TMI Blog1984 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... had allowed deductions under s. 80G on a donation of Rs. 25,000 paid by the assessee company (M/s. Upper Ganges Sugar Mills Ltd., Calcutta) to the Vishwa Mangal Trust. Subsequently, the proceedings were reopened. The trust deed of Vishwa Mangal Trust was examined. The ITO found that clause 2(h) contained an object which was wholly of a religious nature and accordingly was not a charitable purpose. The deduction claimed under s. 80G was held not allowable. The assessment order was modified accordingly. On appeal, the finding and conclusion of the ITO were affirmed by the AAC. The assessee went up to the Tribunal. The Tribunal held that cl. 2(h) read in the light of the various other clauses of the trust deed shows that the underlying idea of cl. 2(h) was the welfare of human brotherhood and the propagation of the concept of universal brotherhood which was not wholly or substantially of a religious nature. On this view, the appeal was allowed and the assessee was held entitled to relief under s. 80G on the donations made to the Vishwa Mangal Trust. In order to resolve the controversy raised in this reference, it is necessary to examine the trust deed. The second clause of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to public places of worship and prayer halls. The question is whether the assessee was entitled to deduction of the amount of donations paid by it to the Vishwa Mangal Trust under s. 80G of the I.T. Act. Under this section, the donations to a trust fund are admissible deductions if the trust is, inter alia, established for a charitable purposes. Section 80G provides that in computing the total income of an assessee, certain deductions will have to be allowed in respect of donations made by an assessee in accordance with and subject to the provisions of that section. Sub-s. (2) of s. 80(G) enumerates a number of institutions, donations to which will be eligible for deduction under s. 80G. Sub-ss. (3) and (4) deal with computation of the deductible amount. Sub-s. (5) provides that donations to an institution or fund established in India for charitable purpose will also qualify for exemption if certain specified conditions are fulfilled. The conditions important for our purpose are as under " 80G. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the objects of the institution or fund must be charitable in nature. Recently, a High Court has held in a case decided under the Gift-tax Act, 1958, that the scope of the expression 'charitable purpose' is wide enough to cover a religious purpose also. This interpretation will have the effect of widening the scope of the above-mentioned provision in the Income-tax Act by way of enabling assessees to claim a rebate of income tax in respect of donations made to institutions or funds established for religious purpose also. This is, however, not in accordance with the intention underlying the provision and the interpretation which has so far been given to it in practice. The Income-tax Act makes a distinction between a charitable purpose and a religious purpose. For instance, section 11 of the Income-tax Act which exempts from tax the income derived from property held on trust for charitable or religious purposes, specifically mentions " religious purposes " besides charitable purposes. The distinction between a charitable purpose and a religious purpose is implicit in section 88 of the Act also because that section contains a separate pro vision for a rebate of income-tax in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes do not become one composite purpose. It will be open to the trustees under the deed of trust to legitimately spend the entire funds of the trust for setting up temples. In my judgment, establishment or maintenance or grant of aid to public places of worship is wholly a religious purpose. Moreover, I fail to see how setting up of prayer halls can be a non religious purpose. Prayer is a matter of faith. It was observed by Byles J. in the case of Baxter v. Langley, 38 LJMC 1. " What is prayer? " Barrow says " It is not only supplication, but adoration." The dictionary meaning of " prayer according to Webster's New International Dictionary, second edition, is: 1. (a) Act or practice or an instance of praying; beseeching; petition supplication. (b) An earnest request to someone (for something) ; an entreaty. 2. Act of addressing supplication to a divinity or object of worship, the offering of adoration, confession, supplication, thanks-giving, etc., to a God; as, public prayer; secret prayer. 3. The form of words used in praying; a formula of supplication; an expressed petition; esp., a supplication addressed to God; as, the Lord's prayer a written prayer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and prayer halls can only be for a religious purpose. It was argued on behalf of the assessee that by the trust deed, the trustees were empowered to set up places of worship and prayer halls not for any particular community or religion. Therefore, this object should not be regarded as a religious object. But that, in my opinion, is quite an irrelevant consideration. Section 80G(5)(iii) disqualifies an institution or fund from the exemption if " the institution or fund is not expressed to be for the benefit of any particular community or caste ". Section 80G(5)(iii) ensures that even a charitable trust will not qualify for the benefit of s. 80G if it is expressed for the benefit of any particular religious community. It does not deal with the contingency of an otherwise charitable trust having a religious purpose. We are in this case concerned with Explanation 3 which categorically excludes from " charitable purpose " any purpose " the whole or substantially the whole of which is of a religious nature ". If a trust is set up for advancement of all the religions in the world, there can be little doubt that the purpose of the trust will be of religious nature, even though it is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has no relevance to the controversy raised before us. Worship and prayer may bring a man mental peace and poise. But that will not make either worship or prayer a non-religious activity. A man of religion may have greater mental poise than a non-religious person. But the fact that a religious man has mental peace and some people practise religion for acquisition of mental peace will not make religious practices like worship and prayer non-religious activities. In the case of S. P. Mittal v. Union of India, AIR 1983 SC 1, the Supreme Court held that the Auroville (Emergency Provisions) Act (59 of 1980), did not stand in the way of the society establishing and maintaining institutions for religious and charitable purposes. It also did not stand in the way of the society to manage its affairs in matters of religion. It had only taken over the management of the Auroville in respect of secular matters. The Act neither violated art. 25 or art. 26 of the Constitution. It was emphasised by Misra J. at p. 30: " The impugned enactment does not stand in the way of the society establishing and maintaining institutions for religious and charitable purposes. It also does not stand in the w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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