Madarsa Mazahir Uloom (Waqf), Saharanpur V. CIT(Exemption), Lucknow

ITA 1436/DEL/2018

AI Insights

The case involves Madarsa Mazahir Uloom, a charitable cum religious institution, appealing against the order of the CIT(Exemption), Lucknow, which rejected their application for exemption under section 12AA(1)(a) of the Income Tax Act, 1961. The institution argued that it was established for the broader purpose of imparting Islamic and modern education and spreading religious awareness, not limited to any particular religious community or caste. The CIT(Exemption) had rejected their application based on assertions that were deemed irrelevant and non-existent by the assessee. The Income Tax Appellate Tribunal (ITAT) decided to refer the matter back to the CIT(E) for a detailed examination of the trust's activities to determine if they align with the requirements for exemption under the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131794 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 28-11-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 27-02-2018
• Other Referred Cases: CIT Vs. Dawoodi Bohara Jamat (364 ITR 31)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 11; 12AA; 13

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘E’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 1436/Del/2018 : Asstt. Year : 2017-18 Madarsa Mazahir Uloom (Waqf), Mohallah Mubarak Shah, Saharanpur, Uttar Pradesh-247001 Vs CIT(Exemption), Lucknow (APPELLANT) (RESPONDENT) PAN No. AADAM4402C Assessee by : Ms. Apporva Bhardwaj, CA Revenue by : Ms. Sarita Kumari, CIT DR Date of Hearing: 29.11.2022 Date of Pronouncement: 22.02.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of ld. CIT(Exemption), Lucknow dated 25.09.2017. 2. Following grounds have been raised by the assessee: “1. The ld. CIT(Exemptions)has made his order based on totally irrelevant and non-existent assertions and has grossly erred in law and on facts in rejection of the application of the appellant trust under section 12AA(1)(a) of the Income Tax Act, 1961.” 3. The assessee institution was established on 09.11.1866. The assessee got registered with Sunni Central Board of Waqfs on 17.10.1990. The ld. AR submitted that the assessee institution is a charitable cum religious institution and has not been established for the benefit of any particular religious community or caste. The main object of the institution is to ITA No. 1436/Del/2018 Madarsa Mazahir Uloom 2 impart Islamic education as well as modern education and spread religious awareness to everyone who desires to study the Islamic education. 4. As per the Income Tax Act, trusts and Institutions established for Charitable and religious purposes are entitled for exemptions. The Trust must be carrying on charitable activity covered under the provisions said Act. The eligible trust is required to make an application for grant of exemption u/s. 12A and 12AA of Income Tax Act, 1961. The exemption is governed by section 11 and 12 r.w.s. 13 of Income Tax Act, 1961. Exemption u/s. 11 is available only to trust/institution which holds the property in trust wholly for charitable purpose or religious purpose. The trust must have been created wholly for charitable purpose or wholly for religious purposes but not for the benefit of a particulars religious community or caste. The objects of the trust must be charitable covered within the meaning of section 2(15). It was submitted that the similar issue was settled by the Hon’ble Supreme Court in CIT Vs. Dawoodi Bohara Jamat (364 ITR 31). The Hon’ble Supreme Court held that where assessee trust is formed with both religious and charitable objects, in terms of section 13(1(b), its claim for registration under section 12AA can be denied only in a case when such objects are carried out for benefit of a particular religious community or caste. Hence, the matter is being referred to the file of ld. CIT(E) to verify whether the trust is involved for charitable purposes at large or only for the benefit of a few and accordingly take a decision in accordance with the provisions of the Act. ITA No. 1436/Del/2018 Madarsa Mazahir Uloom 3 5. In the result, the appeal of the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 22/02/2023. Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 22/02/2023 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR