TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1887
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts total income and in view of the provisions of section 80G(5B), the assessee society does not qualify for approval u/s 80G of the Act. The relevant findings of the ld CIT(E) are contained at paras 4 and 5 of his order which are reproduced as under: "4. While considering the approval u/s 80G the nature of activities under taken by the applicant sansthan is to be examined so as to ascertain the charitable character. On perusal of the Income & Expenditure account for the F.Y 2014-15, it is seen that the applicant sansthan has incurred Rs. 17,230/- on "Mandir Pooja Expenses" which is religious nature. This expenses is 5.73% of total receipts of Rs. 3,00,627/-. Thus expenses incurred on the religious activities by the assessee are more than 5% of the total receipts. 5. The attention is invited to the Section 80G(5B) of the I.T Act, 1961 which is reproduced as under:- "[(5B) Notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation-3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent of its total income in that previous year shall be deemed to be an insti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e time for distribution, agarbatti etc. have been contributed by the assessee society. The contributions have been made only to keep alive the interest of the locals in the said old heritage temple which is ancillary to the main object of the Assessee to preserve or promote such old temple building. Under the facts and circumstances, preservation and promotion of such buildings cannot be held as religious in nature. 3.2 It was submitted that the ld. CIT(E) has erred by not appreciating the fact that the temple under consideration is situated in a very small place and have spiritual importance for entire population of the area having historical importance as well as that area is not having such big building available for common assembly or performing common function of social importance at large. Merely on the basis of presentation in income & expenditure, a conclusion has been drawn by the ld CIT(E). It is important to note that assessee has used the temple accommodation for Training of Stitching to the local women from time to time. The relevant paper cuttings is also enclosed (PBP 25-33). The assessee is also running and maintaining a Tempo to collect garbage under "Swach Bharat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....found in the trust-deed, the Income Tax Department cannot reject the renewal of the Trust as Charitable Trust under Section 80G of the Act merely because one particular expenditure is for an activity which may be termed as spending for a particular religion. In the present case the repair and renovation of Lord Vishnu's temple does not necessarily mean that expenditure in question was for a particular religion only. 31. All people who have faith in Lord Vishnu's temple belong to different sects and have faith in different religions and also visit such temple of Lord Vishnu. The Revenue has not shown that entry in the said temple was restricted to the persons of one particular community or sect practicing one religion. Hinduism is not one particular religion and different sects following Hindu philosophy do visit temples of Lord Vishnu, be that Jains, Sikhs, Brahmins etc. There is no water tight compartment between different castes or sects following one particular religion. Freedom of religion is guaranteed in the Constitution of India under Article 25 of the Constitution of India. Therefore, taking such a pedantic and narrow approach, it cannot be said that character of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... newly added objects, the assessee trust shall maintain the temple worship, pooja, festivals according to Sampradaya in which the temple belongs to. We do not find that such an activity of maintaining the temple as per rits and rituals of particular Sampradaya to which the temple belongs would amount the activity related to a particular religion or community. When the temples which are supposed to maintain by the assessee are open for general public then performing pooja or festivals in a particular manner does not change the public charitable nature of the activities to non-charitable. Even otherwise the objects of assessee trust do not specify the maintenance of any specific or particular temple belonging to a specific sampradaya and if a temple which is maintained by the assessee keeping in view all the rits and rituals being followed in the said temple as per particular sampradaya, the same would be irrelevant for the purpose of construing the objects as charitable." c. ITAT Nagpur in case of Shiv Mandir Devsttan Panch Committee Sansthan Vs. CIT-1, Nagpur (ITA no. 223/Nagpur/2009 dated 11.10.2012) has held as under: "8. We have gone through the relevant clauses which have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hould not be for the benefit of any particular group of person having the common belief in worshiping of superhuman controlling power or having common system & faith and worship. If the trust is for the benefit of any particular community. It would include the advancement, support or propagation of a particular religion, worshipping of Lord shiva, hanumanji. Goddess. Durga and maintaining of temple temple, in our opinion, cannot be regarded for the advancement support or propagation of a particular religion. No evidence or material was placed on record or brought before us by the learned DR which may prove that these object relate to a particular religion. No doubt the DR argued that it relate to Hindu Religion but in our opinion it is not so, Lord shiva. Hanumanji, goddess Durga does not represent any particular religions, they are merely regarded to be the super power of the universe. 11. In the case of Commissioner of Hindu Religious and Charitable Endowments Madras Vs. Sri Lakshmindra Thirhja Swamiar 154 SCJ335. Religion has been expressed to mean a matter of faith with individuals or communities and it is not necessarily theristic. There are well known religious in India, li....
X X X X Extracts X X X X
X X X X Extracts X X X X
....entitled for the deduction u/s80G. The objects as per Explanation 3 must be wholly or substantially whose of which must be of religious nature. The assessee has submitted all the evidence including the objects and how the expenditure has been incurred by it. The onus, in our opinion, gets shifted on the Revenue to prove that the assessee-trust is wholly or substantially for the religious purpose. There is no allegation on the part of the revenue that the whole or substantially whole of the object of the trust is to propagate or advance support to a particular sect. We may observe that Hinduism is a way of life of a civilized society. It as such is not a religion. In this regard we rely on the case of TT Kuppuswamy Chettair Vs. State of Tamil Nadu (1987) 100 L.W 1031 in which it was held "The word "Hindu"has not been defined in any of the texts nor in judgment made law. The word was given by British administrators to inhabitants of India, who were not Christians Muslims, Paris or Jewa. The alleged Hindu religion consists of four castes Brahmins, Kshatriyas, vaishyas and sudras belonging ultimately to two schools of law, mitasharas and dayabhaga. There is, however, no religion by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pplication by holding that in one of the three financial years i.e. F.Y 2014-15, Mandir Pooja Expenses is 5.73% of the total receipts which is in excess of 5% to the total receipts. It was submitted that the ld. CIT(E) has taken the Mandir Pooja Expenses from the face of the Income & Expenditure Account without going into the actual nature of expenditure debited in said Ledger. 3.5 It was further submitted that even for calculation of percentage of Mandir Pooja Expenses, ld. CIT(E) used total receipts, whereas, the relevant Section used the word "Total Income". In that case, Assessee have received voluntary contribution and bank interest, does not have any business income, income from house property or any other source of income. The term "Total Income" has also not defined. It is trite law that the interpretation of term should be according to purpose and context in which, it has been used. Perusal of the Section shows that it is the intention to allow religious nature to be considered as charitable purpose but with certain limitations i.e. 5%. Under the circumstances, all income should be clubbed otherwise; it may take to irrational conclusion. In the instant case, apart from vo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T(E) has to call for and examine the financial statements of last three years and in the instant case, on such examination, the ld CIT(E) has found that in the financial year, pooja expenses as per assessee's own Income and Expenditure account exceeds 5% of total income for the financial year 2014-15, the provisions of section 80G(5B) are clearly attracted. He accordingly relied on the order of the ld CIT(E) and submitted that the assessee society has been rightly denied the registration under section 80G and the order of the ld CIT(E) may therefore be confirmed. 5. We have heard the rival contentions and perused the material available on record. The assessee, a society registered with Registrar of Societies has filed an application before the ld CIT(E) for seeking registration u/s 80G of the Act on 06.12.2017. Separately, the assessee also moved an application U/s 12AA of the Act. Though the date of moving the application u/s 12AA is not apparent, however, within six days of moving the first application u/s 80G, the ld CIT(E) granted registration to the assessee society u/s 12AA of the Act vide his order dated 12.12.2017. However, the first application seeking registration u/s 80....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in its instrument any provision for the transfer or application of the whole or any part of the income or asset for any purpose other than a charitable purpose, it could not avail of the benefit under this section. It has also been provided in Explanation 3 that for the purpose of this section, 'charitable purpose' does not include any purpose the whole or substantially the whole of which is of a religious nature. These provisions have been interpreted to deny the benefit to even such funds or institutions as are predominently engaged in charitable activities but are either inspired to do charity by tenets of religion or spend a negligible amounts on purposes other than charitable. It would be harsh to deny the benefits to the institutions which are engaged in activities, the whole or substantially the whole of which are of charitable nature. 33.2 In order to mitigate hardship to such funds or institutions, the provisions of section 80G are amended so as to provide that in case such institutions or funds spend upto five per cent of their income during the relevant previous year for religious purpose, the benefit of deduction will not be denied to them. 33.3 This amend....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t-aside on this ground itself. 9. In terms of the nature of the Mandir Pooja expenses, it is noted that the said expenditure has been incurred in respect of an 100 years old mandir situated at village Jogalsar where the pooja is performed regularly by the locals at their expenses however, certain expenses in terms of upkeep and maintenance of the temple premises, distribution of prasad, etc is contributed by the assessee society. It has been stated that the contributions have been made to keep alive the interest of the locals in the said old heritage temple which is ancillary to assessee society's main object to preserve and promote such heritage temple buildings. The temple is visited by all locals irrespective of their religion, caste, creed or gender and the temple premises is also used for various social and festival gatherings. The line of distinction between religious and charitable purposes is very thin and no water tight compartment between the two activities can be very established. In the facts of the present case, we donot believe that where the assessee has incurred certain expenses for upkeep and maintenance of the temple premises and distribution of prasad to public ....