1984 (12) TMI 61 - HC - Income Tax

Summary

Issues Involved:
1. Whether the assessee was entitled to relief u/s 80G on donations paid to Vishwa Mangal Trust.
2. Interpretation of the term "charitable purpose" in the context of s. 80G(5) and its third Explanation.

Summary:

Issue 1: Entitlement to Relief u/s 80G
The primary issue was whether the assessee was entitled to relief u/s 80G on donations made to Vishwa Mangal Trust. The Income-tax Appellate Tribunal initially held that the assessee was entitled to the relief. However, upon examining the trust deed, it was found that clause 2(h) of the trust deed, which included the establishment and maintenance of public places of worship and prayer halls, was of a religious nature. The High Court concluded that this purpose was wholly religious and thus did not qualify for the deduction u/s 80G, as per Explanation 3 to s. 80G(5).

Issue 2: Interpretation of "Charitable Purpose"
The court examined the definition of "charitable purpose" under s. 80G, which explicitly excludes any purpose that is wholly or substantially of a religious nature. The trust deed of Vishwa Mangal Trust included several charitable purposes, such as establishing schools, hospitals, and aiding the poor. However, clause 2(h) specifically mentioned the establishment and maintenance of public places of worship and prayer halls, which was deemed a religious purpose. The court emphasized that even if the trust was not for the benefit of any particular religious community, the inclusion of a religious purpose disqualified it from being considered a charitable trust under s. 80G.

Conclusion:
The High Court answered the question of law in the negative, ruling in favor of the Revenue. The court held that the assessee was not entitled to the relief u/s 80G on the donations made to Vishwa Mangal Trust due to the inclusion of a religious purpose in the trust deed. There was no order as to costs.