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TMI Blog2024 (6) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... bound to pass order within 15 days which he has failed and therefore the same be cancelled and approval u/s.12AB as per Form No.10B be granted. 2. (a) Without prejudice to above your Appellant submits that CIT(E) has wrongly interpreted various clauses of the Appellant Trust and inviting attention to Medical Relief his interpretation of the Trust is for the benefit religious community or cast i.e. Muslims is totally mis-construed and wrongly interpreted and the clause is of relief to all without cast or credit. (b) Your Appellant further submits that the clause referred in the Trust Deed has to be interpreted in general and your Appellant refers and relies on the judgement of Lucknow IT AT in the case of Malik Hasmullam Islamic Education & Welfare Society vs. CIT, 24 taxmann.com 93 (Lucknow) and submits that the interpretation of learned CIT(E) was erroneous. 3. (a) Your Appellant submits that the Appellant is old Trust to with registration u/s.12A and u/s.80G were already granted and the Appellant has not made any change in activities or alternation in objects of the Trust and the same activities which were held genuine in past years have been continued and that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. While rejecting the application filed by the assessee, CIT (Exemptions) made the following observations: "Various courts have held that the provisions of sec 13(1)(b) of the Act is not applicable in the case of a religious trust. The provision of sec 13(1)(b) of the Act is applicable to a charitable trust, has been settled by the Hon'ble Supreme Court in the case of CIT vs. Palghat Shadi Mahal Trust, reported in 120 Taxman 889, wherein in the case of a public charitable trust, the Hon'ble Apex court held that where the benefit is available to Muslims from all over the world, none of whom except in Kerala are backward classes, the provision of sec 13(1)(b) would be attracted and therefore the trust is not entitled for exemption u/s 11 of the Act. Even some courts had held that in lease of composite trust/institution, i.e. charitable cum religious, the provision of sec 13(1)(b) of the Act is not applicable. However, the said controversy was resolved by the Hon'ble Supreme Court in the case of CIT vs. Dawoodi Bohara Jamat, reported in 43 taxmann.com 243, wherein the Hon'ble Apex Court held that the provision of sec 13(1)(b) of the Act is applicable even to a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t/assessee cannot be granted registration u/s 12A of the Act. 10. In view of the above, the present application filed in Form No. 10AB for the registration u/s 12Ab of the IT Act, 1961 is rejected." 4. The assessee is in appeal before us against the aforesaid order passed by CIT (Exemptions) rejecting the application filed by the assessee/applicant trust. Before us, the Counsel for the assessee placed reliance in the case of Jamiatul Banaat Tankaria 160 taxmann.com 358 (Ahmedabad - Trib.), wherein the ITAT held that where objects of assessee-trust were primarily charitable rather than favouring any specific religious community, CIT(E) was not justified in denying registration under Section 12A, by invoking Section 13(1)(b) as the said provisions would be attracted only at time of assessment and not at time of grant of registration. . Further, the Counsel for the assessee submitted that in the instant facts, firstly, from the object it is evident that the applicant trust is not formed with the object of only benefiting one particular community i.e. the Muslim community and further, it was submitted that in view of the aforesaid decision cited above, rendered by the jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al purposes. The Madarsa as a Mohommedan institution of teaching does not confine instruction to only dissipation of religious teachings but also contributes to the holistic education of an individual. Therefore, it cannot be said that the object (d) would embody a restrictive purpose of religious activities only. Similarly, assistance by the respondent-trust to the needy and poor for religious activities would not divest the trust of its altruist character. 41. Therefore, the objects of the trust exhibit the dual tenor of religious and charitable purposes and activities. Section 11 of the Act shelters such trust with composite objects to claim exemption from tax as a religious and charitable trust subject to provisions of Section 13. The activities of the trust under such objects would therefore be entitled to exemption accordingly. 42. We would now proceed to examine the objects under the provisions of Section 13(1)(b) of the Act. It becomes amply clear from the language employed in the provisions that Section 13 is in the nature of an exemption from applicability of Sections 11 or 12 and the examination of its applicability would only arise at the stage of claim under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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