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Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.
ORDER
PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the Ld.CIT(E), Kochi dated 12/05/2023 in which the Ld.CIT(E) had rejected the application filed by the assessee trust for granting approval u/s. 80G(5)(vi) of the Act.
The brief facts of the case are that the assessee is a trust created under the interim award in suit No. OS NO 7 of 1951 and was put into action by final award dated 27.06.1960. Under the scheme of the trust, there were 7 temples and a high school and later on the high school was Government in 1987 and thereafter the assessee trust carrying on the activities relating to the temple and other charitable activities such as annadanam etc. The temples owned by the trust are being public places of worship which attracts devotees from all over the area and there is no restriction in respect of the entry and worship. In fact, the temples are open to the general public and no restrictions are imposed by the trust. While doing the activities, the trust is also doing annadanam to all the devotees who are all visiting the temple. The public is permitted through the common entrance and the trust deed also does not contain any restricted clauses such as preventing the public from worship in these temples and taking the annadanam in the temples. The entire income is spent towards the objects set out in the trust scheme and no trustees are getting any benefit from the income and in fact, the incomes were directly spent on the public at large.
In fact, the trust has been registered u/s. 12A of the Act and the trust had also meticulously complied with the conditions imposed by the department in order to maintain the registration. Therefore it is the case of the assessee that the trust is a public charitable trust not related to any particular religion or community and the benefits were all spent towards the betterment of the public. Further, it is the case of the assessee that no discrimination was shown by the trust i.e. anybody from the public can visit the temple and have the annadanam and therefore the trust is not a private religious trust disentitled for approval u/s. 80G(5)(vi) of the Act. The Ld.CIT(E) without considering the entire facts, had come to the conclusion that the assessee manages 7 temples and therefore treated the temples as places of worship of particular religious community and also held that the activities of the assessee, including that of annadanam are substantially of religious nature. On the above said finding, the Ld.CIT(E) had rejected the application filed by the assessee. As against the said rejection order, the assessee is in appeal before this Tribunal and raised the following grounds.
“1. The Order u/s 80G(5)(vi) of the Commissioner of Income Tax (Exemption), Kochi vide DIN ITBA/COM/F/17/2023- 24/1052781025(1) dated 12.05.2023 is opposed to law, facts and circumstances of the case.
2. The Learned Commissioner of Income Tax (Exemption) has gone wrong in denying approval u/s 80G(5)(vi) of the Income tax act.1961 by stating vide Para 9 & 10 of the Order that the appellant trust is managing temples for the benefit a particular religious community and the activities are of religious nature without appreciating the documents, submissions and the case laws relied on by the appellant in entirety for grant of such approval under the act. For these and other grounds that may be urged at the time of hearing. the appellant humbly prays that the Hon'ble Income Tax Appellate Tribunal. Cochin Bench, may kindly be pleased to set aside the order of rejection u/s 80G(5)(vi) of the act and accord approval thereby and to allow the appeal and render justice.”
At the time of hearing, the Ld.AR submitted that the assessee trust is a public charitable trust and the temples are not belonging to a particular religious community and all the activities are not of religious nature. The Ld.AR also filed a paper book. The Ld.AR also relied on the order of the Hon’ble Madras High Court in Suo Motu W.P. No. 574 of 2015 dated 07.06.2021 and also filed the copy of the registration certificate issued u/s. 12AA of the Act and also the provisional approval order in form 10AC of the Act. The Ld.AR also relied on the orders of the ITAT Nagpur Bench in dated 11.10.2012 and the Pune Bench order in dated 17.08.2015 and the Hyderabad Bench order in ITA No. 357/Hyd/2013 dated 23.08.2013 and prayed to allow the appeal. On the other hand, the Ld.DR relied on the order of the Ld.CIT(E) and contended that the maintenance of temples is of a religious nature and therefore the Ld.CIT(E) had rightly rejected the application.
We have heard the arguments of both sides and perused the materials available on record.
In the Nagpur Bench order dated 11/10/2012, the Tribunal had discussed the very same grant of approval u/s. 80G(5)(vi) of the Act since the Ld.CIT(E) had treated the free food expenses and festival prayer and daily expenses related to the religious objects. The Tribunal after elaborately considering the issue in detail and gave the following finding. “8………….Now the question arise whether these objects can be regarded to be of religious nature and the expenditure incurred for the fulfillment of these objects can be said to have been incurred for the benefit of particular religion. 9. The charitable purpose has been defined u/s. 2(15) of the Act. The definition of charitable purpose is inclusive one. It includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility. The objects as enumerated above held on by the assessee trust are charitable within the meaning of section 2 of sub section 15. Some of the objects fall within the “advancement of any other object of general public utility”. Proviso to section 2 sub section 15 restricts the meaning “advancement of any other objects of general public utility”. But CIT(A) has not stated that proviso to section 2 sub section 15 is applicable in the case of the assessee. 10. Now coming to the question whether the assessee trust has violated the conditions as laid down in clause (iii) of section 80G(5), we reproduce this clause which reads as under : “(iii). the institution or fund is not expressed to be for the benefit of any particular religious community or caste. ” This clause stipulates that the Institution or the Trust must not be for the benefit of any particular religious community or caste. The words “religious community” means the group of people having a common religion or faith. The word “religion” means the belief in and worship to a superhuman controlling power, specially the personal god or gods, a particular system of faith and worship. It means the trust should not be for the benefit of any particular group of persons having the common belief in worshiping of superhuman controlling power or having common system & faith and worship. If the trust is for the benefit of any particular religious community, it would include the advancement, support or propagation of a religion and its tenants, it could be said that a trust has violated the condition No. (iii) of section 80G(5). 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 vs. Sri Lakshmindra Thirtha Swamiar 1954 SCJ335, 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 No. (iii) enumerated u/s. 80G(5) of the Act.
12. Even we noted that all the building maintenance expenses, free food expenses and festival, prayer and daily expenses cannot be regarded to be the one incurred for religious object, even if the object is regarded to be religious one. It is not denied that in the building the assesse was carrying yoga centre, tailoring training centre as well as food for the needy and optical centre for the poor.
13. 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 Vs. 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.”
On going through the above findings of the Tribunal, we are of the view that the facts of the present case are similar to the facts of the above said Nagpur bench case and therefore we are of the considered view that the finding of the ld CIT is not correct and liable to be set aside.
In another order of the Pune Bench, similar issue came up for consideration and the Tribunal had given the following finding: “11. We have considered the rival arguments made by both the sides, perused the order of the Ld.CIT and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Ld.CIT in the instant case rejected the application for grant of approval u/s.80G on the ground that the objects as well as activities of the trust are predominantly religious and the assessee trust has violated the provisions of sub-section (5B) of section 80G by incurring religious/pooja expenses in excess of 5% of the total receipts of the concerned year. 12. It is the submission of the Ld. Counsel for the assessee that the assessee is not a religious trust at all and the assessee does not propagate any particular religion.
Further, it is also the contention of the Ld. Counsel for the assessee that the Honorarium paid to the Brahmins is not expenditure of the assessee but is the expenditure of the persons visiting the temple and it is the administrative facility provided to the visitors. Therefore, if the same is excluded from the pooja expenses then the expenditure of pooja expenses is less than 5% of the total receipts.
13. We find some merit in the arguments advanced by the Ld. Counsel for the assessee. Nowhere it has been brought out by the Ld.CIT that the assessee does propagate any particular religion and it is meant only for a particular religious community. The submission of the Ld. Counsel for the assessee that the appellant trust does not pertain to any particular sect and the temple is open for everyone irrespective of religion, caste, creed or sect could not be controverted by the Ld. Departmental Representative. Further, the Ld.CIT has also given a finding that the trust deed has a few charitable objects also. When the main source of the income of the assessee trust is pooja and utsavs and the income is used for maintenance of the temple building, the salary paid to the Brahmins, in our opinion, should not be considered as part of pooja expenses under the facts and circumstances of the case. Therefore, if the same is excluded from the pooja expenses, the total expenditure on pooja/religious activities will not exceed 5% of the total receipts of the assessee trust as per the chart at para 8 of this order. Further, it is also to be noted that the temple is owned by the Government of Maharashtra to perform pooja of Lord Aryanashwar and to celebrate various utsavs and the trust has also been registered u/s.12A of the I.T. Act.
14. We find the Hon’ble Rajasthan High Court in the case of Umain Charitable Trust Vs. Union of India reported in 307 ITR 226 has observed as under (Short notes) : “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. A certificate was granted approving the petitioner-trust under section 80G for a period from April 1, 2001, to March 31, 2004. On an application for renewal of the approval in the prescribed form, the Commissioner held that the trust was not entitled to approval on the ground that it had incurred expenditure exceeding five per cent, of its total income of the year 2004 on a particular religion. On a writ petition against the refusal to renew the approval. Held, allowing the petition, that there was no clause in the petitioner's trust deed which indicated that income of the petitioner-trust was to k applied wholly or substantially for any particular religion. Nothing had been pointed out in the order of the Commissioner that the petitioner-trust had been constantly spending money for a particular religion. A single contribution by the charitable trust to another trust which carried out repair and renovation of Lord Vishnu's temple did not disentitle the petitioner-trust from renewal of its exemption certificate under section 80G. The repair and renovation of the temple did not necessarily mean that the expenditure in question was for a particular religion only. All people who have faith In Lord Vishnu's temple belong to different sects and have faith in different religions and also visit such temple of Lord Vishnu. The Revenue had not shown that entry to the temple was restricted to persons of one particular community or sect practising one religion. Hinduism is not one particular religion and different sects following Hindu philosophy do visit temples of the Lord Vishnu, be they Jains, Sikhs, Brahmins, etc. There is no watertight compartment between different castes or sects following one particular religion. Right to freedom of religion is guaranteed in the Constitution under article 25. Therefore, the Revenue could not take such a pedantic and narrow approach that the character of the charitable trust was lost 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. Therefore, the order of the Commissioner was set aside and the petitioner-trust shall be deemed to be registered under section 80G throughout the period after April I, 2004, with all consequential benefits.
Since in the instant case the objects of the trust are not entirely religious and since some of the objects are charitable in nature, a finding given by the Ld.CIT himself and since the temple is open to everybody irrespective of caste, creed, sect, colour etc. and since there is no restriction of entry of any particular community and since it has been held that if the Honorarium paid to the Brahmins of the assessee trust is excluded, then there is no violation of the provisions of sub-section 5B of section 80G, therefore, we are of the considered opinion that the assessee trust in the instant case should not be denied the benefit of grant of approval u/s.80G of the I.T. Act. We accordingly set aside the order of the CIT and direct him to grant approval u/s.80G of the I.T. Act. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed.”
By considering and applying the above order to the facts and circumstances of the case, we are also of the view that the assessee trust is not a religious trust since the temple is open to the public irrespective of the caste, creed, sex, colour etc. Further, the activity of doing annadanam to the public at large cannot be treated as a religious in nature based on the findings given by the Nagpur and Pune benches of the Tribunal.
In another order dated 31.03.2015 in in the case of Diocese of Pune (CNI) Vs CIT, the Pune bench of the Tribunal had given the following findings and held that there is no bar under the statute that religious trust cannot be granted registration u/s 12A of the Act. “11. The Hon'ble Supreme Court in CIT Vs. Dawoodi Bohra Jamat, (2014) 364 ITR 31 (SC) had observed that the objects of trust as declared in the Trust Deed would govern its right of exemption under sections 11 and 12 of the Act. The Hon'ble Supreme Court also recognized the creation or establishment of trust for either religious or charitable or both religious and charitable purposes. By looking at the objects of the trust, it had to be determined whether the objects were wholly religious or wholly charitable or both religious and charitable and it was held that on consideration of the objects of the trust, the religious and charitable purposes and activities of the trust could be determined. It was further held that section 11 of the Act allows such trust with composite objects to claim exemption from tax as a religious and charitable trust, subject to provisions of section 13 of the Act. Though the objects of the trust were based on religious tenets but where the activities of the trust for both charitable and religious were not exclusively meant for a particular religious community, then it would not fall under the provisions of section 13(1)(b) of the Act and it was further held that where the assessee was charitable and religious trust, which did not benefit any specific religious community and hence, it could not be held that the provisions of section 13(1)(b) of the Act would be attracted to the assessee trust and therefore, it would be eligible to claim exemption under section 11 of the Act. The relevant observations of the Hon'ble Supreme Court are as under:- “(i) that determination of the nature of the trust as wholly religious or wholly charitable or both charitable and religious under the Act is not a question of fact. It is a question which requires examination of the legal effects of the proven facts and documents, that is, the legal implication of the objects of the assessee-trust as contained in the trust deed. It is only the objects of a trust as declared in the trust deed which would govern its right of exemption under section 11 or 12. It is the analysis of these objects in the backdrop of fiscal jurisprudence which would illuminate the purpose behind creation or establishment of the trust for either religious or charitable or both religious and charitable purpose. Therefore, the High Court had erred in refusing to interfere with the observations of the Tribunal in respect of the character of the trust on the grounds that they were pure findings of fact. (ii) That the objects of the assessee-trust were not indicative of a wholly religious purpose but were collectively indicative of both charitable and religious purposes. Although objects (c) and (f) which provided for activities completely religious in nature and restricted to the specific community of the assessee-trust were objects with religious purpose only, the fact that the other objects traced their source to the Holy Quran and resolved to abide by the path of godliness shown by Allah would not be sufficient to conclude that the entire purpose and activities of the trust were purely religious in colour. The objects reflected the intent of the trust as observance of the tenets of Islam, but did not restrict the activities of the trust to religious obligations only and for the benefit of the members of the community. The provision of food to the public on religious days of the community, the establishment of Madarsas and organisations for dissemination of religious education and rendering assistance to the needy and poor for religious activities would reflect the essence of charity. The activity of Dawoodi Bohra community did not restrict the benefit to the members of the community. Neither the religious tenets nor the objects as expressed limited the service of food on these occasions to members of the specific community. The establishment of Madarsas or institutions to impart religious education to the masses would qualify as a charitable purpose qualifying under the head of education under the provisions of section 2(15) of the Act. Similarly, assistance by the assessee-trust to the needy and poor for religious activities would not divest the trust of its altruist character. Therefore, the objects of the trust exhibited the dual tenor of religious and charitable purposes and activities. Section 11 of the Act allowed such trust with composite objects to claim exemption from tax as a religious and charitable trust subject to the provisions of section 13. The Activities of the trust under such objects would, therefore, be entitled to exemption accordingly. In re : trustees of the tribune [1939] 7 ITR 415 (PC) and In re : SOUTH PLACE ETHICAL SOCIETY; BARRALET V. ATTORNEY GENERAL [1980] 3 All ER 918; [1980] 1 WLR 1565; 54 Tax Cas 446 applied. (iii) That the objects of the assessee-trust were based on religious tenets under the Quran according to the religious faith of Islam. The activities of the trust though both charitable and religious were not exclusively meant for a particular religious community. The objects did not channel the benefits to any community if not the Dawoodi Bohra community and thus, would not fall under the provisions of section 13(1)(b) of the Act. The assessee-trust was a charitable and religious trust which did not benefit any specific religious community and, therefore, it could not be held that section 13(1)(b) of the Act would be attracted to the assessee-trust and thereby, it would be eligible to claim exemption under section 11 of the Act."
In view of the above said proposition laid down by the Hon'ble Supreme Court, the objects of the trust are to be looked into and those objects can be either charitable or religious in nature or both charitable or religious in nature. The question which arises for consideration before us is whether the trust whose objects were religious as well as charitable would be entitled for registration under section 12A of the Act. Looking at the objects of the trust, we find that one of the objects of the assessee trust was to provide Ambulance facility to people at large. The object Nos.2, 6 7 of the Trust, were admittedly relating to Christian community. However, other object Nos.3, 4, 5 was to provide Ambulance facility to people at large, to establish and administer educational institutions for needy and deserving Christian students in particular and others in general, to establish hostels, libraries, etc. for Christian boys and girls in particular and other deserving & needy boys and girls in general. The objects of the assessee trust thus, reflect the activities to be carried on for the purpose of Jain religion and also for the purpose of public at large. In view thereof, it could not be held that the same are meant for the benefit of only Jain religious community. We reverse the findings of the Commissioner in this regard.
Now, coming to the second issue of grant of registration under section 12A of the Act, where the trust was both charitable and religious. The Hon'ble Gujarat High Court in CIT Vs. Chandra Charitable Trust (supra) had laid down that even where the objects of the trust were not only to propagate the Jainism or help and assist maintenance of temples, Sadhus, Sadhvis, Shraviks and Shravaks, and other goals as set out in the trust deed, the trust was a charitable as well as religious trust and section 13(1)(b) of the Act would not be applicable. Similar proposition has been laid down by the Hon'ble Gujarat High court in CIT Vs. Barkate Saifiya Society (1995) 213 ITR 492 (Guj), wherein it was held that the exclusion from exemption under section 13(1)(b) of the Act applies only to charitable trust and charitable institution and if the trust was charitable as well as religious in nature, the assessee would be entitled to exemption under section 11 of the Act.
Similar proposition has also been laid down by the Hon'ble Supreme Court in CIT Vs. Dawoodi Bohra Jamat (supra) while holding the trust eligible to claim exemption under section 11 of the Act. In the totality of the above said facts and circumstances, we hold that the assessee is a charitable religious trust and the provisions of section 13(1)(b) of the Act would not be applicable. In view thereof, we direct the Commissioner to grant registration to the assessee under section 12A of the Act as charitable religious trust. The grounds of appeal
raised by the assessee are allowed.
15. In the result, the appeal of the assessee is allowed.”
9. In view of the above decisions cited (supra) the order of the Ld.CIT cannot be sustained. The Ld.CIT had also not furnished any specific instances in support of his allegation that the assessee is a religious trust. It is also not the case of the Revenue that the trust imposed various restrictions on the public to enter the temple and to have the annadhanam. When there is no specific instances of violations it cannot be simply alleged that the assessee trust is a religious trust. In these circumstances the denial of approval u/s 80G of the Act is not correct.
In view of the above said discussion, we set aside the order of the ld CIT (E) and hold that the assessee is not a religious trust and therefore they are entitled for approval u/s. 80G(5)(vi) of the Act.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 02nd December, 2024.