A Trust with both charitable & religious objects cannot be denied registration u/s 12A; ITAT Mumbai [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal, in a recent case ruled that, the registration u/s 12A cannot be denied to a Trust with both charitable and religious objects under section 12AA(1)(b)(ii) read with section 12A of the Income Tax Act, 1961.

The assessee-trust, in the instant case has filed an application for registration under section 12A of the Income Tax. The DIT(E) rejected the application on various grounds. One of the ground pointed out by the DIT(E) was that the trust deed of the applicant has religious objects amoung its charitable objects. The matter was brought before the Appellate Tribunal on appeal.

The Appellate Tribunal noted that in the case of CIT vs. Dawoodi Bohra Jamat, it was held that when the objects of the assessee are not indicating of a wholly religious purpose but are collectively indicative of both charitable and religious purposes, exemption cannot be denied. Therefore, registration cannot be denied to the trust on the above ground.

The Tribunal further noted the decision in Seervi Samaj Tambaram Trust, in which the Madras High Court observed that registration under section 12AA can be granted to the trust with both charitable and religious objects and that the trust is entitled for registration under section 12AA when activities were not started by the trust. The Tribunal opined the above decision is squarely applicable to the instant case.

In view of the above findings, the Appellate Tribunal directed the DIT(E) to grant exemption to the applicant.

Read the full text of the order below.