Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2018 (4) TMI 790

s of the trust that it is constituted mostly to perform puja and seva to Shri Shri Kali Mata in a Mandir built and erected at village Thakdari, P.O. Krishnapur, District-24 Parganas (N), Kolkata 700 102, and to keep and maintain the mandir and the land and to make arrangements to continue seva and puja. In addition to these objects, a number of charitable objects have been included. These relate to relief to poor, maintaining educational institutions etc. - The religious expenditure in question is towards puja expenses and honarium paid to priests. In our view the judgement in the case of Umaid Charitable Trust (supra), does not come to the rescue of the assessee, because in that case a single charitable contribution was made to another trust, which carries out renovation of Lord Vishnu Temple. Such single contribution was not considered as a religious activity. - In the case on hand, worship of Godess Kali Mata and expenditure incurred towards the same is definitely incurred for a particular religious purpose. The arguments of the assessee, that any person of any religion can perform the Puja to Goddess Kali and hence the expenditure in question is not restricted to a p .....

X X X X X X X

Full Text of the Document

X X X X X X X

articular religious community (or caste. As per the MOA of the assessee (pgs. 7 of PB) the object clauses 3(a) to 3(1) contains purposes of performance of seva puja (charitable offerings), give lessons and instructions of Puran, Geeta(holy books), maintain, construct, repair, add or alter the Mandir (temple) & land of Sri Sri Kalimata, These objects are not for any particular religious community or caste. There is nothing in the object clause to indicate that the puja or worshipping right belongs to only Hindus or Brahmins. Any person practicing any other faith, religion or caste is not precluded to enter the temple or to offer puja or to worship and pay respect to the deity namely Bhuvaneswari Kali Thakuranir, offer pranamis etc. Thus, it is argued that the object clause of the assessee does not contain any expression to be for the benefit of any particular religions community or case. Reliance on 307 ITR 226 (Raj) Umaid Charitable Trust V UOI. Further, in the impugned order, nothing has been shown to disentitle the application for approval of assessee by not fulfilling any one or more conditions of s. 80G(5)(i) to (v) as prescribed in Rule 11AA(5) to reject the application. I .....

X X X X X X X

Full Text of the Document

X X X X X X X

n Expl. 3 as excluding purposes, the whole or substantially the whole of which is of a religious nature. Religious nature, having not been defined anywhere in the Act, its ordinary meaning is to be interpreted. Sub section (5) also contains that for application of conditions of s. 80G, the institution must be established for a charitable purpose. Sub clause (ii) of Subsection (5) again states that the instrument under which the inst./fund is constituted, does not contain rules for transfer or application of whole or part of its income or assets for purposes other than charitable. Now, all these clauses are aiming to rule out religious inst./fund from availing benefits of s. 80G. The assessee claims that they are not religious inst./fund, either for any particular community or caste. In case it is held that all activities of worship, tantamount to religious activities, then the use of word particular religious community or caste made in sub clause (iii) of subsection (5) becomes otiose and inoperative. There would have been no need to differentiate between a particular religious community or caste and other religious activity. Religion in its expression resembles a particular sect, .....

X X X X X X X

Full Text of the Document

X X X X X X X

reproduce the relevant provisions of section 80G of the Act to the extent the same are relevant for the controversy involved in the present case. 80G. Deduction in respect of donations to certain funds, charitable institutions, etc.-(2) The sums referred to in sub-section (1) shall be the following, namely :- (iv)any other fund or any institution to which this section applies; or (5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :- (i )where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (23AA) or clause (23C) of section 10 :- Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if- (a) the institution or fund maintains separate books of account in respect of such business; .....

X X X X X X X

Full Text of the Document

X X X X X X X

f its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply. Explanation 3 - In this section 'charitable purpose' does not include any purpose the whole or substantially the whole of which is of a religious nature 6. The learned counsel for the petitioner also relied upon rule 11AA of the Income-tax Rules, 1962 particularly sub-rules (4) to (6) of the said rule 11AA, which are reproduced hereunder :- 11AA. Requirements for approval of an institution or fund under section 80G.-(1) to (3)****** (4) Where the Commissioner is satisfied that all the conditions laid down in clauses (i) to (v ) of sub-section (5) of section 80G are fulfilled by the institution or fund, he shall record such satisfaction in writing and grant approval to the institution or fund specifying the assessment year or years for which the approval is valid. (5) Where the Commissioner is satisfied that one or more of the conditions laid down in clauses (i) to (v) of sub-section (5) of section 80G are not fulfilled, he shall reject the application for approval, after recording the reasons for such rejection in writing : Provided that no or .....

X X X X X X X

Full Text of the Document

X X X X X X X

2001] 251 ITR 849 (AP), the petitioner institution maintained 10 temples and 22 educational institutions, peer home and bala mandir specified in Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987. The petitioner provided free food, free accommodation, free transport to the pilgrims irrespective of caste and religion on the simple declaration of faith in the Lord. The Hon'ble High Court, while allowing the writ petition and setting aside the order of the Commissioner of not granting exemption to the petitioner and directing him to consider the application de novo in light of Hon'ble Court's order, held that 'section 80G of the Income-tax Act, 1861, provides for deduction in respect of donations to certain funds and institutions. It applies to donations to any institution or fund established in India for charitable purpose and if it fulfils the following conditions, namely the instrument under which the institution is constituted does not or rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any .....

X X X X X X X

Full Text of the Document

X X X X X X X

remain necessarily confined to the objects of the trust and set out in the deed of declaration. The real purpose of the establishment of the trust has to be found out and spelled out. 'Purpose' means that which one sets before him to accomplish or attend, an intention or aim, object, plan, project; the term is synonymous with the ends sought and an object to attain, an intention, etc. Purpose must obviously be construed as a real purpose and not a purpose as it outwardly appears to be. Any other interpretation would permit a fraud being played on the law permitting exemption from taxation. If the argument of learned counsel for the petitioner were to be accepted then a trust may be established with a purpose as set out in the deed of declaration which appears to be highly charitable but the trust may in fact be engaged in such activities which cannot even remotely be called charitable, and yet the donations made to the trust would enjoy exemption. The authority conferred with the power to grant exemption is not debarred from finding out the real purpose as distinguished from the ostensible purpose and if it may find that the purpose of the trust was other than charitable t .....

X X X X X X X

Full Text of the Document

X X X X X X X

n the aviary and the menagerie and throwing open both to the people to see and delight is not a mundane mania but has deeper religious roots. Hinduism worships all creation :- (Peace be unto all bipeds and even so to all quadrupeds). Indeed, the love of sum-human brethren is high religion. For 'He prayeth best, who loveth best All things both great and small For the dear God who loveth us. He made and loveth all.' (Coleridge, in Ancient Mariner) From the Buddha and Mahavira to St. Francis of Assissi and Gandhiji, compassion for living creatures is a profound religious motivation. The sublime mind of Mullick was obviously in religious sympathy with fellow beings of the lower order when he showed this tenderness to birds and beasts and shared it with the public. The art gallery too had link with religion in its wider connotation although it is plainer to regard it as a gesture of aesthetics and charitable disposition. God is Truth. Truth is beauty, beauty is Truth. A thing of beauty is a joy for ever. In fact for a highly elevated Indian mind, this conceptual nexus is not far-fetched. The garden and the love of flowers strike a psychic chord at once beautiful and religiously .....

X X X X X X X

Full Text of the Document

X X X X X X X

racticed under propagated by anyone and which may even have some secular activity associated with it. . . . (p. 5) Hon'ble Reddy, J., on page 6 para 13 further observed, Religion is certainly a matter of faith with individuals or communities and it is not necessary theistic. There are well-known religion in India like Buddhism and Jainism that do not believe in God or intelligent first cause. The Hon'ble Court observed at page 20 : Religion is squarely human life with superhuman life. Belief in a superhuman power and such an adjustment of human activities to the requirement of that power as may enable the individual believer to exist more happily is common to all 'religions'. 17. In CIT v. Social Service Centre [2001] 250 ITR 39, the Andhra Pradesh High Court opined, We do not find that donation to a church or construction of a church is not a purpose which is not of general public utility. Therefore, the contention of the Department that the expenditure on religious activities could not be given exemption cannot be accepted particularly in the context of our polity. We are aware that most of the religious and charitable activities go together in this country. (p. 4 .....

X X X X X X X

Full Text of the Document

X X X X X X X

public utility. Not only in India, meditation and yoga are being accepted in the western countries also as a great source for physical 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 to be an activity for the advancement of general public utility. Rule of Consistency 21. In Radhasoami Satsang v. CIT [1992] 193 ITR 321, the Apex Court observed : That in the absence of any material change justifying the Department to take a different view from that taken in earlier proceedings, the question of the exemption of the assessee-appellant should not have been reopened. Strictly speaking, res judicata does not apply to income-tax proceedings. Though, each assessment year being a unit, what was decided in one year might not apply in the following year; where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. (p. 322) 22. In DIT .....

X X X X X X X

Full Text of the Document

X X X X X X X

note that in the earlier assessments of this very trust, the objectives of the trust were accepted and the assessment orders had been passed even after 1992 to the effect that the trust was a public charitable trust. The order of the Income-tax Officer was not valid and was liable to be quashed. 26. In CIT v. Thanthi Trust [1999] 239 ITR 502, the Hon'ble Supreme Court observed that dismissing the appeal, that the question herein was essentially a question of fact. A college was run, not by the assessee-trust, but by another registered charitable Society. The High Court had found that the conduct of the educational institution is drawing from the assessee-trust larger sums than what had been credited by the trust in its favour in 1969-70 showed that it was fully aware of its credit with the assessee-trust and the funds that had been made available to it by the trust. It was no part of the revenue's case at any point of time that the credit entries made in the assessee's books of account were not genuine or the trust or that they were make - believe or bogus. The Income-tax Officer had not doubted the said entries and called upon the assessee to produce the accounts of t .....

X X X X X X X

Full Text of the Document

X X X X X X X

ore, the mere fact that insignificant amount had been spent on religious charity, did not entitle the donors to claim deduction under section 80G. (p. 475) 29. Another decision relied upon by the learned counsel for the revenue in the case of Mishrilal Gordhanlal Batra Charitable Trust v. Union of India [D.B. Civil Writ Petition No. 4287 of 1998, decided on 6-12-2007] in which the case the Court merely remitted the case back to the Commissioner for reconsideration of the application for renewal with effect from 1-4-2000 uninfluenced by the order rejecting the renewal for the previous period 1995 - 2000. This judgment is of no help to the learned counsel for the respondents. 30. I have heard the learned counsel for the parties at length and given my thoughtful consideration to the facts of the present case and the case laws cited at the Bar. 31. This Court is of the considered opinion that mere one contribution by the charitable trust to another trust which carried out repair and renovation of Lord Vishnu's temple does not disentitle the petitioner-trust from renewal of its exemption certificate under section 80G of the Act. The line of distinction between religious purposes and .....

X X X X X X X

Full Text of the Document

X X X X X X X

st deed indicates that said trust was constituted long back on 27-8-1963 and has been carrying on such charitable activities, this Court finds no justification for rejecting its renewal under section 80G of the Act which is a matter of right. The conditions of section 80G(5) read with Explanation3 do not stand violated in the present case. 33. The learned counsel for the revenue relied upon the decision of the Supreme Court in the case of Upper Ganges Sugar Mills (supra), which has been relied upon by the learned CIT(A) also in the impugned order, it was held on the basis of one particular clause (2)(h) of the trust-deed which read to establish, maintain and to grant and/or aid to public places of worship and prayer halls . The Hon'ble Supreme Court dealing with Explanation4 of section 80G(5) held as under : To reiterate, Explanation3 does not require the ascertainment of whether the whole or substantially the whole of the institution or fund's charitable purpose is of religious nature. If it did, it would read differently. It requires the ascertainment of whether there is one purpose within the institution or fund's overall charitable purpose which is wholly, or substa .....

X X X X X X X

Full Text of the Document

X X X X X X X

va to Shri Shri Kali Mata in a Mandir built and erected at village Thakdari, P.O. Krishnapur, District-24 Parganas (N), Kolkata - 700 102, and to keep and maintain the mandir and the land and to make arrangements to continue seva and puja. In addition to these objects, a number of charitable objects have been included. These relate to relief to poor, maintaining educational institutions etc. 6.1. The ld. CIT(E), in his order u/s 80G(5B) of the Act, held that the assessee spent more than 5% of its income towards religious purposes. The religious expenditure in question is towards puja expenses and honarium paid to priests. In our view the judgement in the case of Umaid Charitable Trust (supra), does not come to the rescue of the assessee, because in that case a single charitable contribution was made to another trust, which carries out renovation of Lord Vishnu Temple. Such single contribution was not considered as a religious activity. In the case on hand, worship of Godess Kali Mata and expenditure incurred towards the same is definitely incurred for a particular religious purpose. The arguments of the assessee, that any person of any religion can perform the Puja to Goddess Kali .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||