SRI SHARADA VAIDIKA SMARTHA VIDYALAYAM SOCIETY, WARGAL,MEDAK DIST. vs. COMMISSIONER OF INCOME TAX, EXEMPTIONS,, HYDERABAD

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “B”, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA No.1715/Hyd/2017 Assessment Year: N/A Sri Sharada Vaidika vs. The Commissioner of Smartha Vidyalayam Income Tax (Exemptions) Society, Wargal, Medak Hyderabad. District. PAN- AALTS0006K (Appellant) (Respondent)

Assessee by : Shri K.K. Gupta Revenue by : Shri K. Srinivas Reddy Date of hearing : 03-04-2018 Date of pronouncement : 11-04-2018 ORDER PER SHRI B. RAMAKOTAIAH, AM:

The issue in this appeal is with reference to the granting of registration u/s 80G of the IT Act by CIT (E) vide order dated 20.07.2017. 2. Brief facts of the case are that assessee Trust had applied for registration u/s 12AA of the Act and was accordingly granted registration by CIT (Exemptions). Thereafter, assessee filed an application in Form No.10G on 31.01.2017, seeking approval u/s 80G(5)(vi) of the Act. During the course of hearing, assessee was directed to furnish the detailed reply on specific points. Assessee filed such information called for. CIT (E), after perusal of the

2 ITA No. 1715/Hyd/2017 Sri Sharada Vaidika Smartha Vidyalayam Society, Wargal. record, noticed that the Memorandum of Association, in the objectives itself there are religious objects. He further observed that according to the Activity Report the Society performed religious activities like Varuna Yagam, Rudrabhishekam on every Monday, Maharudrabhishekam on Mahashivaratri day and Sahasra Chandi Yagam. Ld CIT (E) opined that the activies carried out by the Society are in religious nature and therefore the Society is not eligible for approval u/s 80G(5)(vi) of the Act having regard to the provisions of sub-rule (2) to Rule 11AA of Income Tax Rules, 1962 since the activities are contravening / violating the provisions of section 80G(5)(iii) of the Act. Accordingly CIT (E) rejected assessee’s application filed u/s 10G of the Act. Aggrived, assessee is in appeal before us. 3. Before us Learned Counsel for assessee brought our attention to page 2 of the paper book and explained that about 60 students are studying in the Smartha Vidyalayam and they acame from various parts of the state. All of them are being provided with not only free education but also with free food, shelter, cloths, medicines, books etc. The students are also being trained in Yoga, Pranayama, Meditation, Music and Sports, English and Computer Education. The students participate and render their services freely in the social camps religious festivals etc to the public an disabled. The Students conduct Varuna Yagams in the beginning of the mansoon season and by the grace of the Rain GOD there have been sufficient rains and the agriculture in surrounding areas flourished. They also perform Rudrabhishekam every Monday for the welfare of

3 ITA No. 1715/Hyd/2017 Sri Sharada Vaidika Smartha Vidyalayam Society, Wargal. public in general. On Mahashivarathiri day Maharudrabhishekam is performed continuously for 24 hours with grandiose, this begets health and wealth to all the public, and peace and harmony in the society. In the month of April, 2013Sahasra Chandi Yagam was performed at Wargal for 15 days continuously for the welfare of all the citizens of the country. All the students and Acharyas have rendered their support voluntgarily all the 24 hours to the Rithviks and general public. On the occasion of national festivals like 15th August and 26th January the students attend the flat hoisting ceremony singing national anthem and rededicate themselves to the nation with an objective to beocme responsible good citizens of the country. The society proposes to focus on formal education to the poor and needy village children at free of cost by organizing ED-Camps in the surrounding villages and also proposes to impart Vedic Mathematics to the school children by conducting free special classes. The society is encouraging the merit students by awarding cash prizes and mementos to the toppers of the 10th class students; it has distributed pens and writing meterials to the needy students in surrounding villages. In future years the society proposes to extent its arena of activities by adopting identified poor and needy students suporting them throughout their carrier of education, so that a deserving student will not suffer to prosecute his higher education. Ld Counsel for assessee also relied on the decision of the ITAT, Hyderabad “A” Bench in the case of SAI LOVE vs. CIT (ITA No.566/Hyd/2016) dated 24.08.2016 and the decision of ITAT, Chandigarh Bench in the case of Shri Krishna Kripa Gaushala Samiti Pehowa vs.

4 ITA No. 1715/Hyd/2017 Sri Sharada Vaidika Smartha Vidyalayam Society, Wargal. CIT (ITA No.103/Chd/2015) dated 21.09.2015 in support his contentions. 4. Ld. DR refered to 80G5(ii) of the IT Act to submit that these are religious activities so CIT(E) was correct in rejecting assessee’s application. 5. Having regard to the rival contentions and the material on record as well as the case law relied upon by the Learned Counsel for assessee, we find CIT (E) have denied registration are unsustainable as it is very clear from the documents filed by assessee that assessee has mentioned clearly the activities carried out, which are discussed in para 3 of this order. Having granted registration u/s 12A on the very same activities, it cannot be stated that assessee activities are religious in nature. To that extent we are of the opinion that Ld. CIT(E) has erred in categorising the activities as religious in nature when they are meant for benefit of general public. Moreover the main object is to indulge in education. 6. We find that the Coordinate Bench of this Tribunal at Pune in the case of Ashoka Education Foundation vs. CIT in ITA No.549 & 1294/PN/2009 has considered the conditions to be fulfilled for issuance of registration u/s 80G and the circumstances under which the 80G can be denied and at para 21 & 22 of its order has held as under: “21. While granting the exemption or renewal of exemption under section 80G(5) of the Act, the role of CIT is limited to look into the nature of activities being carried on by the institution or fund and the violation if any, of the provisions of section 13 of the Act and its various subsections are to be looked into by the Assessing Officer while deciding the issue

5 ITA No. 1715/Hyd/2017 Sri Sharada Vaidika Smartha Vidyalayam Society, Wargal. of grant of deduction under sections 11 and 12 of the Act. The CIT while issuing the extension of exemption under section 80G(5) of the Act has a limited role to play i.e. to see whether the activities of the assessee trust were charitable in nature. As pointed out in the paras hereinabove, the assessee was engaged in promoting educational activities by way of running schools, colleges, etc. The activities carried on by the assessee were purely charitable in nature which entitled it to claim the exemption under section 80G(5) of the Act … 22. Even otherwise, while granting the exemption under section 80G(5) of the Act, the Hon’ble Gujarat High Court in Orpat Charitable Trust Vs. CIT (supra) while deciding the issue of renewal of certificate under section 80G(5) of the Act, held that even if the ground about contravention of section 11(5) of the Act was validly taken by the CIT, that would have bearing only at the point of the assessment and would not be a material consideration in so far as the granting approval under section 80G(5) of the Act was concerned”

Sd/- Sd/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated: 11th April, 2018.

6 ITA No. 1715/Hyd/2017 Sri Sharada Vaidika Smartha Vidyalayam Society, Wargal. KRK 1) Sri Sharada Vaidika Smartha Vidyalayam Society C/o Sri K.K. Gupta, CA, 3464, Dundoo Vihar, R.P. Road, Secunderabad-03. 2) The CIT(Exemptions), Hyderabad. 3) The Addl. CIT(Exemptions), Hyderabad. 4) The Departmental Representative, I.T.A.T., Hyderabad. 5) Guard File