Commissioner of Income Tax vs Shri Digamber Jain Mandir

R.M. Lodha. J.

The appeal raises following substantial questions of law:

(i) Whether on the facts and circumstances of the case, the Tribunal was right and justified in granting the approval to the assessee trust u/s 80G of the Act, when it is not entitled to hear appeal against the order of the CIT passed u/s 80G of the Act in view of Section 253(c) of the Act of 1961 ?

(ii) Whether the Tribunal was justified in granting registration to the assessee trust u/s 12A of the Act, ignoring the fact that it had religious purpose and not charitable purpose ?

Appeal is admitted and heard finally at this stage by consent of the counsel for parties.

The counsel for the parties are ad idem that no appeal lay to the Tribunal from the order passed by the CIT on the application u/s 80G of Income Tax Act, 1961. In other words, the counsel for the assessee concedes that the appeal preferred by the assessee challenging the order of the CIT on the application u/s 80G was not maintainable and the order passed by the Tribunal in setting aside the order of CIT insofar application u/s 80G is concerned is without jurisdiction. Thus, answer to the question No. (i) has to be in the negative and we order accordingly.

Insofar as question (ii) is concerned, the counsel for the revenue does not dispute that Section 12A does not prohibit registration of the trust whose objects are religious as well as charitable. The view taken by the Madras High Court in New Life in Christ Evangelistic Association Vs. Commissioner of Income Tax and Another, is not challenged by the counsel for the revenue. He admits that there is no judgment to the contrary. However, the submission of the counsel for the revenue is that the Authorised Representative of the assessee admitted before the CIT that the purpose of seeking registration u/s 12A was to get the approval u/s 80G of the Act and, therefore, the Tribunal was not right in holding that the trust having religious objects and purposes could be registered.

Section 12A of Income Tax Act, 1961 reads thus:

12A. The provisions of Section 11 and Section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely--

(a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the CIT before the 1-7-1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered u/s 12AA:

Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of Sections 11 and 12 shall apply in relation to the income of such trust or institution,--

(i) from the date of the creation of the trust or the establishment of the institution if the CIT is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons;

(ii) from the 1st day of the financial year in which the application is made, if the CIT is not so satisfied;

(b) where the total income of the trust or institution as computed under this Act without giving effect to the provisions of Section 11 and Section 12 exceeds the maximum amount which is not chargeable to Income Tax in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below Sub-section (2) of Section 288 and the person in receipt of the income furnish