2013 (5) TMI 1030 - AT - Income Tax

Summary

Issues Involved:
1. Refusal of registration u/s 12AA to the assessee trust.
2. Validity of amendments in the objects of the trust.
3. Classification of the trust as public or private.
4. Legality of the trust's expenditure on maintenance of property.

Summary:

1. Refusal of registration u/s 12AA:
The ld. CIT(A) refused registration u/s 12AA, citing that the trust is associated with a particular religion/community, attracting Section 13(1)(b). Additionally, the trust's activities did not align with its stated objects, and it was deemed a private trust due to having only one settler/trustee.

2. Validity of amendments in the objects of the trust:
The assessee trust argued that amendments to its objects were valid as they were registered with the Asstt. Commissioner, Devsthan Vibhag, Jaipur, under the Rajasthan Public Trust Act, 1959. The trust deed allowed trustees to alter rules with prior approval. The trust cited precedents from the Hon'ble Supreme Court and Rajasthan High Court to support the validity of amendments approved by competent authorities.

3. Classification of the trust as public or private:
The assessee contended that the trust is a public trust, as its benefits are available to the public without distinction of caste, community, or creed. The trust's objects, both original and amended, were for public welfare and not for any individual or group. The Tribunal agreed, noting that the trust's registration under the Rajasthan Public Trust Act, 1959, and its objects confirmed its status as a public charitable trust.

4. Legality of the trust's expenditure on maintenance of property:
The Tribunal found that the trust's activities, including the maintenance of temples, were charitable in nature. Even without written authorization, the maintenance and management of temples were deemed charitable activities. The Tribunal disagreed with the ld. CIT's view that maintaining temples according to specific rituals would make the trust's activities non-charitable.

Conclusion:
The Tribunal directed the ld. CIT to reconsider the matter afresh for granting registration u/s 12AA, concluding that the trust's objects and activities were charitable and aligned with the requirements for registration. The appeal of the assessee was allowed.