Case: Commissioner of Income Tax, Ujjain Vs. M/s. Dawoodi Bohara Jamat

The respondent is a registered Public Trust under the M.P. Public Trusts Act, 1951. The respondent had filed an application for registration before the Commissioner of Income fax (for short "the Commissioner") as envisaged under Section 12 A read with Section 12 AA of the Act for availing the exemption under Section 11 of the Act. The Commissioner, after affording an opportunity of hearing to the applicants, had come to the conclusion that the respondent is a charitable trust and since the object and purpose of the trust is confined only to a particular religious community the same would attract the provisions of Section 13 (1)(b) of the Act and therefore, declined the prayer made for registration of the trust by his order dated 14.09.2007.4. Aggrieved by the order so passed, the respondent had carried the matter by way of an appeal before the Tribunal. The Tribunal after going through the objects of the respondent-trust has come to the conclusion that the respondent is a public religious trust as the objects of the trust arc wholly religious in nature and thus, the provisions of Section 13 (1)(b) which are otherwise applicable in case of charitable trust would not be applicable and therefore, held that the respondent-trust is entitled to claim registration under Sections 12 A and 12 AA and accordingly, allowed the appeal and set aside the order passed by the Commissioner and further directed the Commissioner of Income fax to grant registration under Section 12 A read with Section 12 AA of the Act to all the applicant-trusts.5. Aggrieved by the aforesaid decision passed by the Tribunal, the Revenue approached the High Court under Section 260-A of the Act. The court primarily, is of the view that the decision of the Tribunal is rendered purely on the factual matrix of the case and therefore, it would be improper to disturb the finding of fact so arrived by the Tribunal. Secondly, the court has observed that the provisions of Section 13 (1)(b) would not be applicable to the respondent-trust as the trust is not created or established for the benefit of any particular religious community or caste. Consequently the court has dismissed the appeal filed by the Revenue by judgment and order dated 22.06.2009.6. Disturbed by the aforesaid, the Revenue is before us in these appeals.

Reasoning: 49. In the present case, the objects of the respondent-trust are based on religion tenets under Quran according to religious faith of Islam. We have already noticed that the perusal of the objects and purposes of the respondent-trust would clearly demonstrate that the activities of the trust though boll charitable and religious are not exclusively meant for a particular religious community The objects, as explained in the preceding paragraphs, do not channel the benefits to any community if not the Dawoodi Bohn Community and thus, would not fall under the provisions of Section 13 (1)(b) of the Act.50. In that view of the matter, we are of the considered opinion that the respondent-trust is a charitable and religious trust which does not benefit any specific religious community and therefore, it cannot be held that Section 13 (1)(b) of the Act would be attracted to the respondent-trust and thereby, it would be eligible to claim exemption under Section 11 of the Act.