Thereupon The Assessee Filed An Appealbefore The Income Tax Appellate Tribunal (Hereinafterreferred To As The Triddunal For Snort). Tne Tribdunal By An.order Da v. Barkate Saifiyahsociety, 213 Itr 492 Held That A Trust , Which Has.religious As Well As Charitable Purposes Can Also Be.registered Under Section 12Aa Of The Act

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20 DAY OF NOVEMBER 2070. PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD BETWEEN: LT.A. NCO.314 OF 2016 COMMISSIONER OF INCOME TAX (EXEMPTIONS)C.R. BUILDINGS, UNITY BUILDING ANNEXE|MISSION ROAD, BANGALORE. (BY SRI. E.I. SANMATHI, ADV., FOR|SRI. JEEVAN J. NEERLAGI, ADV.,) — APPELLANT. AND* SRI. MARAMAA TEMPLE SEVA TRUST|NO.11, MARAMMA TEMPLE STREET|1ST MAIN ROAD, VYALIKAVALBANGALORE-560003.PAN; . (BY SRI. RAGHAVAN M, ADV.) .., RESPONDENT THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT,|1961L ARISING OUT OF ORDER DATED 30.10.20L5 PASSED IN ITANO.818/BANG/2015. (1) DECIDE THE FOREGOING QUESTION OF LAW AND/OR|SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BYTHE HON BLE COURT AS DEEMED FIT.(II) TO SET ASIDE THE APPELLATE ORDER DATED30.10.2015 PASSED BY THE ITAT, A BENCH, BENGALURU, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEE'S CASE, IN APPEALPROCEEDINGS NO.ITA NO.818/BANG/2015. |(III) GRANT SUCH OTHER RELIEF AS DEEMED FIT,INTEREST OF JUSTICE. THIS|LIACOMING|ONFOR.HEARING,THISALOK ARADHE J.,DELIVERED THE FOLLOWING: | DAY, | JUDGMENT This appeal under Section 260A of the Income TaxAct, 1961 (hereinafter referred to as the Act for short)Nas been preferred by the revenue. The appeal wasadmitted by a bench of this Court vide order dated10.10.2017 on the following substantial question of law: (i) Whether, on the facts and incircumstances of the case, the Tribunal Is right in directing the Commissioner of[ncome_Tax.(Exemptions)to.grantregistration under section 12-AA of the Act|by holding that class of beneficiaries are|undoubtedly public or a wide section ofpublic when the assessee is Naving mixedobjects, some of which are charitable andsome of whicn are religious and, as SUC),|theassesse'sapplicationWasrigntly|rejected by the Commissioner of Income| Tax.(Exemptions)and,Moreover,theingredients of section 12-AA were. notSatisfied in the case of the assessee. (ii) Whether, on the facts and incircumstances of the case, the Tribunal Is right in not considering the issue pertainingrejection of 80G registration wide orderpassed under section 80G(v)(vi) of the Act. 2.|Facts leading to filing of this appeal brieflystated are that the assessee is a trust, which is.admittedly engaged in religiouS as well as charitableactivities.The.aSSe@SSCEfiledan|application.for.registrationunder|Section1LAZAoftheAct.On|08.09.2014 before the Commissioner of Income Tax!(Exemptions). The aforesaid authority by an order dated2/.03.2015 inter alia held that from perusal of theobjects of the trust as mentioned in the trust deed, it is evident that the object of the trust is religious as well as.charitable and of any other object of general publicutility under Section 2(15) of the Act. It was further held. that under Section 12AA of the Act read with Section 11,12 and 13, a trust or institution can be registered only|under two exclusive categories viz., wholly for charitablepurposes or wholly for religious purposes and there is nothird category i.e., partly for charitable purposes and|partly for religious purposes. Since, the trust has objectsfor religiouS purposes as well as charitable purposes,|therefore, the same cannot be registered under Section|12AA of the Act. In the result, the application wasrejected. 3Thereupon the assessee filed an appealbefore the Income Tax Appellate Tribunal (hereinafterreferred to as the tridDunal for snort). Tne tribDunal by an.order dated 30.10.2015, by placing reliance on decision.of Gujarat High Court in CIT VS. Barkate Saifiyah|Society, 213 ITR 492 held that a trust , which has.religious as well as charitable purposes can also be.registered under Section 12AA of the Act. In theaforesaid factual background, this appeal Nas been filed. 3Thereupon the assessee filed an appealbefore the Income Tax Appellate Tribunal (hereinafterreferred to as the tridDunal for snort). Tne tribDunal by an.order dated 30.10.2015, by placing reliance on decision.of Gujarat High Court in CIT VS. Barkate Saifiyah|Society, 213 ITR 492 held that a trust , which has.religious as well as charitable purposes can also be.registered under Section 12AA of the Act. In theaforesaid factual background, this appeal Nas been filed. 4Learned counsel for the revenue submittedthat as per Section 11(1)(a) of the Act any institution ortrust, has to be wholly charitable or wholly religious andit cannot be partly religious and partly charitable. It isalso pointed out that the expression used in Section.11(1)(a) of the Act is ‘wholly for charitable or religious|purposes. It is also pointed out that the objects of the|trust extracted in para 4 of the order passed by thetribunal are not wholly charitable in nature andtherefore, the assessee has rightly denied the benefit of exemption. In support of aforesaid submission, reliancehas been placed on decision in-‘COMMISSIONER OF.INCOME TAX VS. SHERVANI CHARITABLE TRUST,(2007) 164 TAXMAN 268.On the other hand, learnedcounsel! for the assessee Nas supported the order passedby the tribunal and has submitted that tribunal byplacing reliance on the decision of the Gujarat High)Court. 5.|We have considered the submissions made.by learned counsel for the parties and have perused therecord. Section 11 of the Act deals with the income from.the property held for charitable or religious purposes. In|.FAZLUL RABBI PRADHAN VS, STATE OF WESTBENGAL’, AIR 1962 SC 1722while dealing with theexpression ‘charitable purpose and religious purpose,,|the Supreme Court held that for satisfying the test for|charitable purpose, there must always be some element.of public benefit. In |RAMCHANDRA SHUKLA VS.SHRI MAHADEOJI', AIR 1970 SC 458has held that.in Hindu system there is no line of demarcation between.religion and charity is regarded as part of the religion.In CIT vs. Barkate supra, Gujarat High Court by placing)reliance on aforesaid decisions of the Supreme Courtheld that the words ‘trust for charitable purpose would.include even trust for advancement of religion. It may.be noted that if the object of the trust is partly religiousand partly charitable, so long as no part of income or corpus is utilized for a purpose, which is not eithercharitable or religious, a trust is entitled to exemption.under Section 11(1)(a) of the Act and such a trust is.entitled for registration under Section 12AA of the Act.|We are in agreement with the view taken by High Court|of Gujarat. The decision relied upon by the revenue in|case of SHERVANI CHARITABLE TRUST supra has no.application to the facts of the case as in the aforesaidcase only 1/3rd of the income was to be spent on.charitable objects and remaining income was to be spenton maintenance and support of members of the settlors.family. Therefore, in the aforesaid case it was held thatthe assessee is not entitled to the benefit of exemption,which admittedly is not a case here. In view of preceding analysis, the substantialquestions of law framed by a bench of this court areanswered against the revenue and in favour of tneaSSesSsee, ������������������������������������������������������������������������������������������������ ����������� ��� �����������