2012 (3) TMI 347 - AT - Income Tax

Summary

Issues involved: Rejection of registration under section 12AA of the Income-tax Act and denial of approval under section 80G(5)(vi) of the Act.

Summary:
- The assessee, a trust, appealed against the rejection of its registration under section 12AA and denial of approval under section 80G(5)(vi) by the Commissioner of Income-tax-II.
- The trust initially applied for registration which was rejected due to a religious object clause in the trust deed. The trust later amended the object clause by deleting the religious term.
- The Commissioner found the amendment invalid as it was not done through the proper legal process, and rejected the application under section 12AA and 80G(5).
- The trust argued that charitable and religious objects can coexist as long as no income is used for non-charitable or non-religious purposes.
- The Departmental representative contended that the appeals were not maintainable as the objectionable word was not removed as required.
- The Tribunal found the amendment to the object clause invalid and upheld the rejection of approval under section 80G(5)(vi) due to the presence of a religious term in the object clause.
- The trust's appeal under section 12AA was partially successful, while the appeal under section 80G(5)(vi) was denied based on legal grounds.

In conclusion, the Tribunal ruled in favor of the assessee regarding the registration under section 12AA but upheld the denial of approval under section 80G(5)(vi) due to the presence of a religious term in the trust's object clause.