Sri Sri Sri Dattatreya Seva Samasthanam, Secunderabad V. Director of Income-Tax (Exemtions), Hyderabad

ITA 551/HYD/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9024 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-01-2015
• Assessment Year: misc
• Appeal Filed On: 27-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G APARNA RAO
• Assessee Lawyers: K K GUPTA
• Keywords: Charitable institution
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 551/HYD/2014 SRI SRI SRI DATTATREYA SEVA SAMSTHANAM PAN AAJAS 6062Q DIRECTOR OF INCOME-TAX (EXEMPTIONS), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI K.K. GUPTA REVENUE BY SMT. G. APARNA RAO DATE OF HEARING 05-01-2015 DATE OF PRONOUNCEMENT 14-01-2015 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER DATED 26/02/14 PASSED BY LD. DIT(E), HYDERABAD, REJECTIN G ASSESSEES APPLICATION FOR GRANT OF REGISTRATION U/S 12A OF TH E ACT. 2. BRIEFLY THE FACTS ARE, ASSESSEE CLAIMING ITSELF TO BE A CHARITABLE TRUST WAS CREATED VIDE TRUST DEED REGISTERED BEFORE THE SRO, KARIMNAGAR ON 13/03/13. FOR AVAILING EXEMPTION U/S 11 OF THE ACT, ASSESSEE APPLIED FOR REGISTRATION U/S 12A OF THE AC T BY FILING APPLICATION IN FORM NO. 10A ON 26/08/2013 BEFORE LD . DIT(E), HYDERABAD. AFTER RECEIVING APPLICATION OF ASSESSEE, LD. DIT(E) VIDE LETTER DATED 19/11/2013 CALLED UPON ASSESSEE TO PR ODUCE THE ORIGINAL TRUST DEED AND OTHER DOCUMENTS AS WELL AS BOOKS OF ACCOUNT FOR VERIFICATION. HE ALSO ISSUED A QUESTIONNAIRE SEEKIN G CLARIFICATION ON CERTAIN ISSUES. AFTER EXAMINING THE REPLY OF ASSESS EE AND THE 2 ITA NO. 551/HYD/2014 SRI SRI SRI DATTATREYA SEVA SAMSTHANAM INFORMATIONS SUBMITTED, LD. DIT(E) OBSERVED THAT TH OUGH IN FORM NO. 10A ASSESSEE HAS SHOWN DATE OF CREATION OF TRUST AS 13/03/2013, HOWEVER, SUCH DATE OF CREATION IS NOT MENTIONED IN THE TRUST DEED. FURTHER, TRUST DEED DOES NOT CONTAIN AMENDMENT CLAU SE, AUDIT CLAUSE AND DISSOLUTION CLAUSE. HE ALSO OBSERVED THAT THERE IS NO CLAUSE IN THE TRUST DEED MAKING THE TRUST IRREVOCABLE. DUE TO THESE DEFICIENCIES, LD. DIT(E) WAS OF THE VIEW THAT THE TRUST CANNOT B E TREATED AS A PUBLIC CHARITABLE TRUST, HENCE, NOT ELIGIBLE FOR REGISTRAT ION U/S 12AA OF THE ACT. ON FURTHER VERIFICATION OF THE OBJECTS MENTION ED IN THE TRUST DEED, LD. DIT(E) OBSERVED THAT THE TRUST HAS BOTH RELIGIO US AND CHARITABLE OBJECTS. LD. DIT(E) WAS OF THE VIEW THAT AS THE TRU ST IS FORMED AFTER 01/04/1962 AND HAVING MIXED OBJECTS I.E. BOTH CHARI TABLE AND RELIGIOUS, INCOME OF THE TRUST WILL NOT BE ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. LD. DIT(E) REFERRING TO CERTAIN JUDICI AL PRECEDENTS HELD THAT AS THE TRUST IS HAVING MIXED OBJECTS, IT IS N OT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. ACCORDINGLY, HE R EJECTED THE APPLICATION FOR GRANT OF REGISTRATION FILED BY ASSE SSEE. BEING AGGRIEVED OF THE SAID ORDER, ASSESSEE IS BEFORE US. 3. LD. AR SUBMITTED BEFORE US THAT REFUSAL OF REGIS TRATION ON THE GROUND OF MIXED OBJECTS IS NOT TENABLE AS ASSESSEE IS ESSENTIALLY A CHARITABLE TRUST AS IT IS ENGAGED IN PROVIDING SERV ICES TO ALL THE BENEFICIARIES IRRESPECTIVE OF RELIGION, CASTE AND C REED. FOLLOWING THE TEACHINGS OF LORD DATTATREYA, WHICH IS UNIVERSAL B ROTHERHOOD-LOVE ALL, SERVE ALL, HELP EVER AND HURT NEVER. LD. AR SUBMIT TED THAT EVEN READING OF THE OBJECTS WOULD MAKE IT CLEAR THAT THE Y ARE OF CHARITABLE NATURE AND NOT FOR THE BENEFIT OF ANY PARTICULAR RE LIGIOUS COMMUNITY, HENCE, THE OBJECTIONS OF THE LD. DIT(E) IS NOT TENA BLE. LD. AR SUBMITTED THAT EVEN A TRUST HAVING MIXED OBJECTS OF BOTH RELIGIOUS AND CHARITABLE NATURE CANNOT BE DENIED REGISTRATION U/S 12AA AS THERE IS NO SUCH BAR U/S 11 OF THE ACT. IN SUPPORT OF SUCH C ONTENTION, HE RELIED UPON THE FOLLOWING DECISIONS: 3 ITA NO. 551/HYD/2014 SRI SRI SRI DATTATREYA SEVA SAMSTHANAM 1. M/S SHANTHI SADAN CHARITABLE SOCIETY VS. DIT(E), ITA NO. 1600/HYD/12, DATED 07/11/2013. 2. DIT (E) VS. SEERVI SAMAJ TAMBARAM TRUST (MAD) [2 014] 362 ITR 199 (MAD.) 3. SHREE SWAMI SAMARTH PARIWAR VS. CIT, ITA NO. 2506/MUM/11 DT. 22/08/12 4. CIT VS. DAWOODI BOHARA JAMAT [2014] 364 ITR 31 (SC) 4. AS FAR AS THE OTHER ALLEGATIONS OF LD. DIT(E) WI TH REGARD TO ABSENCE OF CERTAIN CLAUSES IN TRUST DEED AND ABSENC E OF DATE OF CREATION OF TRUST IS CONCERNED, LD. AR THOUGH ADMIT TED THE FACT THAT DATE OF CREATION OF TRUST IS NOT MENTIONED IN THE T RUST DEED, BUT, HE SUBMITTED THAT DATE OF REGISTRATION OF THE TRUST DE ED CAN BE CONSIDERED AS THE DATE OF CREATION OF TRUST. WITH REGARD TO AB SENCE OF CERTAIN CLAUSES IN THE TRUST DEED, LD. AR SUBMITTED THAT BY ITSELF CANNOT BE A REASON TO REFUSE GRANT OF REGISTRATION. LD. AR SUBM ITTED THAT THERE IS NOTHING IN LAW TO SUPPORT THAT THESE PROVISIONS ARE ESSENTIALLY REQUIRED TO BE INCORPORATED IN A TRUST DEED FOR GET TING ITSELF REGISTERED U/S 12AA OF THE ACT. 5. LD. DR, ON THE OTHER HAND, RELIED ON THE DECISIO N OF . LD. DIT(E). 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD AS WELL AS THE IMPUGNED ORD ER OF LD. DIT(E). AS CAN BE SEEN, LD. DIT(E) HAS REFUSED TO GRANT REG ISTRATION BASICALLY FOR THE REASON THAT THE DATE OF CREATION OF THE TRU ST IS NOT MENTIONED IN THE TRUST DEED AND CERTAIN CLAUSES ARE NOT INCORPOR ATED IN THE TRUST DEED. FURTHER, AS THE TRUST IS HAVING MIXED OBJECTS I.E. BOTH RELIGIOUS AND CHARITABLE, IT CANNOT BE GRANTED REGISTRATION U /S 12AA OF THE ACT. AT THE OUTSET, WE WILL DEAL WITH THE ISSUE AS TO WH ETHER A TRUST HAVING MIXED OBJECTS IS INELIGIBLE FOR REGISTRATION U/S 12 AA. BEFORE DWELLING ON THIS PARTICULAR ISSUE, IT IS NECESSARY TO MENTIO N THAT ON PERUSAL OF THE PARTICULAR OBJECT CLAUSE REFERRED TO BY LD. DIT (E), WE ARE OF THE VIEW THAT THEY CANNOT BE CONSIDERED TO BE OF RELIGI OUS NATURE BENEFITTING A PARTICULAR RELIGIOUS COMMUNITY, CASTE OR CREED. EVEN 4 ITA NO. 551/HYD/2014 SRI SRI SRI DATTATREYA SEVA SAMSTHANAM ASSUMING FOR THE ARGUMENT SAKE THAT ASSESSEE HAS MI XED OBJECTS, BUT, STILL THEN THAT CANNOT BY ITSELF BE A GROUND T O DENY REGISTRATION TO ASSESSEE U/S 12AA OF THE ACT, FOR THE FOLLOWING REA SONS: 6.1 SECTION 11(1)(A) OF THE ACT MAKES NO DISTINCTIO N BETWEEN RELIGIOUS OR CHARITABLE INSTITUTION SO FAR AS GRANT OF EXEMPTION IS CONCERNED, SAVE AND EXCEPT THE CONDITIONS IMPOSED U /S 13 OF THE ACT. THE WORD OR BETWEEN CHARITABLE AND RELIGIOUS AS U SED IN SECTION 11(1)(A) IS NOT DISJUNCTIVE BUT CONJUNCTIVE IN NATU RE, THEREFORE, IT IS NECESSARY TO READ THAT INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES OR BOTH ARE EXEMPT. THE HONBLE SUPREME COURT IN CASE OF CIT VS. M/S DAWOOD I BOHARH JAMAT, CIVIL APPEAL NO. 2492 OF 2014 OBSERVED, IN C ERTAIN CASES ACTIVITIES OF THE TRUST MAY CONTAIN ELEMENTS OF BOT H RELIGIOUS AND CHARITABLE AND THUS, BOTH THE PURPOSES MAY BE OVERL APPING. MORE SO, WHEN THE RELIGIOUS ACTIVITY CARRIED ON BY A PARTICU LAR SECTION OF PEOPLE WOULD BE A CHARITABLE ACTIVITY FOR OR TOWARDS OTHER MEMBERS OF THE COMMUNITY OR ALSO PUBLIC AT LARGE. FEEDING ANIMALS OR COW MAY BE A RELIGIOUS ACTIVITY FOR A PARTICULAR COMMUNITY BUT M AY BE CHARITABLE FOR OTHERS. SIMILARLY, FEEDING POOR PEOPLE OR GIVING WA TER TO THIRSTY MAY BE RELIGIOUS FOR SOME BUT CHARITABLE FOR OTHERS. AN ALYSING THE OBJECTS OF THE TRUST BY KEEPING THE AFORESAID PRINCIPLES IN VIEW, HONBLE APEX COURT FINALLY HELD AS UNDER: 41.THEREFORE, THE OBJECTS OF THE TRUST EXHIBIT THE DUAL TENOR OF RELIGIOUS AND CHARITABLE PURPOSES AND ACTIVITIES. S ECTION 11 OF THE ACT SHELTERS SUCH TRUST WITH COMPOSITE OBJECTS TO CLAIM EXEMPTION FROM TAX AS A RELIGIOUS AND CHARITABLE TR UST SUBJECT TO PROVISIONS OF SECTION 13. THE ACTIVITIES OF THE TRU ST UNDER SUCH OBJECTS WOULD THEREFORE BE ENTITLED TO EXEMPTION AC CORDINGLY. 42.WE WOULD NOW PROCEED TO EXAMINE THE OBJECTS UNDE R THE PROVISIONS OF SECTION 13(1)(B) OF THE ACT. IT BECOM ES AMPLY CLEAR FROM THE LANGUAGE EMPLOYED IN THE PROVISIONS THAT SECTION 13 IS IN THE NATURE OF AN EXEMPTION FROM APPLICABIL ITY OF SECTIONS 11 OR 12 AND THE EXAMINATION OF ITS APPLIC ABILITY WOULD ONLY ARISE AT THE STAGE OF CLAIM UNDER SECTIONS 11 OR 12. THUS, 5 ITA NO. 551/HYD/2014 SRI SRI SRI DATTATREYA SEVA SAMSTHANAM WHERE THE INCOME OF A TRUST IS ELIGIBLE FOR EXEMPTI ON UNDER SECTION 11, THE ELIGIBILITY FOR CLAIMING EXEMPTION OUGHT TO BE TESTED ON THE TOUCHSTONE OF THE PROVISIONS OF SECTI ON 13. IN THE INSTANT CASE, IT BEING ESTABLISHED THAT THE RESPOND ENT-TRUST IS A PUBLIC CHARITABLE AND RELIGIOUS TRUST ELIGIBLE FOR CLAIMING EXEMPTION UNDER SECTION 11, IT BECOMES RELEVANT TO TEST IT ON THE ANVIL OF SECTION 13. 43.THUS, THE SECOND ISSUE WHICH ARISES FOR OUR CONS IDERATION AND DECISION IS, WHETHER THE RESPONDENT-TRUST IS A CHARITABLE AND RELIGIOUS TRUST ONLY FOR THE PURPOSES OF A PART ICULAR COMMUNITY AND THEREFORE, NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT IN VIEW OF PROVISIONS OF SECT ION 13(1)(B) OF THE ACT. 44.IN THE INSTANT CASE, THE TRIBUNAL HAS FOUND ON F ACTS AFTER ANALYSING THE OBJECTS OF THE TRUST THAT THE RESPOND ENT TRUST IS A PUBLIC RELIGIOUS TRUST AND ITS OBJECTS ARE SOLELY R ELIGIOUS IN NATURE AND BEING OF THE OPINION THAT SECTION 13(1)( B) IS SOLELY MEANT FOR CHARITABLE TRUST FOR PARTICULAR COMMUNITY , NEGATED THE POSSIBILITY OF APPLICABILITY OF SECTION 13(1)(B) OF THE ACT AT THE OUTSET. THE HIGH COURT HAS ALSO CONFIRMED THE AFORE SAID VIEW IN APPEAL AND OBSERVED THAT SECTION 13(1)(B) WOULD ONL Y BE APPLICABLE IN CASE OF INCOME OF THE TRUST FOR CHARI TABLE PURPOSE ESTABLISHED FOR BENEFIT OF A PARTICULAR RELIGIOUS C OMMUNITY. IN OUR CONSIDERED VIEW, THE SAID VIEW MAY NOT BE THE C ORRECT INTERPRETATION OF THE PROVISION. 45.FROM THE PHRASEOLOGY IN CLAUSE (B) OF SECTION 13 (1), IT COULD BE INFERRED THAT THE LEGISLATURE INTENDED TO INCLUD E ONLY THE TRUSTS ESTABLISHED FOR CHARITABLE PURPOSES. THAT HO WEVER DOES NOT MEAN THAT IF A TRUST IS A COMPOSITE ONE, THAT I S ONE FOR BOTH RELIGIOUS AND CHARITABLE PURPOSES, THEN IT WOULD NO T BE COVERED BY CLAUSE (B). WHAT IS INTENDED TO BE EXCLUDED FROM BEING ELIGIBLE FOR EXEMPTION UNDER SECTION 11 IS A TRUST FOR CHARITABLE PURPOSE WHICH IS ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. 46.SUCH TRUSTS WITH COMPOSITE OBJECTS WOULD NOT BE EXPELLED OUT OF THE PURVIEW OF SECTION 13(1)(B) PER SE. THE SECT ION REQUIRES IT TO BE ESTABLISHED THAT SUCH CHARITABLE PURPOSE I S NOT FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY OR CAST E. THAT IS TO SAY, IT NEEDS TO BE EXAMINED WHETHER SUCH RELIGIOUS -CHARITABLE ACTIVITY CARRIED ON BY THE TRUST ONLY BENEFITS A CE RTAIN PARTICULAR RELIGIOUS COMMUNITY OR CLASS OR SERVES ACROSS THE C OMMUNITIES AND FOR SOCIETY AT LARGE. (SOLE TRUSTEE, LOKA SHIKS HANA TRUST V. CIT, (1975) 101 ITR 234 (SC)). THE SECTION OF COMMU NITY SOUGHT TO BE BENEFITED MUST BE EITHER SUFFICIENTLY DEFINED OR 6 ITA NO. 551/HYD/2014 SRI SRI SRI DATTATREYA SEVA SAMSTHANAM IDENTIFIABLE BY A COMMON QUALITY OF A PUBLIC OR IMP ERSONAL NATURE. (CIT V. ANDHRA CHAMBER OF COMMERCE, 55 ITR 722). 47.THIS COURT IN CIT V. PALGHAT SHADI MAHAL TRUST, (2002) 9 SCC 685 THE MUSLIM RESIDENTS OF KERALA CONSTITUTED A TRUST FOR THE PURPOSE OF CONSTRUCTING AND ESTABLISHING AT PAL GHAT-A-SHADI MAHAL AND OTHER INSTITUTIONS FOR THE EDUCATIONAL, S OCIAL AND ECONOMIC ADVANCEMENT OF THE MUSLIMS AND FOR RELIGIO US AND CHARITABLE OBJECTS RECOGNISED BY MUSLIM LAW AND LATER CLARIFIED THAT THE PROCEEDS WOULD BE UTILIZED FOR T HE BENEFIT FOR PUBLIC AT LARGE AND UPON THIS BASIS, THE TRUST MADE A CLAIM FOR EXEMPTION FROM TAX UNDER SECTION 11. THIS COURT HEL D THAT THE RESOLUTION CLARIFYING THE OBJECT WOULD NOT VALIDLY AMEND THE OBJECT OF THE TRUST-DEED AND SINCE THE OBJECT CONFI NED THE BENEFIT TO ONLY MUSLIM COMMUNITY, IT WOULD BE COVER ED BY THE RESTRICTION UNDER SECTION 13(1)(B) OF THE ACT EVEN THOUGH IT FUNCTIONED FOR PUBLIC BENEFIT. THUS, THEREIN THE OB JECT SUFFICIENTLY DEFINED OR EXPRESSLY STATED BENEFICIAR Y CLASS AND RESTRICTED THE ACTIVITIES OF THE TRUST TO A SPECIFI C COMMUNITY. 48.FURTHER, IN STATE OF KERALA V. M.P. SHANTI VERMA JAIN, (1998) 5 SCC 63 THIS COURT HAS HELD THAT PROPAGATION OF RE LIGION AND RESTRICTION OF BENEFITS OF ACTIVITIES OF TRUST IN I TS OBJECTS TO THE SAID COMMUNITY WOULD RENDER THE TRUST AS INELIGIBLE FOR CLAIMING EXEMPTION UNDER SIMILAR PROVISIONS OF KERALA AGRICU LTURAL INCOME TAX ACT, 1950. THE COURT OBSERVED AS FOLLOWS : THE DEED OF TRUST AND THE RULES RUN INTO MORE THA N THIRTY PAGES OUT OF WHICH SIX PAGES OF THE TRUST DE ED NARRATE THE PHILOSOPHY OF JAIN DHARMA. THE OBJECTS OF THE TRUST CLEARLY SHOW THAT THE TRUST IS MEANT FOR PROP AGATION OF JAIN RELIGION AND RENDERING HELP TO THE FOLLOWER S OF JAIN RELIGION. EVEN MEDICAL AID AND SIMILAR FACILITIES A RE TO BE RENDERED TO PERSONS DEVOTED TO JAIN RELIGION AND TO NON- JAINS IF SUFFERING FROM AILMENTS BUT THE MEDICAL AI D COULD BE GIVEN TO THEM ONLY IF ANY MEMBER OF THE FAMILIES MANAGING THE TRUST, SHOWS SYMPATHY AND IS INTERESTE D IN THEIR TREATMENT. THE TRIBUNAL, IN OUR OPINION, WAS RIGHT IN ITS CONCLUSION THAT THE DOMINANT PURPOSE OF THE TRU ST IN THE PRESENT CASE WAS PROPAGATION OF JAIN RELIGION A ND TO SERVE ITS FOLLOWERS AND ANY PART OF AGRICULTURAL IN COME OF THE TRUST SPENT IN THE STATE OF KERALA ALSO COULD N OT BE TREATED AS ALLOWABLE ITEM OF THE EXPENSES. 49.IN THE PRESENT CASE, THE OBJECTS OF THE RESPONDE NT-TRUST BASED ON RELIGIOUS TENETS UNDER QURAN ACCORDING TO RELIGIOUS FAITH OF ISLAM. WE HAVE ALREADY NOTICED THAT THE PE RUSAL OF THE OBJECTS AND PURPOSES OF THE RESPONDENT-TRUST WOULD CLEARLY DEMONSTRATE THAT THE ACTIVITIES OF THE TRUST THOUGH BOTH CHARITABLE AND RELIGIOUS ARE NOT EXCLUSIVELY MEANT FOR A 7 ITA NO. 551/HYD/2014 SRI SRI SRI DATTATREYA SEVA SAMSTHANAM PARTICULAR RELIGIOUS COMMUNITY. THE OBJECTS, AS EXP LAINED IN THE PRECEDING PARAGRAPHS, DO NOT CHANNEL THE BENEFITS T O ANY COMMUNITY IF NOT THE DAWOODI BOHRA COMMUNITY AND TH US, WOULD NOT FALL UNDER THE PROVISIONS OF SECTION 13(1 )(B) OF THE ACT. 50.IN THAT VIEW OF THE MATTER, WE ARE OF THE CONSID ERED OPINION THAT THE RESPONDENT-TRUST IS A CHARITABLE AND RELIG IOUS TRUST WHICH DOES NOT BENEFIT ANY SPECIFIC RELIGIOUS COMMU NITY AND THEREFORE, IT CANNOT BE HELD THAT SECTION 13(1)(B) OF THE ACT WOULD BE ATTRACTED TO THE RESPONDENT-TRUST AND THER EBY, IT WOULD BE ELIGIBLE TO CLAIM EXEMPTION UNDER SECTION 11 OF THE ACT. 6.2. IN CASE OF THE SOCIETY OF PRESENTATION SISTER S AND OTHERS VS. ITO, 318 ITR(AT)287, THE HONBLE THIRD MEMBER WHILE CONCURRING WITH THE VIEW EXPRESSED BY HONBLE ACCOUNTANT MEMBER, HE LD AS UNDER: IT IS CLEAR FROM PLETHORA OF AUTHORITIES WHERE AFTE R CONSIDERING THE PROVISIONS OF SECTION 11(1)(A) THAT SO FAR AS T HE AFORESAID PROVISION IS CONCERNED, NO DISTINCTION IS MADE BETW EEN CHARITABLE AND RELIGIOUS PURPOSES. A CHARITABLE INS TITUTION CAN HAVE RELIGIOUS PURPOSES; WHEREAS A RELIGIOUS INSTIT UTION MAY BE PARTLY CHARITABLE. MOST OF THE DECISIONS WERE GIVEN UNDER THE 1961 ACT. EVEN WHERE THE DECISION WAS ON CONSIDERAT ION OF 1922 ACT, THERE IS NO MATERIAL DIFFERENCE AS IS DEM ONSTRATED IN THE ABOVE DISCUSSION. THEIR LORDSHIPS OF THE SUPREM E COURT HAVE HELD, AS NOTED EARLIER, THAT CHARITABLE AND RE LIGIOUS PURPOSES OVERLAPS IN INDIA. EVEN OTHERWISE RELIEF A ND HELP TO THE POOR, MEDICAL HELP TO THE NEEDY, LOOKING AFTER OF DEITY AND TEMPLES (MOSQUE, CHURCH INCLUDED) ARE NO DOUBT RELI GIOUS PURPOSES BUT THESE ARE ALSO CONSIDERED AS CHARITABL E IN INDIA. THEREFORE, THE VIEW TAKEN IN THE TWO CASES BEFORE M E THAT EXEMPTION UNDER SECTION 11(1)(A) CANNOT BE ALLOWED TO A CHARITABLE TRUST AS IT IS ALSO CARRYING SOME PURPOS ES WHICH ARE TERMED AS RELIGIOUS IS TOTALLY UNWARRANTED. THE A BOVE VIEW IS TOTALLY CONTRARY TO THE WELL ESTABLISHED AN SETTLED LAW IN INDIA, AS LAID DOWN BY THEIR LORDSHIPS OF THE SUPREME COUR T. THE OTHER REASON GIVEN BY THE LEARNED JUDICIAL MEMB ER IS THAT TWO TRUSTS IN QUESTION ARE PARTLY CHARITABLE OR REL IGIOUS TRUSTS ESTABLISHED AFTER APRIL 1, 1962. THEREFORE, ON ACCO UNT OF LANGUAGE OF THE STATUTE IN SECTION 11, THERE IS PRO HIBITION FROM INCOME DERIVED FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES. ACCORDING TO HIM, INCOME UNDER BOTH CHARI TABLE AND RELIGIOUS PURPOSES CANNOT BE COMBINED TOGETHER AND THE ASSESSEE HAS TO CHOOSE EITHER OF THE CHARITABLE ACT IVITIES OR RELIGIOUS ACTIVITIES, BUT NOT BOTH. I HAD TO STATE THAT IN MY HUMBLE OPINION, THERE IS NO STATUTORY PROVISION TO SUPPORT 8 ITA NO. 551/HYD/2014 SRI SRI SRI DATTATREYA SEVA SAMSTHANAM PROPOSITION OF LAW, STATED BY THE LEARNED JUDICIAL MEMBER. THE LEARNED JUDICIAL MEMBER, LIKE THE REVENUE AUTHORITI ES, MISCONSTRUED THE LEGAL IMPLICATION OF THE WORD OR IN SECTION 11(1)(A). 6.3. THE PRINCIPLE OF LAW EMERGING FROM THE AFORESA ID DECISIONS ARE A TRUST/INSTITUTION HAVING CHARITABLE AND RELIGIOUS OBJECTS WILL BE ELIGIBLE FOR EXEMPTION U/S 11 UNLESS HIT BY RESTRIC TIONS IMPOSED U/S 13(1)(A) OR 13(1)(B) OF THE ACT. AS IN THE PRESENT CASE, LD. DIT(E) HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT PRO VISIONS OF SECTION 13(1)(A) OR 13(1)(B) APPLIES TO THE ASSESSEE, DENIA L OF REGISTRATION U/S 12AA FOR ALLEGED VIOLATION OF SECTION 11(1)(A), IN OUR VIEW, IS NOT JUSTIFIED. MOREOVER, APPLICABILITY OF SECTION 13 OF THE ACT CAN BE LOOKED INTO BY THE AO AT THE TIME OF ASSESSMENT PRO CEEDINGS AND NOT BY LD. DIT(E) WHILE EXERCISING POWER U/S 12AA OF TH E ACT. 6.4 IN VIEW OF THE AFORESAID, WE HOLD THAT LD. DIT( E) WAS NOT JUSTIFIED IN REFUSING GRANT OF REGISTRATION U/S 12A A OF THE ACT ON THE GROUND THAT ASSESSEE IS HAVING MIXED OBJECTS. WE EX PECT THAT IN FUTURE LD. DIT(E) WHILE CONSIDERING SUCH ISSUE SHAL L BEAR IN MIND THE RATIO LAID DOWN BY HONBLE SUPREME COURT IN CASE OF CIT VS. M/S DAWOODI BOHARA JAMAT (SUPRA). 7. AS FAR AS THE OTHER OBJECTIONS OF LD. DIT(E) REL ATING TO NON MENTIONING OF DATE OF CREATION OF TRUST AND ABSENCE OF CERTAIN CLAUSES IN THE TRUST DEED, WE HAVE TO OBSERVE THAT EVEN THO UGH IT IS A FACT THAT DATE OF CREATION OF TRUST IS NOT SPECIFICALLY MENTI ONED IN THE TRUST DEED, HOWEVER, THE DATE OF REGISTRATION OF THE TRUST DEED BEFORE THE SRO I.E. 13/03/13 CAN BE CONSIDERED AS THE DATE OF CREATION OF TRUST. IN SO FAR AS THE ABSENCE OF CERTAIN CLAUSES, AS MENTIONED IN PARA 2 OF LD. DIT(E)S ORDER IS CONCERNED, WE ARE OF THE VIEW THA T BEFORE REFUSING REGISTRATION ON THE GROUND OF ABSENCE OF THESE CLAU SES, LD. DIT(E) COULD HAVE CALLED UPON ASSESSEE TO EXPLAIN ON THE I SSUE AND IF NECESSARY, ASKED ASSESSEE TO MAKE NECESSARY AMENDME NTS TO THE 9 ITA NO. 551/HYD/2014 SRI SRI SRI DATTATREYA SEVA SAMSTHANAM TRUST DEED CONSIDERING THE FACT THAT THESE CLAUSES FORM PART OF A STANDARD TRUST DEED. HOWEVER, WITHOUT GIVING ANY OP PORTUNITY TO ASSESSEE TO EXPLAIN ON THE ISSUE OR MAKE NECESSARY AMENDMENT TO TRUST DEED, LD. DIT(E) WAS NOT JUSTIFIED IN REJECT ING ASSESSEES APPLICATION FOR GRANT OF REGISTRATION U/S 12AA OF T HE ACT. IN THE AFORESAID FACTS AND CIRCUMSTANCES, WE CONSIDER IT A PPROPRIATE TO SET ASIDE THE IMPUGNED ORDER OF LD. DIT(E) AND REMIT TH E MATTER BACK TO HIS FILE TO CONSIDER THE ISSUE AFRESH. LD. DIT(E) I F THINKS IT APPROPRIATE MAY SUGGEST THE ASSESSEE TO MAKE NECESSARY AMENDMEN T TO TRUST DEED INCORPORATING THE CLAUSES AS MENTIONED IN PARA 2 OF HIS ORDER. ONCE, SUCH AMENDMENT TO THE TRUST DEED IS CARRIED O UT BY ASSESSEE, LD. DIT(E) MAY GRANT REGISTRATION TO ASSESSEE U/S 1 2AA OF THE ACT. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 14/01/2015. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 14 TH JANUARY, 2015 KV COPY TO:- 1) SRI SRI SRI DATTATREYA SEVA SAMSTHANAM, C/O SHR I KK GUPTA, FCA KATRAPALLI & CO., CAS., 3464, DUNDOO VIHAR, RP ROAD, SECUNDERABAD - 500 003. 2) DIT(E), AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 500 004. 3) DDIT(E) - I, HYDERABAD 4)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.