Trust Not Ineligible for Sec. 12A Registration Just Because Some of Its Objects Are Restricted to ‘Sunni Muslims’

Case Details: Sunni Muslim Jamat Aamena Madressa Ebdatgah Waqf Committee v. CIT (Exemption) - [2024] 161 taxmann.com 555 (Surat-Trib.)

Judiciary and Counsel Details

• • Dr A.L. Saini, Accountant Member & Pawan Singh, Judicial Member
  • Suresh K. Kabra, CA for the Appellant.
  • S.M. Keshkamat, CIT-(DR), for the Respondent.

Facts of the Case

The assessee was a Sunni Muslim trust which applied for registration under section 12AB to the CIT(E). The CIT(E) rejected the application for registration on the ground that the trust was a religious cum charitable trust, and its objects were restricted to benefiting a particular religious community or caste, “SUNNI MUSLIMS”.

Thus, the provisions of section 13(1)(b) applied to the assessee and, therefore, not eligible for exemption under section 11.

ITAT Held

On appeal, the Tribunal held that the CIT(E) denied registration based on the fact that the assessee was a religious cum charitable trust. The objects of the trust were in the nature of charitable but restricted to the benefit of a particular religious community or caste, “SUNNI MUSLIMS”.

However, it was found that all the objects are not restricted to a particular religious community. For example, the following objects of the trust were not restricted to “SUNNI MUSLIMS”:

a) To make efforts to abolish social evils and provide guidance to society as per the Sharia for social prosperity.

b) By forgetting the local discord and disputes and resolving the issues and disputes at the local level.

c) To maintain love, affection, and brotherliness with the people apart from society.

The Tribunal also referred to various objects that were held to be charitable in nature by the Courts, such as constructing colonies for poor workmen, the marriage of girls belonging to a particular community, repairs and maintenance of the samadhs of the ancestors of the family Guru and holding of mela at samadhs, etc.

Accordingly, the Tribunal directed the CIT(E) to reconsider the application of the assessee and grant registration to the assessee in accordance with the law.

List of Cases Referred to

• • CIT v. Palghat Shadi Mahal Trust [2002] 172 CTR 453/254 ITR 212/120 Taxman 889 (SC) (para 9)
  • CIT v. Dawoodi Bohara Jamat [2014] 43 taxmann.com 243/268 CTR 1/364 ITR 31/222 Taxman 228 (SC) (para 10)
  • CIT v. Kamla Town Trust [1996] 130 CTR 112/217 ITR 699/84 Taxman 248 (SC) (para 17)
  • CIT v. Bhartiya Khatri Sewa Trust [1992] 108 CTR 21/[1994] 205 ITR 96/[1992] 65 Taxman 531 (Allahabad) (para 17)
  • CIT v. Guryani Brij Balabh Kaur Trust [1980] 125 ITR 381/4 Taxman 13 (Punjab & Haryana) (para 17)
  • Smt. Ganeshi Devi Rami Devi Charity Trust v. CIT [1969] 71 ITR 696 (Calcutta) (para 17).