Fwd: Phrase “wholly for religious purposes” or “wholly for religious and charitable purposes” as used in section 115BBC (dealing with anonymous donations) exempting religious institutions etc Held to be interpreted liberally in light of well-accepted fact that all the major religions of the world with one voice eulogise the importance of taking care of the old, infirm, disabled, visited by misfortune etc. on account of some natural or man-made calamity, widowed, orphaned etc. and these discussions/lectures are not divorced from religion as mankind is exhorted in the name of God and saints to take care of the weak and the needy.
Kapil Goel
From: CA.KAPIL GOEL <kapilnkg...@gmail.com>
Date: Mon, Aug 25, 2014 at 11:20 AM
Subject: Phrase “wholly for religious purposes” or “wholly for religious and charitable purposes” as used in section 115BBC (dealing with anonymous donations) exempting religious institutions etc Held to be interpreted liberally in light of well-accepted fact that all the major religions of the world with one voice eulogise the importance of taking care of the old, infirm, disabled, visited by misfortune etc. on account of some natural or man-made calamity, widowed, orphaned etc. and these discussions/lectures are not divorced from religion as mankind is exhorted in the name of God and saints to take care of the weak and the needy.
To: Kapil Goel <advocate...@gmail.com>
Phrase “wholly for religious purposes” or “wholly for religious and
charitable purposes” as used in section 115BBC (dealing with anonymous donations) exempting religious institutions etc Held to be interpreted liberally in light of well-accepted fact that " all the major religions of the world with one voice eulogise the importance of taking care of the old, infirm, disabled, visited by misfortune etc. on account of some natural or man-made calamity, widowed, orphaned etc. and these discussions/lectures are not divorced from religion as mankind is exhorted in the name of God and saints to take care of the weak and the needy."
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: ‘A’ NEW DELHI I.T.A .No.-5812/Del/2012
(ASSESSMENT YEAR- 2009-10)
Bhagwan Shree Laxmi Narain, 20th of August 2014.
10.7. On a consideration of the above alongwith the findings recorded in the assessment order which have been extracted in para 2 & 3 of this order, it is seen that while considering the explanation qua the anonymous donations which was claimed to be voluntary donations by the assessee, the tax authorities have come to the incorrect conclusion that since the assessee was engaged in spiritual lectures which according to their understanding of the context in which the explanation was offered was mistakenly and erroneously considered to be a bar to the assessee
in claiming that the rigours of sec. 115BBC were not attracted. The said
conclusion has been arrived at by the tax authorities on considering the
anonymous donations in the facts of the present case in the light of the newly inserted section 115BBC and the aforesaid Circular No.14 of the CBDT which explained the same. On considering the objects of the trust we are of the view that in the facts of the present case the tax authorities have proceeded on a very narrow and incorrect understanding in holding that the assessee trust was engaged in spreading spirituality and since section115BBC only exempts religious trust, a trust allegedly imparting spiritual knowledge was consequently not contemplated as an exception by the Legislature as much as it consequently is barred to claim exemption vis-à-vis the anonymous donation.
10.8. We have extracted the objects of the trust and on a careful consideration of the same, we hold that the conclusions drawn by the tax authorities are incorrect on facts and law. It is seen that only in clause (viii) of the objects of the trust, it is set out that the trust imparts spiritual lectures to “mentally disturbed” and “to all human beings”. On consideration of the same we find that the said aim has to be understood in the context of and read alongwith the other objects of the trust whose target groups are widows, orphans, old and infirm people, destitutes, illiterate, handi-capped, mentally retarded, providing food and shelter to poor and needy, night shelter, nari-niketan/ mahila ashram, weaker sections and all other
groups who can be included in the phrase in “need of physical, mental and
financial help” including and not exclusively affected on account of natural
calamities. etc. like flood, fire, famine, drought, earth-quakes, storm, accident, pestilence, drought, epidemics etc. A perusal of the above enumerated list when taken in the contest of extreme devastating tragedies and the needs of destitute; old age; infirm etc needs no specific treatise to bring out the potential importance and benefits of spiritual lecture to the target group of mentally disturbed, destitute due to calamities, natural or man-made, age, orphaned, widowed etc. The potential benefit and succor to these target groups by way of some philosophy or imparting of belief that there is some power beyond all this which is watching out for them cannot either be under-estimated or over-emphasized and has to be
considered in the proper perspective. The fact that these arguments/philosophy on the touchstone of science may fail and to some of us non-believers maybe only rhetoric is not a relevant consideration as what cannot be cured has to be endured, for a person on his last breath is no reason to callously subscribe to the philosophy that such a person should be deprived of the psychological comfort of believing that somewhere in the universe there may have been a greater purpose in going through the painful experience. The issue is not what we believe but what strength can be imparted to a potential destitute, sufferer. The objects of ameliorating their miseries, providing night shelter, self-help capability, knowledge distribution of food medicines etc coupled with solace in the name of God cannot be outrightly rejected and merely because the assessee is not limiting itself to disbursing food medicine, providing shelter etc and is also giving lectures
on spirituality was not the kind of assessee contemplated under section 115BBC who was to be visited by the rigours of the said section.
10.9. We also hold on a consideration of the terms “religion”; “religious”
“spirituality” and “spiritual”, that in the context of the present case, no lengthy deliberations on the aforesaid terms is necessary. Suffice it to say that to our understanding the concept of religion divorced from spiritualism may be possible as it may be possible for religion to exist in a purely ritualistic manner but spiritualism divorced from religion is impossible to be visualized and conceived. In the facts of the present case lectures/discourses on the teachings of the prevalent and predominant religions of the country are claimed to have been given as would be found from the written submissions extracted in the impugned order which have also been reproduced from the impugned order in the present
proceedings. It has been stated that during these lectures voluntary donations by the attendees have been made which constitutes the anonymous donations. The department it is seen has considered these voluntary donations exigible to tax onthe understanding that the assessee trust was not fulfilling the requirements of a public religious trust. We have seen and discussed at length and come to a conclusion that the objects of the trust and the context in which spiritual lectures espousing the philosophy i.e. the spirituality of the major and predominant religions of the country needs to considered in the light of the well-accepted and
well-known fact that all the major religions of the world with one voice eulogise the importance of taking care of the old, infirm, disabled, visited by misfortune etc. on account of some natural or man-made calamity, widowed, orphaned etc. and these discussions/lectures are not divorced from religion as mankind is exhorted in the name of God and saints to take care of the weak and the needy. Accordingly considering the entire conspectus of facts, circumstances and position of law, we hold that the Revenue has incorrectly applied section 115BBC to the facts of the assessee’s case.
10.11.While coming to the said conclusion the objects of the trust have been considered vis-à-vis the relevant provision alongwith the Circular No.-14 and the observations and ratio decidendi of the Apex Court in Cit, Ujjain vs M/s Dawoodi Bohara Jamat and considering the rival stand of the parties in the context of the above on the facts of the present case, we hold that the claim of the assessee deserves to be allowed.
Also refer:
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH ‘B’, MUMBAI
I.T.A. NO. 5714/M/2010
ASSESSMENT YEAR 2007-2008
Bombay Panjrapole
Date of order:25.07.2012
7. The DR, representing the department supported and relied upon the order of the AO and submitted that maintaining of the gaushalas and birds and animal hospital does not come under the definition of
“Charitable” , as defined in section 2(15) of the Act, and in any case,
maintaining of gaushalas and veterinary hospitals cannot be considered as charitable activity for “public good”
. He, therefore, submitted that utilization of funds, could not be t
aken to be coming out from the relevant provisions of section 115BBC. He, therefore, submitted that the order of CIT (A) be set aside and the order of AO be restored
9. We have heard the arguments from both the sides and also perused the orders of both the revenue authorities. 10. We are in agreement with the CIT(A) that the purport and purpose for bringing in section 115BBC is to curb the influx of unaccounted money by way of anonymous donations towards educational trusts and other religious trusts and certainly not to curb any and all types of donations / offerings either in temples,
muths and religious trusts, where the collections are collected in donation boxes and that too ranging from as low as Rs. 10/- to Rs. 150/-
11. From the order of the CIT (A), we find that theassessee is running veterinary hospital for treatment of wounded and sick animals and birds. If we strictly accept the submissions of the DR, then we must also accept situations where we will find wounded and dead animals on the roads, in open, and at houses, rotting, spreading foul smell and diseases. Therefore, accordingly, the DR would accept a situation like this. We find that this trust has been in existence for the last 176 years, doing and performing a public good and service to humanity with sincere and good intentions, not even asking people to make contributions. Whatever contributions by way of donations are coming, are coming in small donations, which are put by public at large in donation boxes (dharmau). We also find that approximately Rs. 21 lakhs came as known donations, which were duly taken carein the return and informed to the revenue.
13. Keeping in view all the above considerations and keeping in view the consistent approach from the department, we do not intend to deviate from the order of CIT (A) and hold the same to be correct application of
law and facts.
IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKN BENCH ‘B’ : LUCKNOW
I.T.A. Nos.568 to 572/Lkw/2013
A.Yrs.:2002-03 to 2006-07
A.C.I.T.-1, Vs. M/s Sahyog Jan Kalyan Samiti,
Kanpur. 122/619, Shastri Nagar,
Kanpur
As per sub section (3), unanimous donation are those donations for
which no details of donors are maintained by the assessee. If the details
are maintained, the donations cannot be called unanimous donation and
provisions of section 115BBC cannot be invoked. In the instant case,
undisputedly, the details were maintained by the assessee but the addition
was made on account of non furnishing the confirmation letters. We are
of the considered view that only those donations can be called unanimous
for which details are not maintained. If it is properly maintained, it cannot
be called unanimous donation. Since the assessee has maintained the
details of donors, the donations cannot be called unanimous donation and
provision of section 115BBC cannot be invoked in the given facts and circumstances of the case. If provision of section 115BBC cannot be
invoked, the addition made u/s 68 are to be deleted in the light of the
order of the Tribunal in assessee’s case for assessment year 2005-06 and
the judgment of Hon'ble High Court in which under the identical facts, the
additions made by the Revenue u/s 68 on account of unexplained corpus
donation were deleted. We accordingly set aside the order of CIT(A) and
delete the addition.
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH ‘A', HYDERABAD
ITA No.761/Hyd/2012 : Asstt. Year 2008-09
Social Action for Rural Education
Health and Loving Life of
Abundance Society, Hyderabad.
( PAN - AADTS 1409 C)
V/s. Asstt. Director of Income-tax,
Circle 3(2), Hyderabad
Further, it was the case of the Revenue that the amount of
Rs.79,88,520, representing difference in the sale consideration sought to be
added, was paid by the assessee from out of the anonymous donations collected
by the assessee. Apart from the fact that no corroborative evidence has been
brought on record by the Revenue authorities to support this inference drawn by
them, it has been the contention of the assessee right from the beginning that it
has been maintaining regular books of account, and has maintained record as to
the identity of donors and the relevant details, and consequently provisions of
S.115BBC are not applicable to its case. These contentions of the assessee have
not been controverted by the Revenue even before us with any supportive
material. That being so, in view of consistent view taken by various Tribunal in
similar matters, following Delhi Bench decision of the Tribunal in the case of
Hans raj Samarak Society v. ADIT(E)" [2011] 16 Taxmann.com 103(Delhi), we
agree with the learned counsel for the assessee that since the assessee has
maintained record of the donations with relevant details as to the identity of the
donors, the provisions of S.115BBC are not applicable to the facts of the present
case.