COMMISSIONER OF INCOME TAX Vs. SOCIAL SERVICE CENTRE

JUDGEMENT

(1.) THE assessee is a trust registered under Section 12A of the Income-tax Act, 1961, as a charitable trust. THE assessee filed a return of income barring the income after claiming exemption under Sections 11 and 12. THE return was processed under Section 143(1)(a). THE case was selected for scrutiny. Notice under Section 143(2) was issued. THE assessee filed the information called for and the books of account were examined by the Assessing Officer. He found that Clause (3) of the memorandum and articles of association spelt out the aims and objects of the society which were all charitable in nature but on verification of the return and other books and statements, the Assessing Officer found that the trust was mainly engaged in religious activities. THE assessee had claimed that, it had incorporated the objects of religious purposes in its memorandum by passing the necessary resolution at an extraordinary general body meeting held on August 10, 1993. It was also pointed out that, at the time of submission of the application under Section 12A, the assessee had submitted the original printed copy of the memorandum which did not contain the said amendment to the objects clause. THE assessee also filed copies of the resolution and certificate from the Registrar of Societies. THE Assessing Officer rejected the contentions of the assessee and denied exemption under Sections 11 and 12 in respect of income applied or deemed to have been applied for religious purposes. An appeal was filed challenging the order of the Assessing Officer. THE Commissioner (Appeals) dismissed the appeal and upheld the order passed by the Assessing Officer. On further appeal, the Appellate Tribunal allowed the appeal. Hence, this appeal.

(2.) NOW the only question is, whether an institution which has been given exemption as a charitable institution can claim exemption for the activities which have been termed as religious by the Revenue ? The dispute is with regard to the following entries :

(3.) ONCE an exemption is granted for charitable activities, the religious activities are also included. Two judgments of the Supreme Court, although they were pronounced before the amendment of the definition of "charitable purpose" are still relevant. The Supreme Court held that, if the primary or dominant purpose of an institution was charitable any other object which by itself might not be charitable but was merely ancillary or incidental to the primary or dominant purpose would not prevent the trust or institution from being a valid charity. This principle had been laid down by the Supreme Court in CIT v. Andhra Chamber of Commerce , then it was reiterated in CIT v. Bar Council of Maharashtra . Considering these judgments we are of the view that the Tribunal was right. Therefore, this appeal is dismissed.