2015 (10) TMI 1868 - AT - Income Tax

Registration under section 12AA denied - Held that - The finding of the Commissioner in this regard was that where the objects of the trust were for the benefit of a specific religious community, the same was hit by the provisions of section 13(1)(b) of the Act. In any case, where the trust is formulated for the benefit of a specific religious community i.e. Christian, in this case, the said trust cannot be said to be charitable in nature and is hit by basic provisions of section 2(15) of the Act, under which it is provided that charitable purpose would include relief to the poor, education, medical relief, preservation of environment and preservation of monuments or places or objects of artistic or historic interest and the advancement of any other objects of general public utility. The objects of the assessee are governed by advancement of any other objects of general public utility . Once it is for general public utility, then in case the objects of the trust are specifically for the benefit of particular religious community, then the activities carried on by such body/association cannot be said to be charitable. - Decided against assessee.

Summary

Issues:
Refusal of registration under section 12AA of the Act by the CIT -I, Pune.

Analysis:
The appeal was filed against the order of CIT-I, Pune under section 12AA(1)(b)(ii) of the Income-tax Act, 1961. The assessee raised grounds challenging the rejection of Form No.10A under section 13(1)(b). The appeal process was delayed multiple times due to the absence of the assessee. The main issue revolved around the refusal of registration under section 12AA by the CIT -I, Pune. The applicant trust had applied for registration under section 12A but faced challenges due to mixed charitable and religious objects in its trust deed.

The Commissioner requested various documents and information from the applicant, including proof of charitable activities, bank account details, and statements of accounts. Despite initial non-compliance, the applicant later submitted written submissions. The Commissioner noted that while the trust had charitable objects, it also had religious objectives, particularly benefiting the Christian community. The Commissioner questioned the charitable nature of the trust due to these specific religious objectives and the mixed nature of its activities. The applicant argued that its objects fell under the ambit of "any other objects of general public utility" as per section 2(15) of the Act.

The Tribunal found that the trust failed to address the Commissioner's concerns regarding its specific religious objectives benefiting Christians. The Tribunal highlighted specific trust objects aimed at the Christian community, such as creating Christian music and spreading the Christian religion. It emphasized that activities benefiting a specific religious community could not be considered charitable under section 2(15) of the Act, which defines charitable purposes. As the trust's objects were deemed to benefit a particular religious group, it did not qualify as charitable, leading to the denial of registration under section 12A. Therefore, the Tribunal upheld the Commissioner's decision and dismissed the appeal raised by the assessee.

In conclusion, the Tribunal upheld the denial of registration under section 12AA of the Act due to the trust's specific religious objectives benefiting Christians, which conflicted with the definition of charitable purposes under the Income-tax Act. The judgment emphasized the importance of aligning trust activities with general public utility to qualify as charitable and highlighted the impact of specific religious objectives on charitable status.