2018 (4) TMI 790 - AT - Income Tax

Rejecting grant of the approval u/s 80G - expenditure on particular religious purpose - as per CIT-A the assessee spent more than 5% of its income towards religious purposes - Held that - Objects of the trust that it is constituted mostly to perform puja and seva to Shri Shri Kali Mata in a Mandir built and erected at village Thakdari P.O. Krishnapur District-24 Parganas (N) Kolkata 700 102 and to keep and maintain the mandir and the land and to make arrangements to continue seva and puja. In addition to these objects a number of charitable objects have been included. These relate to relief to poor maintaining educational institutions etc. The religious expenditure in question is towards puja expenses and honarium paid to priests. In our view the judgement in the case of Umaid Charitable Trust (supra) does not come to the rescue of the assessee because in that case a single charitable contribution was made to another trust which carries out renovation of Lord Vishnu Temple. Such single contribution was not considered as a religious activity. In the case on hand worship of Godess Kali Mata and expenditure incurred towards the same is definitely incurred for a particular religious purpose. The arguments of the assessee that any person of any religion can perform the Puja to Goddess Kali and hence the expenditure in question is not restricted to a particular religion is not correct. The expenditure is of religious nature. Just because the expenditure is by persons of all categories castes and creeds does not cease to make the expenditure of religious nature. The requirement of the Section 80G(5)(iii) of the Act are not the basis on which approval u/s 80G of the Act was denied and hence the arguments advanced based on this Section has no merit. - Decided against assessee.

Summary

Issues Involved:
1. Rejection of approval under Section 80G of the Income-tax Act, 1961.
2. Interpretation of Section 80G(5B) regarding expenditure on religious purposes.
3. Applicability of Section 80G(5)(iii) concerning benefits to a particular religious community or caste.

Detailed Analysis:

1. Rejection of Approval under Section 80G:
The primary issue in this case is the rejection of the assessee's application for approval under Section 80G of the Income-tax Act, 1961. The Commissioner of Income Tax (Exemptions) [CIT(E)] rejected the application on the grounds that the assessee society spent more than 5% of its total income on religious purposes, which contravenes Section 80G(5B).

2. Interpretation of Section 80G(5B):
The assessee argued that the expenses incurred, namely priest honorarium and puja expenses, were not for any particular religious purpose and should not disqualify them from approval under Section 80G. They contended that these expenses were for the worship of any person visiting the temple and that the charitable offerings and customary practices were not inherently religious but rather expressions of individual consciousness. The assessee also argued that the limit prescribed by Section 80G(5B) should be applied on a year-to-year basis during assessment and not at the time of seeking registration.

The Tribunal held that the expenses for worship of Goddess Kali Mata were indeed for a particular religious purpose. The argument that any person of any religion could perform the puja did not negate the religious nature of the expenditure. The Tribunal emphasized that the expenditure was inherently religious, regardless of the inclusivity of the worship practices.

3. Applicability of Section 80G(5)(iii):
The assessee further argued that their activities did not benefit any particular religious community or caste as per Section 80G(5)(iii). They cited the Memorandum of Association (MOA) which stated that the temple was open to all, regardless of caste or religion. They referenced various case laws to support their claim that their primary and dominant purpose was charitable, and any religious activities were incidental.

The Tribunal, however, clarified that the rejection was based on Section 80G(5B) and not Section 80G(5)(iii). The Tribunal noted that the CIT(E)'s decision was correct as the expenses incurred were of a religious nature, which exceeded the 5% limit of total income, thereby justifying the rejection under Section 80G(5B).

Conclusion:
The Tribunal upheld the CIT(E)'s order, confirming that the assessee's expenditure on religious activities exceeded the permissible limit under Section 80G(5B). The appeal by the assessee was dismissed, and the order pronounced in the court on 13.04.2018 was affirmed.