SHROUTA VIJNAM GURUKULAM,MANGALORE vs. INCOME TAX OFFICER, WARD-1, EXEMPTIONS, MANGALORE

Aggrieved by the Order of the CIT(E), rejecting the assessee’s application for approval under section 80G of the Act. assessee has filed this appeal before the Tribunal. Assessee has filed a Paper Book enclosing therein the Trust Deed dated 05.04.0213, amendment to Trust Deed dated 19.02.2023, activity report of the assessee trust, audited financial statement for the Financial Years 2020-21, 2021-22 and 2022-23, initial certificate granted registration under section 12A r.w.s. 12AA of the Act, approval under section 80G of the Act, dated 24.02.2015, fresh application for approval under section 80G of the Act in Form 10AB, application for provisional registration under section 12A of the Act, Order of the PCIT granting registration under section 12A of the Act, etc. The learned AR, by referring to the objects of the Trust, submitted that teaching of vedas is not a religious activity and therefore would be eligible for approval under section 80G of the Act. In this context, the learned AR relied on the Orders of the Bangalore Bench of the Tribunal in the case of Sri Ashvalayana Vrunda Vs. ITO in 1085/Bang/2022 (order dated 04.01.2023) and Shrthiparampara Gurukulam Vs. ITO reported in [2023] 150 taxmann.com 125 (Bangalore – Trib.).

Learned DR supported the orders of the CIT(E).

We have heard the rival submissions and perused the material on record. The assessee trust has been formed to protect, preserve and promote Shrouta Vijnana bestowed by the Vedic Seers. The objects of the Trust as mentioned in the Trust Deed dated 05.04.2013 reads as follows:

The word `Veda’ means `knowledge’ and is derived from the Sanskrit word `vid’, which means `to know’. The word `Veda’ signifies highest sacred, eternal and divine knowledge as well as the texts embodying that knowledge. The significance of the Veda is manifold. It has been universally acknowledged that the Veda is the earliest available literature of humanity. The Veda contains the highest spiritual knowledge (Para vidya) as well as the knowledge of the world (Apara vidya). Thus, apart from philosophy, we find here descriptions of various aspects of the different subjects such as sciences, medicine, political science, psychology, agriculture, poetry, art, music etc. The Veda is unique in its purity and sanctity. The text of the Veda is preserved in its pure and original form without any alteration or interpolation even after thousands of years. The Veda is the unadulterated treasure house of true knowledge. So much so that even UNESCO declared it as part of the Intangible cultural heritage of humanity. Despite being oldest, the Vedas have been preserved in their true form up till now. Even Max Muller, a renowned European scholar, has admitted that, the text of the Vedas has been handed down to us with such accuracy and care that there is hardly any change in the words, or there is any uncertain aspect in the whole of Vedas. The credit for this goes to Vedic seers (Rishis) who devised means of protecting and preserving the text of Vedas letter by letter, with all their accessories. Vedic mantras have accents (Swara) which preserve its original form of word- construction.

The Constitution Bench of the Supreme Court in Dr Ramesh Yeshwant Prabhoo v Shri Prabhakar Kashinath Kunte and Others 1996 AIR 1113 referring to various constitution bench decisions, Encyclopedia of Religion and Ethics, Dictionaries, Encyclopaedia Britannica and Treatise, had held as under. “These Constitution Bench decisions, after a detailed discussion, indicate that no precise meaning can be ascribed to the terms `Hindu', `Hindutva' and `Hinduism'; and no meaning in the abstract can confine it to the narrow limits of religion alone, excluding the content of Indian culture and heritage. It is also indicated that the term `Hindutva' is related more to the way of life of the people in the sub- continent. It is difficult to appreciate how in the face of these decisions the term `Hindutva' or `Hinduism' per se, in the abstract, can be assumed to mean and be equated with narrow fundamentalist Hindu religious bigotry, or be construed to fall within the prohibition in sub-sections (3) and/or (3A) of Section 123 of the R.P. Act.” Ordinarily, Hindutva is understood as a way of life or a state of mind and it is not to be equated with, or understood as religious Hindu fundamentalism. “Thus, it cannot be doubted, particularly in view of the Constitution Bench decisions of this Court that the words `Hinduism' or `Hindutva' are not necessarily to be understood and construed narrowly, confined only to the strict Hindu religious practices unrelated to the culture and ethos of the people of India, depicting the way of life of the Indian people. Unless the context of a speech indicates a contrary meaning or use, in the abstract these terms are indicative more of a way of life of the Indian people and are not confined merely to describe persons practising the Hindu religion as a faith. Considering the terms `Hinduism' or `Hindutva' per se as depicting hostility, enmity or intolerance towards other religious faiths or professing communalism, proceeds form an improper appreciation and perception of the true meaning of these expressions emerging from the detailed discussion in earlier authorities of this Court.”

The Tribunal in Shiv Mandir Devsttan Panch Committee Sanstan v CIT [2012] 27 taxmann.com 100 (Nagpur Trib) referring to the above decisions held that worship of Lord Shiva, Hanumanji, Goddess Durga and maintaining of temple cannot be regarded as for the advancement support or propagation of a particular religion and granted the approval under section 80G of the I.T.Act. The relevant observations from the decision are as under:- “The objects as has been pointed out by CIT, nowhere talks of advancement, support or propagation of a particular religion, worshipping of Lord Shiva, Hanumanji, Goddess Durga and maintaining of temple, in our opinion, cannot be regarded for the advancement support or propagation of a particular religion. No evidence or material was placed on record or brought before us by the learned DR which may prove that these object relate to a particular religion. No doubt the DR argued that it relate to Hindu Religion but in our opinion it is not so. Lord Shiva, Hanumanji, Goddess Durga does not represent any particular religion, they are merely regarded to be the super power of the universe.

In the case of Commissioner of Hindu Religious and Charitable Endowments Madras v. Sri Lakshmindra Thirtha Swamiar 1954 SCJ 335, Religion has been expressed to mean a matter of faith with individuals or communities and it is not necessarily theristic. There are well known religions in India, like Buddhism and Jainism, which do not believe in God or in any intelligent first cause. A religion undoubtedly has its basis in a system of beliefs or doctrines which are regarded by those who profess that religion as conducive to their spiritual well being, but it will not be correct to say that religions is nothing else but a doctrine or belief. A religion may not only lay down a code of ethical rules for its followers to accept, but it might prescribed rituals and observances, ceremonies and modes of worship which are regarded as integral parts of a religion, and these forms and observances might extend even to matters of food and dress. No material or evidence has been brought on record by the department which may prove that any person coming, worshipping and maintaining the temple has to follow a particular code of ethical rules and has to carry out the prescribed rituals and observances, ceremonies and modes of worship. The entry is not restricted to a particular group of persons. Any body whether want to worship or not and want to maintain or not can come to the temple and avail of all the facilities available to the public at large. Therefore, these objects cannot be regarded to be the religious objects. In our opinion, until and unless the activities for which the trust is established, involve the activity religious purpose, it cannot be said that the assessee has not complied with the condition No. (iii) enumerated u/s. 80G(5) of the Act.

Explanation 3 to section 80G(v) states that "in this section, "charitable purpose" does not include any purpose the whole or substantially the whole of which is of a religious nature." This explanation takes note of the fact that an institution or fund shall be for a charitable purpose and may have a number of objects. If any one of these objects is wholly or substantially wholly of a religious nature, the Institution or Funds falls outside the scope of section 80G and the donation to it will not make the donor entitled for the deduction u/s. 80G. The objects as per Explanation 3 must be wholly or substantially whole of which must be of religious nature. The assessee has submitted all the evidence including the objects and how the expenditure has been incurred by it. The onus, in our opinion, gets shifted on the Revenue to prove that the assessee-trust is wholly or substantially for the religious purpose. There is no allegation on the part of the revenue that the whole or substantially whole of the object of the trust is to propagate or advance support to a particular sect. We may observe that Hinduism is a way of life of a civilized society. It as such is not a religion. In this regard we rely on the case of T.T. Kuppuswamy Chettiar v. State of Tamil Nadu [1987] 100 LW 1031 in which it was held "The word "Hindu" has not been defined in any of the texts nor in judgment made law. The word was given by British administrators to inhabitants of India, who were not Christians, Muslims, Parsis or Jews. The alleged Hindu religion consists of four castes Brahmins, Kshatriyas, Vaishyas and Sudras belonging ultimately to two schools of law, mitaksharas and dayabhaga. There is, however, no religion by the name 'Hindu'. It only shows that so called Hindu religion has been called for convenience." CIT must be aware of that the Hindu consists of a number of communities having the different gods who are being worshipped in a different manner, different rituals, different ethical codes. Even the worship of god is not essential for a person who has adopted Hinduism way of life. Thus, Hinduism holds within its fold men of divergent views and traditions who have very little in common except a vague faith in what may be called the fundamentals of the Hinduism. The word 'community' means a society of people living in the same place, under the same laws and regulations and who have common rights and privileges. This may apply to Christianity or moslem but not to Hinduism. Therefore, it cannot be said that Hindu is a separate community or a separate religion. Technically Hindu is neither a religion nor a community. Therefore, expenses incurred for worshipping of Lord Shiva, Hanuman, Goddess Durga and for maintenance of temple cannot be regarded to be for religious purpose. Under these facts and circumstances, we are of the view that the CIT is not correct in law in not allowing the approval to the assessee trust u/s. 80G of the Act. We accordingly, set aside the order of the CIT and direct the CIT to grant approval to the assessee-trust u/s. 80G(5)(vi) of the Act.”

The ITAT Bangalore bench in M/s Sri Channamallikarjuna Trust Committee Gangavathi v CIT (E) – (order dated 4.5.2022) explained the difference between charitable purpose and religious purpose and held as under:- “13. In sections 11, 12 & 13, a distinction has been drawn between 'charitable purpose' and 'religious purposes', but there is no definition of the term 'religious purpose' in the Act. Generally interpreted, it would encompass within its fold all institutions or funds, which are for the advancement, support or propagation of a religion and its tenets. How religion is to be understood in the context of the Act, has been examined in the case of Dawoodi Bhora Jamat (supra). If the benefit of religious endowments too ensures for the benefit of the public, then the religious trusts/endowments too will be entitled to the exemption provided by section 11 of the Act. A religious trust could be 'public' or 'private'. Section 13(1)(a) bars exemption to any private religious trust, which does not enure for the benefit of the public. Section 80G(5)(iii) makes a distinction in cases of institutions or funds, which are for the benefit of any particular religious community or caste - say for Hindus, Muslims, Christians or for Brahmins, etc. Donors to such trusts are debarred from claiming benefit of deduction from income for donations made to such trusts. Conversely, it follows that for donations made to religious bodies, which do not fall in the category mentioned in section 80G(5)(iii), benefit of deduction under section 80G can be claimed. Thus, it could be said that a public religious trust, not meant for the benefit of a particular community, caste or section, will be entitled to claim exemption on its income in the same way as a public charitable trust. 15. We are of the view that the objects and purposes of the Assessee are both charitable and religious, the Assessee does not exist exclusively for the benefit of a particular religious community. The objects do not channel the benefits to any community and thus, would not fall as an institution existing solely for religious purpose. In that view of the matter, we are of the view that the Assessee is a charitable and religious trust which does not benefit any specific religious community and therefore, it cannot be held that it exists solely for religious purpose. It cannot be characterised as religious object especially when it does not make a distinction between caste, creed, race, religion, etc.

In Vaidik Bhakti Sadan Asram v CIT [2010] 5 ITR (Trib) 590 (Delhi), the Tribunal held that propagation of vedic thoughts and philosophy cannot be attributed to any religion as the same are more concerned with the lifestyle of the human beings. The relevant observations are as under:- “9. A perusal of the impugned order of the learned Commissioner of Income-tax shows that the renewal of registration under section 80G was denied by him to the assessee-trust mainly on three grounds which have already been enumerated by us while narrating the facts of the case in the foregoing portion of this order. At the time, of hearing before us, learned counsel for the assessee has made elaborate submissions to meet all these objections raised by the learned Commissioner of Income-tax while denying exemption to the assessee under section 80G. As rightly pointed out by him, the objects and activities of the assesseetrust relating to propagation of vedic thoughts and philosophy cannot be attributed to any religion as the same are more concerned with the lifestyle of the human beings across the different religions and countries. It gets corroborated from the fact that yoga and self-meditation are being exercised and followed throughout the world by sections of people from different religions and different countries. These activities are thus not confined or attributed to any particular religion and the same, therefore, cannot be regarded as wholly or substantially of a religious nature. Moreover, as per the trustdeed, neither the trust nor its funds were expressed to be for the benefit of any particular religious community and as further pointed out by learned counsel for the assessee and remained uncontroverted by the learned Departmental representative, not even a single rupee was spent by the assessee-trust on religious activity.”

In view of the above judicial pronouncements of the Hon’ble Supreme Court, Hon’ble High Court and various Tribunal (including the Bangalore bench), there is no merit in the impugned finding of the CIT(E) that teaching Vedas is a religious activity and therefore not eligible for approval under section 80G of the I.T.Act.

As regards the case law relied on by the CIT(E), we find that in the case of Upper Ganges Sugar Mills Ltd v CIT (supra), one of the objects of the Trust deed was ‘to establish, maintain and to grant and / or aid to public places of worship and prayer halls’. The Hon’ble Apex Court considering the said object, held as under:- “10. To reiterate, 'Explanation 3 does not require the ascertainment of whether the whole or substantially the whole of the institution or fund's charitable purpose is of a religious nature. If it did, it would read differently. It requires the ascertainment of whether there is one purpose within the institution or fund's overall charitable purpose which is wholly, or substantially wholly, of a religious nature. There is little doubt that clause 2(h)of the trust deed which permits the trustees to support prayer halls and places of worship sets out a purpose the whole or substantially the whole of which is of a religious nature, and this has not been seriously disputed. Therefore, in our view, the Trust and the donation by the assessee to it fall outside the scope of section 80G.” 19. In the present case, objects of the assessee-Trust are reproduced at para 6 (supra) and they are available at page 31 to 33 of the paper book filed by the assessee. The assessee Trust does not have any object ‘to establish, maintain and to grant and / or aid to public places of worship and prayer halls’ and hence the judgment of the Hon’ble Apex Court in the case of Upper Ganges Sugar Mills Ltd. v. CIT (supra) is inapplicable to the facts of the present case. The impugned conclusion of the learned CIT(E) that teaching of Vedas involve offering worship and prayer to God is not correct and bereft of any reason. The assessee only teaches the students how to recite the Vedas. There is a particular method of pronunciation of Vedas with Swaras attached to it. The recitation and pronunciation of Vedas is what is taught by the assessee-Trust. It is like teaching any other Sanskrit literature. The teaching of Vedas does not involve offering worship and prayer to God as held by the CIT(E). There is no object or activity of worship or prayer to God as contended by the CIT(E). The CIT(E) is also not an authority to conclude what teaching of Vedas involve. Hence, the decision of the Supreme Court in Upper Ganges Sugar Mills Ltd v CIT (supra) is not applicable to the facts of the present case.

The ITAT Jaipur in Shiv Ratan Rathi Foundation v CIT [2012] 20 taxmann.com 221 (JP) followed the decision of the Supreme Court in Upper Ganges and held that organising ‘Bhagavat Katha’ is a religious activity and therefore Trust would not be granted the approval under section 80G. In the present case as explained above, the Supreme Court decision in Upper Ganges is not applicable and also the assessee-Trust does not have any object of organising ‘Bhagavat Katha’. It is only teaching how to pronounce and recite the Vedas, a Sanskrit literature. Thus, the above decision is not applicable to the present case.

The Hon’ble High Court of Rajasthan in Umaid Charitable Trust v UOI (supra) distinguished the judgment of the Hon’ble Supreme Court in Upper Ganges and held as under:- “33. The learned counsel for the revenue relied upon the decision of the Supreme Court in the case of Upper Ganges Sugar Mills (supra), which has been relied upon by the learned CIT(A) also in the impugned order, it was held on the basis of one particular clause (2)(h) of the trust-deed which read "to establish, maintain and to grant and/or aid to public places of worship and prayer halls". The Hon'ble Supreme Court dealing with Explanation4 of section 80G(5) held as under : "To reiterate, Explanation 3 does not require the ascertainment of whether the whole or substantially the whole of the institution or fund's charitable purpose is of religious nature. If it did, it would read differently. It requires the ascertainment of whether there is one purpose within the institution or fund's overall charitable purpose which is wholly, or substantially wholly, of a religious nature. There is little doubt that clause 2(h) of the trust deed which permits the trustees to support prayer halls and places of worship sets out a purpose the whole or substantially the whole of which is of religious nature, and this has not been seriously disputed. Therefore, in our view, the trust and the donation by the assessee to it fall outside the scope of section 80G." (p. 582)

In the above judgment, it was held by the Hon’ble Rajasthan High Court that approval under section 80G cannot be refused if one particular expenditure was made for repair and renovation of Lord Vishnu’s temple and that too by way of contribution to another trust. Relevant observations are as under:- “The line of distinction between religious purposes and charitable purposes is very thin and no watertight compartment between the two activities can be established. Unless the objective of the charitable trust in question itself is to spend its income for a particular religion and it is so found in the trust deed, the Income-tax Department cannot reject the renewal of the trust as charitable trust under section 80G of the Income-tax Act, 1961, merely because one particular expenditure is for an activity which may be termed as spending for a particular religion.”

The CIT(E) has relied on Kasyapa Veda Research Foundation v CIT [2011] 12 taxmann.com 286 (Cochin) to hold that Vedas are religious scriptures and Vedic Study is a study of Hindu religion or religious instruction. The said decision is distinguishable in view of various decisions as discussed hereinabove which holds that Hinduism itself is not a religion or community. The constitution bench decisions of the Supreme Court were not brought on record in the above decision and hence it is distinguishable. Without prejudice, the Tribunal in the above decision noted that universal appeal of Vedas and allowed registration in the status of charitable and religious Trust by holding as under:- “Vedas: Universal appeal 4.6 Vedanta is the philosophy which analysed and taught man to be moral consciously. It is the essence of all religions. The Hindu scriptures teach that man is attracted to this earth to learn, more completely in each successive life, the infinite ways in which the Spirit may be expressed through, and be dominant over, material conditions. Slowly but surely, man, throughout the world, including India, across different religions, nationalities and ideologies, with the entering of the atomic age and the expansion of the world mind, is learning these truths. Wisdom garnered by India, the eldest brother among the nations, is a heritage of all mankind. Vedic truth, as all truth, belongs to the Lord and not to India. The Rishis, whose minds were pure receptacles to receive the divine profundities of the Vedas, were members of the human race, born on this earth to serve humanity as a whole. Distinction by race or nation is meaningless in the realm of truth, where the only qualification is spiritual fitness to receive. The time tested scriptures of the world are one in essence.” “Some overlap between the 'religious' and the 'charitable' is inherent in the very definitions of the two concepts, and has to be admitted and respected. Continuing further, we also observe that the activities of the trust are not confined to these activities alone, but is also undertaking purely charitable activities. As apparent from the Object Clause 2(c), (d), (f ), (i), (j) and (k ) of its Trust Deed, as well as the activities undertaken in pursuance of the same, as listed in the 'Note on its activities' (refer PB pgs. 8,9 and 10). In our considered view, therefore, the appellant-trust qualifies to be a charitable trust as well. Accordingly, it is to be allowed the status of a religious and charitable trust.”

Moreover, the assessee-trust has carried on other charitable activities in the nature of relief of poor. The Vedic Scholars were identified and felicitated irrespective of their caste, creed or religion. The Trust has given financial assistance to various people, irrespective of caste, creed or religion, involved in Indian Heritage Education. During Covid, many were in financial difficulty and the Trust provided financial assistance and distributed food kit, clothes, medicines for the needy Vedic scholars irrespective of their caste, religion or gender. All the expenses were met out of voluntary contributions or donations. The Income and expenditure account for AY 2021-22 are placed on record at page 86, 87 of paper book], and for AY 2022-23, ledger account for expenses incurred in achieving the objects like donation to veda pathashalas, veda pundits, medical assistance etc [Page 94 to 99 of paper book] and invoices, vouchers, brochures and photos [page 127 to 157 of paper book] demonstrates the charitable activities carried on by the assessee Trust. Thus the activities carried on by the assesseeTrust are CHARITABLE in the nature of education, relief of poor and not RELIGIOUS as concluded by the CIT(E). In view of the above, the impugned findings of the CIT(E) that the assessee-trust is registered as RELIGIOUS is quashed and the assessee is allowed registration u/s 12A of the I.T.Act as charitable trust. Consequently, the approval u/s 80G of the I.T.Act is to be granted. It is ordered accordingly.

In the result, the appeals filed by the assessee-trust are allowed.”

A similar view has also been held in the case of Shrthiparampara Gurukulam Vs. ITO (supra). In view of the aforesaid Orders of the Bangalore Bench of the Tribunal which has considered judicial precedence on the subject, we hold that propagation of vedic thoughts and philosophy cannot be attributed to any religion as same are more concerned with the life style of the human beings. Therefore, we hold that the activities carried on by the assessee trust is charitable in nature and not religious, hence, would be entitled to the grant of approval under section 80G of the Act. It is ordered accordingly.

In the result, appeal filed by the assessee is allowed.