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आदेश/Order
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the appellant-trust against the order dated 28.09.2018 of the Commissioner of Income Tax (Exemptions), Chandigarh [hereinafter referred to as ‘CIT(E)’] in denying the registration to the appellant-trust u/s 12A read with Section 12AA of the Income Tax Act as charitable and religious institution.
As per the bye-laws of the appellant-trust, the stated aims and objects of the trust are to do sewa, wish, bhog, festival, devotion, kirtan etc. as per Pushtimargiya community & principles established by Shri
ITA No. 1463-c-2018 Temple Shri Goverdhan Nath Ji Trust, Karnal 2 Vallabhacharya Ji; and according to divine character of Shri
Goverdhannath Ji to run gaushala; further to run Sanskrit school; to
establish ayurved and alopathy dispensaries etc. The appellant-trust
applied for registration u/s 12AA of the Income Tax Act, 1961 (in short
'the Act') to the Ld. CIT(E), however, the Ld. CIT(E) rejected the
application of the trust observing as under:-
“9. Further the applicant has stated in 'note on activities' that the trust has performed activities such as Maharaj Ji Janam Utsav, Sri Krishrn Janmastami Utsav, Holi Milan Samaroh, Bhandara etc. since 2015. These activities don't measure up to the parameters of any of the limbs u/s 2(15) of the Act. Moreovr, it is also seen from the income & expenditure account that the applicant trust has incurred major expenditures on salary, utsav & celebration, sewa & puja samagri, bhandara expenses in last three years which are tabulated as below-
F.Y 2015-16 2016-17 2017-18
Salary 1,20,000/- 1,50,000/- - 1,65,809/- 1,51,737/- 63,874/- Sewa & Puja Samagri
Utsav & Celebration 85,496/- 136,425/- 66,000/-
Bhandara 53,781/- 90,077/- 44,750/- Repair & 72,388/- 79,070/- 18,327/- maintenance Exp.
Expenditures on sewa & puja samagri clearly indicate that the applicant trust is predominantly involved in worship of idol of Shri Govardhan Nath Ji for which the temple was constructed. It is also clear from the above that the trust used receipts predominantly for pursuing activities that don't partake the character of charitable purposes. In fact, in this case the applicant trust has collected money from general public as donations and that money has been utilized for activities that are restricted to the shrine and the idols therein. No charitable work is being done by society from public money. The absence of beneficiary clause, investment clause or the
ITA No. 1463-c-2018 Temple Shri Goverdhan Nath Ji Trust, Karnal 3 irrevocability clause further impinge on the public charitable nature of the trust. 10. It is further seen that the applicant trust has filed its returns of income in the Form No. ITR-5 for the A.Y 2016-17 and 2017-18 which is required to be filed by firm, AOP and BOI. It is pertinent to mention that as per rule 12(1) of the IT Rules, 1962, the returns of income of the society/trust/company which works on the principal of 'no profit no loss', are required to be filed in Form No. ITR-7. Filing of return of income in Form No. ITR-5 clearly indicates that the applicant trust in its own perception as well deems itself to be out of the ambit of charitable activities.
In view of the above, it is held that the society's activities are limited to a mandir and worship of idol of Shri Govradhan Nath Ji. The public money received as donations has been spent on idols and repair & maintenance of the mandir which does not partake the characters of any of the limbs envisaged in section 2(15) of the I.T Act. Moreover, frarning bye-laws and changing its composition by passing a mere resolution without any acceptance of competent court, are not tenable. Lack of beneficiary clause and the investment clause relevant to formation of public charitable trust does not enthuse confidence that the trust enures to the benefit of general public. The application for grant of registration u/s 12AA is accordingly rejected.”
Being aggrieved by the above order of the Ld. CIT(E), the
appellant-trust has come in appeal before us.
We have heard the rival contentions of the Ld. Authorized
Representatives of both the parties and have also gone through the
record. Admittedly, the appellant-trust is a registered trust. As per the
registration deed, copy of which has been placed at page 38 of the paper
book, the property of the trust was donated by one goswami Shri
Parshotam Lal Ji s/o goswami Shri Damodar Lal ji for establishment of
Shri Goverdhannath Ji temple and for doing other religious and
charitable activities. The trust has its bye-laws, as per which the
ITA No. 1463-c-2018 Temple Shri Goverdhan Nath Ji Trust, Karnal 4 objects of the trust are for worship of idol of Shri Goverdhannath Ji and
maintenance of the temple and to follow the Principles set by Shri
Vallabhacharya Ji of service, manorath, good objects, bhog, festival,
bhakti, kirtan etc. and further according to divine character and
principle of Shri Goverdhannath Ji, to run gaushala and sanskrit school;
to establish ayurveda and alopathy dispensary etc. and further to help
mankind in case of any natural or man created calamities and to perform
other religious activities as detailed in the bye-laws. One of the objects
is to impart education to the students without any discrimination of
caste or religion; to give scholarship and help to needy students for
higher education etc. Apart from that, objects of organizing medical
camps, blood donations are also part of the objects as per bye laws of
the trust. The trust also holds the activity of ‘bhandara (free food) to all.
As per the provisions of section 11 read with section 12A of the Income
Tax Act, 1961, the registration can be granted to the charitable or
religious trust or institution. A perusal of the order of the Ld. CIT(E)
shows that the Ld. CIT(E) has declined registration mainly on the
ground that the appellant trust is pre-dominantly doing the religious
activities and that the same do not partake the character of charitable
activity. However, as per the relevant provisions of section 11 read
with sections 12A & 12AA of the Act, the registration can be granted to
charitable or religious institution. Under the circumstances, there is no
bar in granting registration to a religious institution under the relevant
ITA No. 1463-c-2018 Temple Shri Goverdhan Nath Ji Trust, Karnal 5 provisions. Moreover, as per the objects of the trust, the trust is also
involved in charitable activities as noted above. The Ld. CIT(E) himself
has noted that the trust had spent considerable money on ‘bhandara’
(free food ) to all, which, in fact, is a religious-cum- charitable
activity. We, therefore, do not find any justification on the part of the
Ld.CIT(E) to decline the registration to the appellant-trust.
In view of the above discussion, the appeal of the appellant trust is
allowed and the Ld. CIT (E) is directed to register the appellant-trust u/s
12A / 12AA of the Income Tax Act. In the result, the appeal of the appellant trust stands allowed.
Order could not be pronounced earlier due to non-functioning of
the Bench on account of curfew / lockdown in the wake of Covid-19
Pandemic.
Order pronounced on 06.08.2020.
Sd/- Sd/- (संजय गग� / SANJAY GARG) (एन. के. सैनी / N.K. SAINI) उपा�य� /Vice President �या�यकसद�य/ Judicial Member Dated : 06.08 .2020 “आर.के.” 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,
ITA No. 1463-c-2018 Temple Shri Goverdhan Nath Ji Trust, Karnal
6 सहायकपंजीकार/ Assistant Registrar