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2019 (11) TMI 1305 - HC - Income TaxExemption u/s 11 and 12 - religious activities - HELD THAT - As regards the findings pertaining to withdrawal of exemption under Section 11 of the Act is concerned, it has been observed that the reasons assigned by the AO were based on presumption, and the basis of invoking Section 13(1)(c)(ii) was completely misplaced and contrary to the scheme of the Act relating to the taxation of charitable or religious organisations. The addition of ₹ 50 lacs as undisclosed income, being unexplained expenditure of samagams has been held to be contrary to the provisions of the Act as Section 68 has no application on taxation of religious and charitable organisation, because of a specific provision Section 115BBC, which governs taxation of all anonymous donations. On a perusal of the order of this Court in 2015 (9) TMI 558 - DELHI HIGH COURT it emerges that after verifying the objects of the Trust and the activities carried out by the assessee, this Court held that the activities undertaken by the assessee can be included in the broad conspectus of religious activities and in the context of Hindu Religion, such activities cannot be confined to activities incidental to a place of worship like a temple. The findings of the Tribunal on this aspect, do not call for any interference. The observations of the Tribunal vis-a-vis disallowances of 1/3rd expenditure for telecast of samagams, are reasonable and they do not warrant any interference. There is no evidence on record to construe that the GurudevJi has derived any personal benefit which would justify the Revenue to invoke the provisions of Section 13(1)(c)(ii) of the Act to deny assessee the benefit of the expenditure.
Issues involved:
1. Condonation of delay in filing the appeal. 2. Appeal under Section 260A of the Income Tax Act, 1961 challenging the order of the Income Tax Appellate Tribunal (ITAT) regarding the tax-exempt status of a trust engaged in religious activities. Detailed analysis: 1. The judgment begins by addressing the issue of delay in filing the appeal, which was condoned by the court upon the respondent's acceptance and non-opposition to the application seeking condonation of delay. 2. The main issue in the appeal pertains to the tax-exempt status of a trust engaged in religious activities. The trust, created by Brhamrishi Shree Kumar Swamiji, was granted registration under Section 12A of the Income Tax Act. The Assessing Officer (AO) disallowed exemptions under Sections 11 and 12 of the Act, citing that the trust was predominantly involved in religious activities not aligned with its stated objectives. The AO also raised concerns about anonymous donations and expenditures related to telecast of spiritual lectures. 3. The Commissioner of Income Tax (Appeals) (CIT (A)) overturned the AO's decision, allowing all the deductions made by the AO. The Income Tax Appellate Tribunal (ITAT) upheld the CIT (A)'s decision, emphasizing that the trust's activities, including spiritual discourses and samagams, fell within the realm of religious and charitable activities. The ITAT dismissed the revenue's appeal, stating that the trust's activities were for the public's spiritual upliftment and well-being, aligning with the trust's objects. 4. The court referred to previous judgments and held that the trust's activities, such as spiritual discourses and samagams, were integral to religious activities under Hindu beliefs and could not be confined to traditional temple-related activities. The court rejected the revenue's arguments regarding personal benefits derived by Gurudevji and upheld the decisions of the CIT (A) and ITAT. 5. The court dismissed the revenue's appeal, finding no grounds to interfere with the lower authorities' decisions. The judgment emphasized that the trust's activities were in line with religious and charitable purposes, warranting tax exemptions under the Income Tax Act. In conclusion, the court upheld the tax-exempt status of the trust engaged in religious activities, emphasizing that the trust's spiritual and charitable endeavors aligned with its stated objectives and fell within the purview of religious activities under Hindu beliefs.
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