Assessee-Trust Created with Both Charitable and Religious Objects Is Fully Entitled to Section 12AA Registration
Issue
Whether Section 12AA differentiates between trusts created for charitable vs. religious purposes, and whether a trust established with both charitable and religious objects is eligible for registration under Section 12AA of the Income-tax Act, 1961.
Facts
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Nature of Trust: The assessee-trust was created with objects encompassing both charitable and religious activities.
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Application for Registration: The trust filed an application seeking registration under Section 12AA to claim tax benefits under Section 11 of the Income-tax Act, 1961.
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Core Question Raised: The statutory authority evaluated whether Section 12AA disqualifies or differentiates trusts that are established for dual (charitable and religious) objects or for only one of these objects.
Decision
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No Statutory Distinction: Held that Section 12AA makes no distinction between trusts created for charitable purposes, religious purposes, or a combination of both [Paras 4 and 5].
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No Disqualification: Held that even if a trust is not created exclusively for both objects together (or is created for either one), the law contains no disqualification preventing it from applying for or receiving registration [Paras 4 and 5].
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Entitlement to Registration: Held that since the assessee-trust met the legal requirements and possessed both charitable and religious objects, it is fully entitled to registration under Section 12AA [Paras 4 and 5].
Key Takeaways
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Unified Eligibility: Section 12AA governs registration for both charitable and religious trusts equally; pursuing dual objects (charitable and religious) does not bar a trust from registration.
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Absence of Exclusionary Language: The statutory scheme under Section 12AA does not mandate an “exclusive” focus on purely charitable or purely religious objects to qualify for registration benefits under Section 11.
HIGH COURT OF MADRAS
Commissioner of Income-tax
v.
Sahasra Linga Yoga Anjaeya Saptharishi Peedam Seva Trust*
Dr. Anita Sumanth and S. Raveekumar, JJ.
TCA. No. 306 of 2012
SEPTEMBER 8, 2026
J. Narayanasamy, Senior Standing Counsel for the Appellant.
JUDGMENT
Dr. Anita Sumanth, J.- Mr.J.Narayanasamy, learned Senior Standing Counsel for the appellant/Department, circulates a decision of this Court in CIT v. Arulmigu Sri Kamatchi Amman Trust [TCA.No.643 of 2011, dated 25-1-2012], which he says covers the issue.
2. The substantial question admitted in the present matter is as follows:-
“Whether on the facts and circumstances of the case, the Tribunal was right in holding that the assessee trust is entitled for registration under Section 12AA of the Act.”
3. The questions that arose in Shri Kamatchi Amman’s case are as follows:-
“1. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the assessee trust in entitled to registration under Section 12AA of the Act, even though the trust not entitled to claim exemption since the trust has twin objectives which are both charitable and religious in nature?
2. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in directing the Commissioner of Income-tax to grant registration under Section 12AA of the Act to the assessee trust, even though the assessee not established two parameters i.e., genuineness of the trust and charitable activities carried out in terms of the trust deed in terms of the provisions of Section 12AA[1][b][ii] of the Income Tax Act, 1961?”
4. The Tribunal, in accepting the case of the assessee that it is entitled to registration under Section 12AA, has proceeded on the basis that the deed of trust contained a mixture of both religious and charitable objections.
5. In light of the decision in Shri Kamatchi Amman’s case, the operative portion of which is extracted hereunder, the question is answered in favour of the assessee.
“5.We have carefully considered the above submission. For the purpose of making an application under Section 12AA, the applicant must apply in Form 10. The said Form prescribes the format of the notice of accumulation of income to be given by charitable and religious trusts under Section 11[2] of the Act. For the purpose of availing the benefit of Section 11, registration is required. Section 11[1] [a] reads as under:-
“11[1]. Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income– [a] income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of fifteen per cent of the income from such property;”
6. From a reading of the above, it is clear that the income derived from the property held under trust wholly for charitable or religious purposes, shall not be included in the total income of the Trust. Therefore, the said provision would be applicable to both the Trusts established with the object of charitable as well as religious purposes. Therefore, Section 12AA of the Act does not make any difference between the Trusts created with the object of charitable and religious purposes and, even if the Trust is not created with both the objects, law does not make any disqualification for the trust to make an application for registration. Therefore, the Tribunal has correctly applied the provision of law and allowed the appeal, which finding is based on valid material evidence. The finding of the Tribunal is not perverse and it is a question of fact. Therefore, we find no ground to cause our interference into the order passed by the Tribunal. Accordingly, the order passed by the Tribunal is confirmed and both the substantial questions of law raised herein are answered against the Revenue.
7. In the result, the appeal is devoid of merits and hence the same is dismissed.”
6. This Tax Case (Appeal) is dismissed in the above terms. No costs.