) for considering the application filed u/s. 12B of the Act. All the details were furnished before the Ld.CIT(E) and in spite of that, the Ld.CIT(E) had given the finding that the assessee is a religious trust and in that circumstances, there is no necessity for directing the Ld.CIT(E) to consider the issue afresh.
20. We, therefore allow the appeals filed by the assessee by giving the above said directions.
21. In the result, both the appeals filed by the assessee are allowed.
Order pronounced in the open court on 19th May, 2026.
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