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2015 (5) TMI 1013 - ITAT HYDERABAD

2015 (5) TMI 1013 - ITAT HYDERABAD - [2015] 44 ITR (Trib) 161 (ITAT [Hyd]) - Registration under section 12AA denied - maintenance of the temple - Held that:- We are of the opinion that the maintenance expenses incurred for the building relate to the charitable activities and not the religious activities. Since learned counsel for the assessee has submitted that food is distributed to the needy which is called as "Mahaprasadam" and the distribution of the food to the poor people is not a religiou .....

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f the Income-tax Act, 1961 to the assessee-trusts. - Decided in favour of assessee - I. T. A. No. 851/Hyd/2014, I. T. A. No. 852/Hyd/2014, I. T. A. No. 853/Hyd/2014, I. T. A. No. 859/Hyd/2014 - Dated:- 29-5-2015 - SMT. ASHA VIJAYARAGHAVAN (Judicial Member) and INTURI RAMA RAO (Accountant Member) S. Rama Rao for the appellant. D. Sudhakar Rao for the respondent. ORDER 1. These four appeals are filed by four different assessee-trusts, viz., (1) Raghunath Das Damodardas Lohia Charitable Trust, Hyde .....

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solidated order. 2. Briefly stated, the assessee-trusts had filed an application in Form 10A seeking registration under section 12AA of the Income-tax Act, 1961. The authorised representative of the assessee appeared and filed reply to the questionnaire raised by the Director of Income-tax (Exemptions). However, the learned Director of Income-tax (Exemptions) was not satisfied with the explanation offered by the assessee-trusts and rejected the application of the assessee-trusts and passed the f .....

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of pilgrims, tourists'." Making donation to temple and maintenance of temple is clearly of religious nature. Further, making donation for construction of rooms at different pilgrimage places for the benefit of pilgrims visiting such pilgrim centers is also clearly of religious nature. Thus, the applicant- trust in this case has both religious and charitable objects, i.e., has got mixed objects, and since it has been formed on November 18, 2006 i.e., after April 1, 1962, under that circu .....

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of the Act, the assessee-trust, in this case, would not be eligible for registration under section 12AA of the Act. Furthermore, under the prevailing facts, i.e., in the face of such mixed objectives, having regard to the ratio of the decision of the hon'ble Supreme Court in State of Kerala v. M. P. Shanti Verma Jain [1998] 231 ITR 787 (SC) and CIT v. Palghat Shadi Mahal Trust [2002] 254 ITR 212 (SC) and Upper Ganges Sugar Mills Ltd. v. CIT [1997] 227 ITR 578 (SC) and of the hon'ble Jam .....

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ral objects of the trust, some of which are charitable and some non-charitable, and the trustees in their discretion are to apply the income to any of the objects, the whole trust would fail and no part of its income would be exempt from tax. The reason is that in such a case no definite part of the property or its income is allocated for charitable purposes and it would be open to the trustees to apply its income to any of the non-charitable objects or religious purposes.' (at pages 593-594 .....

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observations of the hon'ble High Court in this regard, at page 324 of the said decision, are reproduced as under : '8. In our considered view, since section 11 of the Act provides for exemptions to the trust registered under the Act, it is primarily the purpose of section 11 that will dominate or prevail over other consideration. Section 11 provides for this exemption only if the property held is for charitable or re1igious purposes. It is only when such a purpose is shown that registrat .....

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institution will not be eligible for registration under section 12AA of the Act. Further, the emphasis on specific purpose of the trust, i.e., either 'charitable' or 'religious', in the context of granting of registration, has been stressed by the hon'ble Madhya Pradesh High Court in their subsequent observation made at page 325 of the said decision. The pertinent observation of the hon'ble High Court, in this regard, is as under : '. . . It is only when it is proved .....

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t the assessee-trusts cannot be granted registration under section 12AA of the Act and the application in Form 10A was rejected. Aggrieved, the assessees have filed the present appeals before the Tribunal and has raised the following grounds. For the sake of reference we reproduce the grounds raised in I. T. A. No. 851/Hyd/2014 in the case of Raghunath Das Damodardas Lohia Charitable Trust. "1. The order of the learned Director of Income-tax (Exemptions) is erroneous both on facts and in la .....

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section 12AA of the Income-tax Act simply because both charitable and religious activities were carried on by the appellant herein. 4. The Director of Income-tax (Exemptions) ought to have seen that the activities carried on by the appellant are only charitable activities and ought to have granted registration under section 12AA of the Income-tax Act. 5. Any other grounds that may be urged at the time of hearing." 4. Learned counsel for the assessee Mr. S. Rama Rao relied on the decision o .....

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to be the one incurred for religious object, even if the object is regarded to be religious one. It is not denied that in the building the assessee was carrying yoga centre, tailoring training centre as well as food for the needy and optical centre for the poor. 13. Explanation 3 to section 80G(5D) states that 'in this section, "charitable purpose" does not include any purpose the whole or substantially the whole of which is of a religious nature'. This expla nation takes note .....

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e including the objects and how the expenditure has been incurred by it. The onus, in our opinion, gets shifted on the Revenue to prove that the assessee-trust is wholly or substantially for the religious purpose. There is no allegation on the part of the Revenue that the whole or substantially whole of the object of the trust is to propagate or advance support to a particular sect. We may observe that Hinduism is a way of life of a civilised society. It as such is not a religion. In this regard .....

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re is, however, no religion by the name 'Hindu'. It only shows that so called Hindu religion has been called for convenience'. The Commis sioner of Income-tax 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 diverge .....

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Therefore, expenses incurred for worshipping of Lord Shiva, Hanuman, Goddess Durga and for maintenance of temple cannot be regarded to be for religious purpose. Under these facts and circumstances, we are of the view that the Commissioner of Income-tax is not correct in law in not allowing the approval to the assessee-trust under section 80G of the Act. We accordingly, set aside the order of the Commissioner of Income-tax and direct the Commissioner of Income-tax to grant approval to the assesse .....

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