2013 (4) TMI 961 - AT - Income Tax

Summary

Issues Involved:
1. Refusal to renew approval u/s 80G(5) of the Income-tax Act, 1961.
2. Determination of whether the Trust's objects are of a religious nature.
3. Procedural compliance regarding changes in the Trust's constitution.

Summary:

1. Refusal to Renew Approval u/s 80G(5):
The appellant, a Charitable Trust registered u/s 12A, appealed against the refusal by the Commissioner of Income-tax (Admn.), Ludhiana, to renew its approval u/s 80G(5) for the assessment years 2008-09 to 2010-11. The Commissioner denied the renewal on the grounds that the Trust's objects had a religious nature, making it ineligible for exemption u/s 80G(5)(iii).

2. Determination of Religious Nature of Trust's Objects:
The Commissioner found that the Trust's objects, which included propagating the teachings of various religious figures with an emphasis on vegetarianism, had a religious tinge. This was seen as a violation of Explanation 3 to s.80G, which excludes purposes substantially of a religious nature from being considered charitable. The appellant argued that the objects were not confined to any one religion and were aimed at general public utility, thus qualifying as charitable.

3. Procedural Compliance Regarding Changes in Trust's Constitution:
The Commissioner also objected to the Trust's procedural compliance, noting that changes in the Trust's objects and the increase in the number of trustees were made without approval from the Principal Court of Law. This was seen as a failure to fulfill necessary conditions, referencing the decision in Sakthi Charities v CIT. The appellant countered that these changes were procedural and did not affect the charitable nature of the Trust.

Tribunal's Findings:
The Tribunal condoned the delay in filing the appeals and admitted them. On merits, it found that the Trust's objects, including the propagation of teachings with an emphasis on vegetarianism, were charitable and not substantially religious. The Tribunal noted that the Trust's activities, such as providing free food, maintaining public parks, and promoting national feelings, were charitable. It concluded that the Trust's objects aligned with the definition of "charitable purpose" u/s 2(15) of the Act. The Tribunal directed the Commissioner to grant approval u/s 80G(5).

Conclusion:
The Tribunal allowed all the appeals, directing the Commissioner to grant the requested approval u/s 80G(5), recognizing the Trust's objects as charitable and not substantially religious.