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2020 (4) TMI 862 - HC - Income TaxExemption u/s 11 - entitled to registration as Charitable Trust under Section 12AA read with Section 80G - HELD THAT - The issue involved in this case is no longer res integra and has been decided by the Coordinate Bench of this Court in the case of Director of Income Tax (Exemptions) -Vs- Seervi Samaj Tambaram Trust 2014 (2) TMI 32 - MADRAS HIGH COURT following the Supreme Court decision in the case of Commissioner of Income Tax -Vs- Upper Ganges Sugar Mills Ltd. 1997 (8) TMI 4 - SUPREME COURT and another case decided by the Honourable Supreme Court in State of Kerala -Vs- MP.Shantiverma Jain 1998 (5) TMI 24 - SUPREME COURT in which the Honourable Supreme Court has held that the Income Tax Act, 1961 does not make any distinction with regard to the objectives of the Charitable and Religious purposes and the Trusts having both these objectives can also be registered under Section 11 or 12AA of the Act. Tribunal was justified in allowing the appeal filed by the Assessee and upholding the registration of the Trust under Section 12AA read with Section 80G of the Act. The appeal filed by the Revenue is devoid of any merits - Decided in favour of assessee.
Issues:
1. Appeal filed by Revenue under Section 260A of the Act against the order of the Income Tax Appellate Tribunal granting registration to a Charitable Trust under Section 12AA and approval under Section 80G. 2. Substantial questions of law admitted by the Coordinate Bench regarding the entitlement of the Assessee for registration under Section 12AA and approval under Section 80G. 3. Interpretation of the law regarding registration under Section 12AA for trusts with both charitable and religious objectives. Analysis: Issue 1: The Revenue filed an appeal challenging the Income Tax Appellate Tribunal's decision to grant registration to a Charitable Trust under Section 12AA and approval under Section 80G. The Tribunal directed the DIT(E) to grant registration under Section 12AA and approval under Section 80G, citing provisions of Section 11 of the Act providing exemptions for charitable and religious institutions. The High Court upheld the Tribunal's decision, stating that the appeal lacked merit and dismissed it. Issue 2: The Coordinate Bench admitted the appeal based on substantial questions of law regarding the Assessee's entitlement for registration under Section 12AA and approval under Section 80G. The issue was considered settled based on previous judgments, including the case of "Director of Income Tax (Exemptions) -Vs- Seervi Samaj Tambaram Trust" and decisions by the Supreme Court. The High Court referenced these precedents to support the Tribunal's decision and ruled in favor of the Assessee. Issue 3: The interpretation of the law regarding registration under Section 12AA for trusts with both charitable and religious objectives was discussed. The High Court referred to the case of "CIT Vs. Arulmighu Sri Kamatchi Amman Trust" where the Tribunal allowed registration for a trust with mixed charitable and religious activities. The Division Bench clarified that the Income Tax Act does not differentiate between trusts with charitable or religious purposes, allowing both to apply for registration under Section 12AA. This interpretation was applied in the present case, supporting the Tribunal's decision to grant registration to the Charitable Trust. In conclusion, the High Court upheld the Tribunal's decision, dismissing the Revenue's appeal and ruling in favor of the Assessee's entitlement to registration under Section 12AA and approval under Section 80G. The judgment highlighted the consistent interpretation of the law regarding trusts with mixed charitable and religious objectives, emphasizing the non-discriminatory nature of the Income Tax Act in granting registration to such trusts.
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