2012 (11) TMI 352 - AT - Income Tax

Exemption u/s 80G Religious purpose versus Charitable purpose CIT 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). held that - 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. Expenses incurred for worshipping of Lord Shiva, Hanuman, Goddess Durga and for maintenance of temple cannot be regarded to be for religious purpose. - CIT directed to grant approval to the assessee-trust u/s. 80G(5)(vi) of the Act. in favor of assesse.

Summary

Issues Involved:
1. Grant of approval under Section 80G(5)(vi) of the Income-tax Act, 1961.
2. Determination of whether the expenses incurred by the trust are for religious or charitable purposes.
3. Compliance with conditions laid down in Section 80G(5) of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Grant of approval under Section 80G(5)(vi) of the Income-tax Act, 1961:
The primary issue in this appeal is whether the assessee trust should be granted approval under Section 80G(5)(vi) of the Income-tax Act, 1961. The trust filed an application in Form No. 10G seeking this approval, submitting accounts showing various expenses. The Commissioner of Income Tax (CIT) denied the approval, citing that the expenses were primarily for religious purposes, which exceeded the permissible limit of 5% of total income as per Explanation 3 to Section 80G(5).

2. Determination of whether the expenses incurred by the trust are for religious or charitable purposes:
The CIT viewed the expenses on building maintenance, free food, and festival prayers as related to religious objects, with only a small portion being for non-religious purposes. The assessee argued that these expenses were for charitable activities, such as yoga training and free distribution of food and opticals, and not for religious purposes. The CIT's interpretation was challenged on the grounds that the activities were open to all, regardless of faith, and thus should not be considered religious.

3. Compliance with conditions laid down in Section 80G(5) of the Income-tax Act:
Section 80G(5) stipulates several conditions for approval, including that the institution must be for charitable purposes and not for the benefit of any particular religious community or caste. The CIT contended that the trust's objectives were religious and thus did not comply with these conditions. The tribunal examined the trust's objectives, which included maintaining a temple and celebrating festivals, and concluded that these activities did not advance or propagate a particular religion. It was noted that Hinduism is a way of life rather than a religion, and thus the trust's activities could not be considered exclusively religious.

Conclusion:
The tribunal found that the CIT's denial of approval was not justified. The objects of the trust, such as maintaining a temple and conducting charitable activities, were deemed not to be exclusively religious. The tribunal directed the CIT to grant approval to the assessee trust under Section 80G(5)(vi) of the Income-tax Act, allowing the appeal of the assessee.