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TMI Blog2001 (10) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... and 1969, until he settled in Bombay in 1969. He is stated to have held a meditation camp for the first time in 1964 in Rajasthan. After 1969, many public lectures and appearances were ascribed to him. He also had written profusely on spiritual and allied subjects. Acharya Rajneesh took Maha Samadhi on 19th January, 1990. 3. By an indenture of trust dated 11-6-1969, Shri Himatlal Haribhai Joshi and Shri Ishwarlal Naranji Shah as settlors drew up a Trust Deed creating the Trust known as 'Jeevan Jagruti Kendra'. To start with the registered office of the Trust was at 29, Eastern Chambers, 3rd Floor, 128, Poona Street, Bombay. Under clause 4 of the conditions of the Trust Deed, the activities of the Trust could extend to the whole of India and to such other parts of the world as are decided upon by the Trustees from time to time. Shri Rajneesh, according to clause 2 of the Trust Deed, was to be the advisor to the Trust for life and as an advisor was to have powers mentioned in the Trust Deed. Clause 5 of the Deed dealing with the aims and objects of the Trust runs as under: "5. The aims and objects of the Trust shall be: (a) To spread and impart the preaching of Achary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther steps that may be deemed necessary by the Board of Trustees; (k) To enter into any arrangement with the Government, local authorities, other quasi-Government bodies and other public or private bodies, organisations and/or institutions in order to promote and achieve and/or all of the aims and objects of the Trust; (l) to accept donations either in cash or in kind and/or under any other arrangements and to raise moneys otherwise, for the purposes of carrying out the objects and activities of the Trust and to accept subscriptions and gifts of movable or immovable properties for the same purpose. (m) To borrow and raise moneys for the purpose of carrying out the objects of the Trust in such manner and from such persons as the Trust may think fit; (n) To acquire land, purchase buildings, construct or take on lease or exchange or hire any movable or immovable properties or rights or privileges for the purpose of carrying out the objects of the Trust; (o) To enter into contract, execute deeds and do all other things and to undertake any other activities as may be conducive, suitable or incidental to the work for the attainment of the objects of the Trust or any of them or part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table objects not inconsistent with the objects and purposes to these presents to the advancement of the times and circumstances which may from time to time exist as they may consider desirable and in such case, such newly added objects so decided upon by the trustees shall be deemed to have been incorporated in the objects of these presents, hereinabove be deemed to be the objects and considered charitable or otherwise, by any of the authority, the same shall stand deleted, and the trustees shall not spend any of the trust funds on the said object." 4. The Trustees had power to accept donations and contributions from individuals or institutions. The Trustees under clause 7 have absolute power at their discretion (to deal with and to put into practice the objects mentioned hereinabove). Other clauses of the Trust Deed gave power to the Trustees to deal with the movable and immovable properties etc. to make rules and regulations for the day-to-day working of the Trust. Clauses 11 and 12 dealing with the management of the property and other business of the Trust are as under: "11. The management of the property and other business of the Trust shall be carried out by a Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like patrons, life members, honorary members and/or ordinary members. The Board of Trustees at its discretion in consideration of any scheme of settlement or arrangement including amalgamation or otherwise, may also provided for the co-option of patrons and life members as patrons and life members of these presents. The Board of Trustees may from time to time frame rules for the election and/or nomination of executive council from amongst the different class of members and such council will look after such works as per the rules framed by the Board." 5. An amendment to the Trust Deed dated 26-9-1969 made certain minor changes including the deletion of the words 'or abroad' appearing in clause 5(c) of the Deed. All the activities of the Trust were being carried on to start with at Bombay. In March 1974, a new ashram premises was taken at Poona. The trustees also decided to change the name of the Trust from 'Jeevan Jagrati Kendra' to 'Rajneesh Foundation'. 6. The question of exemption under section 11 has a chequered history in this case since the inception of the Trust in 1969--the first assessment year being for 1970-71. For the assessment years 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of books was intended to be activity of profit. 6A. For the assessment year 1976-77, although the Assessing Officer followed the earlier year's order, the CIT(A) held in favour of the assessee Trust. Revenue took up the matter before the ITAT, Pune Bench. There was a divergence of opinion between the Judicial Member and the Accountant Member. The former viewed in favour of the assessee Trust, while the Accountant Member dissented. The matter was, therefore, referred under section 255(4) of the Act for the opinion of Third Member. This Reference was heard by a Three Member Bench of the Tribunal presided over by the then President of the ITAT and vide a consolidated order dated 2-8-1988 decided the issue against the assessee Trust. The Third Member came to the conclusion that the object cannot be considered to be charitable mainly on two grounds: (1) that so long as Rajneesh is alive, one cannot predict what he will preach and thus the object cannot be said to be charitable, and, (2) the affairs of the Trust were dominated by Shri Rajneesh in view of his being life-time advisor and the object was to preach, establish and perpetuate the image of Shri Rajneesh whose vagu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption has been denied mainly on the grounds that: (a) Bhagwan Shree Rajneesh is a living person and object of propagating his philosophy may not be in public interest as nobody can say what he will preach in future. (b) Some of the views propounded by Bhagwan Shree Rajneesh are repugnant to traditional concepts of public morality and/ or Indian way of life. (c) Bhagwan Shree Rajneesh is life time adviser of R.F. (Though in fact he has never exercised any powers or discretion to influence the object of R.F.). R.F. agrees to suitably modify the Trust Deed and refrain from carrying on objectionable activities/objects from tax point of view. (vii) If the aforesaid terms find acceptance of the department, R.F. undertakes not to press its Writ Petition No. 2597 of 1988." These proposals were broadly accepted by the CIT, Pune vide his letter dated 3-2-1989. It is noted ;that in the assessee's proposal dated 28-11-1988, the Trust had offered in para 4(vi) to suitably modify the Trust Deed and refrain from carrying on objectionable activities/objects from tax point of view. However, there is no mention in the letter of the CIT, Pune relating to the offer thus mentioned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stated that assessee has so far not been granted registration under section 12A by the CIT, Pune, the exemption claimed under section 11 by the assessee is therefore rejected." 10. The assessee appealed to the CIT(A) who after exhaustive review of all the facts and circumstances, including, in particular, the amendments of the Trust Deed, the changed perception about the philosophy of Shri Rajneesh and other materials on record, came to the conclusion that the objects of the Trust were for the benefit of the public at large. She held that the Assessing Officer has not taken cognizance of certain important facts, viz: (i) The first proposal for amendment of the Trust Deed was to delete the name of Acharya Rajneesh entirely. It was, however, the Dy. Charity Commissioner, who prevailed upon the trustees to retain his name since the Trust activities were already motivated by Acharya Rajneesh. The intention, however, was only to spread the teachings of famous thinkers and philosophers, including the preachings of Acharya Rajneesh. Commemorating the name of the founder of any institution is not relevant factor for determining whether the institution is for charitable purposes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion following the order of the ITAT is not correct in view of the distinct difference in the circumstances prevailing then and the circumstances present during the relevant assessment year. The Trust was amended and without the physical presence of Acharya Rajneesh being allegedly the de facto controller, is different from the circumstances which was considered by the ITAT. Furthermore, the teachings of Acharya Rajneesh have much wider acceptance than it had in 1988. The Trust is therefore, eligible for exemption under section 11 of the Act, being for charitable purposes." 12. The Revenue has challenged the order of the CIT(A) and following grounds of appeal have been raised: "(1) On the facts and in the circumstances of the case, the CIT(A) has erred in directing to grant registration to the assessee trust under section 12A and to allow exemption under section 11 of the Income-tax Act. (2) The CIT(A) has failed to appreciate the fact that Assessing Officer's findings were based on the order of the ITAT in the assessee's case wherein it was held that the assessee's case is not a fit case to be classified under section 11. (3) On the facts and in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chings of Acharya Rajneesh are against public policy; the CIT(A) has not taken into consideration the nature of the teachings and hence she is not competent to say that the teachings of Acharya Rajneesh are not against public policy. He, therefore, concluded that the order of the CIT(A) deserves to be reserved and that of the Assessing Officer deserves to be restored. 14. Shri S.N. Inamdar, the learned counsel for the assessee, submitted that the first ground of appeal is erroneously taken and the learned CIT(A) has not directed to grant registration under section 12A of the Act. However, as a matter of fact, he pointed out that such registration has been granted by the CIT, Pune in respect of the same Trust Deed and there has been no change in the Trust Deed. He also pointed out that procedural amendment in the form of insertion of section 12A, which requires the CIT's satisfaction about the public charitable nature of the Trust was made with effect from 1-4-1997 and applied to all pending applications and the registration has been granted on 18-5-1998. However, the learned counsel made it clear that he does not wish to rest his case solely on the ground that the Trust has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... established an Osho Chair for the study of his philosophy. He particularly emphasised that the object behind establishing an Osho Chair was also identical with the objects of the Trust. According to the learned counsel, this was clinching evidence that Osho's preachings were the preachings of a Seer and were receiving recognition all over the world. He also referred to page 258 which contains a report that in the World Book Fair, Osho's books and particularly the book entitled 'Meditation the First and the Last Freedom' was the highest sold book. He submitted that when Osho had large public following not only in India but all over the world and the general public bought his books in such large quantity, itself is a proof that a large section of the public considers his views as beneficial to mankind. The learned counsel relied on the Hon'ble Supreme Court's decision in the case of CIT v. Ahmedabad Rana Caste Association [1983] 140 ITR 1 in which the Hon'ble Supreme Court held that mental, spiritual and physical development of man as a complete human-being is an object of general public utility. It also held that if the objects are beneficial to an identi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied solely on the earlier order of the Tribunal which has been adequately dealt with by the learned CIT (Appeals) and considering the material change in the object clause and the actual activities carried on by the trust, it would be unjust and unfair to deny the benefit of section 11 to the Trust which is also registered under section 12A of the Act now by the CIT, Pune. 21. In rejoinder, Shri Naresh Kumar, the learned senior D.R. maintained that the Trust Deed was a replica of the old Deed in essence and that there was no change. He further maintained that the Third Member order of the Tribunal still prevails. Referring to the contention of the learned counsel that Osho developed different techniques of meditation and his stress was on meditation, the learned D.R. submitted that the meditation as propounded by Acharya Rajneesh is against public morality. He further submitted that merely because the Indian Parliament have placed books authored by Acharya Rajneesh in its library and that some Universities have adopted to propagate the philosophy of Acharya Rajneesh cannot overrule the order of the ITAT which clearly held that the teachings of Acharya Rajneesh were against public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) which in the original Trust Deed read as "to spread and impart the preachings of Acharya Rajneeshji and other philosophers pertaining to all religions and/or main principles thereof and/or morals." Since this phraseology had been found repugnant to the Department, it was proposed to re-draft the clause to read "to spread and impart the preaching of philosophers both past and contemporary pertaining to all religions and/or main principles thereof for the spiritual, mental and/or morals and physical betterment of human beings with the ultimate object of self realisation." However, the Dy. Charity Commissioner did not agree to the deletion of the name of Acharya Rajneesh from the object clause since the Trust had already gained the name by the original clause and it had already carried out such objects in all probabilities. Shri Acharya Rajneeshji being the sole head of the Trust in question, the same objects would be carried out. By changing the words it is not likely that the Trustees would stop publishing or preaching the teachings of Acharya Rajneesh. Keeping these objects in mind, the final amendment, as concluded and approved by the District Civil Court, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was felt by the ITAT that this read with Clause 2 item (b) gave de facto control to Acharya Rajneesh over the activities of the Trust. This clause has now been amended and it reads as "the management of the property and other business of the Trust shall be carried out by the Board of Trustees of not less than 2 (two) and not more than 6 (six) members." The power given earlier to Acharya Rajneesh to nominate 5 members on the Board of Trustees has also been deleted. Thus, objection No. 1 relating to the exercising of de facto control over the activities of the Trust is explained to be resolved by deletion of Clause 2 and amendment of Clause 11. (f) Clause 12 also gave difficulty to the department in recognising the Trust as for charitable purposes. The Clause nominated Acharya Rajneesh as advisor for life. This Clause has also been deleted. (g) Finally, the original Clause 28 which gave power to Acharya Rajneesh to guide and advise on all disputes regarding the administration of Trust, now reads as under: "All disputes arising in the administration of the Trust and all questions relating to the interpretation of these presents or to the exercise or non-exercise o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough. Osho wrote on diverse subjects, like Vedanta on Geeta (Geeta Darshan), on the philosophy of Sant Kabir (Kahe Kabir Diwana), on Gurunanak (Ek Omkar Satnam), a commentary on the Sikh scripture known as "Japuji" hailed as best commentary by Gyani Zail Singh, Ex-President of India. We further find that complete Osho literature was accepted by the Parliament library, where Osho literature was termed as "an original creation" and it was observed by Shri Shivraj Patil, the then Speaker of the Lok Sabha who received the literature from he assessee Trust that "the essence as contained in all the volumes is that one should find peace in oneself. Only then can peace be attained in the society and in the entire universe." 27. We find that the main thrust of the activities of the assessee Trust is on Meditation--observance of which is now being recognised universally in almost all fields of human activity as means of self-realisation. It has been brought to our notice that an Institution like Rani Durgawati University, Jabalpur, backed by the State Government of Madhya Pradesh has established an Osho Chair for the study of his philosophy. The object behind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot;Meditation.--Meditation is a very simple process; all that you need to known is the right button. The Upanishads call it 'witnessing'--the right button. Just witness your mind process, don't do anything at all. Nothing needs to be done, just be a witness, an observer, a watcher, looking at the traffic of the mind--thoughts passing by, desires, memories, dreams, fantasies. Simply stand aloof, cool--watching it, seeing it, with no judgment with no condemnation, neither saying, 'This is good', nor saying, 'This is bad.' Don't bring your moral concepts in, otherwise you will never be able to meditate. Sit by the side of a river and watch the river flowing. Yes, sometimes driftwood passes by and sometimes a boat comes and sometimes a dead body and sometimes a beautiful woman may be swimming in the river--you simply watch, you don't get bothered, you remain cool, you don't get excited. You are not supposed to do anything, you have nothing to do so. It is the river and it is the river's business. You simply sit silently. Sitting silently, slowly slowly the art is learnt...and one day, the moment your watchfulness is total, the mind evaporates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as pointed out in the preceding paras the dominant and primary objects of the assessee Trust are charitable in nature. Accordingly, we do not find any infirmity in the findings of the Commissioner (Appeals) and confirm the same. 30. In the result, the appeal is dismissed. Per Singhal (J.M.) 31. After going through the proposed order carefully, it appeared to me that findings given in the proposed order are contrary to the findings of the larger Bench in assessee's own case (as third Member Bench headed by the then President of the Tribunal). Since in my opinion, such findings cannot be given by this Bench, it was suggested by me in various discussions with my Learned Brother that the matter be referred to the Hon'ble President for constituting a Special Bench of Five Members if it is necessary to take different view than the view taken by the earlier Bench of three Members. The said suggestion has not been accepted by my Learned Brother for two reasons: firstly because of grant of Registration under section 12A by the CIT vide order dated 18-5-1998 on the basis of amended deed which itself is a strong ground for treating the Trust as charitable in nature. Secondly, becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim to exemption under section 11 since certificate under section. 80G had been issued by the CIT. The larger Bench in para 8 of its order held as under: "Therefore, the grant of certificate has no legal implication. Secondly, the Tribunal has the power to decide the eligibility of an assessee for exemption under section 11 and if the Commissioner's certificate was to be taken as conclusive, the Tribunal's jurisdiction would be ousted, which is an absurdity. Further, section 80G is meant for granting deduction to donors and not for the institution which claims to be charitable or religious institution. Therefore when a certificate is granted, the claim of the institution to exemption under section 11 is not examined in detail as would be done when the institution claims the exemption under section 11. Therefore this contention of the assessee's counsel is not accepted." Accordingly, the above finding of the proposed order is, in my opinion, contrary to the legal finding of the larger Bench. 34. The next important finding of the proposed order is that after the amendment of the trust deed, the objects of the Trust have now become charitable particularly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order, the above findings are no more applicable to the year under consideration on account of the following changed circumstances: (1) The main object clause 5(a) which was considered partly non charitable by the larger Bench has been amended. (2) Original Clause (2) appointing Acharya Rajneesh as Life-time Advisor has been deleted. (3) Object clause 5(b) authorising the Trust to print, publish, sale, distribute either free or for price, books, magazines, lectures preachings, writings, periodicals, bulletins etc., considered by the larger Bench as an activity for profit has been deleted. (4) The object Clause 5(f) which was also considered earlier as objectionable has been deleted. (5) Clause 11 providing control of Acharya Rajneesh has been amended by removing the name of Acharya Rajneesh. (6) Clause 28 has also been suitably amended so as to take out the control of the trust from Acharya Rajneesh. (7) That Acharya Rajneesh took Samadhi on 19-1-1990 and is no more alive. Therefore, the major ground taken by the Tribunal that Acharya Rajneesh was de facto controller and there was no limit to his teachings, is no longer available. (8) That the complete Osho literature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has become charitable is contrary to the finding of the larger Bench in assessee's own case. 37. It is in view of the above considerations, it was suggested by me that this Bench has no jurisdiction to go against the finding of the larger Bench and consequently, it was further suggested that matter be referred to the Hon'ble President for considering the issue by the Special Bench. Since this suggestion was not accepted, this dissenting view is being expressed by me. 38. Section 11 of the Income-tax Act, 1961 clearly provides that exemption is available only if the Trust is wholly charitable or religious. Hon'ble Supreme Court had to consider the scope of section 11 in the case of Yogiraj Charity Trust v. CIT [1976] 103 ITR 777. In that case a clear distinction was made between the primary and dominant object and the objects which are ancillary to the main object. The primary or dominant object must be wholly charitable. It is only the ancillary object which may be itself be not charitable and such ancillary object would not render the Trust non-charitable if such ancillary object are for the advancing of primary or dominant object. However, if the main object is not w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y ancillary or incidental to the primary or dominant purpose would not prevent the trust or institution from being a valid charity." 39. Following respectfully the above decision of the Supreme Court, it is held that in order to get exemption under section 11, the dominant or primary object must be wholly charitable. If it is found that such object is partly non-charitable, then claim of the assessee for exemption fails in its entirety. As already explained it was held by the larger Bench that dominant or primary object was object in clause 5(a) i.e., spreading and imparting of the preachings of Acharya Rajneesh. It has also been expressed by me that even after the amendment of this clause, the main object is still to continue to spread and impart the preachings of Acharya Rajneesh. The preachings of Acharya Rajneesh have been found by the larger Bench against the general public utility and accepted norms of Religion. Such finding is still binding of this Bench for the reasons given by me in the earlier part of the order. Following the finding of the larger Bench it is held that primary object clause 5(a) still continues to be partly non-charitable and therefore, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Expenditure A/c. it is seen that out of the total income of Rs. 3,29,74,831, the income under the head "Meditation" itself is Rs. 3,09,62,318. Page 72 of the Paper Book shows the details of income from meditation. The total receipts from the participants is Rs. 2,65,74,029 against nominal expenditure of Rs. 24,02,953 only resulting in profit of Rs. 2,41,72,076. By any standard, it has to be considered as pure business activity. Not only that it is found that the Trust also charged separately from the participants for their foods etc. during their stay. Such receipts arc shown under the head 'Kitchen' amounting to Rs. 2,68,22,927 against expenditure of Rs. 1,83,41,127 resulting in profit of Rs. 84,81,800. Keeping in view the Indian Tradition, a charitable institution is expected to provide subsidised food to its participants instead of earning substantial amount. Further, the income so earned is utilised in lavish spending so as to acquire the Ashram with Five Star facilities as is clear from the accounts. As stated earlier, the assessee had spent more than Rs. 2 crores in acquiring General equipments and Furniture apart from the expenditure in acquiring immovabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, have been reproduced by learned AM in paragraph 3 of his order and for the sake of brevity, they are not reproduced here. The first year of assessment of the Trust to Income-tax was the assessment year 1970-71 and up to and including the assessment year 1974-75, the trust was granted exemption under section 11. In the assessment year 1975-76, a dispute arose for the first time as to the entitlement of the assessee for the exemption. By 1974, the name of the Trust had been changed to "Rajneesh Foundation" and the trust had also shifted its base from Bombay to Pune. For this year, the matter reached the Tribunal. The decision of the Tribunal is reported as Rajneesh Foundation. After a detailed discussion, the Tribunal held that the Trust was not entitled to the exemption. 4. Thereafter, for the assessment year 1976-77, again the matter of exemption under section 11 reached the Tribunal. There was a difference of opinion between the learned JM and the learned AM, the former holding that the assessee was eligible for the exemption in view of the change in the facts and circumstances for the year under consideration and the latter holding that the earlier order of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made to reconcile the Trust Deed in consonance with the Income-tax Act and the Bombay Public Trust Act. The amendments were allowed in substance. 7. The assessments for the assessment years 1989-90 and 1990-91 were completed under section 143(1)(a) accepting the assessee's claim for exemption under section 11. 8. In the assessment year 1991-92, which is the year under appeal, the Assessing Officer (A.O.) took the view, with reference to the amended objects clause 5(a), that the "substance of the clause, even after amendment, has remained virtually the same i.e., the trust even now aims at spreading and imparting preaching of Acharya Shri Rajneesh, though it is mentioned that preachings of other philosophers etc. will also be spread and imparted. But this clause does not preclude the trustees from spreading and imparting the preachings of Acharya Shri Rajneesh only." The Assessing Officer also referred to the orders of the Tribunal for the earlier years and noted that the infirmities or repugnancies pointed out in the preachings of the Acharya such as that they were against public morality or public policy and are not conducive for the well-being of the society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th a view to putting an end to the litigation up to the assessment year 1988-89 and also to the fact that from the assessment year 1989-90, the activities of the assessee-Trust were governed by the amended Trust Deed, which did not contain any of the objectionable clauses. It was therefore pleaded that the assessee should be granted exemption. 10. The CIT(Appeals) in an elaborate order accepted the assessee's contentions and held that there was a distinction between the position which obtained up to the assessment year 1988-89 and the position which obtained thereafter. He referred to the various amendments carried out to the Trust Deed and held that these amendments removed the obstacles which were highlighted by the Tribunal in its earlier orders as being in the way of the assessee getting exemption under section 11. He also held that the message preached by Acharya Rajneesh was meditation as a means of self-realisation, which came close to the message expounded by several other Indian philosophers. According to him, the preaching of Acharya Rajneesh had a spiritual base, without adhering to a particular religion. The Acharya was no more and thus his message could no more su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f education was also deleted. The Acharya's powers to nominate members to the Board of Trustees was also deleted. Thus, the Acharya was neither an advisor to the Trust nor exercised any de facto control over the Board of Trustees. Earlier, the Acharya was the final arbitrator of all disputes regarding the administration of the Trust. However this power was taken away from him and any disputes were to be decided according to the wishes of the majority of the Trustees. 12. The learned AM further noticed that the Acharaya was no longer around as he had taken Maha Samadhi on 19-1-1990. This had put an end to any control exercised by him over the affairs of the assessee-trust and also took care of the objection of the earlier Tribunals that there was no limit to the teachings of Acharya as he was still alive. They cannot also be considered to be vague any longer. 13. The learned AM thereafter referred to the settlement with the CIT, Pune and observed that the assessee-trust had acted to its detriment and interest by withdrawing the Writ Petition. It has also paid the full taxes up to and including the assessment year 1988-89 on the assurance that the amended Trust Deed would resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the mind and the body. The stress of the Acharya, according to the learned AM, was on meditation which has also been recognised as the bedrock of Indian philosophy. He proceeded to quote from a book written by the Acharya on the subject of meditation and held that these views of the Acharya were in line with the Indian techniques of meditation and there was nothing therein which can be said to against public policy. 15. In the aforesaid view of the matter, the learned AM held that the assessee was entitled to the exemption under section 11. 16. In the course of the arguments, a point appears to have been made before the Bench of that the CIT (Appeals) was not justified in directing the grant of registration under section 12A. The assessee would appear to have contended before the Bench that this argument of the Department embodied in ground No. 1 is not factually correct as the CIT (Appeals) had not directed the CIT to grant registration under section 12A. However it was pointed out that as a matter of fact, registration had been granted by order dated 18-5-1998 w.e.f. 18-12-1997. It appears that the assessee contended that w.e.f. 1-4-1997, the CIT was empowered to examine th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80G does not mean that the Tribunal does not have the power to decide whether the objects of the assessee-Trust are charitable in nature or not. Accordingly, the learned JM held that the view of the learned AM regarding section 12A of registration is contrary to the view of the TMB. 19. Turning to the decision of the learned AM that after the amendment of the Trust Deed and in view of the changed circumstances, the objects of the Trust have become charitable in nature, the learned JM proceeded to record his view. According to him, clause 5(a) of the Trust Deed, when compared to the original Deed, shows that there was no fundamental change in the object. The change according to him, was only in language and not in spirit. The preaching of the Acharya still continues to be spread and imparted by the Trust, which has already been held by the TMB as not a charitable object. The Acharya had also written around 650 books and the preachings of the Acharya, which were found by the TMB to be against general public utility and accepted norms of religion, had not been excluded by the assessee-Trust even after the Amendment. Thus, according to the learned JM, clause 5(a) was substant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the time of the hearing as also the written submissions filed by the assessee, including the written submissions filed by the assessee under cover of letter dated 16-4-2001, for which my leave had been taken at the time of the hearing itself. 22. The facts have been narrated in sufficient detail in the order of the learned AM. There is no need to reproduce them now. The first question that was argued before me by the learned DR was that the Bench should have referred the matter to a larger Bench for decision if it had felt that the matter required reconsideration, assuming that there was a change in the facts. Mr. Inamdar, the learned counsel for the assessee submitted that in the absence of a precise question on this aspect, I should refrain from expressing my opinion. He pointed out in this connection that though the learned JM had suggested to the learned AM that the matter should be placed before the Hon'ble President with a request to constitute a larger Bench of five learned Members or more for resolving the issues, the learned AM had not acceded to the suggestion. The learned JM had not pursued the matter. According to Mr. Inamdar, the learned JM should have pursued t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true that certain fundamental principles do not keep changing from year to year and such fundamental principles have got to be uniformly applied for all years. But even in the matter of examining the applicability of those principles, the Tribunal has to first examine whether there is any change in the factual or legal position from those obtaining in the earlier years and if there is a change, the Tribunal has to proceed to evaluate the impact of such changes upon the applicability of the earlier decisions of its own. I have not been referred to a single case--though both sides referred to various judgments before me on the question of judicial propriety--whether it has been held that despite a material change in the factual or legal position, the Tribunal should stick to its earlier view. If the fallacies or pitfalls pointed out by the Tribunal in the rival stands arc rectified and the parties have effected changes in the factual position, or if there is a change in the documentation, the impact of those changes have to be evaluated by the later Tribunal. If ultimately it is shown that there is no substantial change in the factual or legal position, the Tribunal is bound to follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of the application made to the Dy. Charity Commissioner is decisive of the matter. It was pointed out that this view of the CIT (Appeals) is not correct in view of the judgment of the Supreme Court in the case of CIT v. Kamala Town Trust [1996] 217 ITR 699. It was further submitted that the amended Deed has also clouded the view taken by the learned AM, who proceeded on the assumption that the amended Deed applied to the assessment year under appeal. Mr. Inamdar, the learned counsel for the assessee took up a preliminary objection to the effect that the Assessing Officer has not stated that the amended Deed is not effective for the year under appeal, that neither the learned JM nor the learned AM has discussed the question as to the date from which the amended Trust Deed has come into effect, that there is no decision by either of them on this point and therefore there is no difference between them on the point and consequently it is not open to the learned DR to raise the point at this stage. Gently but firmly he reminded me of my jurisdiction as Third Member. It was pointed out that in the absence of any decision on this point, by either of the learned Members, I have no j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the objection of Mr. Inamdar. Consequently, I do not propose to enter into an academic discussion of the question on merits, viz., whether the amended Trust Deed applies to the assessment year under appeal or not. 27. The question whether there is a change in the facts and circumstances for the year under appeal has been carefully considered by me in the light of the orders of the learned Members constituting the Bench and the rival contentions very ably put forth before me. I am satisfied that there is a change in the facts and circumstances for the year under appeal which justifies the view taken by the learned AM. According to the learned JM, there are two changes pointed out by the learned AM, because of which the earlier orders of the Tribunal including the TMB's order, cannot be applied. The first is the grant of registration under section 12A of the Act. The second is the changes made in the trust deed as well as the changed perception of the teachings of Acharya Rajneesh. 28. So far as the impact of section 12A is concerned, I am of the opinion that in view of the amended procedure for registration of charitable trusts introduced by section 12AA w.e.f. 1-4-1997 by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -89. The assessee has further sought to explain that from the assessment year 1989-90, the objects of the trust can neither be considered vague nor to project and perpetuate the image of a single individual, viz., Acharya Rajneesh. The latter also explains further the assessee's case by reference to the changed perception of the teachings of the Acharya. A copy of this letter is at pages 6-9 of the paperbook No. III. Thereafter, on 18-12-1997, the assessee wrote another letter to the CIT Pune briefly recapitulating the developments and requesting the CIT to look into the pending application for registration. On 18-5-1998, the CIT Pune passed an order under section 12A registering the assessee Trust w.e.f. 18-12-1997. A copy of this order is at page 2 of the paperbook No. III. From this documentation, it is clear to me that registration has been granted by the CIT only on the basis of the amended trust deed. The significance of such registration, according to me, is that it has been granted after 1-4-1997. The assessee's application has been pending with the CIT from 30-3-1989. Registration has been granted after the advent of section 12AA, which came into effect from 1-4-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Samadhi in January, 1990. All these developments were clearly within the knowledge of the departmental authorities. The impact of all these developments, it would be reasonable to assume, would have been taken into account by the CIT when he granted registration w.e.f. 18-12-1997 to the assessee-trust under section 12A. The grant of registration has to be viewed in the light of the aforesaid developments. Therefore it is that I consider the grant of registration to be of great significance, may be even indicating a change of heart on the part of the departmental authorities in their attitude to the assessee-Trust. These considerations and developments add that such weight to the grant of registration. Thus, it would be safe and reasonable to assume, according to me, that the departmental authorities have themselves taken note of the changes in the facts and circumstances of the case from the assessment year 1989-90 itself. 31. The learned JM has stated that he cannot accept the grant of registration as a strong ground for holding that the assessee is a charitable Trust. He has referred to the order of the TMB in this behalf, where the TMB has held that if the certificate of regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rant the certificate. It is certainly open to the Legislature to attempt to put an end to unnecessary litigation or to control the same at the threshold itself and such an attempt, in my humble opinion, cannot always be considered to be an attempt to oust the jurisdiction of the Tribunal. The introduction of section 12AA must be viewed in this context and not as an attempt to oust the jurisdiction of the Tribunal. It may perhaps even be argued, though it is not necessary for the present case, that if the Parliament wishes that a particular type of controversy cannot be contested by way of the normal appeal remedy, there is very little the appellate authorities could do. It must be remembered that a right of appeal is not automatic and must be expressly conferred and if it is not so conferred, it cannot be viewed as encroaching upon the jurisdiction of the appellate functionaries. The jurisdiction and role of the appellate authorities are controlled by the express terms of the statute constituting them and conferring upon them the powers to decide disputes. Even otherwise, the impact of section 12AA, in my humble opinion, is not what is apprehended by the learned JM. If the CIT gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ----------- Original clause Amended clause ------------------------------------------------------------------------------------------- (a) To spread and impart the (a) To spread and impart the preaching of Acharya preaching of Philosophers both Shree Rajnishji and other past and contemporary Philosophers pertaining to (including Shri Acharya all religions and/or main Rajneesh) pertained to all principles thereof and/or religions and/or main princi morals. ples thereof for the spiritual mental and/or moral and physical betterment of human beings with the ultimate Objects of self realisation. -------------------------------------------------------------------------------------------- 33. It is true that even after amendment it is open to the trust to spread and impart the teachings of Acharya Rajneesh. But the question is:-- Did the TMB consider that a trust would be ineligible to be characterised as a charitable trust because it endeavoured to spread the teachings of a particular individual? In my opinion, the answer is in the negative. It is not because the assessee-trust was formed to impart and spread the teachings of one individual that it was held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clause to be objectionable. There, the real objection was to the nature and content of his preaching and teachings. According to them, they were harmful to public morality. This part of the objects clause has been considered by the learned AM in paragraph 26 of the order. According to him, the objection that the teachings of the Acharya were against public policy or morality is no longer valid in view of the changed perception of the activities of the trust. He has referred to the fact that over 650 books written by the Acharya have been widely studied and translated into many European, Asian and other languages. He has also referred to the fact that the writings were on diverse subjects such as Vedanta, Geeta, the philosophy of Sant Kabir and Guru Nanak, commentary on Sikh scriptures and so on and so forth. The learned AM has further referred to the fact that the complete literature of Osho has been accepted by the Parliament Library, where it has been termed as an "original creation" by the then Speaker of the Lok Sabha. The learned AM has also referred to the fact that reputed institutions such as Rani Durgavati University of Jabalpur has established an Osho chair fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding the administration of the trust has also been taken away by the amendment and has been vested with the board of trustees. All these amendments were aimed at meeting the objection of the Department that one single individual was being given disproportionate powers of control over the affairs and administration of the Trust. These amendments do make a significant impact on the position obtaining for the year under appeal. 38. One more important amendment was the one made to clause 5(b) which authorised the trust to print, publish, sell, distribute either free or for a price, books, magazines, lectures, preachings, writings, periodicals, bulletins, etc. This clause was considered by the TMB as an activity for profit. This clause was deleted by the amendment to the trust deed. The amendment meets one of the basic objections of the departmental authorities to the grant of exemption. 39. In paragraphs 40 to 42, the learned JM has made observations regarding the style of functioning of the assessee-trust. He has referred to the acquisition of assets by the trust and has opined that such large acquisition of assets by incurring "lavish expenditure" was for non-charita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal both in the grounds of appeal as well as in the course of the arguments, I do find substance in the claim of Mr. Inamdar that the question of lavish expenditure or five star facilities was never raised either by the departmental authorities or before the Tribunal. The assessee therefore has had no opportunity of meeting them. Under these circumstances, I am unable to take note of the observations made by the learned JM in paragraphs 40 to 42 of the order. 41. For all the aforesaid reasons, I agree with the order of the learned AM and answer the question referred to me in the affirmative. The matter will now go before the Bench for passing necessary orders. ORDER Per Chhibber, Accountant Member--As there was a difference of opinion between the Accountant Member and the Judicial Member, the following question was referred to a Third Member: "Whether on the facts of the case and in law, the assessee is entitled to exemption under section 11 of the Income-tax Act, 1961." 2. The learned Judicial Member, Shri R.V. Easwar, sitting as Third Member by his opinion dated 3-10-2001 has concurred with the views of the Accountant Member and has answered the question in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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