JCIT (OS) (EXEMPTION) CIRCLE-2, CHANDIGARH vs. M/S KURUKSHETRA DEVELOPMENT BOARD, BRAHAMSAROVAR, KURUKSHETRA

आदेश/ORDER

PER DIVA SINGH

In the present appeal filed by the Revenue, the hearing has taken place on 22.08.2019 and 26.11.2019. By the present appeal, correctness of the order dated 16.01.2019 of CIT(A)-3, Ludhiana pertaining to 2013-14 assessment year is assailed on the following various grounds :

ITA 362 /CHD/2019 2014-15 Page 2 of 37 ignoring the fact that the expenses of the assessee like light and sound show security service charges, upgradation of Sh. Krishna Museum, expenditure on celebration of Geeta Jyanti, land compensation etc. are not charitable in nature. 3. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and facts in deleting the addition amounting to Rs. 4,93,67,440/- ignoring the fact that the activities of the assessee do not get covered under section 2(15) of Income Tax Act 1961. 4. That the appellant craves to leave, add or amend any grounds of appeal on or before the appeal is heard or disposed of. 2. The ld. CIT-DR relying on the assessment order has

argued that the Assessing Officer having considered the

assessee's stated aim being to undertake overall development of

Kurukshetra etc. has proceeded to compare the assessee with

the other Development Boards whose activities were being run

in the nature of trade, commerce or business, hence, not

covered u/s 2(15) of the Act. Reliance was placed on the

assessme nt order. For Ground Numbe rs 2 and 3 also , reliance

was placed on the assessment order.

had been sought to file a Paper Book, however, the request was

give n up.

First Appellate Authority, the ld. CIT-DR was required to

address the specific facts brought on record by the AO so as to

justify upsetting the conclusion drawn by the CIT(A). On a

reading of the assessment order, it was noticed that no such

fact has been referred to. The ld. CIT-DR in the absence of any

such reference on record on query nevertheless relied on the

ITA 362 /CHD/2019 2014-15 Page 3 of 37

assessme nt order. The respective orders of the authorities

below were read by the parties.

4.1 For the sake of greater clarity, the activities set out in

para 3.1 of the impugned order were required to be read out in

the Court. The Revenue did not dispute that these activities

which included maintaining and preserving the historical

places in and around 48 kms of Kurukshetra and providing

facilities for tourists/pilgrims including celebration for Geeta

Jayanti at Bharam Sarovar and maintaining of Krishna

Museum at Kurukshetra etc. as per the aims and object of the

Trust were carried out. However, despite specific queries, no

instance or fact was referred to support the assertion that

these activities be considered to be a commercial activity and

akin to the activity of a real estate builder as no such analysis

is available in the assessment order.

4.2 Addressing ground No. 2 and 3 also, the ld. CIT-DR relied

upon the assessment order. No other specific arguments on

behalf of the Revenue were advanced.

impugned order submitted that the AO in the subsequent

assessme nt year considering similar activity on the very same

set of facts and circumstances has allowed relief. Accordingly,

it was his submission that the view taken by the CIT(A) cannot

in the circumstances be said to be disputed by the Assessing

ITA 362 /CHD/2019 2014-15 Page 4 of 37

Officer. In the clarification fixed, it was submitted that this

fact has been taken note of by the CIT(A) himself while

granting relief and this fact has not been assailed by the

Revenue.

material available on record. Before addressing the respective

argume nts, it is necessary for the sake of completeness to

extract the relevant findings of the AO on which heavy reliance

is being placed by the ld. CIT-DR : 2. The assessee Board is a society register with Registrar of Societies. Registration u/s 12A has been granted to the assessee by C.I.T-Rohtak on 17.07.1978. The official members of the Board are Governor of Haryana as Chairman, C. M Haryana and Vice Chairman, Urban Development Minister Haryana and 25 others as members. 3. The main aim of the society is to undertake overall development of Kurukshetra including its lands renovation of historical places and facilities to pilgrims and tourist etc. Before moving further it is essential to highlight some important points. The entities engaged in development activities have been operational in all the major cities / Districts of Haryana as well as Punjab besides in other parts of country. At some places they are called Development Boards like that of assessee, or HUD A, PUD A, or City Development Board, Town & Country Planning Boards or Improvement Trust. The nature of activities in all these cases is to develop the infrastructure of the city. The activities involves not only construction of lanes, roads, parks, streets but also to beautify the city through construction of parks, gardens etc. The activities also involve construction of houses and allotment of plots etc. in some cases till 01.04.2003 all these boards were treated as "Local Authority". The income of which was exempt u/s 10(20) of I.T.Act. From 01.04.2003 through an amendment the entities eligible for exemption were recognized and the development board were excluded. From 01.04.2001 onwards the boards started taking exemption u/s 12A of the Act. 4. The same was allowed by the department in some of the cases. However in one case of M/s Jammu Development Authority the registration u/s 12A was called by C.I.T-Jammu on the pretext that as the activities were similar to that of a real estate builder there was no element of charity involved and the JDA was not doing any charitable activity covered u/s 2(15) of I.T.Act. The cancellation of registration u/s I2A has been configured by Hon'ble Supreme Court SLP No. (S) 4990/2014 Dated 21.07.2014.

ITA 362 /CHD/2019 2014-15 Page 5 of 37 5. Now the issue has been settled that activities of development board are not charitable in nature and claim made u/s 11/12 of I.T.Act is not allowable to the assessee. The facts of the case of assessee are also similar in nature. The activities involve the development of the town. The receipts during the previous year have been shown as from Grants in Aid, Miscellaneous receipts, Rent receipts, Donation, Interest and lease of land. The Grants in Aid have been received from Government of Haryana for the purpose of implementation of various schemes. There has been receipt of corpus fund of Yog Ashram of Rs. 5,72,006/-. The expenditure of the amounts have been shown towards "Light & Sound Show Security Service Charges", upgradation of Sri Krishna museum, expenditure on celebration of Gite Jayanti, Land compensation etc. 6. The activities narrated above do not percolate to any activity having in basic limbs of Section 2(15) of I.T.Act i.e Education Medical Relief and Relief to the poor. The activity can best be described in residuary limb i.e "Advancement of any other activity of general utility". The activities narrated above if considered in the residuary limbs are restricted by the first proviso where if the gross receipts exceed Rs. 25Lakhs the benefit of Section 2(15) are not available. In case of assessee the total receipts are Rs. 34,38,22,104/-and as such the activities cannot be claimed as exempt under the limb of "Advancement of general public utility". 7. As the decision of M/s Jammu Development Authority by the Apex Court has Settled the issue in favour of the department. The assessee was given a show cause notice dated 01.11.2016 asking to justify the charitable activity. The reply has been furnished by the assessee. The assessee has submitted as- "we cannot compare our case with that of Jammu Development Authority v/s The Commissioner of Income Tax-Jammu as no activity in nature of trade, commerce or business is being practiced by the assessee". 8. Considering the reply it is clear that assessee has not much to say on the matter. The accounts are reflecting the activities being in the nature of trade, commerce or business. The Grants in Aid is received by the Government for payment of salaries to the employees. There are other grants for development work also but the same have been expanded toward other activities like sound and light shows etc. The receipt as well as payment has no charitable intent. Rather it is administrative expense which area necessity to run the institute. 9. The other receipts include interest which is due to surplus being deposited in Banks and has no direct relation with activities. The other major receipt learned & lease of land. The leasing out of commercial land to entities is purely in the nature of trade or business and as such the activities are squarely covered by proviso to Section 2(15) of I.T.Act and the assessee is not entitled to exemption u/s 11/12 of I.T.Act.”

which having reliance as placed by the ld. AR is also extracted

hereunder for the sake of completeness :

ITA 362 /CHD/2019 2014-15 Page 6 of 37 3.2 Findings :- I have examined the facts of the case and the submissions made by the assessee. The main issue in appeal centres around the denial of exemption under Section 11 of the I.T. Act on the ground that the assessee was not doing any charitable activity. However, an examination of the activities of the appellant society reveals that there is no commercial element involved. There can be no comparison with bodies like Haryana Urban Development Board (HUDA) etc., where the activities are different and commercial in nature as they deal in real estate. No event or activity garnered with any profit motive is carried out by the appellant. Moreover, the interest earned on funds of the appellant society has been as per the provisions of Section 11(5) of the I.T. Act. The light and sound show for which expansion of funds have taken place is as per the tenets laid down in the objects of the society, viz., to provide utmost facilities to pilgrims/tourists coming to Kurukshetra. This fact has been accepted by the Assessing Officer in his order for A.Y. 2016-17 dated 30.12.2018 where the charitable nature of the institution has been accepted. The case of Jammu Development Authority Vs. CIT relied upon by the A.O. is not relatable to this case as the facts are totally different in both the cases. In that case, the registration u/s 12AA of the IT Act was cancelled on the grounds that the assessee was carrying out activities against the spirit of Section 2(15) of the Act. In the appellant's case, there has been no issue with the registration u/s 12AA of the Act and it is seen that there are no flouting of the provisions of Section 2(15) of the IT Act.

In view of the facts as stated above, I am the opinion that the denial of exemption u/s 11 of the IT Act was not justified. I, therefore, delete the addition made on this account. These grounds of appeal are allowed.

aims and objects relied upon by the assessee referred to for

consideration before the CIT(A) and taken into consideration

by the said authority have been extracted in para 3.1 of the

order. Since the above conclusion challenged by the Revenue

in the present proceedings rests on these facts and evidences

brought out in the impugned order, accordingly, it is deemed

appropriate for the sake of completeness to also reproduce the

relevant extract from the impugned order :

“3.1 A. R. Submissions :-

ITA 362 /CHD/2019 2014-15 Page 7 of 37 During the course of appellate proceedings, the appellant submitted the following : "The Assessee society is carrying out the charitable activities of general utility as enumerated in object clause of the deed of registration and few such objects are:- (i) Providing all kind of facilitation to Tourists/Pilgrim coming to Kurukshetra throughout the year. (ii) Maintain and Preserve Historical Places in and around 48 Kms of Kurukshetra (iii) To provide all kind of support for celebration of Gita Jyanti at Brahm Sarovar every year. (iv) To Maintain and operate Krishna Museum at Kurukshetra. (v)………………………..and so on.” 9. On a consideration thereof, looking at the aims and

objects of the Trust and its activities carried out, the specific

areas of its operations, we find that the conclusion drawn by

the CIT(A) does not warrant any interference. For arriving at

the above conclusion we have taken into consideration the

above detailed facts available on record and also seen that no

fact has been referred to by the Assessing Officer to

demonstrate that the facts of the assessee's case were akin to

the facts as considered in the case of M/s Jammu Development

Authority (supra). When we consider the facts as available in

the order, it is seen that Jammu Development Authority as per

record was found to have been engaged in the activity of

developing and selling land as a Real Estate builder. This

finding of fact on record remained unsettled right upto the

Apex Court. The said finding is further coupled with another

clear consistent finding on record as in the facts of the said

case, there were consistent findings of the Courts and Tribunal

ITA 362 /CHD/2019 2014-15 Page 8 of 37

that, there was no element of charity in the activities of Jammu

Development Authority. This finding of fact was further

supported by the primary and material fact available on its

record namely that the Registration u/s 12AA of the said

authority as noticed by the Hon'ble Jammu & Kashmir High

Court also had stood cancelled.

9.1 In the facts of the present case, Registration u/s 12A

stands and no material has been referred to before us even to

suggest that there were any proceedings pending its

cancellation. Thus, the submission that the SLP filed by the

said Authority had been dismissed by the Apex Court, we hold

has no material bearing whatsoever on the facts of the present

case. In the facts of the present case, for the Revenue to rely

on the said decision, it must be established that the present

assessee on facts can be said to be engaged in the activities

akin to a “real estate builder” with no element of charity. There

are no facts referred to for such a conclusion. Further, atleast

some fact or evidence necessarily should be available on record

to show that atle ast the process of cancelling etc. the

Registration u/s 12AA has started. Submissions, arguments

and facts to the said effect are missing. Without caring to

establish a pari-materia on these material facts, we are of the

view that the reliance placed on the decision is misplaced. On

the contrary, we notice that before the CIT(A), the assessee has

ITA 362 /CHD/2019 2014-15 Page 9 of 37

canvassed that “The activities carried out by the Assessee society are

of charitable nature as defined u/s 2(15) of the IT Act, and eligible for

exemption u/s 11 of the Act subject to certain conditions laid down

therein. The Assessee society has complied with all such conditions and

the funds are applied as per those conditions.” It has also been

canvassed that “the surplus funds of the assessee society are kept as per

the provisions laid down u/s 11(5) of the Act”. These submissions, we

find have not been even attempted to be upset by referring to any fact or

evidence ignored by the CIT(A) or noticed by the AO. At the cost of

repetition, we find that no evidence, fact or evidence has been placed

before us to upset these submissions.

alleging similarity of activities in the assessment order without

referring to any specific fact or evidence with HUDA and PUDA

necessarily has to be discarded. Even otherwise, we note that

the facts of these cases are stated to be distinguishable as the

assessees therein are stated to be engaged in activities like

acquisition of lands, its development etc. where the assessee is

exploiting its monopoly position engaged in providing

commercial and residential properties which has been the

basis of the allegation that it was engaged in commercial

ventures. The Revenue infact has argued that the AO has

understood the word “Development” as considered in the case

of Development Boards which engage in development of lands

ITA 362 /CHD/2019 2014-15 Page 10 of 37

and then sell it for profit after plotting etc. Misguided by the

casual usage of development of Kurukshetra, we find in the

facts of the present case the AO has misdirected himself in

understanding the word “development” as akin to activities of

Development Boards etc. We find that no specific instance of

establishing identical facts has been brought on record by the

AO and even in the present appeal, no fact or instance

supporting the claim of near similarity of facts with either

Jammu De velopment Board etc. or HUDA, PUDA etc. has been

brought to our notice by Revenue. On the contrary, we find

that there was no similarity of activity with M/s Jammu

Development Authority namely developmental activities like that of a

Real Estate builder etc. Thus, the reliance placed thereon by the

Revenue has to be discarded.

of Ground No. 2 in the present appeal that the expenses

incurred for “Light & sound Show”; upgrading of Krishna Museum etc. has been considered to be a commercial activity by the AO. It is ne cessary to set out the specific finding of the

CIT(A) challenged by the Revenue. The CIT(A) has held “The light

and sound show for which expansion of funds have taken place is as per the

tenets laid down in the objects of the society, viz., to provide utmost facilities to

pilgrims/tourists coming to Kurukshetra. This fact has been accepted by the

ITA 362 /CHD/2019 2014-15 Page 11 of 37

Assessing Officer in his order for A.Y. 2016-17 dated 30.12.2018 where the

charitable nature of the institution has been accepted.”

11.1 In order to address the issue, the facts as available on

record need to be addressed. The AO, it is seen, has discussed

the same in para 5 of his order. A perusal shows that the

statement therein also serves as his conclusion as it makes

reference to no fact or evidence. We find that there is no

reasoning available to hold that on consideration of which fact

he has concluded that it is a comme rcial activity. It is noticed

that the AO at the cost of repetition in reference to Ground No.

2raised in the present proceedings has observed in the

assessme nt order that “The expenditure of the amounts have been shown

towards "Light & Sound Show Security Service Charges", upgradation of Sri Krishna museum, expenditure on celebration of Gita Jayanti, Land compensation etc.” Apart

from this bald statement, there is no further discussion in the

order as to why it is a commercial activity. On the other hand,

we find that when the facts available on record as considered

by the tax authorities are seen for examining the correctness

of the said conclusion, we notice that the said activity when

carried out by the assessee whose stated aim is facilitating

tourism/pilgrim, maintaining and preserving historical places in and around 48 kms. Of Kurukshetra, celebrating Geeta Jayanti at Baharam Sarovar and maintaining Krishna Museum etc. as per the

stated aims and objects which are not in dispute, how the AO

ITA 362 /CHD/2019 2014-15 Page 12 of 37

has concluded that it was a commercial venture, we find is

curiously left unaddressed by him.

11.2 When we examine the conclusion drawn that the Light

and Sound show was a comme rcial exercise without any

reference to fact, evidence or any consequent reasoning, we

notice from the assessment order itself that it has been argued

before the AO that there was no profit motive in the activity as

the main source of Income for the assessee society is Grant in

Aid from the State & Central Govt. and Local Authority. Out of

the total receipt in the financial year 2013-14 of Rs.

34,38,22,104/-, it has been claime d that an amount of Rs.

32,02,00,000 was received as Grant in Aid from State &

Central Government for charitable activities. Thus, it is seen

that the argument that it was a commercial activity stands

demolished by the facts as the assessee society is mainly

dependent on Government for its activities and there is a very

meager amount of collection on account of donations etc. In

view of these specific facts, we had required the Revenue to

show where is the alleged commercial activity. The ld. CIT-DR

in the absence of any such evidence on record or material

referred to by the AO relied upon the assessment order. We

further notice that the assessee in its submissions extracted at

pages 5 and 6 of the impugned order before the CIT(A) has

stated that the assessee society is exhibiting the philosophy of

ITA 362 /CHD/2019 2014-15 Page 13 of 37

Gita given by Lord Krishna through a Light & Sound show at the Birth place of Gita at "Jyotisar". Apart from these facts, it is seen

that the following supplemental submissions have been

extracted by the CIT(A) which are reproduced hereunder from

the impugned order for the sake of completeness :

Additional Submissions on 12.07.2018:-

In continuation of our previous submission, we submit the following information as desired by your honour: - (01) Copy of Objects for which the Appellant/Assessee Board is established:- The Assessee board was established on 01st Day of August, 1968 by the Former Prime Minister of India Bharat Ratna Sh. Gulzari Lai Nanda. The copy of Memorandum of Association containing Object Clause is attached herewith as per Ex-A. (02) Copy of certificate of Registration under section 12A(a) of the I. T. Act:- The certificate of registration under section 12A(a) of the IT Act, 1961 was issued by Hon'ble CIT on dated 17/01/1978 vide no. 227(15-K)/74-75/J and the copy of same is attached herewith as per Ex-B. (03) Sources of Income:- The assessee Board is mainly dependent on Grant in Aid from State and Centra! Government. During the year under consideration, the assessee has received Rs. 32,02,00,000 as Grant in Aid from Government out of the total receipts of Rs 34-38,22,104. The copy Audit Report in Form No. 10-B alongwith copy of Balance Sheet, Income & Expenditure Account is attached as per Ex-C. (04) Application/Accumulation of Income' by the Assessee Board:- The Income has been applied for the purpose of fulfilment of objects as laid down in the objects clause of Memorandum and/or objects incidental to the main objects of the assessee Board as per the conditions laid down u/s 11 of the Act Further, the amount of income accumulated or set apart for application to charitable/religious purposes, to the extent it does not exceeds 15% of the Income has been properly invested by the assessee as per guidelines laid down u/s 11(5) of the Act. Further, we place reliance on the Landmark judgement of Hon'ble Supreme Court in the case of ACIT Vs. Surat City Gymkhana [2000 (246) ITR 188] wherein Hon'ble Supreme Court held that Registration issued under section

ITA 362 /CHD/2019 2014-15 Page 14 of 37

12AA is a fait-accompli and A.O has no power to further probe into the objects of the Trust(See Ex-D). So, the action of the Ld. A.O. of rejecting claim of the Assessee under section 11 is totally wrong and deserves to be scrapped. Keeping in view the facts and circumstances given above, your honour is requested to pass an appropriate order granting relief to my client."

ground raised, we find that the issue which falls for our

consideration is whether the expenses incurred and the

receipts received by the assessee specifically from the Light

and Sound Show and maintenance of Museum etc. can be said

to arise from the activities of the assessee which can be said

to be covered u/s 2(15) of the Income Tax Act. For the

purposes of determining the claims and the counter claims of

the parties in the present proceedings, it is necessary to first

extract the relevant provision :

Section 2(15) “charitable purpose” includes relief of the poor, education (yoga) medical relief, (preservation of environment (including water-sheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility. Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless— (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year.” 13. In the facts of the present case, at the cost of repetition

it needs to be borne in mind that the assessee as per para 3 of

the assessment order itself is a society whose main aim is to

ITA 362 /CHD/2019 2014-15 Page 15 of 37

undertake overall development of Kurukshetra etc. It has

elaborated its aims as including renovation of historical places

and f acilities to pilgrims and tourists etc. A further perusal of

para 5 of the assessme nt order shows that there has been

receipt in the corpus fund of Yog Ashram of Rs. 5,72,006/-. It

is seen that the expenditure of the amounts have been shown

towards "Light & Sound Show Security Service Charges",

upgradation of Sri Krishna museum, expenditure on

celebration of Gita Jayanti etc.. The activities of the Trust, it

is seen included maintaining and preserving the historical

places in and around 48 kms of Kurukshetra and providing

facilities for tourists/pilgrims including celebration for Geeta

Jayanti at Bharam Sarovar and maintaining of Krishna

Museum at Kurukshetra etc. When these facts are read

alongwith the submissions of the assessee advanced before the

CIT(A) which have been extracted in para 3.1 of the impugne d

order, it is seen that the claim that the assessee is carrying

out the charitable activities of general utility as enunciated in

the Objects clause of its Deed of Registration cannot be

denied. Few of these objects have been extracted hereunder

again at the cost of repetition, they include : (i)Providing all kind

of facilitation to Tourists/Pilgrim coming to Kurukshetra throughout

the year; (ii)Maintain and Preserve historical Places in and around 48

Kms of Kurukshetra; (iii) To provide all kind of support for celebration

ITA 362 /CHD/2019 2014-15 Page 16 of 37

of Gita Jyanti at Brahm Sarovar every year; (iv) To Maintain and

operate Krishna Museum at Kurukshetra. When these facts are

taken into consideration with the finding arrived at in the

impugned order, it is seen that the CIT(A) has come to the

conclusion that there is no commercial element involved. The

said conclusion, we find cannot be faulted with as no event or

activity has been referred to either by the AO or by the ld.

CIT-DR to show that it can be said to be motivated by any

profit motive. He has also concluded that there is no

comparison with bodies like HUDA, PUDA etc. which finding

also we find ourselves in agreement for the reasons brought

out hereinabove and to be elaborated hereinafter.

CIT(A) and uphe ld by us in the facts of an assessee

maintaining a Krishna Museum and having a Light and Sound

Show exhibiting the philosophy of Gita at its birth place “Jyoti

Sar” it needs to be addressed what Kurukshetra stands for.

There may be multiple narratives on the belief whether any

actual war called the Mahabharat was fought or is it a

reference to a constant battle of good and bad waging in e ach

one of us since times immemorial. However, the fact that Gita

was expounded on the battle field of Kurukshetra on the verge

of Mahabharat by Sri Krishna is a subject or rather a fact on

which the belief is based is not itself in dispute. Kurukshetra

ITA 362 /CHD/2019 2014-15 Page 17 of 37

has its name in the hall of fame solely and only due to the

expounding of the philosophy of a civilization which was

plumbing in the depths of ignorance due to the prevalent and

rhetoric adherence to rituals based on incorrect context of the

principles, ideas and philosophies. This religious reform

separating religion from the philosophy of a life lived in

excellence for the benefit of the Society was one of the first of

the many self generated religious reforms of the civilization.

This is contained in the Bhagwad Gita. The fact that it is the

cultural heritage of this nation it cannot be denied by the

most doubting of the doubting Thomases. Kurukshetra attracts

tourists and pilgrims not because it is a site of some scenic

magnificent beauty. Its claim of attraction is solely the

cultural, historical, philosophical heritage of a civilization

which was lost in oblivion for nearly 700 years. The keeping

alive of the new direction and definition shown by the Great

Yogi Sri Krishna who is considered a God by some of us where

shunning the the n corrupted religious practices, he gave a

distinct new definition of Yajna as the act of giving back to the

Universe like the water cycle aided and performed by the Sun;

Like the exchange of gases and interdependence between the

animal world and the vegetation; the flora and the fauna. The

keeping alive of the place which gave birth to the yogic,

enlightened way of life showing how to achieve balance and

ITA 362 /CHD/2019 2014-15 Page 18 of 37

harmony being one within and without was explained by Sri

Krishna at this place. The description of unity in mind, body

and soul within and the universe outside were shown to be

aspirational quests of the civilization. The message of

achieving deliverance of the mind from the fears and greed of

material objects, fame and desires and to live not in the mind

but in the enlightened mind where greater good of all and

negating the self ego were aspirational choices to be guided by

which was explained to Arjun overcome by a paralytic fear

when required to fight in a war against his own. The fact that

there are some relics, temples, trees, water bodies keeping the messages and the life events and the philosophy around these events alive which infact is the vanishing cultural heritage of the civilization cannot be shied away. It

is not the purpose of the present proceedings to debate

whether there was a movement to the Indus valley civilization

or movement away from the Indus Valley civilization, the

preserving of the cultural heritage, however, cannot be ignored. The fact

that the mythical river Saraswati having its temple supposedly

at the ancient site of Pehowa again is a belief which is central

to the core cultural heritage. Efforts to preserve it come

within the 48 km radius. Its importance cannot be over-

emphasized as apart from a religious spot like other religious

sites it has been maintaining a genealogical records of the

families visiting this place over a period of times of birth,

death etc. These are some of the written records which may still be

ITA 362 /CHD/2019 2014-15 Page 19 of 37

available with some families at Pehowa which again is a cultural heritage. The importance of their preservation and maintenance cannot be allowed to be toyed with.

provisions especially keeping in mind the fact that government’s funds

are also involved. It is well settled that all Acts of State and

the Union of India are deemed to be in conformity with the

constitutional mandate of the country as the Constitution of

India is the supreme law of the land. Reference may be made

to the Directive, Principles of State Policy enshrined in Part-IV of

the Constitution. The Director Principles of State Policy though

have not been provided to be enforceable in a Court of law like

fundamental Rights which enjoy such a guarantee, however,

their importance in providing a guidance for formation of State

policies etc. cannot be ignored. Article 49 of the Constitution of India

included in the Chapter of Part IV of the Constitution in clear

unambiguous words is titled “Protection of monuments and

places and objects of national importance” It mandates that;

“It shall be the obligation of the State to protect every monument or place or object of or artistic or historic interest, [declared by or under law made by Parliament] to be of national importance, from spoliation, disfigurement, destruction, removal, disposal or export, as the case may be.”

ITA 362 /CHD/2019 2014-15 Page 20 of 37

enshrined in Part-IVA titled as “Fundamental Duties” may also

be made. The Article in clear terms sets out that it shall be

the duty of every citizen of India to value and preserve the rich

heritage of the composite culture. The specific Clause (f) of Art.

51A sets out that, “ It shall be the duty of every citizen of India

to value and preserve the rich heritage of our composite

culture.” The fact that site which gave birth to a philosophy

which has a rich following right through the generations is the

cultural heritage cannot be denied. Conscious of the fact that

the Directive Principles of State Policy are not enforceable in a

Court of Law like Fundamental Rights, however, there is no

disputing the fact that they hold an equally important status

as the Fundamental Rights guaranteed under the Constitution

as they provide the guiding beacon in the light of which the

framers of the Constitution expected that the State Policy

would be guided by. Infact, there are decisions which allow the

Fundamental Rights to be restricted if a law aims to realize

the mandate of the Directive Principles of State Policy. The

fact that the Constitution of India is the supreme law of the

land and that all provisions of all Acts, Rules and Regulations

are presumed to be in conformity with it is not open to debate.

The fact that the area of Kurukshetra owes its importance to the philosophy of the Bhagwad Gita encapsulating the teachings and message of the Ved, the Upnishads and the Purans contextually summarized by Sri Krishna at this

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place is well known and accepted. The temples, monuments, trees, stone, the space etc. in memory and recognition of and the building of the mythology, the legends, the folklore, the festivals, the songs, bhajans, the music, the dance forms etc. around this event are the cultural heritage of this nation centered in this place constitute and form the vanishing tangible and intangible cultural heritage cannot be denied. The fact that there are doubters

and nay sayers on the very existence and relevance of the

discourse does not detract from the fact that there is a whole

body of cultural, heritage, philosophy and ideas resonated and

birthed from this place. Sri Krishna a God to some of us is

also a supreme yogi, a philosopher and definitely an

enlightened mind to all of us. He has delivered the famous

discourse at this place and this is the reason and the only reason for the importance and relevance of Kurukshetra. Consequently an informative dissemination of his life, time and philosophy cannot be dismissed as commercial activity. The dissemination of information through

Light and Sound available even to the illiterate cannot be

whimsically and arbitrarily discarded as a commercial venture.

Similarly maintenance of a museum keeping alive the

philosophy ideas and cultural folklore constituting the

cultural heritage cannot be dismissed as a commercial activity

simply for the saying. The fact that apart from various other

cites within the 48 KM area of Kurukshetra, there is Pehowa

also which though has been referred to earlier for the

mentioning of the genealogical records is also as per folklore,

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cultural belief is considered to be on the banks of the

erstwhile Saraswati, some would say mythical river embodying

the Godess Saraswati, “Godess of Learning”. The existence of

this river marked by a temple on the purported site may also

have doubt sayers but its existence is the cultural heritage of

this Nation which recognizes “Triveni” and e xistence of

different philosophies and thoughts cannot be denied. A

person on the touchstone of scientific historical standards

may or may not believe its existence, however, the existence of

a cultural heritage around this event cannot be denied. The

fact that its existence is insisted upon by a particular class of

thinkers to justify that as opposed to migration from the

Central Asia infact there was a migration from the East to

Central Asia may cause and keep alive the conflict and give

life to the divergent views available. However, multiplicity of

views is healthy when supported by cultural heritage. The

civilization which is attempting to rise from the 700 years of

oblivion has never shied away or denounced the non-believer

from the believer, infact such tags of identification are not

give n as different views are acceptable and do co-exist

peacefully. The extreme tolerance and accepting existence of

opposing views peacefully may have been the banes and cause

for near extinction of the civilization, however, this fear too

did not sway the civilization. This cultural heritage and the

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importance of maintenance of the vanishing relics, Sites, the

tangible and intangible cultural heritage of national

importance cannot be over emphasized. Its absence becomes

more noticeable where unlike other civilizations which

celebrated victory by building Monuments, Gates, Mausoleum,

Arches etc. this civilization did not build any monuments in

personal honour. The so called highest achievers as role

models of this civilization be they Kings, philosophers or

thinkers consciously avoided perpetuating either their name or

lineage as culturally they have always aspired to attain

control over ones own mind, body, thought and soul and

negate the ego and the name itself. The fact that external

civilizations engaged with part of the population engaged in

business and administration was ignorant of the passion of

the highest achievers who were engaged in their solitary

journeys to negate the ego by yog, medication and dhyan were

not noticed by the rapacious and the greedy, the history with

a lack of victorious symbols of achievement despite the

evidence of well planned ancient sites discovered by

archeologists is evident of this fact. These cultural aspirations

admittedly do not have many physical symbols around which the philosophies, the culture and the ideas and heritage revolved. Thus, preservation of the vanishing and the few remaining relics of the tangible and intangible cultural heritage cannot be treated to be a commercial exercise without even a scrap of evidence.

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17.1 It would not be out of context to quote Koenraad Elst

who has as per information available in the public domain

addressing the queries posed to him on the advice which he

would possibly give to the Hindus as available in

http://koenraadelstblogspot.com/2012/05/hindu-survival-what-is-to-be-

done.html has stated; “Some Hindus ask me , as a symp athizing

outs ide r, if I have any advice f or them when the y wan t to rev ive their fortunes. In princ iple, I have no advice; it would be arrogant to pretend to know something th at the people concerned are not so sure about. But then again, Hindus are no diff erent f rom others, they are subjec t to the same laws , so an app roximative knowle dge of the ir condition is enough to predict where they are mov ing and to say wh at they have to do to make the best of it. So, he re goes. ” and

answered the same with stating that; “The first thing Hindus

have to d o, is to know themselves. The great problem of Hindus toda y is that they have become sleep-walkers, forgetful of their c ivilization. It gets worse with every passing year, as the

ever-larger Hindu middle-class is becoming Americanized both

in consumer patterns and in values. Their knowledge of

Western films and music is becoming bigger as their knowledge

of Hindu tradition is lessening. And the worst is that increasing

numbers take pride in their ignorance.”

17.2 Reference above is not in recognition of the correctness

or approval of the view expresse d, it is in the context to

highlighting the importance of a vanishing appreciation, awareness and

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knowledge of the cultural heritage. Considering the factual and

contextual background of Kurukshetra and the facts of the

case in the light of the statutory provisions, we are of the view

that the need and necessity to keep alive the cultural and

civilization heritage and wisdom is not only a national

necessity for bringing life of dignity and self-respect, its

importance cannot be over emphasized in order to enable the

peoples to live an enlightened and empowering life without

fear. This would go a long way to address the unjust criticism of the ign orant on the so called myths of Hindu cowardice. The passion for non-violence enshrined in the cultural

heritage of the country has to be understood in the context

where the people were exhorted to and were also capable of

understanding that it was possible and they were capable in

this life itself of rising above the material excesses and gains

and achieve the godly qualities of grace, forgiveness,

magnanimity and desire societal welfare avoiding violence. The

philosophy of tolerance, live and let live; giving back to the

society, avoid violence till the nth degree of tolerance so as to

live not in the body but in the spirit beyond the mind. It is

not the purpose of the present order to delve deeply in this

esoteric and metaphysical topic or deliberate upon the

possible ways of holographic visualization of self mind and ego

within one’s own consciousness, the purpose is only to

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highlight that the cultural heritage of the civilization needs a

protection and re cognition keeping in mind the aforesaid

constitutional provisions and the need for preserving the

tangible and intangible cultural heritage revolving around this

area which the society aims to preserve and maintain. It may

also be mentioned that the need, importance and necessity to

maintain, preserve and protect the cultural heritageit is well

recognized even under International Conventions that cultural

policies are a part of development. India is a signatory to the

International Conventions which acknowle dges the need to

implement its key components of development strategy

through Government agencies. Reference may be made to the

United Nation’s Conference on “Human Development” held in 1972 at Stockholm. Reference may also be made to recommendations

made by the Inter-governmental Conference on Cultural

Policies for Development which issued an “Action Plan on

Cultural Policies for Development” (30 March-2 April,1998)

again at Stockholm wherein India was also a Member. The

following Policy Objectives recommended to Member States :

ITA 362 /CHD/2019 2014-15 Page 27 of 37

17.3 Thus, keeping alive the cultural heritage an activity

undertaken by the present assessee as per its aims and

objects and accordingly educating and disseminating this

information through the Light & Sound Show or Museum

alone without any facts and evide nce to the contrary cannot be

termed to be a commercial activity purely on whims and

fancies of the officers. The aim of the Statute is to collect just

and due taxes. Article 245(1) empowers the Parliament to

enact laws for the whole or any part of the territory of India.

Article 265 of the Constitution provides that no tax shall be

levied or collected except with the authority of law. The

Income Tax Act provides for a mechanism to levy and collect

income tax as well as to grant exemption from payment as in

the present case. The “activities” ordinarily undertaken by

Development Authorities have necessarily to be considered as

distinguishable and distinct in fact where it is evident that the

activities reinforce the imple mentation of the cultural policies

and infact aim to safeguard, prote ct and preserve the tangible

and intangible movable and immovable cultural heritage. As

noticed, cultural policies as a part of development stands

recognized even under International Conventions. Considering

ITA 362 /CHD/2019 2014-15 Page 28 of 37

the constitutional mandate enshrined in the Directive

Principles of State Policy and the Fundamental Duties for the

citizens under the umbrella of which the cultural heritage is

sought to be preserved. Disseminating information and

educating through the Light and Sound Show to the curious

and the interested person irrespective of religion, caste,

culture, creed, colour, gender, nationality cannot be

irresponsibly termed as a mere commercial activity without an

iota of evidence. The need for preserving and maintaining

cultural pride cannot be overemphasized as observed earlier

also especially where the presentation of this civilization has

been only through the prism of constant and the mischievous

criticism bringing on the table for discussion only the caste

atrocities, sati or child marriages which no doubt have been

the malaise of the civilization and these events necessarily

call for us to hang our heads in shame but also need to be

considered in the backdrop of what was then happening in the

rest of the world. Events must be understood in the context of

the times. Women as a gender were oppressed and witch

hunting, burning at the stake and other practices of torture

were accepted within those civilizations and religions of those

times. These practices of witch hunting and mal treatment of

the marginalized, the weak and the women were duly

sanctioned as permissible religious tools of oppression in most

ITA 362 /CHD/2019 2014-15 Page 29 of 37

of the other civilizations of the world and were near equivalent

to Sati and caste atrocities. The wome n in the so-called

developed nations even then were married off young with

virtually no say e ither in the event or choice of mate. Their

status and existence was totally dependent on male support

and in the absence of it, were maltreated, having no economic,

social or inheritance rights, denied education much like the

women in this civilization when it was plumbing the depths of

ignorance. Thus no doubt caste, sati, child marriage etc. as

practiced were abominal practices to be shunne d, the other

civilizations too were equally on the back foot on these

aspects. This civilization has periodically had resurgence and

reform initiated by the enlightened religious Reformers, Saints

at different points. Reference may be made to the a new

definition give by Sri Krishna. Reference may also be made to

the reforms and new definition given by Sri Gautam Budh, Sri

Mahavir, Guru Nanak, Mira, Ravi Das, Kabir, Raja Ram Mohan

Roy, Swami Dayanand Saraswati, Shankracharya, Sri

Vivekanand etc. The culture has been alive whe rein several

course corrective self generated corrections have taken place.

There is a lot more to this civilization, then caste divides.The

dissemination of the information and education on the life and

philosophy of Sri Krishna and Gita respectively is a

recognition of the cultural heritage is necessary to address the

ITA 362 /CHD/2019 2014-15 Page 30 of 37

civilization in a proper perspective. The trashing of the

civilization only on the basis of caste can best be addressed by

recognizing and learning about the rich cultural heritage. The

placing of facts in the correct perspective would show that

possibly the unfortunate conflict of caste as portrayed actually

may be better understood as a conflict of the wealthy and the

deprived existing in the capitalist world as well as in the

communist world alike;. in the developed, developing and

under-developed economies of the world over. This fact

represented out of context ignoring the history of the rise and

fall of the civilization in the context of the global trends

continuously belittles the achievements of the Indian diaspora

who have demonstrated their mettle in different fields the

developed nations. The abiding resonance and power of this

philosophy has been oft referred to not only by the Great Indian

minds like Mahatama Gandhi, father of the nation but also other

equally well respected Indian minds like Adi Shankrach arya,

Swami Vivekanand, R abindra Nath Tagore amongst others. The

enlightened international diaspora equally well acknowledges the

relevance and magnificence of this philosophy.Whereas whether

Albert Einstien acknowledged this magnificent text of achieving

excellence in human spirit, on this the jury may be well divided

but other equally famous and well recognized scientists,

historians, philosophers, artists, thinkers have

ITA 362 /CHD/2019 2014-15 Page 31 of 37

acknowledged its magnificent is not in dispute. Reference may

be made to J. Robert Oppenheimer, Henry David Thoreau, T.S.

Eliot, Sun ita Williams, Philip Glass, Annie Besant, Ralph Waldo Emerson, Herman Hesse, Carl Jun g, Alduos Aldous Huxley, Rudolph Stein er etc. etc. and the list can go on. The abiding

principles of Right and Wrong thought, action and deeds were

explained on this terra ferma to Arjun who after having

prepared for this battle baulked on the battlefield and

expressed his extreme revulsion and shame in being involved

in this immoral war. The discourse has stood the test of time

as it involves the highest principles of management as

applicable to an individual, organization or State. It is on this

terra ferma of Kurukshetra that Shri Krishna gave the

discourse of right and wrong actions, thoughts and deeds.

The definition of Right action was explained with the concept

of “swa-dharma” i.e. that action which is right for that person

at that point of time for which no scriptures need to be read,

no ritual needs to be performe d, no God or Guru needs to be

appeased. Right action with the right intellect enlightened by

the pure human spirit bereft of shackling of the mind through

the five senses with no thought or desire of individual benefit

or reward or punishment is explained to be the highest

principle of an enlightened human existence which is possible

only with mindful living. It is a well acknowledged fact that

the lessons addressing the spirit of the human desire to live a

ITA 362 /CHD/2019 2014-15 Page 32 of 37

life of exalted magnificence expounded by Sri Krishna has a

following of renowned philosophers, thinkers of different times

who have acknowledged the lofty ideas and heavily borrowed

therefrom or at times plagiarized the philosophy expounde d

and incorporated it in their Sects/religions and followings. It

is not a religious discourse delivered in a temple or at a

religious ceremony but at a battlefield, the place of action, it

is a life lesson for the spirit starving for excellence and

magnificence. This philosophy has caught the attention of the

enlightened world for generations. The activity of the Trust to

keep alive this message for the curious seeker and the

ignorant visitor alike by giving a perspective of the mythology

and the historical context of the conflict, the message of

resolution and being aware that beyond the five senses

swaying the mind and consequently the body, there is an

intelligence waiting to be tapped for which no knowledge

except the knowledge of the pure self is sufficient cannot be

termed to be a commercial exercise without any reference to

any fact or evidence supporting the claim. The imparting of

these messages through a show or by Light and Sound

maintaining a museum cannot by any stretch of imagination

by considered to be a commercial venture. The fact that this is a

holy place for a Hindu pilgrim open to the world at large cannot be so construed so as to be understood purely in the religious context shorn of the tangible and the intangible cultural context in which itexists.

ITA 362 /CHD/2019 2014-15 Page 33 of 37

educational relevance of museums as contributors to the education of the young and the old, the student or the teacher, the trader or the

artist. The museum inform the diaspora who cares to visit it

not only about the times, the values, the life styles and the

culture of the specific times but also gives a perspective of the

contemporary relevance; status and standing of the other

cultures of those times. Mere charging of fees from visitor or

receipt of State funds for their upkeep etc. does not transform

the character of a museum to be a comme rcial venture. The

museums in fact are akin if not bigger and larger te mples of

learning, then the best of Universities and Colleges. The

reach of the colleges and the Universities is limited to

imparting knowledge only to the admitted literate and

qualifie d unlike Museums which impart knowledge to the

world at large regardless of his literate skills or

qualifications.

knowledge, awareness of the philosophy of Gita, through a Light

and Sound show also cannot be treated to be a commercial

exercise in the manner carried out by the assessee.

Knowledge and information imparted to the world at large

regardless of caste, class or religion does not become

commercial solely because it is more entertaining or available

ITA 362 /CHD/2019 2014-15 Page 34 of 37

also to the illiterate. Education need not necessarily be

through books and lectures and completion of course and

certificates. Lifestyle education which upgrades your life is

equally far reaching and a valuable education having every

day application. It is well acknowledged that when education

is aimed to be imparted to the world at large, then the use of

script alone may not always be sufficient. Audio visual media like

movies, theatre, skits, Light and Sound are also very powerful medium available for disseminating knowledge and education. Their reach and hold can never be over emphasized. The resort to educate and impart

knowledge on the life, message and realities of the times of Sri

Krishna leading to the life lessons of the Srimad Bhagwad Gita

to the world at large, the literate as well as the illiterate, the

unlettered, the ignorant young and the aware old, the

domestic tourists and the international tourists in the

absence of any evidence cannot be presumed to be a

commercial venture. It need not be emphasizes that the reach

of a written message and information is still limited to the

lettered and the privileged. When the same message is

explained through Light & Sound Shows, paintings and art

and the other audio visual mediums, it triggers an interest

arouses a curiosity to know more permits imagination to take

flight. When taught through script in a written word, there

would be few seekers, if it is imparted by a narrator, a

storyteller, it has a greater impact. However, to find an

ITA 362 /CHD/2019 2014-15 Page 35 of 37

audience willing to pay attention is not an easy task as when

only ears are approached, the eyes and the mind tends to

wander. The knower exposed to the philosophy is fully aware

of the power and the presence of the senses on the mind and

the intellect beyond that. The Light and Sound Show ensures that with

the major senses of sight and sound captivated the consequent imaginations and mind are enthralled and caught. The capturing of these senses

can be so overpowering that the senses of touch, taste and

smell subside. The show aiming to address the philosophy of

life and the Gita spelling out played to show so that maximum

possible message in minimal possible time is imparted and a

life abiding interest is generated creating a hunger to study,

learn and improve which is a life long educational exercise

cannot be dismissed as a commercial venture without any

evidence.

as set out hereinabove on a consideration of the peculiar facts

and circumstances of the case in the light of the

Constitutional provisions, the International Conventions to

which Indian is a signatory in the context of the activities

found discussed in the respective orders alongwith the

contextual background wherein the assessee functions, we

hold that the assessee has been formed for the objects falling

within the four corners of the main clause of Section 2(15) of

ITA 362 /CHD/2019 2014-15 Page 36 of 37

the Act. We have seen that the activities undertaken by the

assessee were unlike those undertaken by M/s Jamuna

Development Authority. This issue, we have addressed at

length in the earlier part of this order. The activities

undertaken by the present assessee like Light and Sound

Show, present Security Service Charges for preserving and

maintaining/up-gradation and maintenance of Krishna

Museum expenditure of celebration of Geeta Jayanti etc. are

all relatable activities comme nsurate with its aims and objects

involving no activity in the nature of trade, commerce or

business.

are of the view that in the absence of any fact, instance or

example on record to show that the activities of the trust are

commercial ventures, we find no good reason to vary the

conclusion drawn.

Order pronounced in the Open Court on 6 t h

Dece mber,2019.

Sd/- Sd/- ( अ�नपूणा� गु�ता ) ( �दवा �संह ) (ANNAPURNA GUPTA) (DIVA SINGH) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member

ITA 362 /CHD/2019 2014-15 Page 37 of 37

“Poonam” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6. आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar