Aranyashwar Devalaya Trust Versus CIT-1, Pune

ITAT PUNE

Aranyashwar Devalaya Trust Versus CIT-1, Pune

No.- ITA No.1489/PN/2013

Dated.- August 17, 2015

Ratio/Brief Analysis

Maintenance of a temple does not amount to propagation of any particular religion as the temple is open for everyone irrespective of religion, caste, creed or sect. Approval u/s 80 G cannot be denied.

SHRI R.K. PANDA AND SHRI VIKAS AWASTHY, JJ.

For The Appellant : Smt. Deepa Khare and Shri D.Y. Pandit

For The Department : Shri A.K. Modi

ORDER

PER R.K. PANDA, AM :

This appeal filed by the assessee is directed against the order dated 10-05-2013 of the CIT-I, Pune rejecting the request for grant of approval u/s.80G of the Income-Tax Act, 1961.

2. Facts of the case, in brief, are that the assessee trust vide an application in Form No.10G requested for grant of approval u/s.80G of the I. T. Act. The assessee trust had been registered under the Bombay Public Trusts Act, 1950 vide an order dated 28-10-1952 and also registered u/s.12A of the I. T. Act vide certificate of registration issued by the CIT-II, Pune on 27-09-2009. It may be pertinent to mention that the assessee trust had never applied for approval u/s.80G prior to making the said application.

3. The Ld. CIT after receiving the application in Form No.10G asked the assessee to explain as to why its request for approval u/s.80G should not be rejected since its objects as well as activities are predominantly religious and since the religious expenses in all the 3 years in respect of which statement of accounts have been submitted exceeded 5% of the total income/receipts which is violative of the provisions of sub-section (5B) of section 80G of the I. T. Act.

4. The assessee filed the statement of accounts for the year ended 31-03-2012, the details of donations received during the said year, copy of change report submitted in the office of the Charity Commissioner etc. It was submitted that the main objects of the assessee trust are to maintain the temple of Lord Aranyeshwar which is owned by the Government of Maharashtra, to perform pooja of the Lord and to celebrate various utsavs. The Ld. CIT noted that the trust deed has a few charitable objects too. However, the main sources of income of the applicant trust are poojas and utsavas and the net income is used for maintenance of the temple building.

5. On being confronted by the Ld. CIT it was submitted that the religious expenses during the year ended 31-03-2010, 31-03-2011 and 31-03-2012 were in excess of the 5% of the total receipts is prima-facie correct, however, the religious expenses would not exceed 5% if the honorarium given to the Brahmins is excluded. Without prejudice to the above, it was further argued that the applicant trust does not pertain to any particular sect and the temple is open for everyone irrespective of religion, caste, creed or sex. The decision of the Panaji Bench of the Tribunal in the case of Shri Gurudev Ranade Samadhi Trust Vs. CIT, Belgaum vide ITA No.155/PNJ/2011 order dated 24-12-2012 was relied upon in which it has been held that Hindu is neither a religion nor a community and construction of temple cannot be regarded as a religious activity.

6. However, the Ld. CIT was not satisfied with the arguments advanced by the assessee and rejected the application seeking approval u/s.80G(5) by observing as under :

“4. After carefully considered the submissions made by the applicant during the course of the present proceedings, the subject application in Form No.10G is disposed of as under :-

4.1 The applicant has fairly accepted that the religious / Pooja expenses incurred by it during the three years under consideration have been in excess of 5% of the total receipts of the concerned years. However, the applicant has sought to make out a case that the honorarium paid to the Brahmins should be excluded. I am afraid, the plea thus raised by the applicant is devoid of merit. It cannot be gainsaid that honorarium is paid to the Brahmins for performing the Poojas and other related activities. In the circumstances, the honorarium thus paid cannot be disassociated from the corresponding activities; hence would partake of the colour of the religious. For the same reason, and as the religious expenses in all three years far exceed 5% of the total receipts of each year, there is clear contravention of the provisions of subsection (5B) of section 80G. As a result, the applicant Trust is not entitled to the benefit of approval u/s.80G of the Income-tax Act, 1961. It may be pertinent to mention here that while in its reply the applicant has taken into consideration only the Pooja expenses, the other expenses shown as incurred on the objects of the Trust would also have to be considered as religious expenses for the purpose of sub-section (5B) of section 80G inasmuch as the activities of the applicant trust during the years under consideration have been exclusively religious only.

5. Reference has been already made to the applicant's reliance on the decision of the Hon’ble Tribunal in the case of Shri Gurudev Ranade Samadhi Trust Vs. CIT, Belgaum. I am afraid, the above reliance is a misplaced one. In the cited case the assessee had not carried out any religious activity. It also did not have any temple. Its objects were to commemorate the sacred memory of Shri Gurudev Ranade and to spread his spiritual teachings by publishing articles and books, by arranging lectures and seminars etc. Thus, the facts in the cited case were fully different from the facts in the present case. Hence, the cited decision would not apply.

6. For the detailed reasons stated hereinabove, and in particulars as the applicant trust has contravened the provisions of sub-section (5B) of section 80G of the Income-Tax Act, 1961, its application in Form No.10G seeking approval u/s.80G(5) is hereby rejected.”

7. Aggrieved with such order of the CIT the Assessee is in appeal before us with the following grounds :

“1. The Ld. CIT erred in rejecting the assessees application for Grant of approval u/s.80G of the Income Tax Act, 1961.

2. Reasons assigned for rejection are wrong, insufficient and contrary to Law & facts.

3. The applicant may be permitted to amend or alter any of the above grounds of appeal or add a new ground of appeal any time before the hearing of appeal or during the course of hearing of appeal.”

8. The Ld. Counsel for the assessee strongly opposed the order of the Ld. CIT. She submitted that the assessee is not a religious trust at all and the assessee does not propagate any particular religion. Referring to the decision of the Hon’ble Rajasthan High Court in the case of Umaid Charitable Trust Vs. Union of India and others reported in 307 ITR 226 she submitted that the Hon’ble High Court in the said decision has held that Hinduism is not one particular religion. Referring to the order of the CIT she submitted that the CIT has not brought anything on record to show that the assessee is propagating any religion. Referring to the decision of the Chandigarh Bench of the Tribunal in the case of Christian Medical College, Ludhiana Society Vs. CIT vide ITA No.620/Chd/12 reported in 157 TTJ 83, a copy of which is placed in the paper book at page 8 she submitted that the Tribunal in the said decision has allowed grant of approval u/s.80G(5) to society which was established and run by a minority Christian community where the aim and object of the assessee society was to train professionals in the field of medical and health care in the spirit of Jesus Christ and to provide medical facilities in their hospitals to all persons of any caste, creed, race, religion etc. In her alternate contention, the Ld. Counsel for the assessee referred to page 10 of the paper book which was addressed to the ITO, Technical vide letter dated 23-03-2013 and drew the attention of the Bench to the following chart of actual pooja expenses for last 3 years :

Sr.No.	Asst. Year	Total Receipts	Pooja Expenses	Less Honorarium paid to Brahmins	Actual pooja expenses	5% of the total receipts
1	2012-13	1035551	54688	15325	39363	51778
2	2011-12	854469	54145	13900	40245	42723
3	2010-11	907408	52079	14165	37914	45370

9. Referring to the above chart she submitted that the Honorarium paid to the Brahmins is not the expenditure of the assessee but is the expenditure of the person visiting the temple. 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 the 5% of the total receipts. She accordingly submitted that both factually and legally the assessee is entitled to get the benefit of section 80G(5). She also relied on the decision of the Nagpur Bench of the Tribunal in the case of Shiv Mandir Devastan Panch Committee Sanstan Vs. CIT reported in 150 TTJ 452 (Nagpur).

10. The Ld. Departmental Representative on the other hand strongly supported the order of the CIT. He submitted that the activities of the assessee trust are religious in nature. The objects of the trust are mixed. However, the Brahmins have been employed for pooja etc. for and on behalf of the Devasthan. Therefore, the expenses of Honorarium to the Brahmins cannot be excluded from the pooja expenses. He accordingly submitted that the order of the CIT being in order should be upheld.

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 Incometax 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 petitionertrust 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.

15. 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.

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

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