M/s Sneha Trust, Bangalore V. DIT (Exemptions), Bangalore

ITA 1470/BANG/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9426 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-07-2009
• Assessment Year: misc
• Appeal Filed On: 29-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWATHI S PATIL
• Assessee Lawyers: P C CHADAGA
• Keywords: Charitable institution
• Section: 80G; 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.1470/BANG/2008 ASSESSMENT YEAR : N.A. M/S. SNEHA TRUST (R), NO.14, N.S. IYENGAR STREET, SESADRIPURAM, BANGALORE 560 020. : APPELLANT VS. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), BANGALORE. : RESPONDENT APPELLANT BY : SHRI P.C. CHADAGA RESPONDENT BY : SMT. SWATHI S. PATIL O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL ITA 1417/B/08 IS FILED BY THE ASSESSE E DIRECTED AGAINST THE ORDER OF LD. DIT(E) NO. DIT(E)/BLR/80G(R)/513/A AATS6900M/ITO(E)- 3/VOL 2008-09 DATED 31.10.08 PASSED U/S. 80G(5)(VI) OF THE I.T. ACT, 1961 REJECTING APPLICATION FOR RENEWAL OF APPROVAL. 2. THE ASSESSEE HAS RAISED EXHAUSTIVE TEN GROUNDS IN ITS APPEAL. HOWEVER, THE THRUST OF THE ISSUE INVOLVED IS LD. D IT(E) ERRED IN DENYING EXEMPTION U/S. 80G OF THE ACT BY VIRTUE OF THE AMEN DMENT TO SECTION 2(15) ITA NO.1470/B/08 PAGE 2 OF 15 OF THE ACT BY THE FINANCE ACT, 2008 WITH EFFECT FRO M 1.4.2009 BY HOLDING THAT THE ACTIVITIES OF THE APPELLANT TRUST WAS NOT IN CONFORMITY WITH THE OBJECTS OF THE TRUST, THE ACTIVITY KALYANA KENDRA, CRCHE, ETC. ARE IN THE NATURE OF COMMERCIAL ACTIVITY, SO ON AND SO FORTH. 3. THE APPELLANT TRUST WAS REGISTERED ON 30.8.1985 WITH THE CENTRAL SUB-REGISTRAR, GANDHINAGAR, BANGALORE, AND U/S. 12A OF THE INCOME-TAX ACT, 1961, ON 25.8.1988. SUBSEQUENTLY THE TRUST AL SO ENJOYED RECOGNITION U/S. 80G OF THE ACT. IT WAS ALSO SUBMITTED THAT TH E APPELLANT TRUST HAD AMENDED THE TRUST DEED ON THE ORAL ADVICE OF THE IN COME-TAX AUTHORITIES BEFORE GRANTING REGISTRATION U/S. 12A OF THE ACT. FOR THE RENEWAL OF RECOGNITION U/S. 80G OF THE ACT FOR A FURTHER PERIO D OF THREE YEARS I.E., UPTO 31.3.2011, THE APPELLANT TRUST FILED THE NECESSARY DOCUMENTS BEFORE THE INCOME-TAX AUTHORITIES ON 22.3.08. LD. DIT(E) VIDE HIS LETTER DATED 7.8.2000 SOUGHT FOR SOME CLARIFICATIONS FROM THE APPELLANT T RUST REGARDING THE ACTIVITIES OF THE TRUST; WHICH WERE FOUND NOT TO B E IN CONFORMITY WITH THE OBJECTS OF THE TRUST, VIZ., THE OBJECTS OF THE TRUS T AS IN CLAUSE (1)(IV), (IX) BEING VAGUE AND WIDE, THE OBJECTS OF THE TRUST IN C LAUSE 3(V), (VIII) BEING COMMERCIAL IN NATURE IN VIEW OF THE INSERTION OF PR OVISO TO SECTION 2(15) OF THE I.T. ACT, 1961, AND ALSO FOR WANT OF PLAN OF TH E BUILDING CONSTRUCTED AT J.P. NAGAR. SUBSEQUENTLY, THE APPELLANT TRUST FIL ED AN APPLICATION BEFORE THE LD. DIT(E) SEEKING THE APPROVAL FOR AMENDING TH E TRUST DEED. LD. DIT(E) REJECTED THE APPELLANT TRUSTS PLEA ON THE GROUND T HAT THE TRUSTEES OF THE TRUST WERE NOT CONFERRED WITH THE POWERS TO AMEND T HE OBJECTS OF THE TRUST UNDER ANY LAW. THE ASSESSEE VIDE ITS LETTER DATED 10.10.2008 EXPLAINED THAT THE TRUST ACT DOES NOT STATE ANYTHING ABOUT TH E AMENDMENT TO THE TRUST ITA NO.1470/B/08 PAGE 3 OF 15 DEED. THE TRUST DEED IS ONLY AN INSTRUMENT SPECIFY ING THE INTENTION OF THE TRUSTEES TO HOLD PROPERTY IN THE TRUST FOR THE BENE FIT OF PUBLIC AT LARGE, THE TRUST BY ITS AMENDMENT CLAUSE IN THE TRUST DEED WAS EMPOWERED TO AMEND THE TRUST DEED. THOUGHT THE PROVISIONS OF THE OBJEC T CLAUSE DID NOT VIOLATE THE SPIRIT OF SECTION 11 OF THE I.T. ACT, THE APPEL LANT TRUST SOUGHT TO AMEND THE TRUST DEED ONLY TO SATISFY CERTAIN OBJECTIONS RAISED BY THE LD. DIT(E). HOWEVER, THE LD. DIT(E) REJECTED THE CONTENTIONS OF THE APPELLANT TRUST AND DUE TO THE VARIOUS REASONS CITED ABOVE REJECTED THE APPLICATION OF THE APPELLANT TRUST FOR THE RENEWAL OF RECOGNITION U/S. 80G OF THE ACT GIVING RISE TO THIS APPEAL BY THE APPELLANT TRUST. 4. THE APPELLANT TRUST FILED A PAPERBOOK 1-61 PA GES, CONTAINING APPLICATION FOR RENEWAL U/S. 80G OF THE ACT, CERTIF ICATE GRANTED U/S. 13(1)(C) OF THE ACT, LIST OF ACTIVITIES OF THE TRUST, AUDITO RS REPORT WITH STATEMENT OF ACCOUNTS FOR THE YEAR ENDED 31.3.2007, RETURN OF IN COME FOR ASSESSMENT YEAR 2007-08 WITH ENCLOSURES, FORM 10G, FEW CORRESP ONDENCE BETWEEN THE APPELLANT TRUST AND THE REVENUE, TRUST DEED IN KANN ADA ALONG WITH ENGLISH TRANSLATION, SUPPLEMENTARY TRUST DEED DATED 22.4.20 02, CERTIFICATE U/S. 12A OF THE ACT AND RECOGNITION GRANTED U/S. 80G OF THE ACT FOR THE PRIOR PERIOD UPTO 31.3.2005 ALONG WITH CIRCULAR NO.11 OF 2008, F EW CASE LAWS AS STATED BELOW ALONG WITH AN EXTRACT OF FEW PAGES FROM THE CHARITABLE TRUST AND RELIGIOUS ACT, 1920. (1) PRASANNA TRUST (ITA NO.1391/B/08) (2) SRI BHUVARAHA TRUST (ITA NO.22/B/09) (3) LAXMINARAYANAN LATH TRUST V. CIT (170 ITR 375 ) (RAJ) 5. LD. AR VEHEMENTLY ARGUED BEFORE US THAT THE APPE LLANT IS A PUBLIC CHARITABLE TRUST FOUNDED BY THE PHILANTHROPIST LATE SMT. RAJAMMA KOLLOLIMUTT ITA NO.1470/B/08 PAGE 4 OF 15 FOR THE EDUCATION AND GENERAL UPLIFTMENT OF WOMEN. THE TRUST WAS RECOGNIZED U/S. 12A OF THE ACT AND ENJOYED RECOGNIT ION U/S. 80G OF THE ACT UNTIL 31.3.2008. ON AN APPLICATION FOR RENEWAL TH E REVENUE AUTHORITIES INITIALLY ADVICED THE APPELLANT TRUST TO CARRY CERT AIN AMENDMENTS TO ITS BYE- LAWS AND THE APPLICANT TRUST WAS WILLING TO COMPLY WITH THIS DIRECTION. HOWEVER, LD. DIT(E) REJECTED THE APPLICATION FOR RE NEWAL U/S. 80G ON THE GROUND THAT EVEN IF THE APPELLANTS WAS WILLING TO C ARRY OUT THE AMENDMENTS TO THE TRUST DEED, IT IS NOT COMPETENT TO DO SO AS NO AMENDMENT COULD BE CARRIED OUT TO THE TRUST DEED, EXCEPT FOR THE RECOU RSE AVAILABLE UNDER SECTION 26 OF THE SPECIFIC RELIEF ACT, 1963. LD. AR FORCEFULLY ARGUED THAT THE INDIAN TRUST ACT IS NOT APPLICABLE TO THE PUBLI C CHARITABLE TRUST AS THE ACT WAS AMENDED IN 1882 BY THE BRITISH GOVERNMENT T O DEFINE AND AMEND THE LAW RELATING TO PRIVATE TRUSTS AND NOT PUBLIC C HARITABLE TRUSTS. THE LD. AR STATED THAT THE ONLY CENTRAL ENACTMENT DEALING WITH THE SUBJECT OF CHARITABLE AND RELIGIOUS TRUST IS THE CHARITABLE AND RELIGIOUS TRUST ACT OF 1920. THIS ACT DOES NOT STIPULATE ANY SUCH CONDITIONS AS APPLI CABLE TO PRIVATE TRUSTS GOVERNED BY THE INDIAN TRUST ACT, 1882. THE DEPART MENT HAS GRANTED RENEWAL U/S. 80G IN MANY A INSTANCE ON THE AMENDMEN T OF TRUST DEED OF VARIOUS OTHER TRUSTS FROM TIME TO TIME. IN REGARD T O LD. DIT(E)S OBJECTIONS AS TO CLAUSE 1, 4 & 9 OF THE TRUST DEED THAT THE O BJECTS OF THE TRUST ARE ALL VAGUE, LD. AR EXPLAINED IT IS NOT SO FOR, ALL THE OBJECTS ARE PROPERLY DEFINED AND GENUINE AND THEREFORE THE TRUST WAS GRANTED R EGISTRATION U/S. 12A FROM 28.5.1998 AND ENJOYED RECOGNITION U/S. 80G UNTIL 31 .3.2008. IN EVERY EARLIER OCCASIONS WHEN RECOGNITION WAS GRANTED U/S. 80G AND AT THE TIME OF GRANTING REGISTRATION U/S. 12A THE OBJECTS OF THE T RUST WERE EXAMINED BY ITA NO.1470/B/08 PAGE 5 OF 15 THE ERSTWHILE DIT(E) AND FOUND TO BE IN ORDER. THE LD. AR FURTHER STRESSED THAT EVEN THE CONSTITUTION OF INDIA HAS RECOGNIZED THE DEVELOPMENT OF WOMEN IS A LAUDABLE OBJECTIVE IN AS MUCH AS ARTICLE 15(3) OF THE CONSTITUTION OF INDIA PERMITTING SPECIAL TREATMENT FOR WOMEN. THE BASIC OBJECTS OF THE TRUST ARE NOTHING BUT EMPOWERMENT OF THE WOMEN WITHOUT ANY PROFIT MOTIVE. THE TRUSTS OBJECTS MAINLY CENTRES AROUND WELFARE OF WOMEN IN GENERAL SO AS TO MITIGATE THEIR FAMILY AND PERSO NAL PROBLEMS, TO FREE THEM FROM THE EVILS OF THE SOCIETY LIKE EXPLOITATIO N, DOWRY EVILS, PROBLEM ARISING OUT OF INTER-CASTE MARRIAGE, EDUCATE THEM R EGARDING RIGHTS AND DUTIES AVAILABLE TO WOMEN THROUGH LAW, CUSTOMER AWA RENESS AND TO WIDEN THE KNOWLEDGE IN GENERAL. THESE OBJECTS CANNOT BE CONSIDERED AS COMMERCIAL IN NATURE AS INTERPRETED BY THE LD. DIT( E). ARRANGING EXHIBITION OF MUSIC, DANCE, DRAMA, PAINTINGS, HANDICRAFTS ONL Y MOTIVATE TO BRING OUT THE TALENTS IN WOMEN AND ENCOURAGE THEM IN THESE KI NDS OF ACTIVITIES. THE TRUST ALSO ENCOURAGES THE WOMEN AT LARGE TO KNOW MO RE ABOUT KANNADA LITERATURE AND INDIAN CULTURE AND TO STUDY AND PROP AGATE THE VACHANAS OF MAHAMANANTAVADI, SRI BASVESHWAR AND MAHA SHIVASARAN E AKKA MAHADEVI. TO TREAT SUCH A TRUST AS BEING ENGAGED IN MERE RELIGIOUS ACTIVITY TANTAMOUNTS TO TAKING A NARROW VIEW OF INDIAN PHILO SOPHY WHEREIN THE DHARMA IS MUCH MORE THAN RELIGION AND IT IS NOTHI NG BUT A CODE OF CONDUCT FOR SANE LIVING. SRI BASVESHWAR AND MAHA SHIVASARAN E AKKA MAHADEVI HAVE BEEN HELD AS GREAT SOCIAL REFORMERS OF 12 TH CENTURY AND HAVE INSPIRED ALL GREAT LEADERS OF THE COUNTRY LIKE MAHATMA GANDH I AND DR. AMBEDKAR. THE REVENUE IN MANY OCCASIONS HAS GRANTED BENEFIT U /S. 80G AND 12A OF THE ACT TO MANY TRUSTS OF SIMILAR NATURE. THE TRUS T ALSO IS INVOLVED IN THE ITA NO.1470/B/08 PAGE 6 OF 15 ACTIVITY OF MARRIAGE BUREAU/KALYANA KENDRA IN ORDER TO HELP THEM SETTLE IN LIFE WITHOUT COMPLICATIONS. IT ALSO HAS OBJECT TO SET UP CRCHE TO TINY TODDLERS IN ORDER TO HELP THE WORKING WOMEN. THESE OBJECTS CANNOT BE HELD TO BE ACTIVITIES FOR CARRYING ON OF BUSINESS. THE LD. AR REFERRED TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NARAIAN SWADESHI WEAVING MILLS LTD. V. CETT 26 ITR 765 WHEREIN IT WAS STATED THAT THE WORD BUSINESS CONNOTES SOME REAL, SUBSTANTIVE, SYSTEMATI C OR ORGANIZED ACTIVITY WITH A PURPOSE OF MAKING PROFIT. IN THE PRESENT CA SE THE TRUST IS NOT FUNCTIONING FOR ANY PROFIT MOTIVE ACTIVITY. IN REG ARD TO LD. DIT(E)S OBJECTION THAT THE TRUST HAD NOT CLARIFIED THE OBJECTS OF THE TRUST AS IN CLAUSE (10), THE LD. AR FORCIBLY EXPLAINED THAT ARRANGING AND CONDUC TING PROGRAMMES FOR ENCOURAGING CHILDREN ACTIVITIES FOR RECOGNIZING THE IR TALENTS IS NECESSARILY AN ACTIVITY FOR ADVANCEMENT OF PUBLIC UTILITY FOR CHIL DREN ARE THE SOCIETY OF THE FUTURE AND THEIR WELL BEING IS ONE OF THE PRIMARY D UTY OF THE PRESENT SOCIETY. REGARDING THE DECISION OF THE CASE DAULATRAM PUBLIC TRUST V. CIT 244 ITR 514 CITED BY THE LD. DIT(E) IN JUSTIFYING THE DENIAL OF EXEMPTION DUE TO CHANGE IN POSITION OF LAW, LD. AR PLEADED THAT AS T HE PREROGATIVE OF THE GOVERNMENT TO BRING ABOUT AMENDMENTS TO LAW IT SHOU LD ALSO ALLOW THE APPELLANT TRUST TO AMEND THE OBJECTS OF ITS TRUST D EED SO THAT IT COMES IN CONFORMITY WITH THE AMENDED LAW. AMENDMENTS TO TRU ST DEEDS CAN BE CARRIED OUT WITH THE PRIOR PERMISSION OF THE JURISD ICTIONAL HIGH COURT AS WELL AS THE DIRECTOR OF INCOME-TAX (EXEMPTION) OR THE CO MMISSIONER OF INCOME- TAX, AS THE CASE MAY BE. FINALLY THE LD. AR, MR. P .C. CHADAGA, CONCLUDED THAT RECOGNITION U/S. 80G MAY BE GRANTED TO THE TRU ST. FEW MEMBERS OF THE TRUST, AND THE CHARTERED ACCOUNTANT OF THE TRUST WE RE ALSO PRESENT AT THE ITA NO.1470/B/08 PAGE 7 OF 15 TIME OF HEARING EXPLAINING THE ACTIVITIES OF THE TR UST AND PLEADED THAT THE TRUST MAY BE GRANTED RECOGNITION U/S. 80G OF THE AC T. 6. THE LD. DR, MRS. SWATHI S. PATIL, RAISED ALL THE OBJECTIONS POINTED OUT BY THE LD. DIT(E) AND FORCEFULLY ARGUED THAT THE AC TIVITIES OF THE TRUST IS MAINLY OF RUNNING MARRIAGE BUREAU/KALYANA KENDRA WH EREIN RS.500/- IS RECEIVED FROM THE PROSPECTIVE PARENTS OF THE BRIDES /BRIDEGROOMS AND THIS VENTURE AMOUNTS TO AN ACTIVITY IN THE NATURE OF SER VICE IN RELATION TO BUSINESS. SHE FURTHER POINTED OUT THAT THE ASSESSE E TRUST HAS RECEIVED AN AMOUNT OF RS.9,80,759 FROM THE KALYANA KENDRA ACTIV ITY DURING THE YEAR ENDED 31.03.2007 AND THE TRUST HAS RETAINED A SURPL US OF RS.9,05,265 DURING THE YEAR. THE TRUST HAS NOT CONDUCTED ANY O THER ACTIVITY OTHER THAN THE ACTIVITY OF KALYANA KENDRA DURING THE YEAR. SH E ALSO TOOK NOTE OF THE CLAUSE 4 OF THE OBJECTS OF THE TRUST WHEREIN THE OB JECTS REFERRED TO KANNADA LITERATURE AND RELIGION/DHARMA AND ARGUED THAT THE WORD RELIGION WILL EXCLUDE THE TRUST FROM BEING A TRUST FOR ADVANCEMEN T OF OTHER OBJECTS OF GENERAL PUBLIC UTILITY. SHE FORCEFULLY SUBMITTED TH AT THE AMENDMENTS OF THE TRUST IS NOT POSSIBLE BY MERE REGISTRATION BUT COUL D BE DONE ONLY UNDER SPECIFIC RELIEF ACT CITING THE DECISION OF THE DELH I HIGH COURT IN JAGDAMBA CHARITY TRUST V. CIT AND YOGIRAJ CHARITY TRUST V. C IT REPORTED IN 128 ITR 377 . FURTHER THE LD. DR REITERATED THAT THE ACTIVITY OF MARRIAGE BUREAU IS NOTHING BUT AN ACTIVITY OF COMMERCIAL NATURE AND IN THIS CASE IN PARTICULAR THE TRUST HAS GENERATED INCOME OUT OF ITS ACTIVITY THEREBY VIOLATING THE AMENDMENTS TO PROVISO TO SECTION 2(15) OF THE ACT W HICH IS IN EFFECT FROM 1.4.2009. ITA NO.1470/B/08 PAGE 8 OF 15 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND MINUTELY PERUSED THE DOCUMENTS AND MATERIALS ON RECORD PRODUCED BEFORE U S. FROM THE FACTS OF THE CASE, THE ISSUES TO BE SETTLED BEFORE US IS RED UCED TO:- (1) UNDER WHICH LIMB OF SECTION 2(15) OF THE ACT TH E TRUST COULD BE CATEGORIZED : (A) RELIEF OF THE POOR. (B) EDUCATION. (C) MEDICAL RELIEF. (D) ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBL IC UTILITY. (2) WHETHER THE PROCEDURE ADOPTED FOR AMENDING THE TRUST DEED IS CORRECT IN LAW. (3) DOES THE OBJECTS OF THE TRUST VIOLATE ANY PROVI SIONS OF SECTION 2(15) AND ITS PROVISO BY VIRTUE OF THE AMENDMENT BY THE F INANCE ACT, 2008 W.E.F. 1.4.2009, AND WHETHER THE TRUST IS ENTI TLED FOR RECOGNITION U/S. 80G OF THE ACT? 8. THE OBJECTS STATED IN THE TRUST ARE, TO ORGANI ZE WOMEN AND UTILIZE THEIR INHERENT POWERS, TO EDUCATE WOMEN WITH SCIENT IFIC KNOWLEDGE AND TO ROOT OUT SUPERSTITIOUS BELIEFS, TO COUNSEL THE WOME N REGARDING THEIR FAMILY PROBLEMS, PERSONAL PROBLEMS AND PROTECT THEM FROM E VILS OF THE SOCIETY LIKE EXPLOITATION, DOWRY, REDRESS PROBLEMS RELATED TO IN TER-CASTE MARRIAGE AND BRING AWARENESS OF LAW, HELP THEM LEARN KANNADA LIT ERATURE AND RELIGION/DHARMA, STUDY THE PRINCIPLES AND VACHANAS OF MAHAMANANTAVADI, SRI BASVESHWAR AND MAHA SHIVASARANE AKKA MAHADEVI, TO BRING OUT THEIR TALENTS IN THE FIELD OF MUSIC, DANCE, DRAMA, PAINTI NGS, HANDICRAFTS, ETC., TO RECOGNIZE AND HONOUR KANNADA WOMEN OF ESTEEM AND EM INENT LADIES OF ITA NO.1470/B/08 PAGE 9 OF 15 THE COUNTRY, TO ORGANIZE MARRIAGE BUREAUS, VACHANA MUSIC CLASSES, HOME FOR AGED LADIES, CRCHE, TO DISTRIBUTE FOOD, TO ORG ANIZE SCHEMES, TO MAKE THE ECONOMICALLY WEAKER WOMEN SELF-SUFFICIENT AND T O CONDUCT PROGRAMMES FOR THE CHILDREN TO BRING OUT THEIR TALENTS AND ENC OURAGE THEM IN THEIR ACTIVITIES. 9. ALL THESE ACTIVITIES ARE SPECIFICALLY PROVIDED I N THE TRUST DEED WITHOUT ANY AMBIGUITY. ON ANALYZING EACH AND EVERY OBJECTS MINUTELY, WE ARE OF THE FIRM BELIEF THAT THE TRUST WILL FALL UNDER THE FOURTH LEG OF SECTION 2(15) I.E., ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY. LD. DIT(E) ALSO UNDER THE SAME VIEW HAVE REGISTERED THE TRUST U/S. 12A OF THE ACT VIDE THEIR LETTER DATED 25.8.1998. SINCE THEN RECOGNITION U/S . 80G OF THE ACT WAS ALSO GRANTED. LD. DIT(E) IN HIS ORDER DATED 31.10.2008 HAD RAISED VARIOUS OBJECTIONS SUCH AS AMENDMENT TO THE TRUST DEED TO B E INVALID, MOST OF THE OBJECTS ARE COMMERCIAL AND WIDE IN NATURE, ONE OF T HE ACTIVITY OF THE TRUST IS RELATED TO A PARTICULAR RELIGION, RUNNING A MARRIAG E BUREAU IS FOR THE PURPOSE OF GENERATING INCOME IN VIOLATION TO THE AMENDED PR OVISO TO SECTION 2(15) OF THE ACT, ETC. THE APPELLANT TRUST HAD AMENDED THE TRUST DEED ONLY BY THE ADVICE OF THE REVENUE SINCE THE REVENUE WERE OF THE BELIEF THAT SOME OF THE OBJECTS DOES NOT FALL IN LINE WITH SECTION 2(15 ) OF THE ACT. HOWEVER THE QUESTION OF VALIDITY TO THE AMENDMENT OF TRUST DEED WILL ARISE ONLY IF ANY OF THE ORIGINAL OBJECTS FOUND IN THE TRUST DEED IS OF ANY OBJECTIONABLE NATURE. ON OUR PERUSAL WE FIND THAT ALL THE OBJECTS OF THE TRUST HAVE BEEN CATEGORICALLY IDENTIFIED AND SPECIFIC WITHOUT ANY A MBIGUITY. ON A MINUTE SCRUTINY OF ONE OF THE OBJECTS OF THE TRUST, I.E., TO HELP THE WOMEN TO KNOW MORE ABOUT KANNADA LITERATURE AND RELIGION AND TO S TUDY AND PROPAGATE THE ITA NO.1470/B/08 PAGE 10 OF 15 PRINCIPLES AND VACHANAS OF MAHAMANANTAVADI, SRI BAS VESHWAR AND MAHA SHIVASARANE AKKA MAHADEVI, DOUBTS MAY ARISE THAT, WHETHER THIS ACTIVITY RELATES TO A SPECIFIC RELIGION. LD. DIT(E) TOOK N OTE OF THIS CLAUSE AND OBSERVED AS FOLLOWS: THE TRUST BEING A CHARITABLE ENTITY IN VIEW OF THE SECTION 13(1)(B) IS BARRED BY DOING SUCH RELIGIOUS ACTIVITY. HOWEVER, THE ARGUMENTS SUBMITTED BY THE LD. AR IS V ERY FORCEFUL IN THIS REGARD. THERE ARE VARIOUS DECISIONS TO HOLD THAT T HE TEACHINGS OF RENOWNED PERSONALITIES LIKE SHRI RAMANAMAHARISHI, SHRI VIVEK ANANDA, SRI RAMAKRISHNA PARAMAHAMSA, ARE ALL ACTIVITIES IN THE NATURE OF ADVANCEMENT OF GENERAL PUBLIC UTILITY. IN ONE OF THE RECENT C ASES, THE HONBLE BOMBAY HIGH COURT DECIDED IN THE CASE OF CIT V. RAJNEESH F OUNDATION (280 ITR 553), THAT, PROMOTING YOGA, MEDITATION AND PROPAGAT ING TEACHINGS OF PHILOSOPHERS ARE ALL OBJECTS IN THE NATURE OF GENERAL PUBLIC UTILITY . THE USAGE OF THE WORDS KANNADA LITERATURE AND RELIGION /DHARMA CANNOT BE LOOKED INTO NARROWLY. IT GOES WITHOUT SAYING THAT K ANNADA LITERATURE IS ONE OF THE OLDEST LITERATURE IN THE WORLD ADVANCING VAS T KNOWLEDGE AND ENRICHED WITH INDIAN HERITAGE AND CULTURE, ACKNOWLEDGED THRO UGHOUT THE WORLD. THE WORD RELIGION IS EXPLAINED IN CONCISE OXFORD DICT IONARY AS: (1) THE BELIEF IN AND WORSHIP OF A SUPER HUMAN CONTROLLING POWER E SPECIALLY A PERSONAL GOD OR GODS, A PARTICULAR SYSTEM OF FAITH AND WORSH IP; (2) A PURSUIT OR INTEREST FOLLOWED WITH DEVOTION . THEREFORE, A BROAD ANALYSIS OF THE WORDS KANNADA LITERATURE AND RELIGION WILL NOT VIOLATE ANY OF THE PROVISIONS OF SECTION 2(15) OF THE ACT. IT IS WORTHWHILE TO NOTE THAT THE WORD DHARMA IS EXPLAINED IN THE CONCISE OXFORD DICTIONARY AS: (IN INDIAN RELIGION) THE ITA NO.1470/B/08 PAGE 11 OF 15 ETERNAL LAW OF THE COSMOS; INHERENT IN THE VERY NAT URE OF THING.; THEREFORE THE MENTION OF THE WORD DHARMA DOES NOT BRING ABOUT AN ACTIVITY IN THE NATURE OF ANY SPECIFIC RELIGION. L D. DIT(E) WAS ALSO OF THE OPINION THAT OPERATING MARRIAGE BUREAUS, CRCHE AND PROVIDING FOOD ARE ALSO ACTIVITIES OF COMMERCIAL NATURE. MARRIAGES AR E SOCIAL NEEDS AND NECESSITIES OF THE SOCIETY AT LARGE. MARRIAGES ARR ANGED AND CONDUCTED ELIMINATING THE SOCIAL EVILS LIKE DOWRY SYSTEM ETC. ARE THE NEED OF THE DAY. FACILITATING SUCH NEEDS BY ITSELF CANNOT BE CONSIDE RED TO BE A COMMERCIAL ACTIVITY, UNLESS THERE IS A PROFIT MOTIVE. SIMILA RLY OPENING A CRCHE FOR LOOKING AFTER THE CHILDREN TO RELIEVE THEIR FAMILY AND FACILITATE THEM ON JOB, BY ITSELF CANNOT BE CONSIDERED TO BE AN ACTIVITY OF CO MMERCIAL NATURE, UNLESS THERE IS A PROFIT MOTIVE INVOLVED IN IT. NEEDLESS TO SAY PROVIDING FOOD FREE OF COST WILL NEVER AMOUNT TO BE AN ACTIVITY OF COMMERC IAL NATURE. FURTHER, LD. DIT(E) HAD OBSERVED THAT CLAUSE 10 (EXTRACTED HEREB ELOW) DOES NOT SEEM TO BE CHARITABLE IN NATURE. 10. AS CHILDREN ARE AN INDISPENSABLE PART OF WOMEN , ARRANGE AND CONDUCT PROGRAMMES WHICH ENCOURAGES CHILDRENS ACTI VITIES. PREPARE SCHEMES FOR ORGANIZING THE TALENTED AND ZEA LOUS CHILDREN AND RECOGNIZING THEIR TALENTS AND ENCOURAGING THEM AND IMPLEMENT THE SAME. THE LD. AR HAS PUT IT NICELY IN HIS WRITTEN SUBMISS IONS BEFORE US WHICH WE ARE PLEASED TO EXTRACT HEREWITH: CHILDREN ARE APT TO REPLACE ELDERS AS TIME PASSES BY. IT IS, THEREFORE, NECESSARY THAT THEIR DEVELOPMENT SHOULD BE SO HARNE SSED THAT THEY LIVE IN AN ATMOSPHERE MARKED BY PEACE AND TRANQUILITY OF THE SOCIETY FOR WHICH SCHOOL EDUCATION ALONE IS NOT SUFFICIENT. TH ERE IS A FAMOUS SAYING IN ENGLISH IN THE FORM OF AN ADVICE TO SCHOO L-GOING CHILDREN: DO NOT ALLOW SCHOOLING TO INTERFERE WITH YOUR EDUC ATION. THE MESSAGE CONVEYED BY THIS SAYING IS THAT THE EMPHASI S PLACED BY SCHOOLS IS ONLY TO TEACH LITERACY BUT NOT ALL-ROUND DEVELOPMENT, ITA NO.1470/B/08 PAGE 12 OF 15 PARTICULARLY CHARACTER BUILDING. ABSENCE OF CULTUR AL EDUCATION IMPARTED BY INSTITUTIONS LIKE THE APPELLANT TRUST H AS LED TO MARKED VIOLENCE AMONG SCHOOL/COLLEGE-GOING CHILDREN, WHO H AVE OF LATE EVEN GONE TO THE EXTENT OF MURDERING THEIR OWN MATES AS EVIDENCED BY NEWS REPORTS, A CLEAR FALL-OUT OF THE WESTERN OUTLO OK APED AND COPIES UNFORTUNATELY BY THE SCHOOLS IN OUR COUNTRY. KANNA DA, LIKE ANY OTHER INDIAN LANGUAGE, IS REPLETE WITH NOBLE AND LOFTY TH OUGHTS AND THE OBJECT OF TEACHING THE SAME CANNOT, BY ANY STRETCH OF IMAGINATION, BE CONSTRUED AS VIOLATIVE OF THE CONCEPT OF CHARITY AS THE LANGUAGE IS TAUGHT TO THE WILLING LEARNERS FREE OF COST. WE FULLY AGREE WITH THE VIEWS OF THE LD. AR AND STA ND BY IT. IN OUR OVERALL CONSIDERATION WE ARE OF THE FIRM BELIEF THAT ALL TH E OBJECTS OF THE APPELLANT TRUST FALL IN THE FIELD OF ADVANCEMENT OF GENERAL P UBLIC UTILITY AS DEFINED IN SEC 2(15) OF THE ACT. TO SUM THE ISSUES ARISING O UT OF THE APPEAL FRAMED BY US ARE ANSWERED AS FOLLOWS:- (1) UNDER WHICH LIMB OF SECTION 2(15) THE TRUST COULD BE CATEGORIZED? ON PERUSING THE OBJECTS OF THE TRUST AND KEEPING I N MIND OF THE VARIOUS DECISIONS OF HON HIGH COURTS AND APEX COURT WE HOLD THAT THE TRUST FALLS IN THE FOURTH LIMB OF SEC.2 (15) OF THE ACT VIZ. ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. (2) WHETHER THE PROCEDURE ADOPTED FOR AMENDING THE TRUST DEED IS CORRECT IN LAW ? SINCE WE HAVE HELD THAT ALL THE OBJECTS OF THE TRUS T IN THE ORIGINAL TRUST DEED ARE FOUND TO BE IN ORDER WITH RESPECT TO ADVANCEMENT OF GENERAL PUBLIC UTILITY, WE DO NOT FIND IT NECES SARY TO ANSWER THIS QUESTION. (3) DOES THE OBJECTS OF THE TRUST VIOLATE ANY PROVI SIONS OF SECTION 2(15) AND ITS PROVISO BY VIRTUE OF THE AMENDMENT BY THE F INANCE ACT, 2008 ITA NO.1470/B/08 PAGE 13 OF 15 W.E.F. 1.4.2009, AND WHETHER THE TRUST IS ENTITLED FOR RECOGNITION U/S. 80G OF THE ACT? FROM THE FACTS AND CIRCUMSTANCE OF THE CASE WE ARE OF THE OPINION THAT THE OBJECTS OF THE TRUST BY ITSELF DO NOT VIOLATE T HE PROVISIONS OF SECTION 2(15) OF THE ACT. HOWEVER IT COULD BE MADE OUT FROM THE INCOME AND EXPENDITURE SUBMITTED BY THE APPELLANT TRUST THAT T HE TRUST HAS GENERATED A WHOPPING RECEIPT OF RS. 9,80,759/- FROM ITS ACTIVITY OF RUNNING MARRIAGE BUREAU. THOUGH, THE AMOUNT COLLECT ED FROM THE PARENTS/BRIDES/BRIDEGROOMS IS MEAGER, I.E., RS. 500 /- PER INDIVIDUAL AND RS. 100/- RENEWAL FEE PER ANNUM, PROVISO TO THE AMENDED SECTION 2(15) COMES INTO PLAY. IF THIS AMOUNT COLLECTED IS NOT EXPENDED FULLY FOR RECOVERING OVERHEADS INCURRED ON THIS ACTIVITY THER E COULD EXIST A POSSIBILITY OF AN ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS AS ENVISAGED IN THE ACT. HOWEVER IN THE GIVEN CASE, IT APPEARS FROM THE INCOME AND EXPENDITURE STATEMENT T HAT THE APPELLANT TRUST HAD NOT INCURRED ANY EXPENDITURE ON THIS ACTI VITY. THIS COULD NOT BE SO. THERE SHOULD HAVE BEEN SOME EXPENDITURE INCU RRED BY THE TRUST WHEN THE TRUSTS ONE OF THE PREDOMINANT ACTIV ITIES DURING THE YEAR WAS RUNNING MARRAIGE BUREAU INVOLVING LARGE NU MBER OF BENEFICIARIES. THE LD. ARS FORCEFUL ARGUMENTS ON T HIS REGARD ARE QUITE APPEALING. LD. AR REITERATED THAT ALL THE TRUSTEES AND VOLUNTEERS WERE FROM GOOD BACKGROUND, COMMITTED TO THE CAUSE OF, WE LFARE OF PUBLIC IN GENERAL AND HAVE SWEATED OUT BY SPENDING THEIR TIME AND MONEY FOR THE COMMITMENTS OF THE TRUSTS OBJECTIVES. SINCE AL L THE EXPENSE OF THE ITA NO.1470/B/08 PAGE 14 OF 15 TRUST ARE MET OUT BY THE TRUSTEES AND THE VOLUNTEE RS FROM THEIR RESOURCES THESE EXPENSES REMAINED OUTSIDE THE BOOKS OF THE TRUST AND THEREFORE NOT REFLECTED IN THE INCOME AND EXPEN DITURE STATEMENT OF THE TRUST. FURTHER THERE WAS NO EXPENDITURE ON ACCO UNT OF RENT OR OFFICE OVERHEAD BECAUSE THE SAID ACTIVITY WAS ADMINISTERED FROM THE TRUSTS OWN BUILDING. THE SUBMISSIONS OF THE LD. AR ARE PAS SABLE LOOKING INTO TO THE FACTS AND CIRCUMSTANCES OF THE CASE. WE H AVE ALSO PERUSED THE AMENDMENTS TO SECTION 80G(5)(D) OF THE ACT BROU GHT IN BY THE FINANCE (NO.2) BILL, 2009. THEY ARE EXTRACTED HERE BELOW FOR REFERENCE: (D) AFTER CLAUSE (VI), THE FOLLOWING CLAUSE SHALL B E INSERTED, NAMELY:- (VII) WHERE ANY INSTITUTION OR FUND HAD BEEN APP ROVED UNDER CLAUSE (VI) FOR THE PREVIOUS YEAR BEGINNING O N THE 1 ST DAY OF APRIL, 2007 AND ENDING ON THE 31 ST DAY OF MARCH, 2008, SUCH INSTITUTION OR FUND SHALL, FOR THE PURPOSES OF THIS SECTION AND NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISO T O CLAUSE (15) OF SECTION 2, BE DEEMED TO HAVE BEEN, - (A) ESTABLISHED FOR CHARITABLE PURPOSES FOR THE PR EVIOUS YEAR BEGINNING ON THE 1 ST DAY OF APRIL, 2008 AND ENDING ON THE 31 ST DAY OF MARCH, 2009; AND (B) APPROVED UNDER THE SAID CLAUSE (VI) FOR THE P REVIOUS YEAR BEGINNING ON THE 1 ST DAY OF APRIL, 2008 AND ENDING ON THE 31 ST DAY OF MARCH, 2009. IT IS EVIDENT THAT THIS AMENDMENT IS PROPOSED BY TH E FINANCE (NO.2) BILL, 2009, IN ORDER TO BRING DOWN THE RIGOUR OF THE AMEN DED PROVISO TO SECTION 2(15) AND PROVIDE A BREATHING PERIOD FOR THE TRUST RECOGNISED UPTO 31 ST MARCH, 2008. TAKING COVER UNDER THIS PROPOSED AMEN DMENT, THE TRUST HAS SUBMITTED A DECLARATION BEFORE US DATED 3.8.2009 TH AT THE TRUST HAS STOPPED COLLECTING CONTRIBUTIONS FROM ANY PERSONS F OR RENDERING THE SERVICE OF MARRIAGE BUREAU. IN SUCH SITUATION, WE FIND IT PROPER TO REMIT THIS ITA NO.1470/B/08 PAGE 15 OF 15 ISSUE BACK TO THE FILE OF LD. DIT(E) TO CONSIDER TH E ISSUE AFRESH ACCORDING TO LAW. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF AUGUST, 2009. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 13 TH AUGUST, 2009. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.