Naminath Shwetamber Murtipujak Tapagachh Jain Religious Trust Vs CIT (Exemption) (ITAT Ahmedabad)
Religious-Cum-Charitable Trust Cannot Be Denied Section 12AB Registration Under Section 13(1)(b): ITAT Ahmedabad
The assessee appealed against the order dated 28.03.2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad, rejecting its application for registration under Section 12AB of the Income-tax Act and cancelling its provisional registration. The assessee had also challenged the invocation of Section 13(1)(b), contending that it was a religious-cum-charitable trust, that Section 13(1)(b) applies only to charitable trusts, that the description of its activities in Form 10AB as “charitable” instead of “religious-cum-charitable” was inadvertent, and that its objects were not confined to a private group but extended to all persons following Jainism.
The assessee had filed an application in Form 10AB on 28.09.2023 seeking registration under Section 12(1)(ac)(iii). It had earlier been granted provisional registration on 26.10.2022 for the assessment years 2023-24 to 2025-26. Following a notice dated 20.11.2023, the assessee furnished additional documents on 17.12.2023. On examining the trust deed, the Commissioner observed that one of the principal objects of the trust was to benefit the Jain community, particularly by providing assistance during natural disasters. A show-cause notice dated 24.01.2024 was issued requiring the assessee to explain how its objects complied with Section 12AB(4), with a reply to be furnished by 29.01.2024. Although the assessee replied that it carried out activities for the spiritual benefit of all mankind without discrimination and produced photographs to demonstrate that its activities were not confined to any particular religious community, the Commissioner held that the trust deed specifically focused on aiding the Jain community and that membership was restricted to persons belonging to the Shri Shwetambar Murtipujak Tapegachcha Jain Samaj. Holding that Section 13(1)(b) applied because the trust’s objects were confined to a particular religious community, the Commissioner rejected the application in Form 10AB and cancelled the provisional registration.
