TaxTMI 
TaxTMI 
TaxTMI 
2011 (4) TMI 564
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....r 2008-09, accepting the returned income at Nil (PB pg. 1). It is being granted approval under section 80G of the Act (erstwhile section 88) by the competent authority since 1979 (being for a period of 3 years at a time); the latest being for the period 1-4-2006 to 31-3-2009 vide order dated 20-7-2006 (PB pg. 3). So, however, its latest application for renewal of approval under section 80G(5)(vi) dated 24-12-2008 met rejection at the hands of the competent authority. The reason cited is that the Society has mixed objects, i.e., religious and charitable, which are provided for the benefit of a particular religious community, even as it stood clarified during the course of hearing before him that the applicant is not doing any religious activity, but only running educational institutions. He adverted to the various documents filed in the assessee's paper-book (PB pgs. 1 to 14) in support of his contentions. To a specific query by the Bench regarding the finding by the ld. CIT that the accounts of the Society showed its activities as directed to a specific religious minority, he replied of it being a vague finding, further stating that the accounts of the Society are maintained as in ....
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....tual activities, the language employed, to which we must give full play and due deference while interpreting, is: 'expressed to be for the benefit of.....' . The legislative intent, as expressed in the statute, is thus that where the charter is expressed to be for the benefit of a particular religious community or caste, the institution having reserved the power for the same thus, the prohibition under the Act would follow, irrespective of whether the activities actually exhibit according such preference or not. This, apart from the clear provision of the statute under reference [section 80G(5)(iii)], also follows the decision by the Apex Court in the case of CIT v. Palghat Shadi Mahal Trust [2002] 254 ITR 212/120 Taxman 889, rendered in the context of section 13(1)(b), a pari materia provision, bearing the same proscription, i.e., as in section 80G(5)(iii), only it employing the words: 'created or established for the benefit of ....', instead. 3.3 We may now refer to the Rules and Regulations of the appellant-society (on record). The object clause (3) of the Rules and Regulations, reads as :-- "3. Aims and Objects: To work for the Educational, Social, Cultural and Economic advan....
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....f it being not on a stand alone basis but forming part of a number of other charitable objects. As indeed is the case in the present case, with only two, i.e., clause 4(a) & 4(b), of the total twenty sub-clauses in clause 4 being toward educational institutions, which, i.e., education, as contended, and even as its name suggests, is the sole or at least the principal field of activity of the society. The matter, thus, has a factual dimension to it as well. And where the character is not borne out clearly, being not unequivocally expressed one way or the other, a reference to the actual activities of the trust would also become, for that reason, perfectly justified. So however, we may clarify that the fact that a particular trust or institution may not be actually doing what is stated in its charter or doing it differently, having a bearing on the relevant qualification under the Act, though relevant, inasmuch as genuineness is a pre-requisite for being accorded any benefit under the law, is a different matter altogether. And one with which we are not concerned with at this stage or in this case; the charge of the Revenue being specific that its activities, are directed to the benef....
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.... but as to its character as well; the whole premise of the Article/s being promotion of minority interest, whether construed with reference to language or religion, with the only restriction being toward imparting of religious instruction thereat. The words 'for the benefit of any particular religious community or caste' in section 80G(5)(iii), therefore, have to be read in the background, and in light, of the words 'of their choice' occurring in Article 30, where-under the educational institutions of the appellant-society are established and being maintained, so that it would cover all the aspects of their functioning. What is being taught at such institutions; by whom; and to whom it is being taught. This is as these would go to define the nature and character of the educational institution/s, and thereby determine whether, in the facts and circumstances of the case, the same is set-up for the benefit of any religious community - the charge against it - or not. It would appear, ex facie, paradoxical that an institution/s established by a particular religious community, entitled to the rights and privileges under Articles 25 to 30 of the COI, is yet not set-up for its benefit, i.e....
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....l institutions being set-up and administered by the assessee-society, or any of them, is aided by the State, which precludes discrimination qua admission on any ground [Article 29(2)], would not by itself operate to exclude it from the purview of the section. This follows our reading of the term 'benefit' occurring in the provision, as also in section 13(1)(b), in an unqualified, broad manner, while the only benefit or the aspect qua which an equal treatment is ensured through the constitutional mandate, is with regard to 'admission' to the educational institution. 3.7 The assessee has argued and made out its case on the basis of its past, whereat it has been ostensibly working/running for the benefit of all without any reservation. We are not inclined, being a question of fact, to pre-determine the issue based on past conduct, which though would definitely go to establish a prima facie case in favour of the assessee, but no more, particularly in view of the language of its charter and constitutional frame-work suggesting a preference in respect of its principal activity. Besides, as apparent, there has been no examination of the relevant and vital facets of its functioning either....