2013 (10) TMI 15 - HC - Income Tax

Deduction u/s 80G - charitable activities u/s 2(15) or not - whether the objects mentioned in trust deed like Akhand naam sankirtan in aashram uninterruptedly, Thakur Sewa of Shri Girdhari Ji and Samadhi of Baba Gaurang Das. And organization of Bhadaras on all important religious festival and other festivals like avirbhav and tirobhav tithes of Gaudiya Sampradayas bibhutis are pourely religious in nature and not in accordance with the section 2 (15) of the I.T. Act, 1961 - Rejection of registration u/s 12AA of the Income Tax Act Held that - Reliance has been placed upon the judgment in the case of Radhasoami Satsang v. CIT 1991 (11) TMI 2 - SUPREME Court - From the object of the trust it cannot be said that the object and purpose of establishment of trust was not genuine and that activities as delineated in the object were not carried out by the trust. The findings that Akhand Naam Sankirtan is one type of meditation and yoga with organising Bhandara unless it was proved that it was for any particular community or group of persons and that food was not provided to the persons irrespective of caste and religion could not be a ground to reject the registration Decided against the Revenue.

Summary

Issues involved:
1. Appeal against the order of Income Tax Appellate Tribunal regarding registration under Section 12A/12AA and approval under Section 80G.
2. Eligibility of a Trust for exemption under Section 80G despite predominantly religious activities.
3. Interpretation of Section 13 of the Income Tax Act regarding trusts for private religious purposes.
4. Examination of the genuineness of activities and objects of a trust for registration and approval under Sections 12AA and 80G.
5. Scope of enquiry by Commissioner of Income Tax under Section 80G (5) (vi) regarding trust objects and activities.

Detailed Analysis:
1. The appeal was filed by the Commissioner of Income Tax against the ITAT order directing registration under Section 12A/12AA and approval under Section 80G. The main question was whether a Trust predominantly engaged in religious activities is eligible for exemption under Section 80G.
2. The Commissioner had rejected the Trust's application citing religious nature of activities not aligning with charitable activities as per Section 2(15) of the Act. However, the ITAT allowed the appeal based on precedents establishing the eligibility of trusts with religious activities for exemptions.
3. The legal argument revolved around Section 13 of the Act, emphasizing that trusts for private religious purposes not benefiting the public may be excluded from income. The judgment referred to cases where registration was denied due to specific community-focused activities.
4. The Tribunal's decision was supported by the requirement for the Commissioner to verify trust activities' genuineness for registration and approval under Sections 12AA and 80G. The judgment highlighted the charitable nature of trust activities, including meditation, yoga, community meals, and animal welfare.
5. The Tribunal's reliance on precedents and the limited scope of enquiry by the Commissioner under Section 80G (5) (vi) was crucial. The judgment emphasized the charitable aspects of trust activities, such as meditation, community meals, and animal welfare, as grounds for registration and approval.

In conclusion, the Tribunal upheld the Trust's eligibility for exemptions under Sections 12A/12AA and 80G based on the genuine charitable nature of its activities, dismissing the income tax appeal. The judgment underscored the importance of assessing trust activities' charitable aspects for registration and approval, despite religious undertones.