THE LIFE ETERNAL TRUST,PUNE vs. COMMISSIONER OF INCOME TAX (EXEMPTION),PUNE, PUNE

This appeal filed by the assessee is directed against the order dated 21.12.2024 passed by Ld. CIT, Exemption, Pune rejecting the application for registration u/s 80G(5) of the IT Act.

Facts of the case, in brief, are, that the assessee filed its application for registration in Form No.10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the IT Act on 29.06.2024. With a view to verify the genuineness of activities of the assessee and fulfillment of conditions laid down in clauses (i) to (v) of section 80G(5) of the IT Act, a notice was issued through ITBA portal on 08.08.2024 requesting the assessee to upload certain information/clarification on or before 22.08.2024. In reply to the said notice, the desired information was furnished by the assessee. On verification of the information furnished by the assessee, Ld. CIT, Exemption, Pune found certain discrepancies, therefore, issued another notice on 28.11.2024 and asked the assessee to furnish various other details and also to clarify that the pooja expenses which are religious in nature debited in the account are in excess of 5% of total income of the assessee. The assessee replied that these are not pooja expenses but are related with Sahaj Yoga, a meditation practice taught by Shree Nirmala Devi which is non-religious in nature and beneficial to the public at large. Not being satisfied with the explanation furnished by the assessee, Ld. CIT, Exemption, Pune rejected the application filed by the assessee by observing as under :- “6. The assessee furnished its response on 10/12/2024. The trust has contended that its primary objective is to promote Sahaja Yoga, a meditation practice based on effortless techniques as taught by Shri Nirmala Devi, and that its activities are non-religious in nature, inclusive, and beneficial to the public at large. It has further argued that certain activities are colloquially termed as "Pooja" for public understanding but do not involve worship of specific deities or religious practices, emphasizing that these activities aim to promote spiritual knowledge and Sahaja Yoga practices. The trust has also submitted lists of beneficiaries and asserted that its activities are accessible to all without discrimination based on religion, caste, gender, age, or community. However, on verification of the bills and invoices submitted by the trust, it is evident that the expenditure claimed to be for Sahaja Yoga practices includes multiple instances of expenses explicitly categorized as religious. These include expenses towards events such as "Mahashivratri Pooja," "Shree Krishna Pooja," "Shree Ganesh Pooja," and "Shree Durga Pooja," among others. These expenditures directly contradict the trust's claim that its activities are non-religious and unrelated to the worship of specific deities. The nature of these expenses, as described in the bills and invoices, indicates that they are inherently religious in character, undermining the trust's contention that its activities are secular and aimed solely at advancing Sahaja Yoga practices. Further, the financial statements of the trust reveal a distinct classification of expenses into "Pooja expenses" and "Charity expenses." The presence of a separate category for "Pooja expenses" highlights that a significant portion of the trust's expenditure is allocated to activities explicitly identified as religious. In fact, it has been observed that the expenditure on pooja expenses are more than on the charity expenses. This categorization not only contradicts the trust's claims of non-religious objectives but also raises concerns about the alignment of its activities with its stated objects. 6.1 Moreover, the emphasis on religious expenditures violates the provisions of section 80G(58) of the Income-tax Act, 1961, which explicitly disallows deductions under section 80G for any trust or institution that spends more than 5% of its total income on religious activities. It has been observed that during FYs 2022-23 and 2023-24, the trust has received income of Rs. 38.54 Lakhs and Rs. 12.13 Lakhs respectively. Against the same, it has spent on pooja expenses Rs. 25.90 lakhs and Rs. 2.34 Lakhs which amounts to 67.20% and 19.29% respectively. Thus, the trust's financial statements and supporting documents demonstrate that the expenditure on religious activities far exceeds the permissible limit, further substantiating the conclusion that the trust has failed to adhere to the statutory requirements for claiming exemption under section 80G.