TaxTMI 
TaxTMI 
2021 (8) TMI 763
X X X X Extracts X X X X
X X X X Extracts X X X X
....wrong and arethus challenged. 6. That proper opportunity should have been allowed in the legal manner. 7. That Order is against law and facts of the case. 8. Any other ground pressed at the time of hearing. 2. At the outset, the Ld. AR for Assessee drawn attention to the Order passed by the CIT-1 and our attention was drawn to the following paragraphs:- 2.1 As per application in form no.10G dated 27.12.2007 and the brief introduction on constitution &activities of the SGPC, Amritsar appendedthereto, the SGPC is a body created under the Sikh Gurdwara Act, 1925 which was enacted for administration of Sikh Gurdwaras. The Assessee S.G.P.C.' never made a claim for registration under section 12AA of the I.T. Act, 1961 since the income has been claimed to be exempt undersection 10(23BBA) of the IT.Act, 1961. 2.2 Based upon above factual matrix, it was argued that the SGPC is engaged' in number of charitable activities. It has been submitted that ithas established and/ or aided number of educational institutions, hospitals, lungars and sarais, whose objectives are not only to cater to ,distinction of caste, colour and creed. In suppor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....PC ismanagement and administration of Gurdwaras i.e. purely religiousaffairs. Hence, dominant object of the SGPC is religious in nature. The institution is expressively established for the benefit of Sikh religious community. Accordingly, granting deduction us/80-G to such institution is not in accordance with the provisions of section 80G(5) and is covered under prohibitive clause (iii) of the said section of the I.T.Act, 1961 and proscribed by the provisions of Expl. 3 to section 80-G. 3. Based on the above-said Order, it was submitted by the Ld. AR that the Assessee was denied for the registration u/s 80G because the Assessee is allegedly benefitting the particular religious community. The CIT has not rejected the Assessee's charitable activity by running the schools, colleges, medical colleges, nursing colleges, lungar halls, etc. He had submitted that CIT himself in paragraph 2.2 of his Order (SUPRA) had acknowledged that the Assessee is running hospitals, lungars, Sarai etc. The main emphasis of the CIT was that the Assessee was managing the property belonging to religious communities as per the objects and reasons of the Sikh Gurdwara Act, 1925 and SGPC was created so....
X X X X Extracts X X X X
X X X X Extracts X X X X
....become a religious body. SGPC is akin to the Improvement Trust, Wakf Board, Devsthana Board, Archeological Survey of India etc. It was further submitted that the purpose of the Assessee is neither wholly nor substantially is of religious. It was submitted that the Assessee was entitled to the registration u/s 80G of Income Tax Act. The Ld. AR had filed the detailed written submission in support of his contention, which is reproduced hereinbelow for the completeness of the record:- "......The learned CIT after observing various sections of The Sikh Gurdwaras Act, 1925 has held that the objects of SGPC are religious in nature and the said institution is established for the benefit of Sikh Religious Community only. Therefore, the application was rejected by the ld. CIT. The Assessee is a Statuary Body (Board) created under Sikh Gurdwaras Act, 1925, the income of which is exempt u/s 10(23BBA). During the course of proceedings, detail of charitable expenditure was placed before the Ld. CIT and it is worthwhile to mention here that para in paragraph 2.2, 3.1 & 3.3 of the impugned Order, the ld CIT has not doubted the charitable activities/works carried out by SGPC in va....
X X X X Extracts X X X X
X X X X Extracts X X X X
....income of "Committees of Sikh Gurdwaras" as annual fee for the purpose of administration of Gurdwaras which is then used by SGPC, inter-alia, for charitable purposes for the public at large without discrimination of religion, caste, creed, color, sex, race etc. e. The Board (i.e., SGPC) is a separate legal entity and has a distinct identity, than that of every "Committees of Sikh Gurdwaras". Gurudwaras are places of public worship and are epicenter of religious activities/works and the Board (i.e., SGPC) is not a place of worship. "Committees of Sikh Gurdwaras" are responsible for all the religious activities/work and not the Board (i.e., SGPC). It is the duty of the Board (SGPC) to ensure that every "Committees of Sikh Gurdwara" deal with property and income of the Gurudwara managed by it in accordance with provisions of The Sikh Gurudwaras Act, 1925. For the purpose of administration of "Committees of Sikh Gurdwaras", the Board (SGPC), exercises general supridence over all committees of Gurudwaras and charges 10% of the income of the Gurudwaras. 2. SGPC is a Statuary Body: a. Object & Preamble of The Sikh Gurudwaras Act, 1925provide for the better admin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ous Community only and is for the public at large and therefore, entitled for registration u/s 80G. 3. Activities of SGPC: a. In paragraph 2.2, 3.1 & 3.3 of the impugned Order, the ld. CIT has categorically accepted the "n" number of charitable activities carried out by the SGPC vis-à-vis Schools (53), Degree Colleges (35), Universities (2), Medical Colleges (1), Dental College (1), Nursing College (1), Engineering Colleges (2) & Polytechnic College (1), Hospitals, Lungars, Sarais, Educational Aid, Aid to Poor, Medical Aid, Aid for Historical Buildings, Cancer Aid, Aid for Natural Calamities like Earthquakes/Droughts, Aid for Social Awareness like drugs, dowry etc. b. Further, it is a publicly known fact that the aforesaid charitable activities are provided to the public at large without discrimination of religion, caste, creed, color, sex, race etc. It also publicly known fact that even the employment in the aforesaid institutions run by SGPC is given regardless of religion, caste, creed, color, sex, race etc. In the past, efforts made by SGPC at the time of independence by making refugee camps have been publicly lauded. The humanitarian services ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for Sikh Community only. c. Finance Act, 1999 has inserted a new sub section (5B) in section 80G. Memorandum explaining finance bill appearing at 152 CTR 156 (statutes) at page no. 178 gives detailed reasons for inserting of sub-section (5B) in section 80G as follows: - "Deduction for donations made to funds or institutions for charitable purposes Under the existing provision of section 80G of the Income tax Act, 1961, a deduction in respect of donations to certain funds, institutions etc..is provided. However, if such fund or institution has in its instrument any provision for the transfer or application at anytime for the whole or any part of the income or asset for any purpose other than a charitable purpose, it cannot avail of the benefit under this section, charitable purpose does not include any purpose, the whole or substantially the whole of which, is of a religious nature. Many institutions which are carrying out charitable work are often inspired by the tenets of religion. In order to allow them to show respect to this aspect without depriving them of the benefit of this section, it is proposed to amend the provisions of sectio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... decision in Upper Ganges Sugar Mills Ltd. &Ors. V. CIT (1997) 227 ITR 578 (SC) (i.e prior to coming into force w.e.f 1.4.2000 the amended provisions of Sec.(5B) to Sec.80-G), the Rajasthan High Court's decision (supra) being final in the absence of any contrary view expressed by any other High Court and particularly the A.O's report No. 4107 dated 26.3.07, referred to above, confirming clearly that expenditure incurred by the applicant-trust on religious activities, if any, was less than 5%, the applicant -trust has been allowed continuation of approval u/s 80-G(5)(vi) of the I.T. Act,1961." Copy of Order in the case of Chief Khalsa Diwan dated 24.04.2009 placed on record along filed Written Submissions in the Hon'ble Court on 29.07.2010. 5. Case Laws: In this regard reliance is placed on the following decisions: a. CIT vs. M/s Dawoodi Bohara Jamat 364 ITR 31 (SC) b. CIT v. Christian Medical College (2015) 374 ITR 17 (P&H) c. Sri MarudharKesariSthanakwasi Jain Yadgar Samiti Trust V/s Union of India (2005) 273 ITR 475 (Raj.) d. MishrilalGordhanlal Batra charitable trust v/s Union of India (2008) 307 ITR 221(RAJ.). e. Umaid Chari....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o has neither preferred his own appeal nor filed cross-objections in the appeal preferred by the appellant must be deemed to be satisfied with the decision of the lower authority and that he will not be entitled to seek relief against a rival party in an appeal preferred by the latter, is equally applicable to revenue proceedings. Therefore, when the Ld. CIT has not doubted the registration u/s 12AA in the impugned Order and the said Order has neither been challenged nor rectified till date and the Hon'ble Tribunal having no jurisdiction or power to travel beyond the impugned Order, Revenue is barred from raising such an issue during the appellate proceedings. 9. On the basis of above, it was submitted that the Assessee is entitled to registration u/s 80G(5) of the Income Tax Act and the appeal of the Assessee is required to be allowed. 10. On the other hand, the Ld. DR relied upon the Order passed by the CIT and submitted that though some of the activities are charitable, the religious activities cannot be segregated from the main activities, and on account of the various religious activities, the dominant purpose of the Assessee is religious and therefore, religiou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....such income, if, - (a) the institution or fund maintains separate books of account in respect of such business; (b) the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;]] (ii) the instrument under which the institution or fund is constituted- does not, or the rules governing the institution or fund do not, contain any provision for the transfer of application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; iii) The institution or fund is not expressed to be for the benefit of any particularreligious community or caste. iv).......... v).......... vi)........... vii).......... 5A.............. 5B -Notwithstanding anything contained in clause (ii) o....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Name of Board. - (1) The Board shall be known by such name as may be decided upon at a general meeting of the first Board constituted under the provisions of this Act provided that not less than three-fifths of the members, present at the meeting have voted in favour of the name selected, and that such name has been approved by the [State] Government. (2) If the Board fails to select a name in accordance with the provisions of sub-section (1) or the name selected is not approved by the [State] Government the Board shall be designated the Central Board. (3) The Board shall by such name be a body corporate and shall have a perpetual succession and a common seal and shall by such name sue and be sued." 85.(1) The Board shall be the Committee of Management for the Gurdwaras known as :- (i) The Sri Akal Takhat Sahib at Amritsar and Sri Takhat Keshgarh Sahib, Anandpur; (ii) The Darbar Sahib, Baba Atal Sahib and all other Notified Sikh Gurdwaras other than Sri Akal Takhat Sahib, situated within the Municipal boundaries of Amritsar; (iii) Sri Darbar Sahib and all other Notified Sikh Gurdwaras within the limits of Municipal area of Tar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny two or more such gurdwaras specified in the notification, and may in like manner cancel or modify such notification, provided further that the [State] Government shall not issue, cancel or modify any such notification after constitution of the first Board, except upon recommendation being made to it in this behalf by the Board. [94-A. Incorporation of committees. - Every Committee shall be a body corporate by the name of the Committee of Management of the Gurdwara or Gurdwaras under its management and shall have perpetual succession and a common seal and shall sue and be sued in its corporate name.] 106. Object on which the funds of a gurdwara may be spent. - (1) Subject to the provisions of this Act, all properties and income of a Notified Sikh Gurdwara shall be used, in the first place, for the maintenance or improvement of the gurdwara; for the maintenance of religious worship and the performance and conduct of religious and charitable duties, ceremonies and observances connected therewith; for the payment of allowances or salaries of dependents, officers and servants thereof; for the fulfilment of the objects of the endowments thereof; for the maintenance o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion. (5) A Committee or the Board if it is aggrieved by an order passed under sub-section (4) may, not later than ninety days after the passing of the Order, appeal to the High Court and the High Court may confirm the Order or pass any such order as the Commission might have passed instead of the Order appealed against. [(6) Nothing contained in sub-sections (2), (3), (4) and (5) shall apply to the Board when acting as a Committee of Management under section 85 of this Act. In the case of such a committee when after providing for the purposes specified in sub-section (1) there remains or appears likely to remain any surplus sum or any income not required for such purposes, the Committee may by a resolution passed by not less than two-thirds of the members present in the meeting; provided that the meeting is attended by not less than one-half of the total members constituting the Committee, utilize or allocate a part or the whole of such surplus sum or income of any particular gurdwara under its management to a particular religious, educational, charitable or industrial purpose : Provided further that an allocation so made to devote to such purpose income ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom the Government Treasuries, Banks, Courts, Post Offices, wheresoever situated or from Custodian, Evacuee Property, [Punjab], or any person, member or office-bearer of any local committee or Gurdwara Management Committee of any notified Sikh Gurdwara [in the territory in Pakistan known as Punjab] in possession of or against whom any kind of property or sums or dues recoverable by or payable to any notified Sikh Gurdwara left in the territory now known as Pakistan are still outstanding.] (2) The payment made to the Board in pursuance of sub-section (1) shall constitute a valid discharge of the liabilities of the person or persons aforesaid. (3) This section shall have retrospective effect as from the 15th day of August, 1947.] 133. General powers of committees. - Subject to the provisions of this Act, a committee shall have full powers of control over the office-holders and dependents of, and all properties and income of whatever description belonging to the gurdwara or gurdwaras under its management and of enforcing the proper observance of all ceremonies and religious observances in connection with such gurdwara or gurdwaras and of taking all such meas....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... said to be institution for the benefit of any particular religious community or caste, or not? 23. Before we deal with this issue, we wish to bring on record thatrecord that,Shiromani Gurdwara Parbandhak Committee Amritsar had published on Feb 3, 1945 Sikh RehtMaryada , which had enlisted various do and do not for Sikhs as individual and as a community. Important principles of Sikh RehtMaryada as per publication are 1. Dharam-Di- Kirt Karna (Honest earning and truthful living) 2. VandKeChhakna (Sharing honest earnings with needy and less fortunate) 3. Naam Japna (Meditation on the Name of One God) 4. Puja Akal Ki (Worshipping the Almighty God) 5. ParchaSabad Ka (Understanding and practicing Gurbani) 6. Didar Khalse Ka (Appreciation of Sikh Rehat) Attending company of holy Sangat 7. Amrit Chhakna (Initiation of Amrit Pahul and stay away from taboos) 8. Sarbat Da Bhala (Well-being of all) 9. SevaSambhal (Selfless service for welfare of humanity) 10. Sacha Achar (Keeping good moral character in life) 11. Bhana Manana (Surrender before Will of God) 12. Believe in One God, Sri....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and untouchable, the so-called high and low caste persons, the high and the low. In Article XII of Chapter VIII, it is provided as under :- c) After this, before the distribution to the congregation of the KarhahPrashad, the share of the five beloved ones should be set apart and given away. Thereafter, while the general distribution, the share of the person in attendance of the Guru GranthSahib(Giving double share to the person in attendance constitutes improper discrimination)should be put in small bowl or vessel and handed over. The person who doles out the KarhahPrashad among the congregation should do so without any discrimination on the basis of personal regard or spite. He should dole out the Karhah Parshad equally to the Sikh, the non-Sikh or a person of high or low caste. While doling out the KarhahPrashad, no discrimination should be made on considerations of caste or ancestry or being regarded, by some, as untouchable, of persons within the congregation. In Article XVI of Chapter X, it is provided as under :- j ) A Sikh must not take hemp (cannabis), opium, liquor, tobacco, in short, any intoxicant. His only routine intake sho....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... caste ,creed, sex etc. As is clear from the Sikh Reht Maryada, the place of worship( gurudwaras ) are open for all human beings irrespective of caste creed or religion, similarly, the Karda Prasad, is also distributed to the Sangat without making any discrimination, School, colleges , Medical colleges, Hospitals, Library, Sarai, are open for all human beings irrespective of caste creed or religion. In fact all the establishments were run by the Sikh community, under the ages of the Assessee are open for humanity and, the Assessee through its community is serving to the cause of humanity. 28. As per the definition of the Sikh , given under the Act of 1925,it is the clear that one who believes in Sikhism is a Sikh, though there is further distinction of Amritdahri Sikh, Sajdahri Sikh, Patit that distinction is only relevant for electoral college and election to the committee/ Board. However, the voluntary services given by the Assessee were open and meant for the whole humanity. 29. 80 G(5)(iii), provided that " "the institution or fund is not expressed to be for the benefit of any particular religious community or caste." In our understanding the "benefit of any particular....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dwaras which is then used by SGPC, inter-alia, for charitable purposes for the public at large without discrimination of religion, caste, creed, color, sex, race etc. 33. The committees of Gurdwaras, predominantly doing and taking care of religious activities pertaining to Sikh religion/ sect, have a distinct identity and functions than that of the Board before us. The functions of the Board and of Committee are mutually exclusive in most of cases, however, in some cases functions are overlapping on account of dual role of Board; however, the predominant purpose of the SGPC continued to be to maintain Gurdwaras and its properties, Income and endowment. 34. Further, we have to keep in mind the distinction between management of Gurudwaras properties, Income and endowment, and discharging religious duties/ceremonies affair by the Committee of Gurudwaras. Managing the properties of the Gurdwaras is a function akin to functions performed by various Municipal Authorities, Shrine Boards, Devasthanam Board, Wakf Board, ASI, and other development bodies. 35. The SGPC is undoubtedly running various Schools, Cancer Hospitals, General Hospitals, shelter Homes, Sarai, Lunger ( communit....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../2010 Exp. On Education for Colleges& Schools 6,66,90,720.83 84852758.00 90776613.80 9,13,25,442.00 OtherExp . Salary, office Exp & Promotion of Games 51,26,335.00 95,52,053.00 12147604.00 99,76,442.34 TOTAL(A)...... 7,18,17,055.83 9,44,04,811.00 10,29,24,217.80 10,13,01,884.34 GENERAL BOARD FUND Aid for Education 1,92,56,552.00 0.00 20000000.00 4,83,33,518.00 Aid for Historical Building 50,19,247.24 79,10,434.50 8160302.47 42,14,782.26 Salary & Office Exp. 7,27,17,732.00 8,67,06,385.11 97629965.84 10,94,78,247.00 TOTAL(B)...... 9,69,93,531.24 9,46,16,819.61 12,57,90,268.31 16,20,26,547.26 DM Aidfor Natural Calamity 28,53,114.00 75,59,482.00 12536115.00 9833379.00 Aidfor SocialAwareness 5,70,21,474.00 76,14,822.00 18077590.00 7940694.00 Teaching & Education 15,20,01,613.60 219750729.70 273974975.42 283318336.41 Aid for Historical Buildings 44,46,998.00 4,13,72,346.00 18096963.00 19871026.00 TOTAL(C)...... 21,63,23,199.60 27,62,97,379.70 32,26,85,643.42 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it is old age tradition in India more particularly in Hindus/Sikhs to contribute 10% of the earning for the charitable purposes. The basic concept of charity is to do charity without disclosing identity and knowing who would benefit from the said Charity. (दाएंहाथसेदानकरेऔरबाएंहाथकोभीपतानचले।नेकीकरदररयामेंडाल ). Analyzing form any angel in our considered opinion, the Assessee is entitled to benefit under 80G (5)(iii) of the Income Tax Act, 1961, and it will go wrong to allege that the SGPC was constituted for the benefit of a particular religion. 42. Our views mentioned above are supported by the decisions of the Hon'ble Supreme Court in the matter of Dawoodi Bohara Jamat [2014]43 taxmann.com 243 (SC). The said decision of the Hon'ble Supreme Court had been relied upon by the Hon'ble Punjab & Haryana High Court in the matter of Christian Medical College [2015] 61 ta....