TaxTMI 
TaxTMI 
2011 (9) TMI 278
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.... societies came into existence with the objects of evangelising and edifying the body of Lord Jesus Christ so as to spread His teachings to far off villages, to publish Christian magazines, journals, etc., besides, undertaking certain charitable activities for amelioration of the poor, destitutes, orphans, disabled, aged and sick persons as also provide vocational training to adults and children for enabling them to earn livelihood. Thus, the objects of the society are both religious and charitable in nature when it came into existence. Much later in the year 2004, the society introduced new objects, being establishment and running educational institutions to serve the minority Christian community by providing to them technical, medical, engineering and other humanities related education and maintenance of an orphanage and provision of relief to the lepers, aged and poor. Therefore, both the objects as well as the activities of society represent an admixture of religious and charitable purpose and activities. The CIT has also observed that from a certificate of registration u/s 12AA of the Act dated 14.3.2005, it was not clear whether the society has been registered as a wholly cha....
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....e assessee should have been taken into account while granting registration u/s 80G of the Act. He further contended that from the details of expenditure, it is quite evident that assessee has incurred substantial amount of expenditure to provide help to lepers, aged, poor and orphanage maintenance. The salaries to preachers should have been considered under the head 'charitable activities' but the CIT has considered it under the head 'religious activities'. If this expenditure has been considered under the charitable activities, the expenditure on religious activities is less than 5% of the total income of the assessee society. Since the assessee has fulfilled all the requisite conditions, the registration u/s 80G may be granted. 5. The Ld. D.R. on the other hand has invited our attention to the facts that though the assessee has introduced the new object of the society of establishing and running educational institutions to serve the minority Christian community by providing them technical, medical, engineering and other humanity related education but no activities in this regard were undertaken by the assessees. From the details of expenditure, it is clear that the assessee so....
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....as, the preachers are generally engaged to spread the teachings of Lord Jesus Christ and therefore cannot be considered to be an expenditure incurred for charitable activities. If the salaries to preachers is taken out from the category of expenditure for charitable activities, the expenditure on religious activities would go more than 5% of the total income. Though the assessee has claimed various expenditures under the head charitable activities, but no evidence are placed to establish the same. He has also furnished the details of total income of the assessees but since the expenditure on religious activities is more than 5% of the total income of the assessee it is hit by sub-section 5(ii) read with sub-section 5B of section 80G of the Act. 7. The CIT has made a detailed discussion of all these expenditures in his order and examined the case in the light of various judicial pronouncements. For the sake of reference, we extract the order of the CIT as under: "After hearing the authorized representative, perusal of the records and documents furnished on behalf of the assessee society and on a careful consideration of the facts relating to the issue, the following observatio....
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.... - Bible school stipend - - 1,80,000 - Foreign delegate expenses (visiting preachers) 16,879 - 20,327 - Total 27,28,340 27,11,656 29,68,805 25,53,059 Charitable activities:- Head under which expenditure was debited As at the end of 31.3.2006 31.3.2007 31.3.2008 31.3.2009 Lepers 54,000 54,000 1,20,000 1,20,000 Poor aged 80,000 1,20,000 2,16,000 2,16,000 Poor 19,250 22,150 61,800 1,38,232 Orphanage 7,43,968 10,71,046 12,46,896 13,04,531 Medicines - 18,245 44,802 - Natural calamities 5,500 2,57,351 - - Total 9,02,718 15,42,792 16,89,498 17,78,763 (b) As could be observed from the above tabular chart, capital expenditures towards church building, church lands, church furniture etc., as on 31.3.2006 works out to a huge investment of Rs. 67,17,287/-. Even the expenditures towards religious activities far exceed the expenditures towards the charitable activities undertaken by the assess....