TaxTMI 
TaxTMI 
2019 (3) TMI 1674
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....to Gurudevji, who is a person specified u/s 13 (3) of the Income Tax, Act 1961 in violation of the provisions of section 13(1) (c) of the Act. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the benefits of section 11 & 12 of the Act, ignoring the provisions of section 13(1) which provides that even if there is a single instance of violation of section 13(1), the trust will lose the exemption in respect of its entire income. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that provisions of section l1sBBC are not applicable in this case. 5. On the facts and in the circumstances of the case and in law, the Ld. C!T(A) has erred in holding that the AO was not justified in estimating unexplained expenditure on samagams despite the fact at the assessee could not provide details of expenditure incurred on samagams." 2. The facts in brief, are that assessee trust was granted registration u/s 12A vide certificate / order dated 20.5.2005. The said trust was created vide trust deed dated 30.12.2002 which was set up by its founder Brhamrish Shree Kumar Swamiji. The objects of ....
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....institutions other NGO's. xiv. To open, found, establish, manage, promote, set-up, run, maintain, assist, finance, support and /or help in the setting up and/or maintaining and/or running schools, colleges, arts and science medical, para medical and technical, lecture halls and other establishments or institutions etc, for advancement of education and knowledge in arts, science, literature humanities and ail other useful subjects in all their manifestation. xv. To establish, maintain and run dispensaries, nursing homes, hospitals, providing medical treatment to all human diseases with all scientific and technical and tests of all kinds. xvi. To open found, establish, promote, set-up, run maintain assist, finance, support and/or help in the setting up and/or maintaining, boarding houses, libraries, reading rooms and other training and vocational institutes. xvii. To promote, organize, administer, establish support maintain and/or grant and to person institution or society or organisation is ever having for the objects of charitable purpose and to incur expenditure in connection therewith. xviii. To promote assist and/or maintain all activities by whomsoever carrie....
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....hed for religious purpose then it cannot be justified its activities which has now become religious in nature. The objects of a charitable trust is sacrosanct and it is not permissible to go beyond the objects. The assesee before the AO, submitted that it is essentially religious / spiritual and charitable trust and it is engaged in activities of public charity as well as spiritual / religious activities for the upliftment of consciousness of humanity and facilitation for freedom from suffering by way of cosmic grace. The AO released that as per the admission of assesee itself it is purely religious objects and trust was established for religious purpose. Further tried to distinguish the judgement of Hon'ble Apex Court in the case of CIT vs. Social Service Centre 250 ITR 39 (AP) as relied upon by the assesee and also other judgments. He also tried to reject the assessee's contention that objects of the trust include imparting of spiritual lectures and the words spiritual and religious are sacrosanct. The reason given by for such rejection is that in the dictionary these two have been a different connotation. After detailed discussion and looking to the activities carried out by the....
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....table activities which are very much part of religious activity. In carrying on charitable activities alongwith organizing or spiritual lecturers, the assessee by no means ceases to be religious institution. The activities described by the assessee as having been undertaken by it during the assessment year in question can be included in the broad conspectus of Hindu religious activity when viewed in the context of the objects of the trust and its activities in general". 6. The Ld. CIT(A) further observed that assessee trust continues to enjoy the registration u/s 12A and there is no proceedings initiated for withdrawal of registration and assesee is continuing the activities and was carried out in the previous year i.e. imparting spiritual lectures through various modes. Regarding disallowance of TV expenditure after invoking provision of section 13(1)(c) he held that no benefit directly or indirectly has gone to any of the trust because the dominant purpose for such kind of telecast for money was to impart discourses and not to gain any personal benefit as envisaged in the clauses of section 13(2). He further held that if such a presumption premise of the AO is taken then it wil....
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....ction 13(2). The benefit must be such the same should be capable of being quantified not on the basis of any kind of conjecture and surmises. Lastly on the issue of adhoc estimation of Rs. 50 lacs which has been incurred on organising Samagam he submitted that the assessee has shown expenditure of Rs. 9,23,944/- which has been accepted by the AO. However without any basis or material he has estimated sum of Rs. 50 lacs completely based on hypnotically which cannot be sustained. Accordingly order of the Ld. CIT(A) should be upon. 8. On the other hand, Ld. DR strongly relied upon the various observations of the AO submitted that AO has tried to distinguish the facts on the earlier years and have given a very detailed reasoning as to why the facts are different from earlier years and in any case the assessee's entire activities have been found to be for religious purpose and no such objects of religious purpose has been enshrined in the trust deed and, therefore, such activities beyond the objects cannot entitled the asseee's trust for benefiting u/s 11(1). Unfortunately, there is no such arguments noted by him. Thus activities of the assessee being purely religious in nature and no....
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....y for religious purposes" or "wholly for religious and charitable purposes". The relevant observations on the findings of the Tribunal in para 10.6 to 10.9 for the sake of ready reference are reproduced hereunder :- "10.6. The term" "wholly for religious purposes" or "wholly for religious and charitable purposes" have not been defined under the Income Tax Act. As per general principle of interpretation, expressions which are not defined in a Statute should be construed to give them sensible meaning having regard to well known and accepted concepts so as not to lead to a manifestly absurd or anomalous result which could not have been intended by the Legislature. Hence the expression. "religion" has to be appropriately construed in the context of the document i.e. then Trust Deed in the present case. Before we proceed to consider the Trust Deed, it also needs to be kept in mind that it is a well accepted principle of interpretation that the nomenclature adopted by the parties in any document is not conclusive to indicate the real nature of the document or the intention it actually records. It is the duty of the Court to see and examine what in truth is the essential and factual na....
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....o all human beings". On consideration of the same we find that the said aim has to be understood in the context of and read alongwith the other objects of the trust whose target groups are widows, orphans, old and infirm people, destitutes, illiterate, handi-capped, mentally retarded, providing food and shelter to poor and needy, night shelter, nari-niketan/ mahila ashram, weaker sections and all other groups who can be included in the phrase in "need of physical, mental and financial help'; including and not exclusively affected on account of natural calamities. etc. like flood, fire, famine, drought, earth-quakes, storm, accident, pestilence, drought, epidemics etc. A perusal of the above enumerated list when taken in the contest of extreme devastating tragedies and the needs of destitute; old age; infirm etc needs no specific treatise to bring out the potential importance and benefits of spiritual lecture to the target group of mentally disturbed, destitute due to calamities, natural or man-made, age, orphaned, widowed etc. The potential benefit and succor to these target groups by way of some philosophy or imparting of belief that there is some power beyond all this which i....
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.... objects of the trust and the context in which spiritual lectures espousing the philosophy i.e. the spirituality of the major and predominant religions of the country needs to considered in the light of the wellaccepted and well-known fact that all the major religions of the world with one voice eulogise the importance of taking care of the old, infirm, disabled, visited by misfortune etc. on account of some natural or man-made calamity, widowed, orphaned etc. and these discussions/lectures are not divorced from religion as mankind is exhorted in the name of God and saints to take care of the weak and the needy. Accordingly considering the entire conspectus of facts, circumstances and position of law, we hold that the Revenue has incorrectly applied section 115BBC to the facts of the assessee's case." 10. In the appeal before the Hon'ble High Court against the said judgement the High Court has noted the submission of the Ld. Sr. Standing Counsel of the revenue had discussed the issue threadbare in the following manner :- "8. It was submitted by Mr. Kamal Sawhney that none of the activities stated in Clause 5 of the Trust Deed can be said to be a purely religious activity. ....
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....ivity for or towards other members of the community and also public at large. For example, the practice of option charity in the form of Khairat or Sadaquah under the Mohammadan Law would be covered under both charitable as well as religious purpose. Further, while providing food and fodder to animals especially cow is religious activity for Hindus, it would be charitable in respect to non- Hindus as well. Similarly, service of water to the thirsty would find mention as religious activity in sacred texts and at the same time would qualify as a charitable activity." (emphasis supplied)" 13. What can constitute religious activity in the context of the Hindu religion need not be confined the activities incidental to a place of worship like a temple. The Supreme Court in the Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar 1954 AIR 282 SC held that "a religious denomination or organisation enjoys complete autonomy in the matter of deciding as to what rites and ceremonies are essential according to the tenets of the religion they hold and no outside authority has any jurisdiction to interfere with their decision in such matters." It examined the sco....
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.... the conclusion of the ITAT that for the purpose of Section 115 BBC (2)(a) anonymous donations received by the Assesee would qualify for deduction and it cannot be included in its assessable income." 11. The activities of the trust and Ld. CIT(A) held that these activities are for imparting spiritual education to the persons of all the caste and religion by organising samagam distribution of free medicines, etc. to needy and disabled people. They have also quoted the judgment of Hon'ble Apex Court in the case of CIT vs Bhagwan Shree Laxmi Naraindham Trust (supra) wherein the Hon'ble Apex Court has defined the concept of religion and also in another judgment as quoted in para 14 their Lordship has also defined the religious activities under the Hindu faith which is mainly a way of life. After referring to these judgments their Lordships have held that the religious institutions like assessee are also engaged in charitable activities which are very much part of religious activities and such activities alongwith organising spiritual lectures by no means to be a religion institution and has to be seen in the context of objects of the assessee trust and accordingly by such reasoning t....