Deepak R. Shah, A.M.: This appeal by assessee is directed against order of learned CIT(A)- XXVII, New Delhi dt. 31st Dec., 2004 in appeal against assessment framed under s. 143(3), r/w s. 254 of Act. appellant filed return of income on 26th Oct., 2003 declaring nil income. assessment was framed under s. 143(3) on 5th Jan., 1996 at total income of Rs. 4,99,580. It was held that since appellant trust is not registered under s. 12A of Act, benefit of exemption under s. 11 cannot be given. Thus, after reducing expenditure as per income and expenditure account, surplus was brought to tax. Subsequent to passing of said assessment order, appellant society had been granted registration under s. 12A vide order dt. 4th Nov., 1996 w.e.f. 1st April, 1988. assessee, therefore, requested for rectification of order and for claim of exemption under s. 11 of Act. rectification application was rejected and order refusing rectification under s. 154 was confirmed by learned CIT(A). On further appeal before Tribunal, Tribunal held that subsequent order of registration had rendered AO s finding that there was no registration mistake apparent from record. Tribunal, thereafter, set aside matter to AO to examine case in light of requirement of ss. 11, 12 and 13 and to determine eligibility for exemption and pass fresh order as per law. Pursuant to direction of Tribunal, AO took up issue for framing assessment. AO found that during year total donation received were to tune of Rs. 29,01,392. Out of this foreign donation of Rs. 27.48 lakhs was mainly received from Pocket Testament League, UK and USA and Word of Outreach. AO noted that following expenses were incurred: Conference Expenses Rs. 7,34,404 Literature Expenses Rs. 4,84,800 Team Expenses Rs. 2,80,734 Training Expenses Rs. 2,28,165 Salary and honorarium Rs. 2,12,277 Establishment expenses Rs. 3,79,041 Including Gen. Admn., Office Running, repair, maintenance & ors. AO found that conference expenses was incurred on boarding, food and travelling of delegates for this conference. As per advertisement made in regard to conference, only pastors, Christian workers and Pastors wives were eligible for participation. conference was held for studies on eliminating distinction in body of Christ, Church growth and developing core staff etc. statement of chief functionary was recorded about purpose of t h e conference. It was stated that special conference was organized for Pastors, church leaders and delegates from churches to give opportunity to come together and to give teachings based upon Bible value and ethics. AO also observed that literature was distributed for uplift of disturbed people. literature contained mainly stories and teachings from Bible. AO was, therefore, of opinion that activities have been carried out in such way that it is for benefit of particular religious community i.e., Christianity. AO proposed to invoke provisions of s. 13(1)(b) so as to deny exemption under ss. 11 and 12 of Act. appellant submitted that amount incurred on conference was spent on ordinary kind of food, stay and conveyance for participants and it was donated by "Word Outreach". By this activity, there was no direct or indirect benefit to participant. benefit of this activity is for public at large. AO held that benefit of exemption under ss. 11 and 12 would not be available to any trust which has created for benefit of any religious community. AO found that society has incurred various expenditure on teams which have been sent to different parts to serve victims of flood for community service, to educate masses etc. Such activities are charitable in nature. However, society has also applied its income for benefit of particular religious community i.e., Christianity and hence, benefit of exemption under s. 11 was denied. entire donation was treated as income and only those expenditure i.e., on account of salary, honorarium and other would be expenses which are incurred towards earning receipts were allowed and other expenses stated to be on object of trust were disallowed. total income was determined at Rs. 23,10,074. Before learned CIT(A), assessee submitted that appeal before Tribunal was against order refusing to rectification under s. 154. It is only order under s. 154 has to be amended and in such rectification, income cannot be exceeded as originally assessed. It was also submitted that benefit of exemption under s. 11 cannot be denied as assessee is to be treated as charitable as well as religious trust and hence, s. 13(1)(b) is not attracted. Learned CIT(A) confirmed action of AO and hence, this appeal. Learned counsel for assessee reiterated submissions made before CIT(A). He also relied upon following case laws in support of his arguments: (1) CIT vs. Chandra Charitable Trust (2006) 206 CTR (Guj) 418: (2006) 156 TAXMAN 19 (Guj); (2) CIT vs. Social Service Centre (2001) 169 CTR (AP) 130: (2001) 250 ITR 39 (AP); (3) CIT vs. Barkate Saifiyah Society (1995) 213 ITR 492 (Guj). Learned Departmental Representative, on other hand, relied upon appellate order. We have carefully considered relevant facts, arguments advanced and case laws cited. As observed by AO in p. 7 of his order, society has incurred various expenditure on teams which have been sent to different parts of various expenditure on teams which have been sent to different parts of country to serve victims of flood for community service, to educate masses etc. These activities are no doubt charitable in nature. Secs. 11 and 13 which are relevant for purpose of discussion herein are extracted: "Sec. 11. Income from property held for charitable or religious purposes. (1) Subject to provisions of ss. 60 to 63, following income shall not be included in total income of previous year of person in receipt of income (a) income derived from property held under trust wholly for charitable or religious purposes, to 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 extent to which income so accumulated or set apart is not in excess of twenty-five per cent of income from such property." "Sec. 13. (1) Nothing contained in s. 11 or s. 12 shall operate so as to exclude from total income of previous year of person in receipt thereof (a) ** ** ** (b) in case of trust for charitable purposes or charitable institution created or established after commencement of this Act, any income thereof if trust or institution is created or established for benefit of any particular religious community or caste," phrases charitable purpose is defined under s. 2(15) of Act which reads as under: "Sec.2(15) Charitable purpose includes relief of poor, education, medical relief and advancement of any other object of general public utility." exemption under s. 11(1)(a) is available where income derived from property held under trust for charitable or religious purposes to extent to which such income is applied to such purposes in India. Thus, even if income is earned by trust, which is charitable as well as religious and is part of income is applied for religious purposes, exemption under s. 11(1)(a) is still available. issue to be examined is that whether in view of provisions of s. 13(1)(b), exemption under s. 11 is to be denied or not. Hon ble Gujarat High Court in case of Barkate Saifiyah Society (supra) held as under: "19. By reading aforesaid section, it is clear that it cares out exception to s. 11 or 12 by providing that in those case which are covered by cls. (a),(b), (c) and (d), provisions of s. 11 or 12 shall not operate. Broadly speaking, it is divided into three categories and exception is carved out in case of private religious trusts, charitable trusts and charitable or religious trust if conditions mentioned in cls. (a), (b), (c) and (d) are satisfied. Firstly, any part of income from property held under trust for private religious trust which does not enure for benefit of public is not to be excluded as provided under s. 11. That means benefit of s. 11 would not be given to trust which is private religious trust which does not enure benefit of public [as per cl. (5)]. Secondly, any income of trust for charitable institution is created or established after commencement of IT Act (sic). In each case authority is required to find out whether trust for charitable purposes is established for benefit of particular religious community or caste. If it is so established, then provisions of s. 11 would not be applicable. Thirdly, cls. (c) and (d) carve out exception in case of trust for charitable or religious purposes or charitable or religious institution. It provides for certain cases in which any income thereof enures, or is used or applied, directly or indirectly, for benefit of any person referred to in sub-s. (3). In cls. (c) and (d), legislature has used phrase trust for charitable purposes or charitable institution. It does not deal with trust for religious purposes. It only deals with trust for charitable purposes or charitable institutions which are established for giving relief to poor or medical relief or for education of any particular religious community or caste. Clauses (c) and (d) would be applicable to trust which is either for charitable purposes or religious purposes or partly charitable purposes and partly religious. Hence it can be stated that if charitable trust is established only for benefit of any particular religious community or caste, then provisions of s. 11 would not be applicable. But in case of trust or institution for religious purposes wherein certain activities can be termed as charitable activities for benefit of any particular religious community or caste, cl. (b) would not be applicable. In view of aforesaid discussion, in our view, Tribunal has rightly held that s. 13(1)(b) applies only to trusts which were purely for charitable purposes and assessee trust was charitable as well as religious in nature and assessee was entitled to exemption under s. 11. Hence, question No. 1 i s answered in affirmative in favour of assessee and against Revenue." This decision was followed in case of Chandra Charitable Trust (supra) wherein Hon ble Gujarat High Court held as under: "5. question, that what should be principle adopted and whether Jainism is lifestyle or religion, would lose much of its importance in view of judgment of this Court in matter of CIT vs. Barkate Saidiyah Society (supra). If Jainism is accepted to be religion and from covenants of trust deed it can be spelt out that not only to propogate Jainism or help and assist maintenance of temple, Sadhus, Sadhvis, Shraviks and Shravaks, yet other goals are set in trust deed, then trust would become charitable trust, so also religious trust or it can be addressed as charitable religious trust, and, if that be so, s. 13(1)(b) would not be applicable. Once basic question is answered against interests of Revenue, then other questions can conveniently be decided against interests of Revenue." Hon ble Andhra Pradesh High Court in case of Social Service Centre (supra) held that institution which is registered as charitable institution can claim exemption for activities which are of religious nature. Following aforesaid decision, it can be held that since appellant trust was carrying charitable purpose also and even if part of income was applied for religious activities, benefit of exemption under s. 11(1)(a) cannot be denied. AO is directed to grant exemption under s. 11(1)(a). alternate ground that income should be restricted as originally computed will not survive. In result, appeal is allowed. *** POCKET TESTAMENT LEAGUE (INDIA) v. DEPUTY DIRECTOR OF INCOME TAX (EXEMPTION)