Worship of Hindu Gods is not “religious activity for the purpose of section 80G


  Nagpur ITAT has held in Shiv Mandir Devsttan Panch Committee Sanstan vs. CIT that “Hinduism” is not a religion & worship of Hindu Gods is not “religious purpose” while deciding the application for granting of certificate u/s 80G of Income Tax Act.


It is notable that certificate u/s 80G is granted to those organizations only who are established for charitable purposes and Explanation 3 to section 80G provides that charitable purpose doesnot include a purpose which is of religious nature



Facts:The assessee trust was set up with the object of “worship of Lord Shiva, Hanumanji, Goddess Durga and maintaining of temple” and “to celebrate festivals like Shivratri, Hanuman Jayanti, Ganesh Uttasav, Makar Sankranti”. It applied for a certificate under section 80G. S. 80G (5) provides that the trust should be established for a “charitable purpose”. Explanation 3 to s. 80G provides that “charitable purpose” does not include a purpose which is of a “religious nature”. S. 80G(5)(iii) also stipulates that the trust should not be expressed to be for the benefit of any particular religious community or caste. The CIT rejected the application on the ground that the assessee was set up for “religious” purposes. On appeal by the assessee to the Tribunal, HELD reversing the CIT

Held: The objects of the assessee is not for advancement, support or propagation of a particular religion. Worshipping Lord Shiva, Hanumanji, Goddess Durga and maintaining the temple is not advancement, support or propagation of a particular religion. Lord Shiva, Hanumanji & Goddess Durga do not represent any particular religion. They are merely regarded to be the super power of the universe. Further, there is no religion like “Hinduism”. The word “Hindu” is not defined in any of the texts nor in judge made law. The word was given by British administrators to inhabitants of India, who were not Christians, Muslims, Parsis or Jews. Hinduism is a way of life. It consists of a number of communities having different gods who are being worshipped in a different manner, different rituals, different ethical codes. The worship of god is not essential for a person who has adopted Hinduism way of life. Therefore, expenses incurred for worshipping of Lord Shiva, Hanuman, Goddess Durga and for maintenance of temple cannot be regarded to be for religious purpose


IN THE INCOME TAX APPELLATE TRIBUNAL
NAGPUR BENCH, NAGPUR

BEFORE: SHRI P.K. BANSAL, ACCOUNTANT MEMBER

AND

SHRI D.T. GARASIA, JUDICIAL MEMBER

ITA No.223/Nagpur/2009

Assessment Year : NA

Shiv Mandir Devsttan
Panch Committee Sanstan
Nagpur

Vs.
CIT-1
Nagpur

(Appellant) (Respondent)

Appellant By: Shri P.R. Gandhi, Advocate

Respondent By: Shri Suresh R. Kirtane, JCIT

Date of hearing: 09.10.2012

Date of pronouncement: 11.10.2012

ORDER

Per P.K. Bansal, Accountant Member:-

The only issue involved in this appeal filed by the assessee relates to the grant of approval u/s 80G(5)(vi) of the Income-tax Act, 1961.

The brief facts of the case are that Shiv Mandir Devsttan Panch Committee Sanstan, Nagpur filed an application in form no.10G on 9.7.2008 seeking approval u/s 80G(5)(vi) of the Income-tax Act. The copy of the accounts for the year 31.3.2008 was also filed. As
per this, the assessee has incurred total expenditure amounting to Rs.82,977/-,
which consist of building maintenance expenses – Rs.23,530/-; Free food expenses –
Rs.34,399/-; Festival prayer & daily expenses – Rs.18,328/-; Tailoring training
expenses – 1,225/-; Yoga training expenses – Rs.2,475/- and Free distribution of
opticals – Rs.3,020/-.

2. The CIT took the view that the expenses for building maintenance, free food
expenses and festival prayer & daily expenses related to the religious object. Only
balance sum of Rs.6,700/- were incurred for non-religious objects. In view of
explanation 3 to section 80G read with sub-section 5B, he took the view that since
the expenditure on religious object exceeds 5% of the total income of the assessee
trust, therefore, he did not approve the assessee u/s 80G(5)(vi).

3. The Ld. A.R. before us contended that the assessee is carrying on yoga
training, tailoring training and free distribution of opticals to the poor and needy
people. The building is required for the training, yoga etc. The maintenance
expenses incurred over the building relate to the charitable activities and not the
religious activities. Food distributed to the needy may be called as maha prasad and
distribution of the food to the poor people is not a religious expenditure. Similarly,
the expenses incurred on festival prayer & daily expenses represent Rs.3,600/- paid
to safai worker, Rs.1,080/- for news papers, Rs.1,136/- for cleaning the cloths and
Rs.5,373/- for miscellaneous purchases for day to day consumption. It is only a sum
of Rs.7,139/- which is less than 5% can be regarded to have been spent for the
religious purpose even if it is treated that maintenance of the temple is a religious
purpose. He contended that the temple is open to everybody without caste and
creed. Anybody who have faith or not in Shiva, Hanuman, Durga may come or even
the person who does not have faith in these deities, can also come. The temple
does not belong to a particular religion. The expenditure so incurred are not of
religious nature. Even the objects of the assessee are not the religious nature.
Putting the idols is not a religious activity. The CIT has not stated how the activity so
carried are religious. The assessee has duly been registered u/s 12A of the Incometax
Act.

4. The Ld. D.R. on the other hand contended that the CIT(A) has rightly denied
the approval u/s 80G. The assessee was carrying on religious activities and has
spent money for the maintenance of the temples.

5. We have heard both the parties and have carefully perused the entire
material available on record along with the order of CIT. The provisions of section
80G sub-section (5) of the Income-tax Act lays down as under :

“(5). This section applies to donations to any institution or fund
referred to in sub-clause (iv) of clause (a) of sub-section (2), on if it is
established in India for a charitable purpose and if it fulfils the
following conditions, namely –

(i). where the institution or fund derives any income, such income
would not be liable to inclusion in its total income under the
provisions of section 11 and 12 or clause (23AA) or clause (23C)
of section 10 :

Provided that where an institution or fund derives any income,
being profits and gains of business, the condition that such
income would not be liable to inclusion in its total income under
the provisions of section 11 shall not apply in relation to such
income, if –

(a) the institution or fund maintains separate books of
account in respect of such business;

(b) the donations made to the institution or fund are not
used by it directly or indirectly, for the purposes of such
business; and

(c) the institution or fund issues to a person making the
donation a certificate to the effect that it maintains
separate books or account in respect of such business
and that the donations received by it will not be used,
directly or indirectly, for the purposes of such business;

(ii) the instrument under which the institution or fund is constituted
does not, or the rules governing the institution or fund do not,
contain any provision for the transfer or application at any time
of the whole or any part of the income or assets of the
institution or fund for any purpose other than a charitable
purpose;

(iii) the institution or fund is not expressed to be for the benefit of
any particular religious community or caste;

(iv) the institution or fund maintains regular accounts of its receipts
and expenditure;

(v) the institution or fund is either constituted as a public charitable
trust or is registered under the Societies Registration Act, 1860
(21 of 1860), or under any law corresponding to that Act in
force in any part of India or under section 253 of the Companies
Act, 1956 (1 of 1956), or is a University established by law, or is
any other educational institution recognised by the Government
or by a University established by law, or affiliated to any
University established by law, or is an institution financed wholly
or in part by the Government or a local authority; and

( vi) in relation to donations made after the 31st day of March,
1992, the institution or fund is for the time being approved by
the Commissioner in accordance with the rules made in this
behalf:

Provided that any approval shall have effect for such
assessment year or years, not exceeding five assessment years,
as may be specified in the approval.”

6. From the perusal of the aforesaid section, it is apparent that section 80G of
the Act provides for deduction in respect of the donations made by the tax payers to
certain trust or institution. These trusts or institutions have to comply with the
condition as laid down u/s. 80G(5)(i) to (v) of the Income-tax Act. By Finance Act,
1991, the deduction under the provisions of section 80G for any fund or Institution
not specifically mentioned is allowed if it is approved by the Commissioner of
Income-tax in accordance with section 80G(5)(vi). The approval has to be made in
accordance with the Rules made in this behalf. Rule 11A under the Income-tax Rules
has been inserted w.e.f. 21.09.1992. This rule requires an institution or fund to
make an application for approval under section 80G(5)(vi) in form No. 10G. The
application was to be submitted in triplicate. This Rule further requires that the
application shall be accompanied with the following documents namely :

(i). Copy of registration granted u/s. 12A or copy of the notification issued
u/s. 10(23) or 10(23C);

(ii). Notes on activities of the institution or fund since its inception or
during the last three years, whichever is less;

(iii). Copies of account of the Institution or fund since its inception or during
the last three years, whichever is less.

7. Sub-rule (3) empowers the Commissioner to call for such documents or
information from the institution or fund or cause such enquiries to be made as he
may deem necessary in order to satisfy himself about the genuineness of the
activities of such Institution. Sub-rule (4) lays down that if all the conditions as
enumerated in clause (1) to (v) of sub-section (5) of section 80G are fulfilled by the
institution or fund, CIT shall record such satisfaction in writing and grant approval to
the institution or fund specifying the assessment year or years for which the
approval is valid. Sub-rule (5) empowers the CIT to reject the application for
approval after recording the reasons for such rejection in writing where the CIT is
satisfied that one or more conditions laid down in clause (i) to (v) of section 80G(5)
are not fulfilled. This rule also states that no order rejecting the application shall be
passed without giving an opportunity of hearing to the institution or trust. Subrule(
6) requires the CIT to pass an order granting or rejecting the application within
6 months from the date on which the application is made. We noted that in the case
of the assessee-trust, the CIT was of the opinion that the assessee-trust has not
complied with the conditions No. (ii) and (iii) of section 80G(5). He is of the opinion
that the trust is expressed for the religious object and has applied the fund for the
purpose other than charitable as contemplated in Explanation 3 to section 80G(5) in
contravention of section 80G(5)(ii) of the Income-tax Act. The Explanation 3 to this
section lays down that charitable purpose does not include any purpose the whole or
substantially whole of which is of a religious nature. The main objection of the CIT is
that the objects as enumerated in the trust deed are religious and the expenditure
has been incurred for religious purposes. He has also noted that a trust or institution
is permitted to incur an expenditure not exceeding to 5% of his total income in the
previous year for religious purpose so that it may not contravene the condition No.
(ii), as stipulated u/s. 80G(5) of the Act.

8. We have gone through the relevant clauses which have been regarded to be
religious in nature by the CIT(A). The object clause of the trust reads as under:
“Worship of Lord Shiva , Hanumanji, Goddess Durga and maintaining of
temple. To celebrate festivals like Shivratri, Hanuman Jayanti, Ganesh Uttasav,
Makar Sankranti, renovation and maintenance of temple. To make available temple
for general public and to provide facilities for the public visiting temple. Balance
fund, if any after utilizing for the above mentioned objects, may be utilized for
education, social and the cultural activities. To conduct nursery school, library,
sports club, hostels and other activities. To help poor children for education. To
provide medical aid for poor. To help the peoples affected by natural calamity.”

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.

11. 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 cannot be said that the assessee has not complied with the condition 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.

14. In the result, the appeal of the assessee is allowed.
Pronounced in the open Court on 11.10.2012

Sd/- Sd/-
(D.T. GARASIA ) (P.K. BANSAL)
JUDICIAL MEMBER ACCOUNTANT MEMBER
VG/SPS
Nagpur
Dated 11th October, 2012

Copy to
1 Shiv Mandir Devsttan Panch Committee Sanstan, Tailor Lane, Chaoni,
Nagpur
2 The CIT-1, Nagpur
4 The CIT(A), Nagpur
5 The DR, ITAT, Nagpur
6 Guard file. By order
Sr. Private Secretary
Income Tax Appellate Tribunal
Nagpur


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