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Issues involved:
The judgment deals with the issue of whether an institution claiming exemption as a charitable trust can also claim exemption for activities deemed as religious by the Revenue. Summary: The assessee, a trust registered u/s 12A of the Income-tax Act, filed a return of income seeking exemption u/s 11 and 12. The Assessing Officer found that the trust, despite having charitable aims in its memorandum, was primarily engaged in religious activities. The Assessing Officer denied exemption for income applied for religious purposes, a decision upheld by the Commissioner (Appeals) but overturned by the Appellate Tribunal. The main question was whether an institution exempt as charitable could also claim exemption for religious activities. The High Court noted that the definition of "charitable purpose" includes objects of general public utility. The court held that activities like construction of a church and donations to religious entities could be considered as activities of general public utility. Referring to u/s 11, the court emphasized that once exemption is granted for charitable activities, religious activities are also covered. Citing Supreme Court judgments, the court affirmed that if the primary purpose of an institution is charitable, ancillary religious activities do not disqualify it from being a valid charity. The court dismissed the appeal, upholding the Tribunal's decision. Therefore, the High Court ruled that an institution engaged in both charitable and religious activities can claim exemption for both under the Income-tax Act, dismissing the appeal in favor of the assessee trust.
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