Shyam Prem Sansthan, Mathura V. CIT, Agra

ITA 442/AGR/2009

• Counselvise Citation: 44220314 RSA 2009
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-08-2011
• Assessment Year: misc
• Appeal Filed On: 04-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHRMA
• Assessee Lawyers: M M AGARWAL
• Keywords: Charitable institution
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 442/AGRA/2009 SECTION 80G(5)(VI) SHYAM PREM SANSTHAN, VS. THE COMMISSIONER OF 334-A, CHAITANYA VIHAR, PHASE-I, INCOME-TAX-I, AGRA. VRINDABAN 281 121, DISTT. MATHURA. (PAN : AAHTS 6509 D) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI M.M. AGARWAL, C.A. FOR RESPONDENT : SHRI A.K. SHRMA, JR. D.R. DATE OF HEARING : 12.08.2011 DATE OF PRONOUNCEMENT : 16.08.2011 ORDER PER BENCH: IN THIS APPEAL, THE ASSESSEE-SANSTHAN HAS TAKEN U P TWO SUBSTANTIVE GROUNDS, THE SUM AND SUBSTANCE OF WHICH IS THAT THE CIT ERRED IN REJECTI NG THE APPLICATION FILED BY THE ASSESSEE FOR CONTINUATION OF APPROVAL U/S. 80G. IT IS ALSO MENTI ONED THAT SHE ERRED IN RECORDING THE FINDING THAT THE ASSESSEE-SANSTHAN INCURRED EXPENDITURE FOR RELI GIOUS PURPOSES IN EXCESS OF LIMIT LAID DOWN IN SECTION 80G(5B) OF THE INCOME-TAX ACT, 1961 (THE A CT FOR SHORT). 2. BRIEFLY, THE FACTS ARE THAT THE ASSESSEE-SANSTHA N MOVED AN APPLICATION DATED 24.03.2009 IN FORM NO. 10G FOR RENEWAL OF APPROVAL EARLIER GRANTE D U/S. 80G OF THE ACT. THE EARLIER APPROVAL WAS VALID FOR THE PERIOD 24.01.2008 TO 31.03.2009. THE LEARNED CIT EXAMINED THE INCOME AND EXPENDITURE ACCOUNT FOR THE FINANCIAL YEAR 2008-09 AND FOUND THAT A SUM OF RS.1,37,185/- HAD BEEN EXPENDED TOWARDS RAMARCHA MAHOTSAVA. THE EXPEN DITURE, INTER ALIA, INCLUDED THREE 2 AMOUNTS OF RS.3,300/-, RS.8,800/- AND RS.6,600/- EX PENDED ON 10.03.2009 AS OFFERING TO THE SAINTS, TAKING PART IN THE MAHOTSAVA. AN AMOUNT OF RS.35,000/- WAS ALSO PAID TO SHRI KRISHNA SATSANG CHARITABLE TRUST ON OR ABOUT 09.03.2009 IN CONNECTION WITH THE MAHOTSAVA. THE TOTAL RECEIPTS IN THIS YEAR AMOUNTED TO RS.2,29,393/-. TH EREFORE, THE AFORESAID EXPENDITURE, PRIMA FACIE , BEING EXPENDITURE FOR RELIGIOUS PURPOSES, EXCEEDE D THE LIMIT OF 5% MENTIONED IN SECTION 80G(5B). THEREFORE, THE ASSESSEE WAS REQUIRED TO SH OW CAUSE AS TO WHY THE APPLICATION MAY NOT BE REJECTED. IT WAS SUBMITTED THAT THE TOPIC OF SE MINAR WAS MORALS OF SHREE RAM AND ITS RELEVANCE IN THE CURRENT SCENARIO. ABOUT 500 PERSO NS PARTICIPATED IN THE SEMINAR, WHO TOOK OATH TO FOLLOW THE MORALS OF SHREE RAM AND SPREAD HIS ME SSAGE WORLD-WIDE. TRAVELING EXPENSES OF THE FACULTY, WHO DELIVERED LECTURES, WERE REIMBURSE D. RUPEES 35,000/- WERE PAID TO SHRI KRISHNA SATSANG CHARITABLE TRUST AS RENT OF THE HALL AND TH E ROOMS. IT WAS CONTENDED THAT SHREE RAM IS THE IDEAL MAN NOT ONLY OF INDIA BUT OF THE WORLD. H E IS WORSHIPED BECAUSE HE UPHELD GREAT MORAL VALUES SUCH AS OBEDIENCE TO PARENTS, TO KEEP THE PR OMISES MADE, TO DEFEND TRUTH, TO WORK FOR THE WELFARE OF GENERAL PUBLIC ETC. THEREFORE, THE CONDU CTING OF SEMINAR WAS IN FURTHERANCE OF THE CHARITABLE ACTIVITY AND NOT THE RELIGIOUS ACTIVITY. THE LD. CIT CONSIDERED THE FACTS AND THE SUBMISSIONS. IT IS MENTIONED BY HER THAT SHREE RAM IS A GOD FOR HINDUS. THEREFORE, RAMARCHA MAHOTSAVE WAS A RELIGIOUS ACTIVITY. THE EXPENDITURE ON THIS ACTIVITY EXCEEDED 5% OF THE TOTAL RECEIPTS, WHICH IS IN VIOLATION OF THE PROVISION CO NTAINED IN SECTION 80G(5B). THEREFORE, THE APPROVAL HAS BEEN DENIED. 3. BEFORE US, THE LD. COUNSEL REFERRED TO THE OBJEC TS OF THE SANSTHAN, WHICH ARE AVAILABLE ON PAGE NOS. 3 TO 5 OF THE PAPER BOOK. IT IS SUBMITTED THAT NONE OF THE OBJECTS IS RELIGIOUS IN NATURE. IT IS FURTHER SUBMITTED THAT THE SEMINAR WAS CONDUC TED FOR SPREADING THE MORAL VALUES ESPOUSED 3 BY SHREE RAM. THIS ACTIVITY IS CHARITABLE IN NATURE AND NOT RELIGIOUS IN NATURE. THEREFORE, THE FINDING THAT SINCE SHREE RAM IS CONSIDERED TO BE GO D OF HINDUS, THEREFORE, THE SEMINAR TO PROPAGATE MORAL VALUES UPHELD BY HIM IS A RELIGIOUS ACTIVITY, IS NOT LEGALLY TENABLE. IN THIS CONNECTION, RELIANCE HAS BEEN PLACED ON THE DECISIO N OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF UMAID CHARITABLE TRUST VS. UNION OF INDIA AND OR S., (2008) 307 ITR 226 (RAJ.). 3.1 IN REPLY, THE LD. DR RELIED ON THE FINDING OF T HE LD. CIT THAT CONDUCTING OF RAMARCHA MAHOTSAVA WAS RELIGIOUS ACTIVITY SINCE SHREE RAM IS GOD OF HINDUS. THEREFORE, 5% LIMIT ON RELIGIOUS EXPENDITURE AS PROVIDED IN SECTION 80G(5B ) HAD BEEN BREACHED. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUB MISSIONS MADE BEFORE US. THE ESSENTIAL QUESTION BEFORE US IS WHETHER PROPAGATION OF VALU ES ESPOUSED BY SHREE RAM THROUGH RAMARCHA MAHOTSAVA CONSTITUTES RELIGIOUS ACTIVITY ? HONBLE RAJASTHAN HIGH COURT CONSIDERED A NUMBER OF DECISIONS IN THE CASE OF UMAID CHARITABLE TRUST (SU PRA) IN THIS CONNECTION. IN PARAGRAPH 31 OF THE JUDGMENT, IT HAS BEEN MENTIONED THAT THE COURT IS O F THE CONSIDERED OPINION THAT MERE ONE CONTRIBUTION BY THE CHARITABLE TRUST TO ANOTHER CHA RITABLE TRUST, WHICH CARRIED OUT REPAIRS AND RENOVATION OF LORD VISHNUS TEMPLE, DOES NOT DISENT ITLE THE ASSESSEE-TRUST FROM RENEWAL OF ITS APPROVAL U/S. 80G. THE LINE OF DISTINCTION BETWEEN THE RELIGIOUS PURPOSE AND CHARITABLE PURPOSE IS VERY THIN. THEREFORE, UNLESS THE OBJECT OF THE TRUS T ITSELF IS FOR SPENDING INCOME FOR A PARTICULAR RELIGION AND IT IS SO FOUND IN THE TRUST DEED, THE REVENUE CANNOT REJECT THE APPLICATION FOR RENEWAL OF APPROVAL MERELY BECAUSE ONE PARTICULAR EXPENDITU RE IS FOR AN ACTIVITY, WHICH MAY BE TERMED AS SPENDING FOR A PARTICULAR RELIGION. WE FIND THAT IN THIS CASE, NO OBJECT IS OF RELIGIOUS NATURE. THE EXPENDITURE HAS NOT BEEN INCURRED ON ANY RITUALS, B UT ON SPREADING THE MORAL VALUES PROPOUNDED 4 BY SHREE RAM, TO WHICH WE HAVE ADVERTED EARLIER. TH ESE VALUES ARE OF SOCIAL USE AND DO NOT HAVE ANY RELIGIOUS CONTENTS. WHILE SOME HINDUS MAY CONSI DER SHREE RAM TO BE GOD, OTHERS MAY CONSIDER HIM TO BE ONLY A GREAT PERSON, WHO FOLLOWE D CERTAIN SOCIAL VALUES REQUIRED TO BRING PEACE AND HARMONY AMONGST PEOPLE. ACCORDINGLY, WE A RE OF THE VIEW THAT THE EXPENDITURE WAS NOT INCURRED FOR RELIGIOUS PURPOSE AND IT WAS FOR C HARITABLE PURPOSE. THEREFORE, IT IS HELD THAT THE LD. CIT ERRED IN NOT GRANTING APPROVAL U/S. 80G. AC CORDINGLY, SHE IS DIRECTED TO GRANT THE APPROVAL ON THE BASIS OF APPLICATION DATED 24.03.2009. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.08.2011. SD/- SD/- (H.S. SIDHU) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16 TH AUGUST, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY