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Issues involved: Rejection of registration under section 12AA of the Income-tax Act, 1961 due to mixed charitable and religious activities.
Summary: The appeal was against the rejection of registration under section 12AA of the Income-tax Act, 1961, by the Director of Income-tax (Exemptions), Hyderabad, based on the grounds that the assessee-society's objects included both charitable and religious activities. The assessee-society applied for registration under section 12AA of the Act, having been registered under the A.P. Societies Registration Act. The society's objects included preaching the good news of Jesus Christ, supporting/maintaining churches, establishing Bible Schools, schools, medical relief centers, orphanages, and carrying out acts of charity. The main contention was whether a trust/society with mixed charitable and religious objects is eligible for registration under section 12AA. The counsel for the assessee argued that engaging in both charitable and religious activities does not disqualify the trust for registration, citing relevant case laws to support the argument. Upon review, the Tribunal found that there is no provision precluding an institution with mixed objects from registration under section 12AA. The trust in question was found to be engaged in only charitable and religious activities, with no non-charitable or non-religious activities. Previous judgments supported the view that a trust with charitable and religious objects is not debarred from registration. The Tribunal disagreed with the DIT(E)'s interpretation and directed the grant of registration to the assessee-society, as there was no contrary decision brought to their notice. The DIT(E)'s observation regarding the concept of "charitable religious trust" was deemed unwarranted, and registration was ordered subject to any other conditions. In conclusion, the appeal of the assessee was allowed, and registration under section 12AA was granted.
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