2018 (7) TMI 2329 - AT - Income Tax

Trust wins appeal for charitable registration despite Hindu temple as main object under Section 12A

ITAT Mumbai-AT allowed the appeal of a trust seeking registration u/s 12A as a charitable trust. The trust's main object was establishing a Hindu temple ... Charitable purpose - religious purpose - registration under section 12A - public at large - advancement of any other object of general public utility - compliance with condition (iii) of section 80G(5) - Hinduism is a way of lifeCharitable purpose - religious purpose - public at large - registration under section 12A - Hinduism is a way of life - advancement of any other object of general public utility - compliance with condition (iii) of section 80G(5) - Whether the trust is a charitable trust entitled to registration under section 12A for assessment year 2008-09 or is a religious trust restricted to a particular religion - HELD THAT: - The Tribunal examined the trust deed and found that, although the primary objects include the construction and maintenance of a temple and installation of an idol according to Hindu shastras, the deed also expressly provides a range of charitable activities - running schools, scholarships, libraries, gaushalas, orphanages, old age homes, relief to victims of calamities, aid to the poor, institutions for the physically handicapped and similar public oriented objects - and stipulates that facilities are to be provided without distinction of caste, creed, colour, religion or sex. Applying the authorities relied upon, the Tribunal accepted that Hinduism has been treated by higher courts as a way of life and that the presence of temple related objects does not alone render the trust for the benefit of a particular religious community. Reliance was placed on co ordinate Bench decisions which held that mere worship or maintenance of a temple, when combined with unrestricted public access and broader public utility objects, does not constitute advancement or propagation of a particular religion attracting exclusion under Explanation 3 to section 80G or clause (iii) of section 80G(5). The Tribunal observed that the Revenue did not prove that the trust's objects are wholly or substantially for a religious purpose or that access or benefits are restricted to followers of a particular religion. On the overall appraisal of objects and the trust deed, the Tribunal concluded that the dominant and operative purpose is charitable for the public at large and directed granting of registration as a charitable trust under section 12A. [Paras 6, 8, 9]The trust is a charitable trust for the public at large and the order of the CIT(E) denying registration under section 12A is set aside; the CIT(E) is directed to grant registration as a charitable trust.Final Conclusion: Appeal allowed; the Tribunal set aside the CIT(E)'s order and directed grant of registration as a charitable trust under section 12A for assessment year 2008-09. Issues Involved:1. Whether the trust should be granted registration under section 12A as a charitable trust.2. Whether the trust's objectives are religious or charitable in nature.Detailed Analysis:1. Registration under Section 12A as a Charitable Trust:The primary issue in the appeal is the denial of registration under section 12A by the Commissioner of Income Tax (Exemption) [CIT(E)]. The assessee trust was constituted via a trust deed dated 18.09.2015 and registered with the Assistant Charity Commissioner on 06.04.2016. The trust applied for registration under section 12A(a) on 12.04.2016. The CIT(E) denied the registration on the grounds that the trust's main objective was religious, specifically to build a Hindu temple and install an idol of Shri Krishna, which was deemed not for the public at large but for a particular religion.2. Nature of Trust's Objectives:The CIT(E) argued that the trust's objectives were religious in nature, focusing on Hindu rituals and ceremonies, and thus did not qualify as charitable under section 2(15) of the Income Tax Act. The assessee contended that Hinduism is a way of life and not a religion and that the trust's objectives were for the public at large, including running schools, providing scholarships, maintaining gaushalas, orphanages, and other charitable activities without discrimination based on caste, creed, or religion.Assessee's Arguments:The assessee argued that the trust's objectives were charitable and for the benefit of the public at large. They cited the Supreme Court's observation that Hinduism is a way of life, not a religion. The trust deed explicitly stated that the temple would be open to all, irrespective of caste or creed, and included various charitable activities such as education, medical relief, and aid to the poor and needy. The assessee relied on judicial precedents, including Shiv Mandir Devsttan Panch Committee Sanstan Nagpur vs. CIT and Shri Radha Raman Niwas Trust, where it was held that Hinduism is not a religion but a way of life, and trusts with similar objectives were granted charitable status.Revenue's Arguments:The Revenue, represented by the Ld. D.R., supported the CIT(E)'s decision, emphasizing that the trust's primary objective was religious, focusing on Hindu rituals and the promotion of the pushtimargiya religion. They argued that the trust should be considered religious, not charitable, as per the Supreme Court's decision in Surat Art Silk Cloth Manufacturers Association. The Revenue also cited the case of Boxar Diocesan Society, where a trust benefiting a particular section of society was not granted charitable status.Tribunal's Findings:The Tribunal analyzed the trust's objectives and the relevant judicial precedents. It noted that the trust's activities included both religious and charitable aspects but emphasized the inclusive nature of Hinduism as a way of life. The Tribunal found that the trust's objectives, such as running schools, providing scholarships, maintaining gaushalas, and other charitable activities, were for the public at large and not confined to any particular religion or community.The Tribunal referred to the decisions in Shiv Mandir Devsttan Panch Committee Sanstan Nagpur vs. CIT and Shri Radha Raman Niwas Trust, where it was held that trusts with similar objectives were charitable. The Tribunal concluded that the CIT(E) erred in denying registration under section 12A, as the trust's objectives were charitable and for the public at large.Conclusion:The Tribunal set aside the CIT(E)'s order and directed the CIT(E) to grant registration to the trust as a charitable trust under section 12A. The appeal of the assessee was allowed, emphasizing that Hinduism is a way of life and the trust's objectives were charitable, benefiting the public at large without discrimination based on caste, creed, or religion.Order Pronounced:The appeal was allowed, and the order was pronounced in the open court on 27.07.2018.