9911796707
TMI Blog2013 (3) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 12AA and approval under Section 80G of the Act as under:- "3. The objects mentioned in trust deed like Akhand naam sankirtan in aashram uninterruptedly, Thakur Sewa of Shri Girdhari Ji and Samadhi of Baba Gaurang Das. And organization of Bhandaras on all important religious festival and other festivals like avirbhav and tirobhav tithes of Gaudiya Sampradayas bibhutis are pourely religious in nature and not in accordance with the section 2(15) of the I.T. Act, 1961. 4. In view of the above discussed facts, I am not satisfied about the objects and the genuineness of the activities of the applicant's trust as the applicant has failed to establish that its activities partake the character of charitable activities as defined in Sec.2 (15) of the I.T. Act1961. As such, the applicant trust's application for granting of registration u/s 12AA of I.T. Act, 1961 is hereby rejected. For the same reasons the applicant's request for grant of approval u/s 80G is also hereby rejected." 3. The learned Authorised Representative submitted that the assessee was established by Baba Murli Manohar Das alias Baba Sheetal Charan Das vide Trust Deed registered with SDM, Math, District Mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tan Panch Committee Sanstan Nagpur Vs. CIT-1 Nagpur reported in ITA No. 223/Nagpur 2009 order dated 11.10.2012. 6. The learned Departmental Representative relied upon the order of CIT. 7. We have heard the learned Representatives of the parties and records perused. The issues under consideration whether under the facts of the case the CIT was correct in rejecting the assessee's application for registration under Section 12AA of the Act and application for grant of approval under Section 80G of the Act. The assessee filed both applications in prescribed form on 10.04.2012. The submission of learned Authorised Representative is that the assessee has furnished the complete details before the CIT which were required for granting registration under Section 12A/ 12AA of the Act and approval under Section 80G. The copy of submission made before CIT has also been placed in Paper Book .For granting registration under Section 12AA of the Act. Procedure for registration is provided under Section 12AA of the Act. If we see the entire scheme of the Act, in this regard, we notice that the trusts or institutions claiming exemption from taxation under the Income-tax Act, 1961, have to comply wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the 31st day of March, 16[2004] shall be deemed to be the income of the previous year and shall accordingly be charged to tax.] [Conditions for applicability of sections 11 and 12.] 12A.[(1)] The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:- (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form22 and in the prescribed manner to the 23[***] Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, 24[whichever is later and such trust or institution is registered under section 12AA] : [Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution,- (i) from the date of the creation of the trust or the establishment of the institution if the 26[***] Commissioner is, for reasons to be recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. [(1A) All applications, pending before the Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Commissioner and the Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.] (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a)[or clause (aa) of sub-section (1)] of section 12A.] [(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1)[or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)]] and subsequently the Commissioner is satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered at New Delhi on the 21st day of February, 1985; or] [(iiid) the Rajiv Gandhi Foundation, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of June, 1991; or] [(iiie) the National Foundation for Communal Harmony; or] [(iiif) a University or any educational institution of national eminence as may be approved by the prescribed authority in this behalf; or] [(iiig) the Maharashtra Chief Minister's Relief Fund during the period beginning on the 1st day of October, 1993 and ending on the 6th day of October, 1993 or to the Chief Minister's Earthquake Relief Fund, Maharashtra; or] [(iiiga) any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat; or] [(iiih) any Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district for the purposes of improvement of primary education in villages and towns in such district and for literacy and post-literacy activities. Explanation.-For the purposes of this sub-clause, "town" means a town which has a population not exceeding one lakh according to the last p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government; or] [(iiihj) the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities constituted under subsection (1) of section 3 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999); or] (iv) any other fund or any institution to which this section applies; or (v) the Government or any local authority, to be utilised for any charitable purpose [other than the purpose of promoting family planning; or] (vi) an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;] (via) any corporation referred to in clause (26BB) of section 10; or (vii) the Government or to any such local authority, institution or association as may be approved in this behalf by the Central Government, to be utilised for the purpose of promoting family planning;] (b) any sums paid by the assessee in the previous year as donations for the renovation or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;]] (ii) the instrument under which the institution or fund is constituted does not, or the 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 purpose other than a charitable purpose; (iii) the institution or fund is not expressed to be for the benefit of any particular religious community or caste; (iv) the institution or fund maintains regular accounts of its receipts and expenditure;[* * *] (v) the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 25 of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st day of March,[2004]; [(iv) the amount of donation remaining unutilised on the 31st day of March, [2004] is transferred to the Prime Minister's National Relief Fund on or before the 31st day of March,[2004];] (v) it renders accounts of income and expenditure to such authority and in such manner as may be prescribed, on or before the 30th day of June, [2004].]" Rules 17A and 11AA [Application for registration of charitable or religious trusts, etc. 17A. An application under[clause (aa) of sub-section (1)] of section 12A for registration of a charitable or religious trust or institution shall be made in duplicate in Form No. 10A and shall be accompanied by the following documents, namely :- (a) where the trust is created, or the institution is established, under an instrument, the instrument in original, together with one copy thereof; and where the trust is created, or the institution is established, otherwise than under an instrument, the document evidencing the creation of the trust or the establishment of the institution, together with one copy thereof : Provided that if the instrument or document in original cannot conveniently be produced, it shall be op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made: Provided that in computing the period of six months, any time taken by the applicant in not complying with the directions of the Commissioner under sub-rule (3) shall be excluded.]" CBDT Circular FINANCE (NO.2) ACT, 1996 - CIRCULAR NO. 762, DATED 18-2-1998- registration of charitable and religious trusts- "19.1 Under the existing provisions of the Income-tax Act, exemption from income-tax in respect of the income of a charitable or religious trust or institution is available only if the conditions specified in that section are satisfied. One of these conditions if that the person in receipt of the income shall make an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Chief Commissioner or Commissioner of Income-tax within the specified time. However, there was no provision in the Income-tax for processing of such an application and granting or refusal of registration to the concerned trust or institution. Finance (No. 2), Act, 1996 19.2 Hence the Act now provides for a procedure to be followed for grant of registration to a trust or institution. According to this procedure, the Chief Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he trust filed its application on June 23, 1973 which was within stipulated period and the Commissioner failed to deal with it within reasonable time, registration granted on April 1, 1996, should be deemed to have been granted from June 23, 1973, the date of filing the application so as to entitle the trust to benefit under section 11 for assessment years 1988-89 and 1989-90. (iv) CIT vs. Jodhpur Chartered Accountants Society [2002] 258 ITR 548 (Raj) - In this case, it was held that if the object of the trust was to benefit whole of mankind by education in tax matters, it was entitled to get registered. (v) Fifth Generation Education Society vs. Commissioner of Income-tax [1991] 54 TAXMAN 237 (ALL.) - In this case the assessee-society applied for registration under section 12A, but the Commissioner refused to grant registration to it on the grounds, inter alia, (i) that the objects of the assesseesociety were general in nature, and (ii) that no activity had been carried on by the assessee-society. On writ it was held that it is evident that at the stage of registration under section 12A the Commissioner is not to examine the application of income. All that he may examine is wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come derived for trust property must be determined on commercial principles. In order to be eligible for the aforesaid exemption, the assessee has to get the trust registered under section 12A. The assessee has to make an application in the prescribed form and comply with the other legal requirements mentioned in the aforesaid section. On receipt of such application for registration, the Commissioner is under an obligation to follow the procedure prescribed under section 12AA before he grants or refuses registration. What he is expected to do on receipt of such an application is to call for such documents or information from the trust in order to satisfy himself about the genuineness of the activities of the trust or institution. In addition to securing information in the aforesaid manner, it is open to the Commissioner to make such enquiries as he deems necessary in this behalf. Having regard to the scheme of sections 11, 12 and 13 ultimately what the Commissioner has to look into is not the source of income of the trust, but whether such income is applied for charitable or religious purposes. The satisfaction of the Commissioner should be regarding the application of the income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly or indirectly, for the purposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business: (ii) the institution under which the institution or fund is constituted does not, or the 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 purpose other than a charitable purpose: (iii) the institution or fund is not expressed to be for the benefit of any particular religious community or caste: (iv)the institution or fund maintains regular accounts of its receipts and expenditure: (v) the institution or fund is either constituted as a public trust or is a registered under the Societies Registration Act, 1860(21 of 1860), or under any law corresponding to that Act in force in any part of India or under Section 253 of the Companies Act, 1956 (1 of 1956), or is a University established by law, ir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in writing and grant approval to the institution or fund specifying the assessment year or years for which the approval is valid. Sub-rule (5) empowers the CIT to reject the application for approval after recording the reasons for such rejection in writing where the CIT is satisfied that one or more conditions laid down in clause (i) to (v) of section 80G(5) are not fulfilled. This rule also states that no order rejecting the application shall be passed without giving an opportunity of hearing to the institution or trust. Sub rule(6) requires the CIT to pass an order granting or rejecting the application within 6 months from the date on which the application is made. We noted that in the case of assessee-trust, the CIT was of the opinion that the assessee trust has not complied with the conditions No.(ii) and (iii) of section 80G(5)(ii) of the Income Tax Act. The Explanation 3 of this section lays down that charitable purpose does not include any purpose the whole or substantially whole of which is of a religious nature. The main objection of the CIT is that the objects as enumerated in the trust deed are religious and the expenditure has been incurred for religious purposes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... community or caste. The words "religious community" means the group of people having a common religion or faith. The word "religion" means the belief in and worship to a superhuman controlling power, specially the personal god or gods, a particular system of faith and worship. It means the trust should not be for the benefit of any particular group of person having the common belief in worshiping of superhuman controlling power or having common system & faith and worship. If the trust is for the benefit of any particular community. It would include the advancement, support or propagation of a particular religion, worshipping of Lord shiva, hanumanji. Goddess. Durga and maintaining of temple temple, in our opinion, cannot be regarded for the advancement support or propagation of a particular religion. No evidence or material was placed on record or brought before us by the learned DR which may prove that these object relate to a particular religion. No doubt the DR argued that it relate to Hindu Religion but in our opinion it is not so, Lord shiva. Hanumanji, goddess Durga does not represent any particular religions, they are merely regarded to be the super power of the universe. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that an institution or fund shall be for a charitable purpose and may have a number of objects. If anyone of these objects is wholly or substantially wholly of a religious nature, the Institution or Funds falls outside the scope of section 80G and the donation to it will not make the donor entitled for the deduction u/s80G. The objects as per Explanation 3 must be wholly or substantially whose of which must be of religious nature. The assessee has submitted all the evidence 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 civilized society. It as such is not a religion. In this regard we rely on the case of TT Kuppuswamy Chettair Vs. State of Tamil Nadu (1987) 100 L.W 1031 in which it was held "The word "Hindu"has not been defined in any of the texts nor in judgment made law. The word was given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to show that assessee is spending its income for a particular religion. (ix) Relying on decision in Radhasoami Satsang vs. CIT (1991) 100 CTR (SC) 267 : (1992) 1993 ITR 321 (SC), it was observed in Sonepat Hindu Eductional & Charitable Society vs. CIT & Anr. (2005) 196 CTR (P&H) 623 : (2005) 278 ITR 262 (P&H) that the scope of enquiry by the CIT, while dealing with the application under s. 80G(5) (vi), extends to eligibility to exemption under various provisions of the Act, referred to in that sub-section, but not to actual computation of income under the Act, particularly when a society or a trust is claiming exemptions under ss. 11 and 12 and not under s. 10. It needs little emphasis that the enquiry for the said purpose relates to whether the applicant is registered under s. 12A; whether it is a trust wholly for charitable purposes and whether the income received by it is liable to be considered under s. 11. Exemption under the provision of s. 10(23C) would not be necessary to make the petitioner eligible for approval under s. 80G. It was emphasized that while dealing with the application under s.80G(5), the scope of enquiry by the CIT extends to eligbility of the applicant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) In CIT vs. Swastik Textile Trading Co. Pvt. Ltd. 1977 CTR (Guj.) 618 : (1978) 113 ITR 852 (Guj) : donation was made to a charitable trust. One of the objects of the donee-trust was establishing, maintaining, running and helping gaushalas, pajarapoles and other similar institutions for animals, etc. The contention of the Revenue was that donation to such a trust was hit by section 80G(5), as the said object of the trust was religious in nature. Gaushalas are for preservation and improvement of breed of bovine animals, etc. while panjarapoles are for protection and preservation of infirm animals. The Gujarat High Court negatived the contention of the Revenue, on the ground that the said object was charitable in nature only. According to the High Court, the object so as to embrace within its scope those acts of charity, which advance general public morality, alleviating suffering of weak, infirm animals or preventing cruelty to animals, encouraging compassionate feeling and tender treatment by protecting such domestic animals, by service of such animals or looking after and promoting the well \-being of these domestic animals, including such bovine animals which are the mainstay of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To carry sewa puja of Sri Girdhari Ji and carry Akhand Naam Sankirtan uninterruptedly in Aashram is one type of meditation and yoga. The trust carries such meditation and yoga since its inception, more than last 50 years. Such types of meditation accepted not only in India but are accepted in western country 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 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) of 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 foods to persons irrespective of any cost or religious. Such bhandara activities are like day meal food scheme of the government. When the government is running such scheme, under those circumstances, it cannot be said that objects of the trust are not charitable. Running gaushala, Piaau and providing dana to birds is also charitable activities. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table, the activities are charitable in accordance with section 2(15) of the Act, or carrying activities for a particular cast or commodity or group of person or religious one. The Hon'ble jurisdictional High court in the case of Oxford Academy for Career Development vs. Chief CIT [2009] 315 ITR 382/226 CTR (All.) 606 -while examining words "charity' observed that the expressions 'charity' or 'charitable purposes' do not admit of rigid definition. In order to understand what these expressions legally convey, one can merely enumerate its various aspects and characteristics as they have been recognized by the laws of a particular country. In Umar Baksh vs. CIT AIR 1931 Lakh. 578 (SB), it was observed that for construing the words 'religious or charitable purpose' it is necessary to investigate the meaning of these words in the particular system of jurisprudence that may be followed by the assessee. In the Hindu Smritis 'charity', whether secular or religious, is but a part of the content of the word 'dharma'. When the word is used in the context of gifts of property, it means all acts of piety and benevolence considerably wider than what is understood by the use of the word 'charity' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l income of the previous year of person in receipt thereof - in the case of trust charitable purpose institution created after the commencement of this Act, any income thereof if the institution is crated for the benefit of any particular religious community or caste. Thus the bar under the said section 13(1)(b), is not applicable to a charitable trust which was created or established for the benefit of any particular religious community or caste before the commencement of the Income Tax Act, 1961 as held in following cases:- i) CIT Vs. Shri Maheswari Agarwal Marwari panchayat, (1982) 136 ITR 556 (MP) ii) CIT vs. Saraswath Poor Students Fund (1985) 46 CTR (Kar) 107 : (1984) 150 ITR 142 (Kar) iii) CIT vs. Arya Vysya Kalyana Nilaya Sangam (1986) 54 CTR (AP) 155 : (1986) 150 ITR 142 (AP) : iv) CIT vs. Surji Devi Kunji Lal Jaipuria Charitable Trust (1990) 87 CTR (All) 213 : (1990) 186 ITR 728 (All) v) CIT vs. Surji Devi Kunji Lal Jaipuria Charitable Trust (1990) 186 ITR 728 (All) vi) CIT vs. Surji Devi Kunji Lal Jaipuria Charitable Trust (1991) 187 ITR 590 (All) 15. In the case under consideration, the undisputed fact is that the trust is created on 12.02.1957, befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
