SIDH SHRI BABA BALAK NATH JI TRUST ,JAWALAMUKHI vs. CIT(EXEMPTION), CHANDIGARH

आदेश/Order

Per Annapurna Gupta, A.M. :

The present appeal has been filed by the assessee against the order passed by the Commissioner of Income Tax (Exemptions), Chandigarh [in short referred to as ‘CIT(E)’] dated 28-02-2020 denying grant of approval u/s 80G(5)(vi) of the Income Tax Act,1961(hereinafter referred to as “Act”).

At the outset, it was pointed out that the appeal was delayed for 77 days for which an application seeking condonation of delay was filed by the Ld.Counsel for the assessee before us stating that the delay in filing of the appeal was on account of the Nationwide lockdown which was imposed in

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 2 the wake of the Covid-19 pandemic since last date of filing the appeal was 29 t h April 2020 and Nationwide lockdown was imposed much prior to that in the month of March, 2020 itself. The contents of the condonation application filed by the assessee are as under:

Subject; Prayer for condonation of delay in the case of M/s Sidh Baba Balak Nath Ji Trust, Teh Jawalamukhi, Kangra, H.P.,PAN AAWTS8OO3R for A.Y. 2O19-2O. Hon'blc Bench, Kindly refer to the matter cited above. The present appeal is against the appellate order passed u/s 12AA by Worthy CIT (Exemptions). The facts of the case are as under: The Worthy CIT(Exemptions) vide its order dtd. 28.02.2020 rejected the application for granting approval of u/s 80G of the Act , against which I am filing the appeal before the Hon'ble ITAT. That the last date of filing of appeal against the above subject order was 29.04.2020. 3. That as regards the reason for delay in filing appeal before the Hon'ble ITAT, was the nation wide lockdown imposed by the Government of India in wake of Covid-19 pandemic. Therefore, there was no interstate movement allowed which was the reason for delay in authentication of the appeal documents lying at the Chandigarh office of the Authorized Representative. 4. That there was reasonable and bonafide cause in not filing the appeal in prescribed time before the Hon'blc ITAT. The delay in filing of the appeal deserves to be condoned and I pray that the same may please be condoned. I deserve to be heard on merits of the case and I undertake to co-operate fully towards early disposal of this matter. A duly sworn & attested affidavit of the appellant, in this regard, is attached (Pages 3).ln the light of above facts, submission, legal position and more so in the interest of natural justice, it is prayed that the delay in filing of my appeal may please be condoned. I shall be highly obliged. I further undertake to co-operate and participate fully towards early disposal of this matter.” 2. The Ld. Counsel for the assessee, therefore, prayed that the delay be condoned. The Ld. DR did not oppose the same.

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 3 3. We have perused the contents of the application seeking condonation

of delay and are convinced that the assessee had reasonable cause for the

delay since the Nationwide lockdown, during the period in which the

assessee was required to file its appeal, made it impossible to do so. In

view of the same, the delay is condoned. Order was pronounced in the

open court.

grounds:-

“1. That on the facts, circumstances and legal position of the case, the Worthy CIT in its order dated 28.02.2020 has erred in passing that order in contravention of the provisions of Section 80G(5)(vi) of the Income Tax Act, 1961. 2. That on facts, circumstances and legal position of the case, the Worthy CIT(E) has erred in rejecting the application of the appellant trust for granting approval u/s 80G of the Act on flimsy grounds even when the objects and activities of the appellant were charitable nature and it deserved to be granted said registration. 3. That on the facts, circumstances and legal position of the case, the Worthy CIT(E) has erred in rejecting the application of the appellant society for granting approval u/s 80G of the Act without affording reasonable opportunity to the appellant. 4. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.”

the order of the CIT(E) that the application of the assessee for approval

u/s 80G filed on 19.08.2019 was rejected for the reason that it was

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 4 found to have been created for religious purposes, which, it was pointed

out, as per section 80G (5) explanation 3 did not qualify as charitable

purposes to be entitled to approval under the said section. Our attention

was drawn to section 80G(5) and the explanation 3 thereto as under:

“Sub-section (5) This section applies to donations to any institution or fund referred to in sub-section (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely:- [(i)………………. (a)…………………. (b)………………… (c)…………………. Explanation 3. In this section “charitable purpose” does not include any purpose the whole or substantially the whole of which is of a religious nature.”

He thereafter stated that the reason for holding and arriving to this

conclusion that it was a religious trust, was the title of the Trust Deed as

being “Temple Trust Deed’ and aims and objects in the opening line

stating the trust to be a “Public Religious Trust”. Our attention was

drawn to para 5 of the Ld. CIT(E) order incorporating the aforesaid

findings as under:

“5. Online reply was submitted by the applicant on 11.02.2020. On perusal of the details/documents submitted by the applicant it transpires that the applicant trust has been created for religious purpose. The issues leading to this conclusion are discussed below:

(a) On perusal of the trust deed, it has been observed that the deed of the trust is Temple Trust Deed and it has also been admitted in the opening line of the deed that the trust is a Public Religious Trust. Also, it has been stated in the

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 5 trust deed that the settler is desirous of making a religious trust wholly for religious purposes of the said money. Further, on further perusal of the aims and objects of the trust it has been referred that it has been incorporated wholly for the religious purposes. the relevant extract of the aims and object of the trust in this regard is as under:-

“3. Aims & Object of the Trust That the aims & objectives of the Trust shall be wholly for the religious purposes and incomes shall be applied for the same and accumulated in India wholly for religious purposes without prejudice to generality of provisions aforesaid and the following shall be deemed to be the principal objectives of SIDH SHRI BABA BALAK NATH JI TRUST:-

(b) Further, on perusal of the reply submitted it has been observed that the applicant has stated that the trust had been incorporated for the benefit of the general public and not for any particular religious community or caste. This contention of the applicant is rebutted on the fact that the aims and objects of the trust are wholly for religious purpose. Also, the trust has been granted registration u/s 12AA of the Act on 19.07.2019 with silent activities as Relief of the poor and Religious Activities.”

Thereafter Ld. counsel for the assessee contended that the findings of

the Ld. CIT were based or incorrect appreciation of facts and that the

assessee trust was not wholly or substantially of religious nature as

required by explanation 3 to disqualify as a Charitable Trust. hHs

arguments to this effect briefly stated are as under:

(1) One that the aims and objects of the trust have not been read

entirely which would on a complete reading would show that

the objects were primarily charitable for the opening of public

and the poor and needy. Our attention was drawn to the objects

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 6 of the trust at page 14 to 16 of the paper book filed before us is

as under:

“3. Aims & Object of the Trust

That the aims & objectives of the Trust shall be wholly for the religious purposes and incomes shall be applied for the same and accumulated in India wholly for religious purposes without prejudice to generality of provisions aforesaid and the following shall be deemed to be the principal objectives of SIDH SHRI BABA BALAK NATH JI TRUST:- 1. To establish and construct the new temple, Dharamshala, Dispensaries, Medical Camps & other religious infrastructures for the poor people of the society. 2. To provide free education to the poor people of the society, to provide free medical facility to the public and to organize blood donation camps. 3. As and when need of an hour, the trust will work as shoulder to shoulder with the concerned state government in tackling any epidemics and other serious situations that came across the state. 4. To formulate spiritual truths as fundamental factors in human evolution. This does not mean the formulation of creed, but rather the recognition of the spiritual instinct inherent in all human beings. Every religion the world has known has been an attempt to interpret this primary impulse in human nature. To the extent that individuals are able to interpret this impulse wisely, humanity is able to understand what true religion. 5. To offer religious and spiritual services to one and all. 6. To work for the spiritual upliftment of people by taking them to a higher level of consciousness and guiding them to a transcendental level of universal understanding and cosmic awareness. 7. To work for the promotion of the spirit of brotherhood of man and fatherhood of God, and love amongst all human beings.

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 7 8. To advice and encourage people on moral values, truth, righteousness peace and non-violence. 9. To promote the understanding and integration of all the religions of the world for peace, love, harmony and tolerance in the society, communities and between all races of the world. 10. To render holistic healing services like Yoga, Meditation, Jyotisham, Ayurveda, Nature care, Mantra, healing, devotional music and prayers. 11. To reach out to the youth of today and impart moral advice and spiritual wisdom on the righteous ways of life and human values, so that they may grow up to become good citizens and lead their country to prosperity. 12. To work towards heralding the new era into the golden age of truth, morality, justice, unity, love, non-violence, peace and prosperity so that humanity may live in harmony with nature and as per the divine will. 13. To promote the divine and spiritual messages amongst the fellow humans in universe, devotees perform outreach activities by meeting in different places and conducting Bhajans and religious discourses message to the public. 14. To promote universal brotherhood and harmony in the society by conducting Seminars on universal peace, love, and non violence. 15. To establish and run the Seminars in Educational Institutions based on human values such as truth, right conduct, peace and non violence prescribing a character-oriented. 16. To inculcate the Sanatana Dharma and to help the poor and needy of the society, as service to human beings is service to God. 17. It is being understood that objects of the Trust will not include objects involving the carrying on of any activity for profit which does not confirm to the definition of “Religious Purpose” as given in the Section 2(5) of Income Tax Act, 1961. 18. The trust moneys shall be invested in the manner as defined in section 11(5) of Income Tax Act, 1961.”

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 8

(2) That it was granted registration as a Charitable Trust u/s 12AA

of the Act for both the charitable & religious purposes and

therefore it could not be said to be established wholly for

religious purpose. (3) The financial statement of the assessee trust demonstrated that

no religious activity of any sort had been carried out by the

assessee trust. Our attention was drawn to the balance sheet of the assessee trust for the financial year ending 31st March, 2019

placed before us at paper book page no. 45 to 51.

To this the Ld. DR countered by stating that the fact that it was a

“Temple Trust Deed” itself showed that the primary purpose of

establishing the trust was for constructing a new temple which is evident

from the aims and objects mentioned at point number 1, in the Trust

Deed and that this is the primary objects of the trust while the rest are

only secondary. In this regard he also pointed out that certain

photographs of the activities of the construction site where the trust was

located, which was filed before CIT(E), showed that a temple was under

construction. The main thrust of the argument of the Ld. DR supporting

the order of the CIT(E) was that the primary object was construction of

temple and imparting spiritual education which clearly were activities

being religious in nature and therefore the approval u/s 80G had been

rightly denied. The Ld. counsel for the assessee countered by stating

that the photographs of the construction site were of a hall being

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 9 constructed for conducting various activities to be carried out by the

trust and to this effect as a reply had been filed to the Ld. CIT(E) also

mentioning the aforesaid facts, our attention was drawn to page no. 5 of

the paper book containing the reply to the CIT(E) at pointed no. 3 is as

under:

“3. Query No. 3: As regard to this query, the trust is in the process of Construction of Place where spiritual knowledge and education will disseminated. The photos of construction site where the trust is situated is enclosed herewith. No activities have been conducted since the inception of the trust because of the ongoing construction. However, as soon as the construction is completed the trust is motivated to conduct activities such as to establish and construct dharamshala, dispensaries, medical camps, yoga camps, and to provide free education, medical facility to poor people irrespective of any religion. All these activities will be done within the territorial boundaries of India only.”

80G of the Act in the present case is for the reason that the assessee

trust was found to be wholly for religious purposes. Explanation 3 to

section 80G stating that religious purposes shall not be construed as

charitable purposes for the purpose of grant approval of u/s 80G, has

been reproduced above in the earlier part of our order and there is no

dispute vis-à-vis this position of law that charitable trust carrying out

activities which are primarily religious in nature are not entitled to

approval u/s 80G of the Act.

Having said so what is pertinent therefore now to determine is whether

the findings of the CIT(E) that assessee trust was wholly religious is

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 10 correct or not. For the said purpose it is necessary to understand the

meaning and import of the phrase religious purposes. Religious purpose

means a purpose which relates exclusively to religious worship,

teaching, service or performance of religious rites. It refers to all

actions taken to advance religion by way of maintaining or propagating

religion or supporting public religious service.

In the present case, the findings of the Ld.CIT(E) that the assessee

trust is wholly for religious purposes is based on the facts that the Trust

Deed is titled “Temple Trust Deed” and the opening line of the aims

and objects of the deed state that the trust is wholly for religious

purpose. The Ld. CIT(E)‘s finding are not based on the activities being

carried out by the Trust ,which we have noted the assessee to have

stated before him as not having commenced.

Since the Ld.CIT(E)’s findings are based on the objects for which the

trust was created, the entire aims and objects have to be read to arrive at

the correct conclusion of the purpose of creation of the trust. On going

through the same, which are reproduced above in the earlier part of or

order, we find nothing pointing to the fact that the trust is wholly for the

advancement of any particular religion, except for mentioning one of the

objects as construction of the temple which we find goes on to include

in the same line, construction of dharamshala, dispensaries, medical

camps. The rest of the objects we find have nothing to do with the

advancement of any particular religion nor are of the nature of

conducting any religious activity. The objects read in entirety are to the

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 11 effect of serving humanity at large and the poor in particular, by

providing free education, medical facility to the poor and also helping

those in need during epidemics or other serious situations. They are to

the effect of spiritual upliftment of the general public and the

advancement of moral values, truth & righteousness, peace and non

violence amongst them. In fact object no. 9 mentions promoting the

understanding and integration of all religion of the world for peace, love

and harmony. Reading the entire aims and objects of the trust, therefore

it is clear that the purpose is definitely not for promoting or

advancement of religion but is primarily to serve humanity at large in

all possible capacities. We have noted that even the registration granted

to the assessee trust is not for religious purpose alone but by

recognizing that it exists for charitable and religious purposes. Having

so recognized the assessee trust, the department cannot now take a

different view of the fact situation and hold that the assessee trust is

existing primarily for religious purposes. Further the mere fact that the

assessee is constructing a temple, though vehemently disputed by the

Ld. Counsel for the assessee, alone does not lead to the conclusion that

it is existing for religious purposes. This would have been the situation

where the sole object of the trust was construction and maintenance of

temple and carrying out religious activities in the temple .But in the

present case this is not the fact. Temple construction is one of the

objects but beyond that the objects are in the larger interest of service to

humanity. We therefore hold that the findings of the Ld. CIT(E) that the

ITA No. 299/Chd/2020 Sidh Shri Baba Balak Nath Ji Trust v. CIT(E), Chandigarh 12 assessee trust was religious in nature is not based on the correct

appreciation of the facts. That the assessee trust is therefore not covered

by Explanation 3 to section 80G to be treated as not for charitable

purposes and therefore is entitled to approval u/s 80G of the Act. The

order of the Ld. CIT(E) is accordingly set aside and he is directed to

grant approval to the assessee trust.

Order pronounced in the Open Court on 30.07.2021.

Sd/- Sd/- (R. L. Negi) (ANNAPURNA GUPTA) Judicial Member Accountant Member Dated : 30.07.2021 GP/Sr.PS आदेशक���त�ल�पअ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकरआयु�त/ CIT 4. आयकरआयु�त (अपील)/ The CIT(A) 5. �वभागीय��त�न�ध, आयकरअपील�यआ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar