SAKAL DIGAMBER JAIN SAMAJ SAMITI, Kota V. CIT, Kota

ITA 66/JPR/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54231 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-10-2011
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHASH CHANDRA
• Assessee Lawyers: MAHENDRA GARGIYA
• Keywords: Charitable institution; Benefit of exemption
• Section: 80G; 12A; 12AA; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, B JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L. KALRA) ITA NO.66/JP/2011 ASSESSMENT YEAR : 2010-2011 SHRI SAKAL DIGAMBER JAIN SAMAJ VS. COMMISSIONER OF SAMITI, SHOPPING CENTRE, INCOME-TAX, KOTA. KOTA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MAHENDRA GARGIYA RESPONDENT BY: SHRI SUBHASH CHANDRA DATE OF HEARING: 18.10.2011 DATE OF PRONOUNCEMENT: ORDER PER SHRI N.L. KALRA, A.M. THE ASSESSEE HAS FILED AN APPEAL AGAINST ORDER OF LD. CIT (KOTA) U/S 12AA DATED 26.11.2010. THE GROUND OF APPEAL RAISED BY THE ASSE SSEE IS AS UNDER: UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE H ONBLE COMMISSIONER OF INCOME TAX-KOTA HAS ERRED IN REJECTING THE APPLI CATION FILED FOR REGISTRATION U/S 12AA(1) OF THE INCOME TAX ACT, 196 1 AND HAS FURTHER ERRED IN HOLDING THAT THE SAMITI IS NOT EVEN ELIGIB LE FOR REGISTRATION U/S 80G OF THE INCOME TAX ACT. 2. THE RELEVANT FACTS ARE: 2 THE RELEVANT FACTS ARE THAT THE APPELLANT SAMITI WA S REGISTERED WITH THE REGISTRAR OF SOCIETIES VIDE REGISTRATION CERTIFICAT E NO.2/94-95 DATED 22.04.1994. THE SAMITI WAS SET-UP WITH THE MAIN OBJ ECTIVE TO ESTABLISH AND RUN ORPHANAGES, SCHOOLS, MEDICAL CENTRES, ETC., AND TO SERVE THE SOCIETY AT LARGE, WITHOUT ANY DISCRETION OF CASTE CREED AND SE X. THE SAMITI HAS FILED AN APPLICATION IN FORM NO.10A ON 14.05.2010 SEEKING REGISTRATION U/S 12AA(1). THE INCOME TAX OFFICER, W ARD-1(1), KOTA VIDE HIS REPORT BEARING NO.3006 DATED 09.01.2010 RECOMME NDED TO CONSIDER THE APPLICATION OF THE APPELLANT SAMITI FOR GRANT O F REGISTRATION U/S 12AA. THE ADDL. CIT VIDE HIS LETTER NO.ADDL. CIT/R-1/KTA/ U/S12AA/2010- 11/734 DATED 11.11.2010 HAS NOT RECOMMENDED THE CAS E FOR GRANT OF REGISTRATION U/S 12AA FOR THE REASON THAT IN THIS CASE, A REPORT ON EXEMPTION U/S 80G HAS AL READY BEEN SENT BY THIS OFFICE VIDE LETTER NO.717 DATED 29.10.2010 ALONGWIT H AOS REPORT WHEREIN THE CASE WAS NOT RECOMMENDED FOR APPROVAL. THE FACT S OF THE CASE ARE THE SAME AS DISCUSSED IN THE AOS REPORT IN THIS REPORT ALSO. FURTHER, THE APPLICANT TRUST WAS REGISTERED WITH THE REGISTRAR O F SOCIETY ON 22.04.1994. HOWEVER, THE APPLICATION FOR REGISTRATION U/S 12AA HAS BEEN FILED ON 14.05.2010 WHICH IS BEYOND TIME. 3. THE LD. CIT REFUSED TO GIVE REGISTRATION AFTER O BSERVING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSE E BUT- (I) ON GOING THROUGH THE INCOME AND EXPENDITURE ACC OUNT FOR THE YEAR ENDED ON 31.03.2008 IT IS NOTICED THAT TOTAL RECEIP TS WERE RS.3,85,289/- AGAINST WHICH EXPENSES ON MAHAVEER JA YANTI WERE SHOWN AT RS.3,18,879/- BESIDES MEETING EXPENSES RS. 900/- KSHAMAWANI PARV KHARCH RS.27,223/- AND OTHER EXPENS ES RS.6,000/- LEAVING SURPLUS OF RS.32,287/- (II) FOR THE YEAR ENDED ON 31.3.2009 THE APPLICANT HAS SHOWN RECEIPTS AT RS.5,50,365/- AGAINST WHICH EXPENSES ON MAHAVEER JAYANTI WERE SHOWN AT RS.3,59,044/- MUNI VYAWASTHA EXPENSES AT R S.6,000/-, KSHAMAWANI PARV KHARCH RS.18,057/-, MEETING EXPENSE S AT RS.2,175/- SHIKSHAN EXPENSES AT RS.25,800/-, PRINTI NG AND STATIONARY EXPENSES AT RS.35,620/-, TRISHALA CHANDA N BALA SAMMAN AT RS.7,430/- OTHER EXPENSES AT RS.22,619/- LEAVING SURPLUS OF RS.78,620/-. (III) FOR THE YEAR ENDED ON 31.03.2010 THE APPLICAN T HAS SHOWN RECEIPTS AT RS.6,55,313/- AGAINST WHICH EXPENSES ON MAHAVEER JAYANTI WERE SHOWN AT RS.5,05,575/- MUNI VYAWASTHA EXPENSES AT R S.2,585/-, KSHAMAWANI PARV KHARCH RS.28,686/-, MEETING EXPENSE S AT 3 RS.6,946/-, STATIONARY EXPENSES AT RS.257/-, KHATA (FURNITURE) AT RS.360/-, OTHER EXPENSES AT RS.19,098/- LEAVING SUR PLUS OF RS.91,806/-. THE AIMS AND OBJECTS OF THE SOCIETY MAY BE CHARITAB LE IN NATURE FOR NAMESAKE BUT THE REAL ACTIVITY CARRIED OUT SO FAR A S SEEN FROM THE AFORESAID DISCUSSION MAINLY RELATE TO CELEBRATION O F MAHAVEER JAYANTI, KSHAMAWANI PARVA ETC. WHICH ARE EXCLUSIVELY RELIGIO US ONE AND ARE FOR A PARTICULAR COMMUNITY. THE APPLICANT APPLIED ABOUT 7 0%, 82% AND 89% OF ITS RECEIPTS ON EXPENSES OF RELIGIOUS NATURE OF A P ARTICULAR COMMUNITY. SECTION 13(1) OF THE I.T. ACT CLEARLY PROVIDES TH AT: NOTHING CONTAINED IN SECTION 11 (OR SECTI8ON 12) SH ALL OPERATE SO AS TO EXCLUDE FROM THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT THEREOF- (A) ANY PART OF THE INCOME FORM THE PROPERTY HELD U NDER A TRUST FOR PRIVATE RELIGIOUS PURPOSES WHICH DOESNT ENSURE FOR THE BENEFIT OF PUBLIC; (B) IN THE CASE OF A TRUST FOR CHARITABLE PURPOSE O R A CHARITABLE INSTITUTION CREATED OR ESTABLISHED AFTER THE COMMEN CEMENT OF THIS ACT, ANY INCOME THEREOF IF THE TRUST OR INSTITUTION IS CREATED OR ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR RELIG IOUS COMMUNITY OR CASTE. THE ASSESSEE SAMITI THOUGH HAS CHARITABLE OBJECTS M ENTIONED IN ITS CONSTITUENT DOCUMENT HAS NOT AT ALL ACTED ACCORDING TO THEM AND HAS SPENT ITS INCOME SUBSTANTIALLY ON CELEBRATION OF MAHAVIR JAYANTI. KSHMAVANI PARVA AND OTHER CEREMONIES EXCLUSIVELY RELATED TO T HE JAIN RELIGIOUS COMMUNITY AS SEEN FROM THE DISCUSSION MADE ABOVE. T HEREFORE, IT ATTRACTS THE MISCHIEF OF SEC. 13(1) (B) OF THE I.T. ACT AND ITS INCOME CANNOT BE GRANTED EXEMPTION U/S 11 OF THE I.T. ACT OR CANNOT BE REGISTERED AS A PUBLIC CHARITABLE AND RELIGIOUS INSTITUTE U/S 12A R .W.S. 12AA OF THE I.T. ACT. THE APPLICANT SOCIETY HAS APPLIED FOR GRANT OF EXEM PTION U/S 80G ALSO CLAUSE (III) OF SUB SEC. (5) OF SEC. 80G MAKES AN I NSTITUTION ELIGIBLE FOR THE BENEFIT OF SEC. 80G SUBJECT TO VARIOUS CONDITIONS A ND ONE SUCH CONDITIONS AS PER CLAUSE (III) READS THE INSTITION OR FUND IS NOT EXPRESSED TO BE FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CA STE. ON POINTING OUT THE VIOLATION OF THIS CONDITION BY THE SOCIETY THE OFFICE BEARERS WHO ATTENDED THE HEARING WITHDREW THE APPLICATION AND A CCORDINGLY THE APPLICATION SEEKING GRANT OF EXEMPTION U/S 80G OF I .T. ACT WAS REJECTED VIDE ORDER DATED 11.11.2010. 4 IN THIS PREOCEEDINGS AS WELL AS IN THE PROCEEDINGS RELATE TO GRANT OF EXEMPTION U/S 80G IT AMPLY TRANSPIRED THAT THE FUND S OF THE SOCIETY WAS MAINLY UTILIZED FOR CARRYING OUT RELIGIOUS ACTIVITI ES EXCLUSIVELY RELATED TO JAIN COMMUNITY. PROVISIONS OF SUB-SECTION 5B OF SECTION 80G CLARIFI ES AND RESTRICT INCURRING EXPENSES TO THE EXTENT NOT EXCEEDING 5% OF THE TOTA L INCOME TO AVAIL BENEFIT OF THE PROVISIONS OF SEC. 80G. SUB-SECTION (5B) OF SEC. READS AS UNDER:- (5B) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE (II) O9F SUB-SECTION (5) AND EXPLANATION 3, AN INSTITUTION OR FUND WHICH INCURS EXPENDITURE, ANY PREVIOUS YEAR, WHICH IS OF A RELIGIOUS NATURE F OR AN AMOUNT NOT EXCEEDING FIVE PERCENT OF ITS TOTAL INCOME IN THAT PREVIOUS YEAR SHALL BE DEEMED TO BE AN INSTITUTION OR FUND TO WHICH THE PR OVISIONS OF THIS SECTION APPLY. THEREFORE, THE SOCIETY IS EVEN NOT ELIGIBLE FOR REG ISTRATION U/S 80G OF THE I.T. ACT. UNDER THE FACTS AND CIRCUMSTANCES DISCUSS ED ABOVE I AM NOT INCLINED TO GRANT REGISTRATION U/S 12AA(1) OF THE I .T. ACT, 1961 TO THE APPLICANT. ACCORDINGLY, THE APPLICATION SEEKING REGISTRATION U /S 12AA(1) OF I.T. ACT, 1961 IS REJECTED. 4. BEFORE US THE LD. A/R HAS FILED THE WRITTEN SUBM ISSIONS WHICH ARE REPRODUCED AS UNDER: SEC. 13 NOT RELEVANT FOR GRANTING REGISTRATION: THE LD. CIT HEAVILY RELIED UPON SECTION 13 TO DERIVE HOME THE POINT THAT THE A PPELLANT WAS CONFINED TO A PARTICULAR RELIGION I.E. JAIN DHARM HENCE WAS NOT ELIGIBLE FOR REGISTRATION U/S 12AA. HOWEVER, IT WAS A MISCONCEPT ION ON HIS PART. SCOPE OF POWER U/S 12AA(1) : HOWEVER, AT THE OUTSET IT IS SUBMITTED THAT FOR GRANTING REGISTRATION U/S 12AA(1), REFERENCE AN D RELIANCE TO SEC. 13 R/W 11 & 12 IS NOT AT ALL RELEVANT IF THESE PROVISI ONS ARE SEEN. SEC. 12AA (1) READS AS UNDER: (1) THE [***] COMMISSIONER, ON RECEIPT OF AN APPLI CATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER C LAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A, SHALL- (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT THE 5 GENUINENESS OF ACTIVITIES OR THE TRUST OR INSTITUTI ON AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE- (I) SHALL PASS AN ORDER IN WRITING REGISTERING TH E TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORD ER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SU CH ORDER SHALL BE SENT TO THE APPLICANT. FROM A BARE READING OF THESE ABOVE PROVISION CONTAI NED U/S 12AA(1), IT IS EVIDENTLY CLEAR THAT THE LD. CIT, WITH A VIEW TO GR ANT REGISTRATION TO ANY TRUST/INSTITUTION, HAS TO BE SATISFIED (I) ABOUT TH E OBJECTS OF THE TRUST OR INSTITUTION AND (II) THE GENUINENESS OF ITS ACTIVIT IES. THE PROVISION NOWHERE SPEAKS THAT IF SEC.13 R/W SEC. 11 & SEC.12 SHALL HA VE APPLICATION IN ANY MANNER WHATSOEVER SO FAR AS THE GRANT OF REGISTRATI ON IS CONCERNED. HOWEVER NO ADVERSE FINDING WAS RECORDED BY THE CIT ON THESE CONDITION. NOT ONLY THIS, EVEN A BARE READING OF THESE PROVISI ONS WILL ALSO MAKE IT CLEAR THAT CONTRAVENTION OF SEC. 13 SHALL AT THE WO RST MAY DENY EXEMPTION U/S 11 & 12 TO A TRUST FOR THE PURPOSES OF ASSESSME NT OF ITS INCOME AND NOT MORE THAN THAT SEC.13 OVERRIDES SEC. 11 & 12 BUT NO T SEC. 12A OR 12AA. THE LANGUAGE OF SEC.12A DOES NOT INDICATE, NOT EVEN REMOTELY, THAT AN INSTITUTION OF RELIGIOUS NATURE CANNOT GET ITSELF R EGISTERED U/S 12A. IN OTHER WORDS, AN INSTITUTION OF RELIGIOUS NATURE AS WELL A S CHARITABLE PURPOSES CAN CLAIM REGISTRATION UNDER SECTION 12A. IN CIT V/S SHRI DIGMBER JAIN MANDIR, CHAKSU (2009 ) 29 DTR 65 (RAJ) IT WAS HELD THAT WE FIND NO INDICATION THAT IN ORDER TO BE ABLE TO GET REGISTRATION UNDER SECTIONS 12A OF THE ACT, THE INSTITUTION MUST FIRST ESTABLISH AS TO HOW IT WOULD BE ABLE TO CLAIM THE EXEMPTIONS UNDER SECTION S 11 AND 12. IT WAS FURTHER HELD THAT WE FIND OURSELVES IN AGREEMENT WITH THE VIEW OF M ADRAS HIGH COURT THAT THE QUESTION OF EXEMPTIONS UNDER SECTIONS 11 AND 12 OF THE ACT OR AS THE CASE MAY BE, UNDER SECTION 80G WOULD COME ONLY WHEN SUCH EXEMPTIONS ARE CLAIMED BY THE TRUST AT THE TIME WHEN IT IS ASS ESSED TO TAX. IT WAS HELD THAT THE LANGUAGE OF SEC.12A DOES NOT INDICATE, NOT EV EN REMOTELY, THAT AN INSTITUTION OF RELIGIOUS NATURE CANNOT GET ITSELF R EGISTERED U/S 12A. IN OTHER 6 WORDS, THE INSTITUTIONS OF RELIGIOUS NATURE AS WELL AS FOR CHARITABLE PURPOSE CAN CLAIM REGISTRATION U/S 12A THE ABOVE OBSERVATIONS MANIFEST THE LEGISLATIVE INT ENT VERY CLEAR THAT SIMPLY BECAUSE THE TRUST IS MEANT FOR A PARTICULAR RELIGION DOESNT DE-BAR TO CLAIM EXEMPTION, MEANING THERE BY THE BAR OF JAI N RELIGION AS PUT BY THE LD. CIT, IS NOT AT ALL RELEVANT FOR THE PURPOSE OF CANCELLATION. THE SLP FILED BY THE REVENUE AGAINST THE SAID DECISION (200 9) 310 ITR 2 (STATUTE) STANDS DISMISSED. THIS DECISION IS RECENTLY FOLLOWED BY THIS HONBLE BENCH IN THE CASE OF ITO V/S EMMANUEL BIBLE INSTITUTE SAMITI (2011) 140 TTJ 508 (JP)/ 57 DTR 228 (JP) MANY A CASE CAN BE CITED WHICH RULE THAT REGISTRATI ON OF TRUST HAVING RELIGIOUS NATURE CAN ALSO GET REGISTRATION UNDER SE CTION 12A. IN NEW LIFE IN CHRIST EVANGELISTIC ASSOCIATION V/S CIT [2000] 2 46 ITR 532 (MAD) IT WAS HELD THAT SECTION 12A DOES NOT PROHIBIT REGISTRATION OF THE TRUST WHOSE OBJECTS ARE RELIGIOUS AS WELL AS CHARITABLE. WHEN THE PHRASE CHARITABLE PURPOSE IS EMPLOYED IN THE ACT, IT MUST HAVE BEEN WITH THE INTENTION THAT IT WOULD COMPREHE ND BOTH RELIGIOUS AS WELL AS CHARITABLE PURPOSES. IT WAS SO HELD IN S.M. N. THANGASWAMY CHETTIAR V/S CIT (1965) 57 ITR 546 (MAD.). WHILE CONSIDERING THE ASSESSEES APPLICATION FOR GR ANT OF REGISTRATION U/S 12A, ALL THAT THE COMMISSIONER MAY EXAMINE IS WHETH ER THE APPLICATION IS MADE IN ACCORDANCE WITH THE REQUIREMENTS OF THAT SE CTION READ WITH RULE 17A, AND WHETHER FORM 10A HAS BEEN PROPERLY FILLED UP. HE MAY ALSO SEE WHETHER THE OBJECTS OF THE TRUST ARE CHARITABLE OR NOT. AT THAT STAGE, IT IS NOT PROPER TO EXAMINE THE APPLICATION OF INCOME-FIF TH GENERATION EDUCATION SOCIETY V/S CIT (1990) 185 ITR 634 9ALL. ). SO LONG AS A TRUST HAS EDUCATION AS ONE OF ITS OBJE CTS IT HAS TO BE ACCEPTED THAT TRUST IS HAVING A CHARITABLE PURPOSE AS ITS OB JECT AND MAY QUALIFY FOR CLAIMING EXEMPTION IN TERMS OF SECTIONS 11 & 12 SUB JECT TO FULFILLING OF CONDITIONS ENUMERATED THEREIN; MANNER OF APPLICATIO N OF FUNDS AND AS TO WHETHER ASSESSEE CAN CLAIM BENEFIT OF EXEMPTION IN TERMS OF SECTIONS 11 AND 12 ARE QUESTIONS WHICH HAVE TO BE EXAMINED BY A SSESSING OFFICER AT STAGE WHEN SAME ARE URGED AND NOT BY COMMISSIONER W HILE CONSIDERING APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12A-DIT V/S GARDEN CITY EDUCATIONAL TRUST (2010) 191 TAXMAN 238 (KAR.) . 7 ALTERNATIVELY, EVEN ASSUMING SEC. 13 WILL BE RELEVA NT, NEITHER SEC.13 NOR SEC.11 & 12 HAS BEEN CONTRAVENED IN AS MUCH AS SEC. 13 DENIES BENEFIT OF SEC. 11 OR 12 UNDER CERTAIN CIRCUMSTANCES. FROM THE DIFFERENT PHRASEOLOGIES USED BY THE LEGISLATURE IN CLAUSES (A ), (B) AND (C) IN SEC.13(1), IT CAN BE INFERRED THAT THE LEGISLATURE INTENDED TO COVER ONLY THOSE TRUSTS WHICH ARE MEANT FOR CHARITABLE & RELI GIOUS PURPOSES U/S 13 (1)(B) AS HELD IN SHRI CHANDRA CHARITABLE TRUST V/S ITO (1995) 51 TTJ (AHD) 88 AND APPROVED IN CIT V/S CHANDRA CHARITABLE TRUST 294 ITR 86 (GUJ). IN THIS CASE THE TRUST PROPAGATED JAINISM, MAINTAIN ED TEMPLE AND PROVIDED ASSISTANCE TO SADHUS, SADHVIS ETC., BESIDES OTHER C HARITABLE ACTIVITIES WERE ALSO PURSUED BY THE TRUST. IT WAS HELD THAT THE TRU ST COULD BE ADDRESSED AS A CHARITABLE RELIGIOUS TRUST, AND IF THAT BE SO SEC.1 3(1) (B) WOULD NOT BE APPLICABLE. ANOTHER DIRECT DECISION ON THE ISSUE IS IN THE SOCI ETY OF PRESENTATION SISTERS V ITO (2009) 30 DTR 1 (COCH) (TRIB), HOLD ING SO FAR AS THE PROVISION OF S.11(1)(A) IS CONCERNED, NO DISTINCTIO N IS MADE BETWEEN CHARITABLE AND RELIGIOUS PURPOSES. A CHARITABLE INS TITUTION CAN HAVE RELIGIOUS PURPOSES; WHEREAS A RELIGIOUS INSTITUTION MAY BE PARTLY CHARITABLE. EVEN OTHERWISE RELIEF AND HELP TO THE P OOR MEDICAL HELP TO THE NEEDY THE NEEDY, LOOKING AFTER OF DEITY AND TEMPLES (MOSQUE, CHURCH INCLUDED) ARE NO DOUBT RELIGIOUS PURPOSES BUT THESE ARE ALSO CONSIDERED AS CHARITABLE IN INDIA. THEREFORE, THE VIEW TAKEN THAT EXEMPTION UNDER S.11(1)A) CAN NOT BE ALLOWED TO A CHARITABLE TRUST AS IT IS ALSO CARRYING ON SOME PURPOSES WHICH ARE TERMED AS RELIGIOUS IS TO TALLY UNWARRANTED. IN CIT V/S DAWOODI BOHRA JAMAT 317 ITR 342 (MP), HE LD THAT THE SEC. 13(1) (B) WERE NOT APPLICABLE TO A RELIGIOUS TRUST, BUT APPLIED ONLY TO A CHARITABLE TRUST. IN THE CASE OF CIT V/S BARKATE SAIFIYAH SOCIETY (19 95) 213 ITR 492 (GUJ), HELD THAT A TRUST WHICH IS FOR CHARITABLE AS WELL A S RELIGIOUS PURPOSES IS NOT COVERED BY SECTION 13(1) (B), WHICH APPLIES ONL Y TO PURELY CHARITABLE TRUSTS. SUCH A TRUST WOULD NOT LOSE THE BENEFIT OF EXEMPTION UNDER SECTION 11, EVEN THOUGH IT MAY BE FOR THE BENEFIT OF A PART ICULAR COMMUNITY. IN CIT V/S SOCIAL SERVICE CENTRE (2001) 250 ITR 39 (AP) HELD THAT THE ASSESSES WAS A TRUST REGISTERED UNDER SECTION 12A O F THE INCOME TAX ACT, 1961, AS A CHARITABLE TRUST. IN ITS RETURN THE ASSE SSEE CLAIMED EXEMPTION UNDER SECTION 11 AND 12. THE ASSESSING OFFICER FOUN D THAT THE TRUST WAS MAINLY ENGAGED IN RELIGIOUS ACTIVITIES AND DENIED E XEMPTION BECAUSE THE EXPENDITURE WAS INCURRED FOR DONATION TO A DIOCESE AND FOR CONSTRUCTION OF A CHURCH. THE TRIBUNAL REVERSED THE ORDER OF THE AS SESSING OFFICER. ON APPEAL: HELD, THAT DONATION TO A CHURCH OR CONSTRUC TION OF A CHURCH WAS 8 NOT A PURPOSE WHICH WAS NOT OF GENERAL PUBLIC UTILI TY WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. SINCE RELIGIOUS AND CH ARITABLE ACTIVITIES WENT TOGETHER EXPENDITURE ON RELIGIOUS ACTIVITIES COULD NOT BE DENIED EXEMPTION. MOREOVER IN VIEW OF SECTION 11 WHICH USES THE WORDS CHARITABLE OR RELIGIOUS EXEMPTION GRANTED FOR CHARITABLE ACTIVIT IES ALSO INCLUDED RELIGIOUS ACTIVITIES. THE ORDER OF THE TRIBUNAL WAS , THEREFORE, JUSTIFIED. ALSO REFER CALICUT ISLAMIC CULTURAL SOCIETY V/S ACI T, 28 SOT 148 (COCHIN TRIB) AND ADI(E) V/S SADHRMIK UTKARSH TRUST, 36 BCA J 518 (MUM TRIB). THAT MEANS, IF A TRUST IS A COMPOSITE ONE FOR BOTH RELIGIOUS AND CHARITABLE PURPOSES, THEN IT WOULD NOT BE COVERED BY CLAUSE (B ). IT IS ALSO EVIDENT THAT IF THE TRUST IS ONLY FOR RELIGIOUS PURPOSES, C LAUSE (B) WOULD NOT APPLICABLE. CLAUSE (B) DEALS WITH A TRUST FOR CHARI TABLE PURPOSES, OR CHARITABLE INSTITUTIONS ONLY, WHICH ARE ESTABLISHED FOR GIVING RELIEF TO THE POOR OR MEDICAL RELIEF OR FOR EDUCATION OF ANY PART ICULAR RELIGIOUS COMMUNITY OR CASTE. APPLICATION OF THE RATIO: APPLYING THE ABOVE PRINCI PLES LAID DOWN, ON THE FACTS OF THE PRESENT CASE, IT WILL BE FOUND THAT SE C.13(1) (A) IS NOT APPLICABLE AS THE SAMITI IS NOT A TRUST FOR PRIVATE RELIGIOUS PURPOSES AND SIMILARLY CLAUSE (B) IS ALSO NOT APPLICABLE IN AS M UCH AS THE SAMITI IS A TRUST FOR RELIGIOUS PURPOSES [AS ADMITTED BY THE LD . CIT ALSO] OR AT THE BEST A COMPOSITE TRUST. IN ANY CASE, THE SAMITI WAS NOT CREATED/ESTABLISHED FOR THE BENEFIT OF ANY PARTICULAR COMMUNITY I.E. JAINS AS EVIDENT FROM A B ARE READING OF THE MEMORANDUM OF ASSOCIATION OF SAMITI. A BARE PERUSAL OF THE INCOME & EXPENDITURE A/C FOR THE YEAR ENDING 31.3.2008, 31.3.2009 AND 31.3.2010 AND VARIOUS DETA ILS ALONGWITH PHOTOGRAPHS AND OTHER EVIDENCES CLEARLY ESTABLISHED THAT THE ACTIVITIES OF THE APPELLANT SAMITI WERE NOT CONFINED TO MERELY TO JAIN COMMUNITY/RELIGION BUT IT WAS IN ACCORDANCE WITH TH E OVER ALL OBJECTS OF THE SAMITI WHICH WAS BENEFICIAL TO THE SOCIETY AS A WHOLE. KINDLY REFER OUR DETAILED SUBMISSION TO THE AO DATED 08.07.2010 FILE D DURING THE COURSE OF REGISTRATION PROCEEDINGS, IN PARA 2. EXAMPLE OF SOME OF THE CASES, WITH REFERENCE TO THE PHOTOGRAPH AND THE RELEVANT PAPER BOOK PAGES ARE AS UNDER: 9 S.NO. REASONS PAPER BOOK PAGE NO. 1 BLOOD DONATION 49 2 WATER PROTECTION MOVEMENT 50 3 HONORING THE DONORS 51 4 CONSTRUCTION OF BUILDING TO HOUSE ATTENDANTS OF T HE PATIENTS 53 5 TO WORK FOR THE PEACE IN SOCIETY 54-57 6 EXPENDITURE ON PROMOTION OF GAME 59 7 FINANCIAL HELP TO THE SUFFERS OF JAIPUR BOMB BLAS T CASE 61 8 FINANCIAL AID TO MBA STUDENT 63 IN FACT, THE CHARITY AND VARIOUS EXPENDITURES INCUR RED ON CHARITABLE PURPOSES ON DIFFERENT OCCASIONS DURING THE RELEVANT YEAR/S HOWEVER, SOMETIME SUBSTANTIAL EXPENDITURE ON THESE VERY EXPE NDITURE WERE INCURRED ON THE OCCASION OF MAHAVEER JYANTI. BUT CHARITY DO NE ON A PARTICULAR OCCASION CANNOT UNDONE THE ADMITTED FACT OF THE CHA RITY. THE LD. CIT THUS, MISREAD THE FACTS AND HENCE, HIS OBJECTION THAT TH E ASSESSEE SAMITI THOUGH HAS CHARITABLE OBJECTS MENTIONED IN ITS CONS TITUENT DOCUMENT HAS NOT AT ALL ACTED ACCORDING TO THEM AND HAS SPENT IT S INCOME SUBSTANTIALLY ON CELEBRATION OF MAHAVIR JAYANTI. KSHMAVANI PARVA AND OTHER CEREMONIES EXCLUSIVELY RELATED TO THE JAIN RELIGIOUS COMMUNITY AS SEEN FROM THE DISCUSSION MADE ABOVE IS IGNORING THE CORRECT STAT E OF AFFAIR. ALSO THEREFORE, IT DOESNT ATTRACTS THE MISCHIEF OF SEC. 13(1)(B). SEC. 11 & 12 MAKE A DISTINCTION BETWEEN TRUSTS FOR CHARITABLE PURPOSES AND THOSE FOR RELIGIOUS PURPOSES. CHARITABLE PURPOS E HAS BEEN DEFINED IN SECTION 2(15) BUT THE WORDS RELIGIOUS PURPOSE HAV E NOT BEEN DEFINED IN THE ACT. ITS COMMON PARLANCE MEANING WOULD THEN BEC OME RELEVANT. BLACKS LAW DICTIONARY DEFINES RELIGION AS: A S YSTEM OF FAITH AND WORSHIP USUALLY INVOLVING BELIEF IN A SUPREME BEING AND USUALLY CONTAINING MORAL AND ETHICAL CODE; ESPECIALLY SUCH A SYSTEM RECOGNIZED AND PRACTICES BY A PARTICULAR CHURCH, SUCH OR DENOM INATION. AS SUCH IT WOULD INCLUDE THE ADVANCEMENT, SUPPORT OR PROPAGATI ON OF A RELIGION AND ITS TENETS. ALL TRUSTS WHICH ARE MEANT FOR THE ESTA BLISHMENT AND WORSHIP OF IDOLS AND PERFORMANCE OF RELIGIOUS FESTIVALS WOULD THEREFORE BE EXEMPT U/S 11, EVEN THOUGH THEY MAY BE FOR THE BENEFIT OF A PA RTICULAR RELIGIOUS COMMUNITY OR CASTE AND SUBJECT TO SEC. 13(1)(B) WHI CH EXCLUDES FROM EXEMPTION A TRUST OR INSTITUTION WHICH IS ESTABLISH ED FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY, IN CASE CREATED AFT ER 1.4.1962. 5. ON THE OTHER HAND THE LD. D/R HAS SUPPORTED THE ORDER OF LD. CIT KOTA. OUR ATTENTION WAS DRAWN TOWARDS PARA 7 OF THE ORDER OF CIT. OBJECTS OF THE SOCIETY ARE 10 CHARITABLE FOR THE NAME SAKE BUT THE EXPENSES HAVE BEEN INCURRED FOR THE CELEBRATION OF MAHVEER JAYANTI, KSHMAWANI PARVA ETC. AT THE TIME O F REGISTRATION, THE LD. CIT HAS TO BE SATISFIED ABOUT THE GENUINENESS OF ACTIVITIES AND A PPLICATION OF INCOME TOWARDS OBJECTS. IN THE INSTANT CASE, THE TRUST IS FOR A PARTICULAR REL IGIOUS COMMUNITY AND HENCE IT WAS SUBMITTED THAT LD. CIT WAS JUSTIFIED IN REJECTING T HE APPLICATION FOR REGISTRATION. 6. WE HAVE HEARD BOTH THE PARTIES. THE TRIBUNAL IN THE CASE OF EMMANUEL BIBLE INSTITUTE SAMITI (SUPRA) HAS HELD THAT RELIGIOUS TR USTS ARE ENTITLED FOR REGISTRATION. REFERENCE WAS MADE TO THE DECISION OF HONBLE JURIS DICTIONAL HIGH COURT IN THE CASE OF SHRI DIGAMBER JAIN MANDIR CHAKSU.(SUPRA). THE LD. C IT HAS NOT CONSIDERED THE DECISION OF JURISDICTIONAL HIGH COURT. CONSIDERING THE FACT THAT ISSUE IS COVERED BY THE DECISION OF JURISDICTIONAL HIGH COURT, WE, THEREFORE, DIRECT TH E LD. CIT TO ALLOW REGISTRATION. IN THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER IS PRONOUNCED IN OPEN COURT ON 21.10.201 1 SD/- SD/- (R.K.GUPTA) (N.L.KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21.10.2011 *S.KUMAR* COPY FORWARDED TO:- 1. SHRI SAKAL DIGAMBER JAIN SAMAJ SAMITI, 278, SHOP PING CENTRE, KOTA. 2. COMMISSIONER OF INCOME TAX, KOTA 3. THE CIT 4. THE CIT(A), 5. THE D/R, ITAT, JAIPUR 6. THE GUARD FILE IN ITA NO.66/JP/2011 BY ORDER A.R., I.T.A.T., JAIPUR