2014 (8) TMI 1209 - HC - Income Tax

Exemption u/s 11 - Denial registration under Section 12AA - whether registration can be granted to the trust with both charitable and religious objects? - HELD THAT - The issue involved in this appeal is covered by a decision of this Court M/S. SEERVI SAMAJ TAMBARAM TRUST 2014 (2) TMI 32 - MADRAS HIGH COURT wherein this Court, following the decision of this Court reported in Arulmighu Sri Kamatchi Amman Trust 2012 (2) TMI 159 - MADRAS HIGH COURT dismissed the appeal filed by the Revenue holding that the Revenue would not be justified in refusing the grant of registration at the threshold.

Summary

Issues:
1. Granting registration under Section 12AA to a trust with charitable and religious objects.
2. Granting registration under Section 12AA without established genuineness of trust and charitable activities.

Analysis:
1. The first issue raised in the appeal questions whether the Income Tax Appellate Tribunal was correct in granting registration under Section 12AA to a trust with both charitable and religious objectives based on the application of section 11(1)(a). The court referred to a previous decision and noted that the issue was already settled. The court mentioned that a similar case was dismissed previously, emphasizing that the Revenue cannot refuse registration at the threshold. Consequently, the court dismissed the appeal and ruled in favor of granting registration to the trust with dual objectives.

2. The second issue revolves around the Tribunal's direction to the Commissioner of Income Tax to grant registration under Section 12AA despite the lack of established genuineness of the trust and its charitable activities with documentary evidence. The court, in line with its previous decision, dismissed the appeal based on the principle that the Revenue cannot justify refusing registration at the initial stage. By following the precedent set in a prior case, the court ruled against the Revenue, emphasizing that registration should not be denied solely on the grounds of unestablished genuineness of the trust and its charitable activities. The court upheld the Tribunal's decision to grant registration under Section 12AA without requiring documentary evidence to establish genuineness.

In conclusion, the High Court of Madras upheld the decisions of the Income Tax Appellate Tribunal and dismissed the appeal filed by the Revenue. The court ruled in favor of granting registration under Section 12AA to a trust with both charitable and religious objectives, emphasizing that the genuineness of the trust and its charitable activities should not be a barrier to registration at the initial stage.