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Jan Sewa Jagriti Munch Society Versus CIT, Rohtak

2015 (11) TMI 990 - ITAT DELHI

Registration u/ss 12AA(1)b)(ii) and 80(G) denied - Held that:- In the case in our hand, the assessee’s charitable activities are not restricted to any particular caste or section of society. In addition to celebrating Dussehra and Ekadashi festivals which are to promote the heritage, culture and festivals of India, it is also engaged in the activity of helping the poor and needy. It also incurs expenditure for marriage of poor girls and pays fees of poor students. It is not the case of the ld.CI .....

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A Nos. 4613 & 4614/Del/2014 - Dated:- 17-11-2015 - Shri J. Sudhakar Reddy, AM And Shri Kuldip Singh, JM For the Petitioner : Shri Tarun Rohatgi, CA For the Respondent : Ms Sulekha Verma, CIT, DR ORDER Per J. Sudhakar Reddy, AM Both these appeals by the assessee are directed against the orders passed by the CIT, Rohtak, dated 27.6.2014, u/ss 12AA(1)b)(ii) and 80(G), respectively, of the Income-tax Act, 1961 (hereinafter also called the Act ). 2. ITA No.4613/Del/2014 is filed against the order of .....

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essence of charity, which is necessary for getting the status of being charitable as is required in view of section 2(15) of the Act; b) The AO as well as the Joint Commissioner of Income-tax has reported that the main aims and objects of the society is to promote the inherited culture and festivals and this does not fall within the ambit of section 2(15); c) On page No.7 of the Memorandum and Articles of Association of the assessee society, it is noticed that the Resolution No., date of meetin .....

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as these expenditure incurred are for religious activities, it cannot be treated as charitable. Thus, the assessee is not entitled to registration; and e) The Dissolution clause is not in accordance with the law. 4. The ld. counsel for the assessee Mr. Tarun Rohatgi submitted that: a) A perusal of the objects demonstrates that they are charitable in nature; b) As the assessee is incurring expenditure to help poor and needy and for the marriage of poor girls and for paying fees of poor students, .....

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itution of the society is prepared and it was the incomplete and an unsigned copy which was with the CIT and the signed copy was later made available to the ld.CIT which was not considered. 5. Reliance was placed on the following:- i. 88 ITR 354 (Guj); ii. 42 Taxman.com 77 (All); iii. 27 Taxman.com 100 (Nagpur); and iv. 140 ITR 1 (SC); 6. The ld. DR, on the other hand, submitted that all the papers filed by the assessee by way of paper book before the Tribunal were not available with the ld.CIT( .....

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for registration. Referring to the Memorandum registered on 26th day of July, 2013, she submitted that these papers were not before the CIT. She argued that more than 50% of the expenses were made on religious purposes such as celebration of Hindu festival like Dussehra, etc., and under such facts registration u/s 12A cannot be granted. She pointed out that the assessee has admitted that it would fall under the category the advancement of any other object of general public utility specified by .....

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e. The Hon ble Supreme Court held as follows:- According to section 2(15), the expression 'charitable purpose' has been defined by way of an inclusive definition so as to include relief to the poor, education, medical relief and advancement of any other object of general public utility. A catena of decisions of this Court which have interpreted the said provision and especially the expression 'any other object of general public utility' have observed that the said expression is o .....

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is intended to be served. [Para 30] In certain cases, the activities of the trust may contain elements of both: religious and charitable and thus, both the purposes may be over lapping. More so when the religious activity carried on by a particular section of people would be a charitable activity for or towards other members of the community and also public at large. For example, the practice of optional charity in the form of Khairat or Sadaquah under Mohammadan Law would be covered under both .....

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he Holy Quran and resolve to abide by the path of godliness shown by Allah would not be sufficient to conclude that the entire purpose and activities of the trust would be purely religious in colour. The objects reflect the intent of the trust as observance of the tenets of Islam, but do not restrict the activities of the trust to religious obligations only and for the benefit of the members of the community. [Para 38] The activity of providing for food on certain specific occasions and other re .....

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lifies as a charitable purpose which would entail general public utility. [Para 39] Further, establishment of Madarsa or institutions to impart religious education to the masses would qualify as a charitable purpose qualifying under the head of education under the provisions of section 2(15) of the Act. The institutions established to spread religious awareness by means of education though established to promote and further religious thought could not be restricted to religious purposes. The Mad .....

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e dual tenor of religious and charitable purposes and activities. Section 11 shelters such trust with composite objects to claim exemption from tax as a religious and charitable trust subject to provisions of section 13. The activities of the trust under such objects would therefore be entitled to exemption accordingly. [Para 41] Further, one has to examine the objects under the provisions of section 13(1)(b) of the Act. It becomes amply clear from the language employed in the provisions that se .....

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aiming exemption under section 11, it becomes relevant to test it on the anvil of section 13. [Para 42] Thus, the second issue which arises for consideration, whether the respondent-trust is a charitable and religious trust only for the purposes of a particular community and therefore, not eligible for exemption under section 11 in view of provisions of section 13(1)(b). [Para 43] In the instant case, the Tribunal has found on facts after analysing the objects of the trust that the respondent tr .....

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y. The said view may not be the correct interpretation of the provision. [Para 44] From the phraseology in clause (b) of section 13(1), it could be inferred that the Legislature intended to include only the trusts established for charitable purposes. That however does not mean that if a trust is a composite one, that is one for both religious and charitable purposes, then it would not be covered by clause (b). What is intended to be excluded from being eligible for exemption under section 11 is .....

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particular religious community or class or serves across the communities and for society at large. The section of community sought to be benefited must be either sufficiently defined or identifiable by a common quality of a public or impersonal nature. [Para 46] In the present case, the objects of the respondent trust are based on religious tenets under Quran according to religious faith of Islam. As already noticed that the perusal of the objects and purposes of the respondent-trust would clear .....

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ligious community and therefore, it cannot be held that section 13(1)(b) of the Act would be attracted to the respondent-trust and thereby, it would be eligible to claim exemption under section 11. [Para 50] In the result, the appeals are dismissed. [Para 51] 7. In reply, the ld. counsel for the assessee submitted that as per the requirements of Government of Haryana, subsequent change in regulations of Societies Act, 2012, all societies were required to re- register themselves and such registra .....

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and orders of the authorities below, we hold as follows. The aims and objects of the society are as follows:- a) To promote the in heritage, Culture and Festivals of India. b) To help the poor, needy people in form of cash and objects. c) To help the poor child in continuing their studies d) to cooperate and assist with the others social institutions/organizations having the similar aims and objects. e) to support and help the people at the time of natural calamities. f) to set up old age home .....

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s 12A of the Act. 10. The society was required to get itself re-registered in view of the change in law in the State of Haryana and, accordingly, it got itself reregistered. Thereafter, the certificate of registration along with Memorandum of Association was filed with the Department along with a letter dated 20.6.2014. Thus, the submission of the CIT, DR that these documents are not before the CIT is factually incorrect. 11. Coming to the other objections of the ld.CIT for grant of registration .....

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ause, the rejection of registration on this ground is not valid. Regarding the blank left by not filling the Resolution No., and date by the promoters, we find that in the later registration documents such gaps are not there. The registration is to be considered based on the new Memorandum which is currently in force. Thus, this objection of the ld.CIT has been removed by the assessee. 13. Coming to the observation that a major amount is spent for religious purposes, we find that the Nagpur Benc .....

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Some of the objects fall within the 'advancement of any other object to general public utility'. Proviso to section 2 sub-section (15) restricts the meaning 'advancement of any other objects of general public utility'. But the Commissioner has not stated that proviso to section 2 sub-section (15) is applicable in the case of the assessee. [Para 9] Assessee had not violated conditions laid down in clause (iii) of section 80G(5) • The objects as has been pointed out by Commiss .....

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esent any particular religion, they are merely regarded to be the super power of the universe. [Para 10] • A religion undoubtedly has its basis in a system of beliefs or doctrines which are regarded by those who profess that religion as conducive to their spiritual well being, but it will not be correct to say that religions is nothing else but a doctrine or be lief. A religion may not only lay down a code of ethical rules for its followers to accept, but it might prescribed rituals and obs .....

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to a particular group of persons. Any body whether want to worship or not and want to maintain or not can come to the temple and avai l of all the facilities available to the public at large . • Therefore, these objects cannot be regarded to be the religious objects. Until and unless the activities for which the trust is established, involve the activity religious purpose, it cannot be said that the assessee has not complied with the condition No. (iii ) enumerated under section 80G(5). [Pa .....

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e • Commissioner must be aware of that the Hindu consists of a number of communities having the different Gods who are being worshipped in a different manner, different rituals, different ethical codes. Even the worship of God is not essential for a person who has adopted Hinduism way of life. Thus, Hinduism holds within its fold men of divergent views and traditions who have very little in common except a vague faith in what may be called the fundamentals of the Hinduism. The word 'com .....

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religious purpose. Under these facts and circumstances, the Commissioner is not correct in law in not allowing the approval to the assessee-trust under section 80G . • Accordingly, the order of the Commissioner is set aside and the Commissioner is directed to grant approval to the assessee-trust under section 80G(5)( vi ) [Para 13] . 14. Thus, incurring expenditure for celebrating festivals such as Dussehra, Ekadashi, etc., cannot be considered as spent for religious purposes. Even otherwi .....

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ncial years ending March 31, 1960, March 31, 1961, and March 31, 1962 respectively). The ITO held that the respondent was not entitled to the benefit under s. 4(3)(i) of the Act of 1922 in respect of the first two assessment years and under s. 11 for the assessment year 1962- 63. The ITO proceeded on the view that the objects for which the respondent association was constituted contained certain clauses which permitted the respondent to apply the income to purposes which were not wholly charitab .....

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I.T, Act, 1922, and s. 11 of the I.T. Act, 1961?" Before the High Court the controversy centred around sub-cls. (4) and (5) of cl. 3 of the memorandum of association of the respondent-association as well as sub-cl. (4) of cl. 8. The High Court after considering the entire matter at length in the light of the prevailing case law has found that the objects sufficiently control the application of the income derived by the respondent-association to purposes which can be described as entirely re .....

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193 ITR 321/60 Taxman 248 and Sonepat Hindu Educational & Charitable Society v. CIT [2005] 278 ITR 262/147 Taxman 1 (Punj. & Har.), and recorded finding as follows:- "We find that at the time of granting the registration under Section 12AA, the Commissioner has limited power only to examine objects of the Trust and genuineness of the activities. The law requires that he should pass a speaking order. In the case under consideration, we notice that the assessee has furnished all the r .....

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ical and mental health and spiritual attainment. When a large number of people feel that meditation is a great source for physical, mental and spiritual well being, it must be held that these activities are for the advancement of general public utility. Maintaining Samadhi of Guru is also charitable purpose in accordance with Section 2 (15) o the Act and Pooja of such Samadhi reminds people of ideology of Guru, in whose memory pooja is carried out. Organizing bhandara is an activity of providing .....

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