2018 (7) TMI 2329 - AT - Income Tax

Exemption u/s 11 - non granting registration u/s 12A as public and charitable trust - main object of the trust deed was to build Hindu temple and install idol of Shri Krishna as per Hindu shastras - HELD THAT - Assessee trust was constituted for establishment of Hindu temple at village Ganthovli, Madhura and install the idol of Lord Shri Krishna and according to Hindu shastras. The trust funds include movable or immovable properties including the money offered before the deity in the temple would be part of the funds and to invite a priest for any Hindu religious discourses and to facilitate and to provide accommodation to all religious priests/Gurus for promoting pushtimargiya religion and discourses. It was also provided in the trust deed that funds of the trust would be utilised for running and maintenance of the temple, organizing schools, literature, scholarship to students, librarian reading room build cemeteries, maintenance of gaushalas, orphanage, gardens, gymnasium, to establish and maintain or grant aid to old age homes, orphanages, help to poor, destitute, widows and aged people, to establish and maintain institutions for physically handicapped people, to grant relief to the victims of natural calamities, to construct and manage cemeteries, murdghats and burial grounds besides other charitable objects etc. for the public at large and not confined to any caste, creed, colour, religion or sex. Looking to the overall objectives of the trust we are not in agreement with the finding of the Ld. CIT(E) that it is a religious trust. Hinduism is not a religion but a way of life which has been held by the Constitution bench of the Hon ble Supreme Court. Moreover, the temple and other facilities are created not for the particular community but for the public at large. Therefore, the conclusion that it is meant for a particular religion is wrong. The case of the assessee is supported by the decision of the co-ordinate bench of the Tribunal in the case of Shiv Mandir Devsttan Panch Committee Sanstan Nagpur vs. CIT-1 2012 (11) TMI 352 - ITAT NAGPUR wherein the co-ordinate bench has held that Hindu is a way of life but not a religion We are of the considered view that the trust is for the charitable purposes and not for the religious purposes as held by the Ld. CIT(E) and therefore we set aside the order of the Ld. CIT(E) and direct him to grant registration as charitable trust. Appeal of assessee allowed.

Summary

Issues Involved:
1. Whether the trust should be granted registration under section 12A as a charitable trust.
2. Whether the trust's objectives are religious or charitable in nature.

Detailed Analysis:

1. Registration under Section 12A as a Charitable Trust:
The primary issue in the appeal is the denial of registration under section 12A by the Commissioner of Income Tax (Exemption) [CIT(E)]. The assessee trust was constituted via a trust deed dated 18.09.2015 and registered with the Assistant Charity Commissioner on 06.04.2016. The trust applied for registration under section 12A(a) on 12.04.2016. The CIT(E) denied the registration on the grounds that the trust's main objective was religious, specifically to build a Hindu temple and install an idol of Shri Krishna, which was deemed not for the public at large but for a particular religion.

2. Nature of Trust's Objectives:
The CIT(E) argued that the trust's objectives were religious in nature, focusing on Hindu rituals and ceremonies, and thus did not qualify as charitable under section 2(15) of the Income Tax Act. The assessee contended that Hinduism is a way of life and not a religion and that the trust's objectives were for the public at large, including running schools, providing scholarships, maintaining gaushalas, orphanages, and other charitable activities without discrimination based on caste, creed, or religion.

Assessee's Arguments:
The assessee argued that the trust's objectives were charitable and for the benefit of the public at large. They cited the Supreme Court's observation that Hinduism is a way of life, not a religion. The trust deed explicitly stated that the temple would be open to all, irrespective of caste or creed, and included various charitable activities such as education, medical relief, and aid to the poor and needy. The assessee relied on judicial precedents, including Shiv Mandir Devsttan Panch Committee Sanstan Nagpur vs. CIT and Shri Radha Raman Niwas Trust, where it was held that Hinduism is not a religion but a way of life, and trusts with similar objectives were granted charitable status.

Revenue's Arguments:
The Revenue, represented by the Ld. D.R., supported the CIT(E)'s decision, emphasizing that the trust's primary objective was religious, focusing on Hindu rituals and the promotion of the pushtimargiya religion. They argued that the trust should be considered religious, not charitable, as per the Supreme Court's decision in Surat Art Silk Cloth Manufacturers Association. The Revenue also cited the case of Boxar Diocesan Society, where a trust benefiting a particular section of society was not granted charitable status.

Tribunal's Findings:
The Tribunal analyzed the trust's objectives and the relevant judicial precedents. It noted that the trust's activities included both religious and charitable aspects but emphasized the inclusive nature of Hinduism as a way of life. The Tribunal found that the trust's objectives, such as running schools, providing scholarships, maintaining gaushalas, and other charitable activities, were for the public at large and not confined to any particular religion or community.

The Tribunal referred to the decisions in Shiv Mandir Devsttan Panch Committee Sanstan Nagpur vs. CIT and Shri Radha Raman Niwas Trust, where it was held that trusts with similar objectives were charitable. The Tribunal concluded that the CIT(E) erred in denying registration under section 12A, as the trust's objectives were charitable and for the public at large.

Conclusion:
The Tribunal set aside the CIT(E)'s order and directed the CIT(E) to grant registration to the trust as a charitable trust under section 12A. The appeal of the assessee was allowed, emphasizing that Hinduism is a way of life and the trust's objectives were charitable, benefiting the public at large without discrimination based on caste, creed, or religion.

Order Pronounced:
The appeal was allowed, and the order was pronounced in the open court on 27.07.2018.