TMI Blog2001 (10) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... in 1969. He is stated to have held a meditation camp for the first time in 1964 in Rajasthan. After 1969, many public lectures and appearances were ascribed to him. He also had written profusely on spiritual and allied subjects. Acharya Rajneesh took Maha Samadhi on 19th January, 1990. 3. By an indenture of trust dated 11-6-1969, Shri Himatlal Haribhai Joshi and Shri Ishwarlal Naranji Shah as settlors drew up a Trust Deed creating the Trust known as 'Jeevan Jagruti Kendra'. To start with the registered office of the Trust was at 29, Eastern Chambers, 3rd Floor, 128, Poona Street, Bombay. Under clause 4 of the conditions of the Trust Deed, the activities of the Trust could extend to the whole of India and to such other parts of the world as are decided upon by the Trustees from time to time. Shri Rajneesh, according to clause 2 of the Trust Deed, was to be the advisor to the Trust for life and as an advisor was to have powers mentioned in the Trust Deed. Clause 5 of the Deed dealing with the aims and objects of the Trust runs as under: 5. The aims and objects of the Trust shall be: (a) To spread and impart the preaching of Acharya Shri Rajneeshji and other philoso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be deemed necessary by the Board of Trustees; (k) To enter into any arrangement with the Government, local authorities, other quasi-Government bodies and other public or private bodies, organisations and/or institutions in order to promote and achieve and/or all of the aims and objects of the Trust; (l) to accept donations either in cash or in kind and/or under any other arrangements and to raise moneys otherwise, for the purposes of carrying out the objects and activities of the Trust and to accept subscriptions and gifts of movable or immovable properties for the same purpose. (m) To borrow and raise moneys for the purpose of carrying out the objects of the Trust in such manner and from such persons as the Trust may think fit; (n) To acquire land, purchase buildings, construct or take on lease or exchange or hire any movable or immovable properties or rights or privileges for the purpose of carrying out the objects of the Trust; (o) To enter into contract, execute deeds and do all other things and to undertake any other activities as may be conducive, suitable or incidental to the work for the attainment of the objects of the Trust or any of them or part of them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic public charitable objects not inconsistent with the objects and purposes to these presents to the advancement of the times and circumstances which may from time to time exist as they may consider desirable and in such case, such newly added objects so decided upon by the trustees shall be deemed to have been incorporated in the objects of these presents, hereinabove be deemed to be the objects and considered charitable or otherwise, by any of the authority, the same shall stand deleted, and the trustees shall not spend any of the trust funds on the said object. 4. The Trustees had power to accept donations and contributions from individuals or institutions. The Trustees under clause 7 have absolute power at their discretion (to deal with and to put into practice the objects mentioned hereinabove). Other clauses of the Trust Deed gave power to the Trustees to deal with the movable and immovable properties etc. to make rules and regulations for the day-to-day working of the Trust. Clauses 11 and 12 dealing with the management of the property and other business of the Trust are as under: 11. The management of the property and other business of the Trust shall be carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rship like patrons, life members, honorary members and/or ordinary members. The Board of Trustees at its discretion in consideration of any scheme of settlement or arrangement including amalgamation or otherwise, may also provided for the co-option of patrons and life members as patrons and life members of these presents. The Board of Trustees may from time to time frame rules for the election and/or nomination of executive council from amongst the different class of members and such council will look after such works as per the rules framed by the Board. 5. An amendment to the Trust Deed dated 26-9-1969 made certain minor changes including the deletion of the words 'or abroad' appearing in clause 5(c) of the Deed. All the activities of the Trust were being carried on to start with at Bombay. In March 1974, a new ashram premises was taken at Poona. The trustees also decided to change the name of the Trust from 'Jeevan Jagrati Kendra' to 'Rajneesh Foundation'. 6. The question of exemption under section 11 has a chequered history in this case since the inception of the Trust in 1969--the first assessment year being for 1970-71. For the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the publication of books was intended to be activity of profit. 6A. For the assessment year 1976-77, although the Assessing Officer followed the earlier year's order, the CIT(A) held in favour of the assessee Trust. Revenue took up the matter before the ITAT, Pune Bench. There was a divergence of opinion between the Judicial Member and the Accountant Member. The former viewed in favour of the assessee Trust, while the Accountant Member dissented. The matter was, therefore, referred under section 255(4) of the Act for the opinion of Third Member. This Reference was heard by a Three Member Bench of the Tribunal presided over by the then President of the ITAT and vide a consolidated order dated 2-8-1988 decided the issue against the assessee Trust. The Third Member came to the conclusion that the object cannot be considered to be charitable mainly on two grounds: (1) that so long as Rajneesh is alive, one cannot predict what he will preach and thus the object cannot be said to be charitable, and, (2) the affairs of the Trust were dominated by Shri Rajneesh in view of his being life-time advisor and the object was to preach, establish and perpetuate the image of Shri Rajne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by 30-9-1989. (vi) Tax exemption has been denied mainly on the grounds that: (a) Bhagwan Shree Rajneesh is a living person and object of propagating his philosophy may not be in public interest as nobody can say what he will preach in future. (b) Some of the views propounded by Bhagwan Shree Rajneesh are repugnant to traditional concepts of public morality and/ or Indian way of life. (c) Bhagwan Shree Rajneesh is life time adviser of R.F. (Though in fact he has never exercised any powers or discretion to influence the object of R.F.). R.F. agrees to suitably modify the Trust Deed and refrain from carrying on objectionable activities/objects from tax point of view. (vii) If the aforesaid terms find acceptance of the department, R.F. undertakes not to press its Writ Petition No. 2597 of 1988. These proposals were broadly accepted by the CIT, Pune vide his letter dated 3-2-1989. It is noted ;that in the assessee's proposal dated 28-11-1988, the Trust had offered in para 4(vi) to suitably modify the Trust Deed and refrain from carrying on objectionable activities/objects from tax point of view. However, there is no mention in the letter of the CIT, Pune relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held, it is also to be stated that assessee has so far not been granted registration under section 12A by the CIT, Pune, the exemption claimed under section 11 by the assessee is therefore rejected. 10. The assessee appealed to the CIT(A) who after exhaustive review of all the facts and circumstances, including, in particular, the amendments of the Trust Deed, the changed perception about the philosophy of Shri Rajneesh and other materials on record, came to the conclusion that the objects of the Trust were for the benefit of the public at large. She held that the Assessing Officer has not taken cognizance of certain important facts, viz: (i) The first proposal for amendment of the Trust Deed was to delete the name of Acharya Rajneesh entirely. It was, however, the Dy. Charity Commissioner, who prevailed upon the trustees to retain his name since the Trust activities were already motivated by Acharya Rajneesh. The intention, however, was only to spread the teachings of famous thinkers and philosophers, including the preachings of Acharya Rajneesh. Commemorating the name of the founder of any institution is not relevant factor for determining whether the institution is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer's conclusion following the order of the ITAT is not correct in view of the distinct difference in the circumstances prevailing then and the circumstances present during the relevant assessment year. The Trust was amended and without the physical presence of Acharya Rajneesh being allegedly the de facto controller, is different from the circumstances which was considered by the ITAT. Furthermore, the teachings of Acharya Rajneesh have much wider acceptance than it had in 1988. The Trust is therefore, eligible for exemption under section 11 of the Act, being for charitable purposes. 12. The Revenue has challenged the order of the CIT(A) and following grounds of appeal have been raised: (1) On the facts and in the circumstances of the case, the CIT(A) has erred in directing to grant registration to the assessee trust under section 12A and to allow exemption under section 11 of the Income-tax Act. (2) The CIT(A) has failed to appreciate the fact that Assessing Officer's findings were based on the order of the ITAT in the assessee's case wherein it was held that the assessee's case is not a fit case to be classified under section 11. (3) On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that the preachings of Acharya Rajneesh are against public policy; the CIT(A) has not taken into consideration the nature of the teachings and hence she is not competent to say that the teachings of Acharya Rajneesh are not against public policy. He, therefore, concluded that the order of the CIT(A) deserves to be reserved and that of the Assessing Officer deserves to be restored. 14. Shri S.N. Inamdar, the learned counsel for the assessee, submitted that the first ground of appeal is erroneously taken and the learned CIT(A) has not directed to grant registration under section 12A of the Act. However, as a matter of fact, he pointed out that such registration has been granted by the CIT, Pune in respect of the same Trust Deed and there has been no change in the Trust Deed. He also pointed out that procedural amendment in the form of insertion of section 12A, which requires the CIT's satisfaction about the public charitable nature of the Trust was made with effect from 1-4-1997 and applied to all pending applications and the registration has been granted on 18-5-1998. However, the learned counsel made it clear that he does not wish to rest his case solely on the ground t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Madhya Pradesh had established an Osho Chair for the study of his philosophy. He particularly emphasised that the object behind establishing an Osho Chair was also identical with the objects of the Trust. According to the learned counsel, this was clinching evidence that Osho's preachings were the preachings of a Seer and were receiving recognition all over the world. He also referred to page 258 which contains a report that in the World Book Fair, Osho's books and particularly the book entitled 'Meditation the First and the Last Freedom' was the highest sold book. He submitted that when Osho had large public following not only in India but all over the world and the general public bought his books in such large quantity, itself is a proof that a large section of the public considers his views as beneficial to mankind. The learned counsel relied on the Hon'ble Supreme Court's decision in the case of CIT v. Ahmedabad Rana Caste Association [1983] 140 ITR 1 in which the Hon'ble Supreme Court held that mental, spiritual and physical development of man as a complete human-being is an object of general public utility. It also held that if the objects are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the Revenue relied solely on the earlier order of the Tribunal which has been adequately dealt with by the learned CIT (Appeals) and considering the material change in the object clause and the actual activities carried on by the trust, it would be unjust and unfair to deny the benefit of section 11 to the Trust which is also registered under section 12A of the Act now by the CIT, Pune. 21. In rejoinder, Shri Naresh Kumar, the learned senior D.R. maintained that the Trust Deed was a replica of the old Deed in essence and that there was no change. He further maintained that the Third Member order of the Tribunal still prevails. Referring to the contention of the learned counsel that Osho developed different techniques of meditation and his stress was on meditation, the learned D.R. submitted that the meditation as propounded by Acharya Rajneesh is against public morality. He further submitted that merely because the Indian Parliament have placed books authored by Acharya Rajneesh in its library and that some Universities have adopted to propagate the philosophy of Acharya Rajneesh cannot overrule the order of the ITAT which clearly held that the teachings of Acharya Rajne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the object clause 5(a) which in the original Trust Deed read as to spread and impart the preachings of Acharya Rajneeshji and other philosophers pertaining to all religions and/or main principles thereof and/or morals. Since this phraseology had been found repugnant to the Department, it was proposed to re-draft the clause to read to spread and impart the preaching of philosophers both past and contemporary pertaining to all religions and/or main principles thereof for the spiritual, mental and/or morals and physical betterment of human beings with the ultimate object of self realisation. However, the Dy. Charity Commissioner did not agree to the deletion of the name of Acharya Rajneesh from the object clause since the Trust had already gained the name by the original clause and it had already carried out such objects in all probabilities. Shri Acharya Rajneeshji being the sole head of the Trust in question, the same objects would be carried out. By changing the words it is not likely that the Trustees would stop publishing or preaching the teachings of Acharya Rajneesh. Keeping these objects in mind, the final amendment, as concluded and approved by the District Civil Court, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with Clause 2 item (b) gave de facto control to Acharya Rajneesh over the activities of the Trust. This clause has now been amended and it reads as the management of the property and other business of the Trust shall be carried out by the Board of Trustees of not less than 2 (two) and not more than 6 (six) members. The power given earlier to Acharya Rajneesh to nominate 5 members on the Board of Trustees has also been deleted. Thus, objection No. 1 relating to the exercising of de facto control over the activities of the Trust is explained to be resolved by deletion of Clause 2 and amendment of Clause 11. (f) Clause 12 also gave difficulty to the department in recognising the Trust as for charitable purposes. The Clause nominated Acharya Rajneesh as advisor for life. This Clause has also been deleted. (g) Finally, the original Clause 28 which gave power to Acharya Rajneesh to guide and advise on all disputes regarding the administration of Trust, now reads as under: All disputes arising in the administration of the Trust and all questions relating to the interpretation of these presents or to the exercise or non-exercise of the powers and authorities which are confe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Vedanta on Geeta (Geeta Darshan), on the philosophy of Sant Kabir (Kahe Kabir Diwana), on Gurunanak (Ek Omkar Satnam), a commentary on the Sikh scripture known as Japuji hailed as best commentary by Gyani Zail Singh, Ex-President of India. We further find that complete Osho literature was accepted by the Parliament library, where Osho literature was termed as an original creation and it was observed by Shri Shivraj Patil, the then Speaker of the Lok Sabha who received the literature from he assessee Trust that the essence as contained in all the volumes is that one should find peace in oneself. Only then can peace be attained in the society and in the entire universe. 27. We find that the main thrust of the activities of the assessee Trust is on Meditation--observance of which is now being recognised universally in almost all fields of human activity as means of self-realisation. It has been brought to our notice that an Institution like Rani Durgawati University, Jabalpur, backed by the State Government of Madhya Pradesh has established an Osho Chair for the study of his philosophy. The object behind establishing an Osho Chair was also incidental to the objects of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndian Mystical tradition to new and scientific methods specially designed for the contemporary man. Here, we would like to quote Osho's views on Meditation from the Book An Introduction to the teachings of Bhagwan Shree Rajneesh, Series II from I to Q pages 240 and 241 printed and published in U.S.A. by Acharya Rajneesh Foundation International: Meditation.--Meditation is a very simple process; all that you need to known is the right button. The Upanishads call it 'witnessing'--the right button. Just witness your mind process, don't do anything at all. Nothing needs to be done, just be a witness, an observer, a watcher, looking at the traffic of the mind--thoughts passing by, desires, memories, dreams, fantasies. Simply stand aloof, cool--watching it, seeing it, with no judgment with no condemnation, neither saying, 'This is good', nor saying, 'This is bad.' Don't bring your moral concepts in, otherwise you will never be able to meditate. Sit by the side of a river and watch the river flowing. Yes, sometimes driftwood passes by and sometimes a boat comes and sometimes a dead body and sometimes a beautiful woman may be swimming in the river- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of Indian Chamber of Commerce v. CIT [1975] 101 ITR 796. The Hon'ble Bench also disapproved the observation of Khanna and Gupta JJ. in Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234(SC) and further approved the observation of Beg J. in Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234 (SC). In the case before us, as pointed out in the preceding paras the dominant and primary objects of the assessee Trust are charitable in nature. Accordingly, we do not find any infirmity in the findings of the Commissioner (Appeals) and confirm the same. 30. In the result, the appeal is dismissed. Per Singhal (J.M.) 31. After going through the proposed order carefully, it appeared to me that findings given in the proposed order are contrary to the findings of the larger Bench in assessee's own case (as third Member Bench headed by the then President of the Tribunal). Since in my opinion, such findings cannot be given by this Bench, it was suggested by me in various discussions with my Learned Brother that the matter be referred to the Hon'ble President for constituting a Special Bench of Five Members if it is necessary to take different view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22). If this view is taken to the logical end, then it impliedly means that the jurisdiction of the Tribunal is ousted to consider the issue whether objects of the assessee Trust are charitable or not. This issue had also arisen before the larger Bench. There the assessee had raised a contention before that Bench that the Revenue could not contest assessee's claim to exemption under section 11 since certificate under section. 80G had been issued by the CIT. The larger Bench in para 8 of its order held as under: Therefore, the grant of certificate has no legal implication. Secondly, the Tribunal has the power to decide the eligibility of an assessee for exemption under section 11 and if the Commissioner's certificate was to be taken as conclusive, the Tribunal's jurisdiction would be ousted, which is an absurdity. Further, section 80G is meant for granting deduction to donors and not for the institution which claims to be charitable or religious institution. Therefore when a certificate is granted, the claim of the institution to exemption under section 11 is not examined in detail as would be done when the institution claims the exemption under section 11. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erall view of the matter the only object of the trust is to project, establish and perpetuate the image of Sri Rajneesh with all his vague and contradictory views which can neither be called religious nor serve any such purpose or any purpose of educational or charitable nature or of general public utility. 35. According to the proposed order, the above findings are no more applicable to the year under consideration on account of the following changed circumstances: (1) The main object clause 5(a) which was considered partly non charitable by the larger Bench has been amended. (2) Original Clause (2) appointing Acharya Rajneesh as Life-time Advisor has been deleted. (3) Object clause 5(b) authorising the Trust to print, publish, sale, distribute either free or for price, books, magazines, lectures preachings, writings, periodicals, bulletins etc., considered by the larger Bench as an activity for profit has been deleted. (4) The object Clause 5(f) which was also considered earlier as objectionable has been deleted. (5) Clause 11 providing control of Acharya Rajneesh has been amended by removing the name of Acharya Rajneesh. (6) Clause 28 has also been suitably ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in reality, there is no fundamental change in the object. The preachings of Acharya Rajneesh still continue to be spread and imparted by the Trust. The change is only in the language and not in the spirit. It is clear from the submissions of the learned counsel for the assessee that the preaching of Rajneesh is being spread and imparted through more than 650 books written by Acharya Rajneesh. Reference can be made to para 26 of the proposed order. It is also not the case of the assessee that it had excluded those preachings of Acharya Rajneesh which were found by the larger Bench as against general public utility and accepted norms of religion. If that is so, then it cannot be said that primary and dominant object has become wholly charitable or religious after the amendment. Therefore, it is my considered view that finding in the proposed order to the effect that primary and dominant object has become charitable is contrary to the finding of the larger Bench in assessee's own case. 37. It is in view of the above considerations, it was suggested by me that this Bench has no jurisdiction to go against the finding of the larger Bench and consequently, it was further suggeste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y not prevent the grant of an exemption. This is because such an ancillary or secondary object, even though not of a religious or charitable nature, is intended to effectuate the main and primary objects of the trust. If the primary or dominant purpose of a trust is charitable, another object which by itself may not be charitable but which is merely ancillary or incidental to the primary or dominant purpose would not prevent the trust from being a valid charity. Again, the Supreme Court in the case of Surat Art Silk Cloth Mfrs. Association case held as under: (ii) Where the main or primary objects are distributive each and every one of the objects must be charitable in order that the trust or institution may be upheld as a valid charity. But if the primary or dominant purpose of a trust or institution is charitable, another object which by itself may not be charitable but which is merely ancillary or incidental to the primary or dominant purpose would not prevent the trust or institution from being a valid charity. 39. Following respectfully the above decision of the Supreme Court, it is held that in order to get exemption under section 11, the dominant or primary obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ------------------------------------------------------------------------------------------- Motor Vehicles Rs. 2,45,740 Furniture Fixtures Rs. 34,59,897 General equipment Rs. 1,69,62,866 Computer Rs. 89,016 ---------------- Total Rs. 2,07,57,519 ---------------- -------------------------------------------------------------------------------------------- Following the finding of larger Bench, it is held that such lavish expenditure was for non-charitable purposes and therefore, exemption under section 11 fails. 42. Before parting with my order, it would be useful to refer the style of functioning of the Trust. From the perusal of statement of accounts, it appears to me that main activity of the Trust is to carry on the business for the sole purpose of acquiring assets in the manner as to making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the following question may be referred to a Third Member or to pass such order as the President may desire: Whether on the facts of the case and in law, the assessee is entitled to exemption under section 11 of the Income-tax Act, 1961? THIRD MEMBER ORDER Per R.V. Easwar, J.M.--The following question has been referred to me for decision under section 255(4) of the Income-tax Act: Whether on the facts of the case and in law, the assessee is entitled to exemption under section 11 of the Income-tax Act, 1961? 2. The aforesaid question has been referred to me on a difference of opinion between the learned Members constituting the Bench. Whereas the learned Accountant Member (AM) has held that the assessee is entitled to the exemption, the learned Judicial Member (JM) has rejected the assessee's claim. 3. I may briefly narrate the facts leading up to the difference of opinion. The assessee is a trust by name Neo Sannyas Foundation, which was earlier known as Rajneesh Foundation. The Trust was constituted by Deed dated 11-6-1969 by two persons as settlors. The Trust was originally known as Jeevan Jagruti Kendra. It initially functioned from Bombay. The ai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Writ Petition, the assessee applied to the CIT, Pune for settlement of the pending issues in order to put an end to the long drawn litigation regarding the claim for exemption. A detailed reference to the proposals put forth by the assessee before the CIT is contained in paragraph 7 of the learned AM's order. Suffice it to notice only a few of the proposals. It was proposed by the assessee that it would pay the taxes as per the TMB's orders up to and including the assessment year 1988-89, that it would withdraw the Writ Petition before the High Court, that the Trust Deed would also be suitably amended or modified with effect from the assessment year 1989-90 in order to overcome the objections of the Income-tax authorities. By letter dated 3-2-1989, the aforesaid proposals were broadly accepted by the CIT. 6. Thereafter, the assessee-Trust made the necessary amendments to the Trust Deed including the deletion of certain clauses in the object clause considered by the Income-tax Department to be objectionable. An application was made on 29-3-1989 before the Dy. Charity Commissioner of Pune and therein it was made clear that the amendments to the Deed became necessary becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udio cassettes, video cassettes, books etc. containing the teachings of the Acharya was deleted with the result that such activities can no longer be pursued by the Trust. It was also pointed out that the public perception of the activities of the assessee-Trust has drastically changed since the TMB's order in 1988 and that many of the books authored by the Acharya found a place in the Parliament Library. Attention was drawn to the fact that some of the Universities like the Jabalpur University and the Pune University were proposing to or had actually set up a chair for research into the preachings of the Acharya. It was thus submitted that there was nothing objectionable or repugnant in the preachings of the Acharya and what he had preached during his lifetime was only meditation, the aim of which was self-realisation, which is the ultimate aim of all religions. In support of the claim that the Acharya can no longer be accused of being vague in his preaching, it was pointed out that he took Maha Samadhi on 19-1-1990 and therefore one of the main objections of the TMB, viz., that the Acharya can change his views, was no loner valid. Attention of the CIT(Appeals) was also draw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Rajneesh and his preaching, but the Dy. Charity Commissioner, Pune, was of the view that since the trust had already gained the name by the original clause, the name of the Acharya should not be omitted altogether from the objects clause. It was at his insistence that the name of the Acharya was retained even in the amended clause. The CIT(Appeals) noted that the trust deed as amended referred to the spreading and imparting of the preaching of philosophers, thinkers and scholars both past and contemporary (including Acharya Rajneesh) pertaining to all religions, and/or main principles thereof for the spiritual, mental and moral and physical betterment of human beings with the ultimate object of self-realisation. He noted that the Acharya also ceased to be an advisor of the trust for life. The trust had also omitted clause 5(b) under which it was empowered to print and publish book, etc. containing the preachings of Acharya Rajneesh. This clause had been considered by the TMB as resulting in a business activity for profit and the omission thereof was considered by the learned AM as a significant change. Clause 5(f) authorising the establishment of Ashrams, schools, colleges, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eation' and it was observed by Shri Shivraj Patil, the then Speaker of the Lok Sabha who received the literature from the assessee-Trust that 'the essence as contained in all the volumes is that 'one should find peace in oneself. Only then can peace be attained in the society and in the entire universe'. He further referred to the fact that the subject of meditation is now being recognised universally as a means of self-realisation and that the Rani Durgavati University of Jabalpur, backed by the State Government of Madhya Pradesh has established an Osho Chair for the study of the philosophy of Acharya Rajneesh. The learned AM reasoned that if the preachings of the Acharya were considered to be against public policy or harmful to the public interests, such a perception by eminent universities or by the Parliament of India would have been unwarranted. He further observed that merely because the preachings of Acharya Rajneesh would seem controversial to some, it cannot be assumed that they are not for public benefit. He referred to the accounts of the Trust and found that the main activity carried on by the Trust was meditation on the lines developed by the Acharya by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ident with a request to constitute a Special Bench consisting of 5 learned Members if it is found that a different view is to be taken. The suggestion was not accepted by the learned AM for two reasons--firstly, because of the grant of registration under section 12A on the basis of the amended Deed which is a strong ground for treating the Trust as charitable in nature and secondly, the earlier order of the TMB was passed 11 years back based on the unamended Deed which has now been practically replaced by a new Deed which was drawn up in consultation with the CIT, Pune and which removed all the defects contained in the original Deed. Since the learned AM did not accede to the request, the learned JM proceeded to record his dissenting view. 18. He first referred to the learned AM's view that the registration under section 12A was a strong ground for holding that the assessee was a charitable trust. According to the learned JM, if this view is taken to its logical end, then it would mean that the jurisdiction of the Tribunal, to consider the issue whether the objects of the Trust are charitable or not is ousted. He noted that the very same question had arisen before the TMB an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Trust appeared to him to be the carrying on of business for the sole purpose of acquiring assets in such manner as to make the ashram have five star facilities. He referred to the details of income received from meditation and the expenditure in connection therewith, which showed a profit of Rs. 2.41 crores. This was considered by him to be a pure business activity. The participants in the activities of the Trust were charged for taking food etc. which according to the learned JM is contrary to the Indian tradition. According to him, not only should the objects of the Trust be charitable, but the activities of the Trust should appear to be carried on for achieving the charitable objects. From the style of functioning of the assessee-Trust, the learned JM came to the conclusion that the main object of the assessee is to earn profit and not to achieve any charitable object. In this view of the matter, dissenting from the view expressed by the learned AM, he held that the assessee was not entitled to the exemption under section 11. He thus allowed the appeal by the Revenue. 21. This is how the matter is now before me. I have carefully considered the rival contentions. I have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e public perception regarding the activities of the Trust. It is equally open to me to consider, within the framework of the question referred to me, as to whether the learned JM was right in saying that there is no change in the circumstances of the case and that the Trust Deed remains substantially the same and therefore the earlier orders of the Tribunal should be followed. Judicial discipline and propriety arc statutory principles that have to be followed in the interest of uniformity, clarity and certainty in the adjudication process. However, the principles should not be indiscriminately applied, ignoring the changes in the facts and circumstances that have taken place since the earlier decisions and their impact on the question for the year under consideration. Blind adherence to the earlier decisions without being sensitive to the changes, both factual and legal, also does harm to the adjudication process just as a refusal to follow the earlier decisions even when the facts and circumstances and the legal position continue to be the same. This is especially true under the Income-tax law, where each assessment year is considered to be a different year and where the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions available to me is that if I find that there is no substantial change, I have to agree with the learned JM, but if I find there is a substantial change in the position, as compared to the years with which the earlier Tribunals were concerned, then my duty is to agree with the view taken by the learned AM. These are the only options available to me and the third option, that of holding that the matter should have been referred to a larger Bench consisting of five or more learned Members is not open to me in the absence of a specific question to that effect. 25. Before I proceed to examine whether there is a change in the position for the year under appeal, I need to refer to one or two other aspects of the matter. It was argued before me on behalf of the Department that the amended trust deed did not take effect for the year under appeal and that it took effect only from 3-9-1991, the date on which the District Court passed the order approving the changes. It was contended that the CIT (Appeals), inasmuch as he had looked into the amended Deed, committed an error. It was further contended that the conclusion of the CIT (Appeals) that the amended Deed came into effect from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d filed with the CIT, it had come into force so far as the assessee is concerned. 26. On this aspect of the matter, I have to sustain the preliminary objection taken by Mr. Inamdar. Nowhere in the differing orders passed by the learned Members, have they discussed the question as to when the amended Deed came into effect. It appears to me on a reading of the learned AM's order, which records the rival contentions, that the question was not argued at all before the Bench. The learned JM has also not adverted to any such argument. Therefore I am convinced that I am precluded from entering into this question. There appears to have been no dispute between the parties that it was the amended Trust Deed which was applicable to the assessment year under consideration. Even the learned JM has only held that the amendments did not make any substantial change to the earlier position; he has not held that the amendments do not apply to the assessment year under consideration. On this question, therefore, there is no decision by either of the learned Members presumably because the case all through proceeded on the footing that the amended Trust Deed applied to the year under considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only after satisfying himself about the objects of the trust and the genuineness of its activities. The section also contemplates an opportunity to be given to the trust before the CIT exercises his power of refusal to register the trust. The departmental Circular No. 762 dated 18-2-1998 has explained the scope and effect of section 12AA. The Circular is reproduced at pages 1090 and 1091 of Chaturvedi Pithisaria's Income Tax Law, 5th Edition. The Circular recognises the effect of the section. 29. In the present case, the assessee had applied to the CIT for registration under section 12A of the Act only on the basis of the amended trust deed. This is an undisputed position, having regard to the application dated 30-3-1989 filed on the same day with the office of the CIT, Pune, in the prescribed form 10A, a copy of which is placed at pages 10 and 11 of paper book No. III filed by the assessee. There is also a letter written by the assessee on 4-8-1992 to the CIT, Pune in which there is reference to the pending application for registration under section 12A. In this letter, the assessee has sought to explain to the CIT how the amended trust deed has sought to remove the obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is one of the important changes in the circumstances for the year under appeal and has rightly persuaded the learned AM to take a view different from the view taken by the earlier Tribunals. 30. In my opinion, apart from the above, there is also one more reason why the registration must be considered to be a significant change. For the assessment years 1975-76 and 1976-77, the Tribunal had rejected the assessee's plea for exemption under section 11. Certain doubts had been expressed by the Tribunal regarding the teachings of Acharya Rajneesh. Objections had also been raised to a certain clause in the Trust Deed which according to the Tribunal amounted to carrying on of a business activity and some clauses which gave powers to the Acharya to gain control over the administration of the Trust. In this background, the assessee came up with a settlement proposal before the CIT. It had amended the Trust Deed and had sought to remove the objectionable clauses therein. It had also offered to pay the taxes up to the assessment year 1988-89, as per the orders of the Tribunal, to put an end to the litigation. It had withdrawn the Writ Petition filed by it against the order of the TMB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout the objects of the Trust and the genuineness of the activities. In view of this change in the legal position, the view taken by the TMB cannot be automatically applied to the present year. The learned JM has taken the view, again following the TMB, that the Tribunal has to decide the eligibility of an assessee under section 11 and if the CIT's certificate is to be taken as conclusive, that means that the Tribunal's jurisdiction is ousted, which is an absurdity. The answer to this is again that after the advent of section 12AA, the certificate of the CIT granting registration has to be considered as conclusive of the objects and the genuineness of the activities of the trust. It is possible that the Legislature wanted to do away with the litigation that often arises regarding the charitable nature of the objects of a Trust and wanted that a scrutiny of the objects and activities of the trust should be made at the inception itself by a senior functionary of the Department. That is perhaps why the CIT, a senior officer of the Department, has been conferred power to scrutinise the objects and activities of the Trust even before granting registration. An opportunity of bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also preserved. Therefore, in my humble opinion, the fears of the learned JM that the Tribunal's jurisdiction would be ousted are perhaps not justified. 32. I now turn to the next important difference of opinion. According to the learned JM, even after the amendment of the trust deed, the objects of the Trust cannot be considered as charitable and there is no change in the circumstances for the year under appeal. In paragraph 35 of the order, the ld. JM has listed 9 points, which according to the ld. AM, denote a change in the circumstances. The ld. JM has not agreed with the ld. AM that these 9 points indicate a change in the circumstances for the year under appeal. In the opinion of the learned JM, the amendment made to the main object clause 5(a) does not cure the defect pointed out by the TMB that this clause is partly non-charitable. According to the learned JM, this clause, both before and after the amendment, refer to the teachings of Acharya Rajneesh and for that reason, it continues to be non-charitable, and therefore the ratio of the order of the TMB continues to apply for the year under appeal also. I may reproduce this clause both before and after the amendme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s therefore have attained a definiteness and have become unalterable. It is a different matter that some of the members of the public may hold a different view-point or may not agree or follow the teachings of Acharya Rajneesh. But, the charge that the teachings were liable to be changed or contradicted can no longer hold good. This is one important change, which has an impact for the current year. 34. The imparting and spreading of the teachings of Acharya Rajneesh have been considered by the learned JM, following the order of the TMB, to be a non-charitable object of the assessee-trust. The answer to this has been given by the learned AM in paragraph 23(a) and paragraph 26. He has first noticed that the proposed amendment was to the effect that the assessee-trust would spread and impart the preaching of philosophers both past and contemporary pertaining to all religions, etc. The name of Acharya Rajneesh was proposed to be completely omitted from the original clause. However, the Dy. Commissioner of Charities, Pune did not agree to the deletion of the name of the Acharya from the clause, since according to him, the trust had gained its name and reputation by the original claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s so as to enable humanity to enlighten themselves and attain peace and self-realisation. He has referred to the income and expenditure relating to this activity for the year under consideration. 35. In the light of the aforesaid developments which have taken place in the recent past and certainly after the order of the TMB, I agree with the observations of the learned AM that there is a changed perception of the teaching of Acharya Rajneesh in the public mind. It is difficult to imagine that the teachings of any person which are vague or opposed to public policy or harmful to the interests of public morality would be found worthy of being researched upon by educational institutions or worthy of adorning the libraries of esteemed political institutions established by the Constitution of India. 36. In my opinion, therefore in view of the changed public perception of the teachings of Acharya Rajneesh, whether one agrees with the teachings or follows them or not, it must be held that the earlier view that his teachings were vague or opposed to public policy or were harmful to public morality can no longer be countenanced. I therefore agree with the learned AM on this part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the learned JM. Mr. Inamdar also pointed out that on these matters, there is no opinion expressed by the learned AM except to the income and expenditure on meditation courses offered by the Trust. He also referred to the fact that on these aspects, there is no finding recorded by either the Assessing Officer or the CIT(Appeals). He therefore pleaded that these observations should be ignored by me while taking a decision. 40. I have carefully considered the plea of Mr. Inamdar, the learned counsel for the assessee. I find that neither the CIT (Appeals) nor the Assessing Officer has referred to the style of functioning of the assessee-trust. They have not referred to any lavish expenditure having been incurred by the assessee on provision of five star facilities . The learned AM has also not adverted to these aspects of the matter. In paragraphs 13 and 21, the learned AM has recorded the contentions of the learned Sr. DR. A perusal of these paragraphs does not reveal that any objections were taken on behalf of the Department on the ground that the assessee was indulging in lavish expenditure in the provision of five star facilities. Consequently, there is no finding re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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