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Income Tax Appellate Tribunal, CHANDIGARH
Before: SMT. DIVA SINGH, JM & SMT.ANNAPURNA GUPTA, AM
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 :
That on the facts & circumstances of the case, the Id. CIT(A) has erred in law and facts in deleting the addition amounting to Rs. 4,93,67,440/-ignoring the fact that the receipts of the assessee like interest, rent receipt and lease receipt of commercial land are not charitable in nature. 2. 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/-
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.
The ld. AR relied upon the impugned order. Initially time
had been sought to file a Paper Book, however, the request was
give n up.
Since the Revenue is aggrieved by the order passed by the
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.
The ld. AR on the othe r hand heavily relying upon the
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.
We have heard the rival submissions and perused the
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.”
The finding of the CIT(A) challenged by the Revenue on
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.
In the facts of the present case, it is seen that some of the
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.
We also notice that the generalistic sweeping observation
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.
Addressing the next specific grievance addressed by way
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."
On a consideration of the above facts in terms of the
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.
In order to address the expenditure accepted by the
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.
At this stage, it would be apposite to refer to certain constitutional
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
A further reference to Article 51A of the Constitution of India
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,
ITA 362 /CHD/2019 2014-15 Page 22 of 37
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.
ITA 362 /CHD/2019 2014-15 Page 24 of 37
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
ITA 362 /CHD/2019 2014-15 Page 26 of 37
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 :
To make cultural policy one of the key components of development strategy; 2. To promote creativity and participation in cultural life; 3. To reinforce policy and practice to safeguard and enhance tangible and intangible, movable and immovable cultural heritage and to promote cultural industries;
ITA 362 /CHD/2019 2014-15 Page 27 of 37
To promote cultural and linguistic diversity in and for information Society; and 5. To make more human and financial resources available for cultural development.
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
To our understanding, no texts be cited to highlight the universal
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.
Similarly, we find dissemination of information,
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.
In view of the aforesaid facts, circumstances and reasons
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.
Thus, for the de tailed reasons set out hereinabove, we
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.
In the result, appeal of the Revenue is dismissed.
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