IMPORTANT POINT
A trust with both charitable and religious purposes is eligible for registration under Section 12AA of the Income Tax Act, 1961, provided it serves the public at large.

ORDER :

Sanjay K. Agrawal, J.

1.Heard on admission of the appeal and also on the formulation of substantial question of law.

2.The present is a Revenue’s appeal filed under Section 260-A of the Income Tax Act, 1961 (hereinafter shall be referred to as, ‘Act of 1961’) assailing the Order dated 21.9.2022 passed by the Income Tax Appellate Tribunal, Raipur Bench, Raipur (hereinafter shall be referred to as, ‘ITAT’) in ITA No.16/RPR/2019.

3.A brief overview of the case is that the Assessee Society i.e. Respondent herein had applied for its registration under Section 12AA of the Act of 1961 in Form No.10A before the Commissioner of Income Tax (Exemption), Bhopal (hereinafter shall be referred to as, ‘CIT(E)’). In order to verify the objectives and activities of the Society and to ascertain the fulfillment of the conditions mentioned under Section 12AA, the CIT(E) issued notice to the Assessee Society. The Assessee Society filed its Written Statement stating that the object of the Society is to work for the betterment of Kanya Kubj society and public at large as well and also submitted that the Society is duly registered before the Registrar of Societies, Durg and the main object of the Society as per their bye-laws are also to spread awareness of education among Kanya Kubj community, to help that community and also to educate the children of that community. However, the Joint Commissioner of Income Tax and the Assessing Officer vide their report dated 31.10.2018 did not recommend the case of the Assessee Society for registration under Section 12AA of the Act of 1961 on the ground that the Society is not doing any charitable activity. Eventually, the CIT(E) by its Order dated 28.11.2018, passed under Section 12AA(1)(b)(ii) of the Act of 1961, rejected the said application of the Assessee Society holding that the Society has not furnished any details or evidence regarding charitable work carried out by the Society for public at large and the sole object of the Society is to benefit a particular community i.e. “Kanya Kubj Samaj” which is a sub community in the Brahmin Community belonging to Kanya Kubj gotra and in that view of the matter, the Society is not entitled for registration under Section 12AA of the Act of 1961, thereby refused the registration of the Assessee Society. Feeling aggrieved and dissatisfied by the said order of the CIT(E), the Assessee Society preferred an appeal before the ITAT who by impugned Order dated 21.9.2022 allowed the appeal of the Assessee Society directing for the registration of the Society under Section 12AA of the Act of 1961. It is this order of the ITAT which is under challenge in the present appeal.

4.Mr. Amit Choudhary, learned Counsel appearing for the Appellant Revenue submits that the ITAT is absolutely unjustified in granting the application for registration of the Assessee Society under Section 12AA of the Act of 1961 and setting aside the order passed by the CIT(E) by recording a finding that is totally perverse and contrary to law and evidence on record, as the object of the Assessee Society is purely religious in nature and therefore the ITAT ought not to have entertained the appeal of the Assessee Society but should have rejected the said appeal. As such, the appeal involves substantial question of law for determination and accordingly it be formulated.

5.We have heard learned Counsel for Appellant Revenue, considered his submission made herein above and also perused the record of the case with utmost care and circumspection.

6.First of all, it would be advantageous to notice Section 12AA of Act of 1961 which deals with the registration of charitable trusts and institutions and states as under:-

“12AA. Procedure for registration.—

(1)The Principal Commissioner or Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) or clause (aa) or clause (ab) of sub-section (1) of section 12A, shall—

(a) call for such documents or information from the trus