INCOME TAX ACT, 1961

--Charitable trust--Registration under section 12AARegistration denied on being object religious in nature--Revenue denied application of registration under section 12AA of assessee-trust for the reason that object clause 4(a) of the trust deed included an object of a religious nature. Assessee-trust in view of said objection amended its object clause 4(a) by deleting the word 'dharmik' therein. Revenue however, found that amendment to object clause of the trust deed was not valid as clause 10 of trust deed did not authorise the Board to change the object of trust as defined in the trust deed. Held: Was not justified as the assessee was neither aware of the decision in relation to the manner in which amendment was to be carried out, which it sought to do, in fact with alacrity nor even that it was in law permissible to retain objects bearing charitable and religious nature in its charter as held by the higher courts of law. More so, the only prohibition of revenue was that section 13(1)(b) excludes a trust or institution created or established for the enefit of any particular religious community or caste (save as listed in Explanation 2 of the section), providing that exemption under sections 11 and 12 would not apply to such a case. The same was admittedly not applicable in the instant case. Thus, denial of registration was not valid. Held: That being the case, the revenue's only objection, i.e., apart from the merits of the assessee's case is that had actually complied with the order dated 2-5-2011. But then, could be department be allowed to contend that the change (in te object clause) is not valid and, at the same time, object to the assessee pleading its case on merits on the basis of the pre-amended objects. There is no presumption in law that everyone knows the law (refer Motim Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh (1979) 118 ITR 326 (SC). It is apparent that the assessee was neither aware of the decision by the Honble Apex Court in relation to the manner in which the amendment is to be carried out, which it sought to do, in fact with alacrity, nor even that it is in law permissible to retain objects bearing charitable and religious nature in its charter, i.e., as held by the higher courts of law. The delay in challenging the denial of registration under section 12A of the Act within the prescribed time in the present case, thus, deserves to be condoned. The only prohibition in this regard is contained in section 13(1)(b) of the Act, which excludes a trust or institution created or established for the benefit of any particular religious community or caste (save as listed in Explanation 2 to the section), providing that exemption under sections 11 and 12 would not apply to such a case. The same is admittedly not applicable in the instant case. [Para 7]

Income Tax Act, 1961 Section 12AA

Income Tax Act, 1961 Section 3(1)(b)

INCOME TAX ACT, 1961

--Deduction under section 80G--Approval or continuance to institution under section 80G(5)(vi)Pre-requisite condition of registration under section 12A not satisfied--assessing officer denied exemption under section 80G(5) as the pre-requisite condition of registration under section 12A was not satisfied. Held: ,/i>Was justified as the assessee was directly hit by the provision of section 80G(5)(iii) read with Explanation 3 wherein the said explanation only required ascertaining whether one purpose within the institutions are fund's overall charitable purpose is wholly or substantially wholly, of a religious nature as the object 'Dharmik' in the object clause of assessee indeed was. Moreoso, there was nothing in the object clause of assessee to indicate a bar on the assessee-trust limiting the expenditure on religious objects to S per cent of the total income for a particular year.

Income Tax Act, 1961 Section 80H(5)(vi)

Income Tax Act, 1961 Section 12A