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TMI Blog2012 (12) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... unces the Hindu religion or transfers of any portion of trust property in violation of the conditions herein before recited, then "he or she shall for the purpose of this deed be considered to be dead and the person next after him or her entitled to succeed as Trustee, shall succeed". The learned CIT-I, Amritsar also observed in the order dated 26-8-2008 that before rejecting the trust's application, its reply along with a paper written on 20-12-1993 but signed on 1-8-2008 stated to be corrigendum to the trust deed were duly considered and the same are an afterthought and self-serving document, which has no legal binding. 2.1 The assessee challenged the order dated 26-8-2008 before the Tribunal, who vide its order dated 19-12-2008 passed in I.T.A. No. 512(ASR)/2008 remitted back the issue to the Commissioner of Income-tax-I, Amritsar to decide afresh in accordance with law after taking into consideration the corrigendum filed by the assessee and the effect thereof on the objects of the Trust for the purpose of renewal of approval under section 80G(5) of the Act. 2.2 In compliance of the same, the learned CIT-I, Amritsar issued notice to the assessee asking the assessee-trust to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also supported his view by the decision of the Hon'ble Allahabad High Court in the case of Shervani Charitable Trust v. CIT [1968] 69 ITR 750 wherein it is held that the trustees do not have any power to override the Trust Deed through a resolution by virtue of which the non-charitable portion of the income could also be applied to charitable purposes. 2.5 Keeping in view the aforesaid finding, the learned CIT-I, Amritsar finally rejected the application filed by the assessee by passing the impugned order in the month of July, 2009. 3. Aggrieved by the same, the assessee has filed the present appeal. 4. The learned counsel for the assessee stated that the learned CIT-I, Amritsar has passed an illegal order, which is bad in law and liable to be cancelled because the learned CIT-I, Amritsar has wrongly treated the corrigendum to the original Trust Deed is nothing but an afterthought and not treating in letter and spirit the judgment of ITAT, Amritsar Bench dated 19-12-2008 passed in the case of the assessee while challenging the order dated 27-8-2008 passed by the same CIT-I, Amritsar in which he has rejected the assessee's application for the renewal of approval under section 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mended deed of the Trust and lastly granted the same exemption on 14-9-2005 w.e.f. 1-4-2005 to 31-3-2008 but he has wrongly rejected the exemption under section 80G of the Act to the assessee without any valid reason. He further stated that when the ITAT at page 5, para 9 of the order dated 19-12-2008 has already held that there is nothing preventing the assessee from filing such corrigendum and thereby amending its objects. He further stated that the Bench also held that the learned CIT-I, Amritsar erroneously rejected such corrigendum as merely an afterthought and not having any binding force and this cannot be sustained in the absence of any provision of law prohibiting the assessee from amending the original Trust Deed by way of corrigendum. The learned counsel for the assessee stated that the learned CIT-I, Amritsar has not followed the order of the jurisdictional I.T.A.T., which is violation of judicial discipline, therefore, the impugned order deserves to be cancelled and the direction may be issued to the learned CIT-I, Amritsar to grant exemption under section 80G of the Act as requested by the assessee-trust. 5. On the contrary, the learned D.R. relied upon the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not possible to continue in future and it has been decided to change the objects accordingly a resolution was passed and recorded in the minute book on 1-8-2008 and also corrigendum was written on 1-8-2008 w.e.f. 1-8-2008 wherein it has been decided to involve this trust in the acts of service to the society which includes- (i) Construction of Dharamshalas, Community Halls. (ii) Setting up and running of charitable hospital. (iii) Helping the deserving parents to solemnize the marriage of their daughters. (iv) Advancement of any other objectives of general public utility, not involving the carrying of any activity for profits, as the law may regard as public charitable purposes. That the clause No.4 of the original Trust deed dated 20th December, 1993 stands deleted right from beginning as if it was never been the part of the trust deed. This supplementary deed is executed on 20-4-2010 w.e.f. from 1-8-2008 is signed by the trustees in the presence of the following witnesses. Self drat CB Acharya. 1. Witnesses Trustees Sd/- Sd/- AMIT HANDA 175 Rani Ka Bagh, Amritsar, 1. (Bhawna Ramanjum) &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, which he has already passed on 27-8-2008. The relevant portion of the impugned order dated 27-8-2008 and the impugned order under appeal are as under:- "Impugned Order dated 27-8-2008. Keeping in view this strong emphasis on a particular religion the representative of the Trust, Sh. Anil Aggarwal during he hearing before me on 10-7-2008 was asked to explain how the trust can be treated to have been established for charitable purposes in view of conditions laid down in section 80G[5](iii) read with Explanation 3 which makes it quite clear that the institution or fund has not to be expressly established for the benefit of any religion, community or caste. The Explanation 3 has put a further strong rider against granting registration to any trust or institution or fond for any purpose which does not include any purpose for wholly or substantially to whole of which is religious nature. Sh. Anil Aggarwal's attention was also invited to Hon'ble Supreme Court's decision in the case of Upper Ganges Sugar Mills Ltd. and others v. CIT cited at 227 ITR 578. The Hon'ble Supreme Court has held that establishment of public places of worship and prayer halls are religious purpose, hence don ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estioned about the trust being overwhelmingly by religious in nature, thus not entitled to benefits of section 80G. The so called corrigendum was an afterthought. (iii) In view of the decision of Hon'ble Allahabad High Court in the case of Shervani Charitable Trust v. CIT [1968] reported as 69 ITR 750 (All.), the trustees cannot convert a partial trust into a wholly charitable trust. The trustees do not have any power to override the trust deed through a resolution by virtue of which the non charitable portion of the income could also be applied to charitable purposes. It is a trust distinct from a wholly charitable trust on the basis of provisions of original trust deed dated 20th December, 1993. In view of the above discussed factual and legal position of the case, and section 5(iii) r/w Explanation 3 of section 80G of the I.T. Act, it is declared that the trust is not entitled to be registered for the purpose of section 80G and no approval is accordingly given and the application filed for the said purpose is hereby rejected." 9. After going through the impugned order as well as order dated 27-8-2008 passed by the learned CIT-I, Amritsar, we are of the considered opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the act of services to the general society by way of constructing the Dharamshalas, Community Halls, setting up and running of charitable hospital, helping the deserving parents to solemnize the marriage of their daughters and others which are purely charitable in nature for the general public and not for a particular religion or caste. 10. Keeping in view the aforesaid discussion, we are of the considered opinion that the impugned order passed by the learned CIT-I, Amritsar is contrary to the law and facts on the file, therefore, deserves to be cancelled and we cancel the same with direction to the CIT-I, Amritsar to grant approval of renewal of exemption under section 80G(5) of the Act for three years w.e.f. 1-4-2008 to 31-3-2011, as he has already given the exemption under section 80G of the Act upto 31-3-2008. 11. In the result, the appeal filed by the assessee is allowed. Mehar Singh, Accountant Member - The proposed appellate order, authored by my esteemed Ld. Brother, Sh. H.S. Sidhu, the Ld. Judicial Member, has been carefully perused and considered by me. I also had discussions and deliberations, on the core issues, for adjudication, in the instant appeal. In spite of my ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering the corrigendum made by the assessee trust, as also after placing reliance, on the decision of the Hon'ble Allahabad High Court, in the case of Shervani Charitable Trust (supra), gave clear finding that the Trust is not entitled to be registered for the purpose of section 80G of the Act. Hence, no approval for renewal, was granted and the application filed by the assessee trust, was rejected, by the CIT, vide said order. 3.1 The main finding of the Ld. CIT-1, in the impugned order under appeal, on consideration of corrigendum, in question, specifically highlighted that the settlers cannot override the aims and objects, as contained in the original Trust Deed, executed by the settlers in terms of which the Trust was expressed to be for the benefit of a particular religious community, and, hence, contravenes the provisions of section 80G(5)(iii) of the Act, read with Explanation-3 of section 80G of the Act. Aggrieved by such finding and rejection of the application of the assessee trust, the present appeal was filed before us. 4. In the course of present appellate proceedings, the Ld. Counsel for the assessee, filed two paper books containing pages to 1 to 27 and pages 1 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 696 (Cal) (iv) CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC) (v) Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234 (SC) (vi) CIT v. Bar Council of Maharashtra [1981] 130 ITR 28 (SC)." 4.1 Further, the assessee annexed to the paper book 'Notes on Public Charitable Trust' for formation of a Trust and its instrument. The assessee has also referred to section 2(15) of the Act. The assessee filed a copy of the decision of the ITAT, Amritsar Bench, in the case Maj. Gen. (Retd.) Kanwarjit Singh Gill (supra). The paper book contains following decisions, on which the assessee placed reliance: (i) CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC) (ii) Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234 (SC). (iii) CIT v. Bar Council of Maharashtra [1981] 130 ITR 28/6 Taxman 1 (SC). 4.2 He, further, referred to certain decisions supporting the doctrine of binding judicial precedent as mentioned in the written submission. The Ld. Counsel for the assessee, further, argued and contended that the Trust is competent to amend clause (4) of the original Trust Deed and to add new objects to the said Trust Deed by way of passin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Trust Deed and added certain new objects to the said Trust Deed. This amendment has been effected by the settlers of the said Trust Deed, without any power or jurisdiction conferred on them, in the said original Trust Deed. Consequently, judicial precedents of the Supreme Court, on this issue, are binding in nature and to be respectfully followed in preference to the decision of any lower appellate authority. The Hon'ble Supreme Court, in the following cases, clearly held that original Trust Deed cannot be amended . (i) Sri Agasthyar Trust v. CIT [1999] 236 ITR 23/103 Taxman 363 (SC) (ii) CIT v. Palghat Shadi Mahal Trust [2002] 254 ITR 212/120 Taxman 889 (SC) (iii) CIT v. Kamla Town Trust [1996] 217 ITR 699/84 Taxman 248 (SC) 6.4 The trust deed cannot be amended in view of the non-availability of such power or jurisdiction in the said trust deed itself. These cases rendered by the Hon'ble Supreme Court, have been discussed, in detail, in this order, in the ensuing paragraphs. 6.5 In view of the factual discussions of the case and having regard to the binding judicial precedent within the meaning of article 141 of the Constitution of India, the said decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rust is public or private or it relates to movable or immovable property. This is because as per Indian Succession Act, a will has to be in writing. When the trust is created in relation to an immovable property of the value of Rs.100 and upwards, in case of a private trust deed is not mandatory, even in respect of immovable property, but is optional. Where the trust/association is being formed as a society or company, the instrument of trust; i.e. the memorandum of association, and Rules and Regulations has to be in writing." 6.9 It is added that the text of the decision quoted by the assessee trust speaks about the impugned modalities of a trust, which is not under dispute, in the present appeal. Consequently, in the light of the text quoted by the assessee trust, the same is not applicable to the fact-situation of the present case, as the present case, is to be considered in the light of provisions of section 80G(5) of the Act. 6.10 The assessee, further, quoted provisions of section 2(15) and also placed reliance on the decision of the Hon'ble Supreme Court, in the case of Andhra Chamber of Commerce (supra), which defines the 'charitable purpose'; "The statutory definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... renewal, as contemplated under section 80G(5) of the Act, the case laws relied upon by the assessee are not appli6able to the express provisions of section 80G(5) and its sub clause (iii), which reads as: "the institution or fund is not expressed to be for the benefit of any particular religious community or caste;" 7.1 The Ld. CIT, has rejected the application of the assessee for renewal under section 80G(5)(iii), on the plea that the Trust is expressed to be for the benefit of a particular religious community. Hence, the same violates the provisions of section 80G(5)(iii) r.w. Explanation -3 to section 80G(5C) of the Act. The case laws cited by the assessee-trust are not, on the subject, contained under section 80G(5) (iii) of the Act. Hence, the same are not applicable to the fact-situation of the present case. Moreover, the decisions of the Hon'ble Supreme Court, in the case(s) of Upper Ganges Sugar Mills Ltd. (supra), State of Kerala v. M.P. Shanti Verma Jain [1998] 231 ITR 787 (SC), Arsha Vijnana Trust v. D.P. Sharma, I.R.S., DIT (Exemption) [2007] 295 ITR 437/[2008] 171 Taxman 182 (AP) and Hon'ble Jurisdictional High Court of Punjab & Haryana, in the case of CIT v. Guryan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any other object of general public utility and do not lay down any ruling on the express provisions of section 80G(5)(iii) of the Act, which is made the foundation, for rejection of the assessee's application, by the CIT, in the order before the Bench. Provisions of section 80G(5)(iii) of the Act, are clear, where the CIT is satisfied that all the conditions laid down in clauses (i) to (v) of section 80G(5) of the Act are not fulfilled, he shall reject the application for approval after recording reasons for such rejection. In view of this, the CIT, rejected the application of the said Trust, on non-satisfaction of the conditions of section 80G(5)(iii) r.w. Explanation 3 to section 80G(5C) of the Act, as clearly recorded in the impugned order. In view of this, the case laws cited by the assessee are not applicable to the fact-situation of the present case, as the provisions of section 80G(5)(iii) read with Explanation-3, to section 80G(5C) of the Act, are the subject matter of the assessee's appeal. 7.5 To support his contention, the Ld. Counsel for the assessee, also placed reliance, on the decision of the Hon'ble Rajasthan High Court, in the case of Umaid Charitable Trust (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of the trust. Thus, worshiping and adoration of the said deity and maintenance of repair of the Laxminarayan Temple cannot be construed as secular object or non-religious object of this trust. Needless to state that each religion such as Hinduism, Jainism, Sikhism, Islam and Christianity is clearly discernible, from its distinct place of worship such as temple, Gurudwara and mosque and its religious scriptures such Geeta, Upnishad, Veda, Sri Guru Granth Sahib and Bible etc.. Similar is the position in respect of various rituals and mode of prayer and worship, distinct and distinguishable from each religion. In view of this, particular religious community can be identified, in the light of such religious indicators. The present trust does not specify the metaphysical concept of religion as enunciated by Shankaracharya, but the wholly worldly and pragmatic concept of particular religious community. The religious aspect cannot be conceived in purely abstract terms devoid of ground realities. The original Trust Deed as well as the unauthorizedly amended trust deed are clearly expressed to be for the benefit of a particular religion community, as is evident from the detailed discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrined therein. 7.11 The assessee filed additional evidence, vide letter dated 23.04.2010, in the shape of supplementary deed, to the impugned original Trust Deed. The supplementary Trust Deed goes to the root of the issue being legal in nature and to consider the same is essential for the disposal of this case. Hence, such additional evidence deserves to be admitted. A perusal of the text of the supplementary deed clearly reveals that it was made on 21st day of 2010 by the same persons, who were the settlers of the original Trust, created vide Trust Deed dated 20th Dec, 1993. In this context, it is evident that the opening sentence of the said supplementary deed does not mention the month of 2010 year, in which it was executed. However, the same was registered with Sub-Rgistrar-1, Amritsar, on 22.04.2010, after a gap of one year and eight months, from the purported resolution, dated 01.08.2008, as recorded at the back of the stamp paper. In the impugned supplementary deed, it is recorded that by way of resolution passed and recorded, in the minutes book, on 01.08.2008 and corrigendum written, on 01.08.2008, w.e.f. 01.08.2008, the dause-4 of the original Trust Deed dated, 20th Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held that the trust has no power to override the trust deed through resolution. Consequently, the Ld. CIT, held that the trust is not entitled for renewal under section 80G of the Act. The relevant part of the impugned order of the CIT is reproduced hereunder: "4. As is evident from above, through corrigendum dated 01.08.2008 an attempt has been made to delete the clause-4 of the original trust deed. It is an attempt to undone the work already done. Needless to mention, the original trust deed contained provision for spending the income or assets of the trust for purposes other than charitable. Further, the trust was expressly established for the benefit of a particular religious community. These are prohibited by the conditions laid down in clause (iii) and (iv) of Section 80G(5) of the I.T. Act, 1961. The corrigendum aforesaid brought into existence virtually a new trust which has totally changed the complexion and objectives of the Trust. In fact, a new trust should have been constituted which the assessee has not done to reap the benefits of section 80G, retrospectively. In this connection, it would be pertinent to refer to S.No.4 of assessee's application in F. No. 10G f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dec, 1993, clearly reveals that in this case, the Trustees or the Settlers are incompetent to delete clause 4 of the original Trust Deed, dated 20th Dec, 1993 and add certain new objects, to the original trust deed, by way of mere resolution, without following prescribed procedure for such amendment, through the competent Civil Court, under section 92 of Civil Procedure Code, 1908 or under section 26 of the Specific Relief Act, 1963, as the original trust deed, ingestion does not provide for any power or jurisdiction, for any amendment or alteration or deletion or addition. 7.16 It is legally settled proposition that once a Trust is created with certain specified objects, no one has the power to delete any of the original objects. This is founded on the very concept of Trust and its creation. A 'Trust' is an obligation annexed to the ownership of the property and arising out of confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another and the owner. The irrevocability of the Trust is an essential ingredient of a valid Trust, which has been violated by the settlers by way of effecting unauthorized alterations to the original Trust D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and not the deed which was executed by the two founders of the trust. The judgment also did not indicate that the question relating to the validity of the deed dated July 1, 1944, was ever in issue before the Supreme Court. The decision in East India Industries' case [1967] 65 ITR 611 (SC), did not and could not preclude the appellants from contending the deed dated July 1, 1944 was illegal and of no consequence and what was to be seen was whether the assessee was a public charitable trust on the basis of the partnership deed dated November 28,1941. The deed of 1941 originally gave the power to the founders to revoke the trust but this power was taken away by a subsequent document which was executed on August 26, 1943 was thereafter, that the trust became an irrevocable trust. The powers of the trustee in respect of the said trust continued to remain the same as set out in clause (8) of the partnership deed. The trustee was only required to carry out the objects of the trust and spend the trust funds for charitable purposes in the manner indicated therein. No power was given to the trustee to amend, alter, vary or change in any manner the objects of the trust as created in 1941. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to fasten any legal consequence, on the original Trust Deed. In the book Tudor on Charities (6th Edition) at page 131, it is stated as follows: "When a charity has been founded and trusts have been declared, the founder has no power to revoke, vary or add to the trusts. This is irrespective of whether the trusts have been declared by the individual, or by a body of subscribers, or by the Trustees", (extracted from page 32 of 236 ITR). It may be observed that the Supreme Court, in the case of Sri Agasthyar Trust v CIT [1999] 236 ITR 23, have expressed their full agreement with the principle stated in the above passage of the Madras High Court vide P.33 of 236 ITR. (ii) In another decision, in the case of Palghat Shadi Mahal Trust (supra), the Hon'ble Supreme Court, held as under: "Charitable Trust - Trust for construction of a Shadi Mahal and Establishing other Institutions for Educational, Social and Economic advancement of Muslims - General Body meeting clarifying that the income and the Mahal shall be made available to all communities - Clarification clause of Trust Deed enabling Trustees to decide meaning and scope of clause of Trust deed-Amendment by General Body not per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itable objects of the trust deed were deleted subsequently with retrospective effect and a declaratory decree was obtained from the court, but the Tribunal refused exemption to the trust on the ground that the original trust deed did not empower the trustees to alter the objects clauses of the trust deed: Held, that the finding of the Tribunal was justified and that the trust was not entitled to exemption under section 11 of the Income-tax Act, 1961. The reference applications were liable to be dismissed." 7.19 The issue of changing the basic complexion or objects of the Trust as set out in the original Trust Deed, in question, is further, analysed hereinafter. It is extremely difficult to amend a trust deed since a trust by its inherent nature is irrevocable. Therefore, it is important to provide the amendment clauses in the trust deed itself. There is no power or jurisdiction conferred on the settler or the trustee to amend the original Trust Deed, dated 24th Dec, 1993, as no such power is provided by the settlers of the Trust in the said Trust Deed. 7.20 However, it is pertinent to add here that if the amendment clauses provided in the trust deed are too wide, then the trust m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, ruling in the case of Sri Agasthyar Trust (supra) is also relevant. 7.23 It should be kept in mind that the trustees inherently do not possess any power to amend the trust deed, for that matter even the settler does not have the power of any subsequent amendment. The power to amend shall be limited to the extent provided in the trust deed itself. Therefore, drafting of trust deed becomes very important and suitable clauses should be kept for future need of changes and contingencies. Further, care should be taken to ensure that the amendment clauses are not too wide or discretionary in nature which may render the trust invalid and revocable. However, it is undisputed fact that in this case, the settlers of the Trust did not provide for any amendment to the said original Trust Deed. 7.24 In view of the above legal and factual discussions and the binding decisions of the Hon'ble Supreme Court, as discussed above, the amendment in the form of deletion of clause (4 ) of the original trust deed and addition of certain other objects, to the said original trust deed is void ab-initio, as no power is conferred under such original trust deed, for such alteration, deletion or addition. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deed itself, any amendment thereto, without following the procedure laid down in section 92 of Civil Procedure Code, 1908 and section 26 of the Specific Relief Act, 1963, no amendment can be effected to the original Trust Deed and if any amendment made, the same is invalid and, hence, the original trust deed, with its object clause, remains effective, operative and holds the field. The settlers or the trustees are not competent to alter the object clause of the Trust Deed "at will" as it denudes the valid trust from its basic ingredient of 'irrevocability'. However, the impugned Trust Deed was amended without jurisdiction. In view of this, it is important to provide amendment clause in the trust deed itself. To be precise, in the present case, no such amendment 'clause has been provided in the impugned Original Trust Deed. Consequently, there being no amendment clause, in the original trust deed, any amendment has to be done through a Civil Court. No such amendment has been carried out, in the impugned Original Trust Deed, through any civil court, in the instant case. The assessee-trust by mere resolution passed by the settlers, deleted the impugned clause (4) from right from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed deed constitutes breach of trust, and runs contrary to the conceptual import of the term 'Trust'. In the present case, the settlers acted against the intent of the original Trust. 8. In view of the above legal and factual discussions and having regard to the decisions of the Hon'ble Supreme Court, the amendment in the shape of deletion of clause (4) to the original trust deed and addition of certain other objects, to the original trust deed being invalid, the original object clause of the trust remains operative and intact. Thus, the impugned deletion of clause (4) to the original Trust Deed and additions of new objects are without jurisdiction and invalid and, hence, with no attendant legal consequence, on the original Trust and original Trust Deed, dated 20th Dec, 1993. 9. Next primary issue, for consideration, is whether on facts and in law of the case, such trust is entitled for approval, under section 80G(5) of the Act. A bare perusal of the trust deed dated, 20th Dec, 1993, clearly reveals that the trust has been expressed to be for the benefit of a particular religious community i.e. Hindu religious community. The trust has been formed, for the purpose of construction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustees dedicate the Trust Properties for the cost of construction of the said Temple and to secure the worship of the said deity and of making a public charitable trust of the said Trust Properties in the planner hereinafter appearing: Now This Deed Witnesses and Hereby declare as follows: 1. In pursuance or the said desire, Trustees hereby grant, set apart, and dedicate the Trust Properties to the use of the said deity as provisions for worship of the said deity and periodical festivals of the deity and maintenance and upkeep of the temple, absolute for ever in the manner hereinafter contained. 2. That for the consideration as aforesaid, the Trustees do hereby divest themselves of all ownership, control and employment or the Trust Properties and grant, convey, transfer, give, assign, assure and dedicate the same absolutely and for ever unto and in favour of the deity, so as to vest the same in the said deity free from all encumbrances, in the manner hereinafter indicated and deliver possession thereof unto and in favour of the deity. AND THE SAID Trustees do hereby constitute, appoint and nominate themselves as Trustees for the aforesaid propertie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaking spiritual education for Public in General the trustees decided to change the objects and has decided to involve the Trust in addition to that itself of the acts of service to the society which includes a. Construction of Dharamshalas, Community Halls. b. Setting up and running of Charitable Hospital c. Helping the deserving parents to solemnize the marriage of their daughters. d. Advancement of any other objectives of General Public utility, not involving the carrying on of any activity for profit, as the law may regard as Public Charitable purposes. It is decided to put into 'Black and while. The meeting is chaired by Swami C.B. Acharya. Sd/- Sd/- Sd/- C.B. Ramanujam Janak Raj Vijay Sharma and three others " (C) The corrigendum to the Trust Deed Dated 20th December, 1993, is reproduced hereunder: "This Deed of corrigendum is executed at Amritsar this day of 01.08.2008 is as under: That the trust has decided to amend/delete certain things as decided mutually as stated below: 1. That the clause No.4 of the original trust deed dated 20th Dec,, 1993 stands deleted righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciety which includes: e. Construction of Dharamshalas, Community Halls. f. Setting up and running of Charitable Hospital g. Helping the deserving parents to solemnize the marriage of their daughters. h. Advancement of any other objectives of General Public Utility, not involving the carrying of any activity for profits, as the law may regard as Public Charitable purposes. It is decided to put into Black and while. The meeting is chaired by Swami C.B. Acharya. That the clause No.4 of the original Trust Deed dated 20th Dec,1993 stands deleted right from beginning as if it was never been the part of the trust deed." 9.1 The undated affidavit signed by deponent Ravi Sharma S/o Sh. Bishan Dass, duly attested by Notary on 18th March, 2010, was filed before Bench. It is pertinent to reproduce clause 10 of the said affidavit "10. That before 31.08.2008 there was one object i.e. construction of Mandir and, therefore, only one utilization account was coming and no detailed narration was appearing in the books as utilization was only on account of construction of Mandir." 9.2 A bare reading of the above clause of the said affidavit clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties shall be applied first in the maintenance and repair of the temple property. 10. The term religion is not defined under the Income-tax Act, 1961. The point for consideration, therefore, is what are the matters of religion and what are not. What are the matters of religious or non-religious nature. The Constitution of India also makes no attempt to define religion. However, there are well known religion with well known Deity, places of worship and and mode of prayers in India, like Jainism, Hinduism, Sikhism, Persian & Christianity etc. The expression 'religion' mentions that clause (b) of article 26 of the Constitution of India, includes not only the philosophical side of the religion but also religious practice, as laid down, in the tenets of nature - religious sects. Religious practices or performances of acts, in pursuance of religious belief are as much a part of a religion as faith or belief, in particular doctrine. Thus, if the tenants of the Jain or Parsi or Hindu religion laid down that the certain rites or ceremonies are to be performed at certain times and in a particular manner, it cannot be said that these are secular activities and not 'religious activities'. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. If it were to be so treated as "religious" the donor does not get deduction under section 80G of the Act, in view of Explanation 3 to section 80G(5C) and section 80G(5)(iii) of the Act, which bars such deduction for charitable institutions established for religious objects. Even if any one of the objects of a public trust should be religious in nature, it stands disqualified. The Calcutta High Court, in CIT v. Upper Ganges Sugar Mills Ltd. [1985] 154 ITR 308/23 Taxman 546, had taken the view that "prayer and worship in common parlance denote religious activities". It was of the view that prayer always has a religious significance. This decision was affirmed by the Supreme Court in Upper Ganges Sugar Mills Ltd. (supra). It was observed that it is true that such prayer halls may be available to all religions but on that account the object of setting up places of worship and prayer halls do not cease to be a religious object. 14. The factual matrix of the present case, as discussed above, in detail clearly establishes that the original Trust deed, dated 20th Dec, 1993, was created wholly for a particular religious community and, thus, it contravenes the express provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by the assessee to it fell outside the scope of section 80G. Decision of Calcutta High Court in CIT v. Ganges Sugar Mills Ltd. [1985] 154 ITR 308 affirmed. To reiterate, Explanation 3 does not require the ascertainment of whether the whole or substantially the whole of the institution or fund's charitable purpose is of a religious nature. If it did, it would read differently. It requires the ascertainment of whether there is one purpose within the institution or fund's overall charitable purpose which is wholly or substantially wholly, of a religious nature. There is little doubt that clause 2(h) of the trust deed which permits the trustees to support prayer halls and places of worship sets out a purpose the whole or substantially the whole of which is of a religious nature, and this has not been seriously disputed. Therefore, in our view, the trust and the donation by the assessee to it fall outside the scope of section 80G" 14.1 In the present case, fact-situation of the case, in the light of object clause expressing clearly the intent of the settlers of the Trust, for construction of said temple of the said deity, for the purpose of worshiping the deity and its adoration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years, by misconstruing the law, would not be a bar for the Director of Income-tax (Exemption), to pass an order, where an application for extension of grant of exemption was made before him. Relevant part of the decision is reproduced : "Donation for charitable purposes - Effect of sub-section (5)(iii) - Section 80G - Trust publishing religious books - Not entitled to approval under section 80-G - Income Tax Act, 1961. All donations made to charitable institutions are entitled to deductions in accordance with section 80G of the Act, with certain exemptions, one of the exemptions being under section 80G(5)(iii) which lays down that charitable purpose does not include any purpose of the whole or substantially the whole of which is of a religious purpose. From the date of its constitution in 1983, the assessee-trust had published various books mostly in Telgu and English. These books included the translations of Sanskrit Ramayana, Mahabhartha Gita with Sankara Bhashyam. The trust was given benefit u/s 80G of the Act from its establishment without interruption till a notice was given in January, 2003, and an order was subsequently passed holding that the trust had contravened the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing renewal of recognition under section 80G, to the petitioner trust from April 1, 1996, onwards was justified." 14.5 The assessee trust argued and contended that it was granted exemption, in terms of the objects set out, in the unamended original trust deed, dated 20th Dec, 1993, cannot be denied renewal of the same, for subsequent period. Generally, speaking the principle of res judicata is not applicable to the income tax proceedings, as held by the Hon'ble Supreme Court, in plethora of decisions. The facts of the present case also clearly warrants non-application of the principle of res judicata, as the approval was granted u/s 80G, in the past, on misreading and misconstruction of the provisions of section 80G of the Act. The misconception and misinterpretation of such provisions of the Act led to miscarriage of justice and violation of such express provisions of the Act. The judicial conscience cannot allow perpetuation of such mistake. Further, it is no judicial heroism, to allow such mistake to perpetuate, on the foundation of misinterpretation of law in the past. The Hon'ble Supreme Court in the case of Union of India & v. Raghubir Singh [1989] 178 ITR 548 & Sri Agasthya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dule to the said Trust Deed remains untouched. The income from the said Trust property is to be applied first, in the maintenance and repair of temple property, as also to be spent for the worship of the said Deity and in defraying of the usual expenses on holding festivals of the said deity, remains intact. Similarly, the construction of the temple and worship of the said Deity and adoration of the said Deity is still an integral part of unauthorisedly amended Trust Deed. Further, holding of periodical festivals of the Deity and offering daily worship, are still the organic part of the said Deed. These objects are purely religious in nature, inextricably linked to the Hindu religious community and its Deity 'Laxmi Narayan'. There cannot be any dispute on this vital issue, in the present case. Hence, even the unauthorized amended Trust Deed contravenes the provisions of section 80G(5)(iii) of the Act, being expressed to be for the benefit of a particular religious community. 16. If the objects of a trust include Charitable as well as religious purpose, the deduction under section 80G of the Act, would not be permissible, in respect of donations made to such trust, as held by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not alter the position, as contained in the original Trust Deed, in view of the three decisions of the Hon'ble Supreme Court, as cited supra. In view of this, the unauthorisedly amended Trust Deed is also ineligible for renewal or exemption under section 80G of the Act. 18. Thus, having regard to the above detailed legal and factual discussions and following the decisions of the Hon'ble Supreme Court, and jurisdictional High Court, as discussed, at appropriate place, on relevant issues, the impugned order of the Ld. CIT is upheld and, consequently, the appeal of the assessee is dismissed. 19. In the result, the appeal filed by the assessee sands dismissed. Reference under section 255(4) of the Income-tax Act, 1961 There is a difference of opinion amongst the Members constituting the Bench in the aforesaid appeal, therefore, the following questions need to be referred to the Hon'ble President for nominating the Third Member under section 255(4) of the Income tax Act, 1961:- "(1) Whether on the facts and in the circumstances of the case and the record available, the assessee is entitled for grant of approval of renewal of exemption under section 80G(5) of the Income tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deed and the amended one, under section 80G(5) of the Act, without compliance with the statutory conditions precedent of section 80G(5)(iii) read with Explanation 3 to section 80G(5C) of the Act ?" Statement under section 255 (4) of the Income Tax Act, 1961 "(1) Whether on the facts and in the circumstances of the case and the record available, the assessee is entitled for grant of approval of renewal of exemption under section 80G(5) of the Income-tax Act, 1961? (2) Whether on the facts and in the circumstances of the case, the CIT can overlook the binding precedent of the order dated 19-12-2008 passed by the ITAT, Amritsar Bench in assessee's own case in ITA No.512(ASR)/2008 in para Nos. 9 and 10, page No.5, holding that the learned CIT erroneously rejected the said corrigendum as a mere afterthought and not having any binding force and in the absence of any provision of law prohibiting the assessee from amending the original Trust Deed by way of corrigendum? (3) Whether on the facts and in the circumstances of the case, the learned CIT can refuse the approval of renewal of exemption under section 80G(5) of the Income-tax Act, 1961 on the ground that one of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f renewal of exemption under section 80G(5) of the Income tax Act, 1961 on the ground that one of the objects No. 4 that the assessee-trust has been established for a particular religious purpose for the followers of the diety, who have to be only Hindus, inspite of the fact that he has already granted the approval of renewal of exemption in many limes under section 80G(5) of the Income tax Act, 1961?" 3. The Hon'ble President, Income Tax Appellate Tribunal, Mumbai vide order dated 15.12.2010 nominated the Zonal Vice President as a Third Member u/s 255(4) of the Income Tax Act, 1961 to resolve the controversy. 4. At the very outset, I may point out that the controversy involved in the present appeal can be resolved with reference to the first question referred to by Ld. JM, which reads as under:- "Whether on the facts and in the circumstances of the case and the record available, the assessee is entitled for grant of approval of renewal u/s 80G(5) of the Income Tax Act, 1961"? 5. Now, I proceed to decide the above question. In order to understand the real controversy, I think it necessary to narrate the brief facts of the case. The assessee Trust (Ramanujam Spiritual Charitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trust properties in violation of the condition hereinbefore recited, then he or she shall for the purpose of this deed be considered to be dead and the person next after him or her entitled to succeed as Trustee, shall succeed. The Trustees for the time being shall hold the Trust Properties and manage the same to the best advantage of the Trust. 5. The income to the said Trust Properties shall be applied first in the maintenance and repair of the temple property and the payment of land revenue, cesses, taxes and other outgoings in respect of the same and shall be spent in the daily worship of the said diety and in defraying the expenses of the usual festivals, with full liberty to apply a portion of such income to the improvement of the Trust Properties, as detailed in First Schedule (attached). 6. The Trustees shall cause accurate accounts to be kept of all moneys received and spent and of all matters in respect thereof in course of management of Trust Properties and in relation to the carrying out of the objects and purposes of the Trust as well as of all aspects and effects of the Trust Properties. The Trustees have contributed Rs. 1,000/- (Rs. One tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the Trust. 6.2 The Ld. CIT rejected the arguments advanced on behalf of the assessee stating that the corrigendum is nothing but an afterthought and self serving document not legally binding. He further observed that the said corrigendum did not in any manner change the basic character of the objects of the Trust and the Trust remained a trust for a temple with a deity which was confined only to a particular community for worship. He also observed that there is a strong stipulation in the trust deed that a trustee who renounces Hindu religion ceases to remain a trustee. According to him, this object (clause No.4 of Trust deed) is sufficient evidence to prove that the Trust was established for a particular religious purpose. He further observed that the provisions of section 80G(5) read with section 2(15) of the Act, under the circumstances make it clear that a trust or fund will not qualify to be approved u/s 80G for getting donations made exempt from tax. The argument made on behalf of the assessee that the approval for renewal had been given by earlier CIT under the similar circumstances has been rejected by the CIT holding that any order passed erroneously or inadvertentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val u/sec. 80G(5)(vi) of the Income Tax Act, 1961 submitted on 20.3.2008. This clause nowhere mentions the corrigendum, if any, executed and annexed thereto. In view thereof it can well be concluded that the corrigendum submitted later on is an afterthought and a self serving document submitted especially when put to question by this office and it is just to enjoy the benefits under section 80G of the Income Tax Act, 1961 retrospectively. It is simply an act to undone the work which has already been done. It cannot override the aims and objects of the trust deed originally executed which are basically religious in nature. My view finds force from the decision pronounced by the Hon'ble Allhabad High Court in the case of Shervani Charitable Trust v CIT [1968] 69ITR 750 (All.) wherein it is held that the trustees do not have any power to override the trust deed through a resolution by virtue of which the non-charitable portion of the income could also be applied to charitable purposes. The above discussion is summed up as under:- (i) The accounts of the assessee are silent as to the nature of the expenditure incurred for any charitable purposes. (ii) The corrigend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are incompetent to delete clause (4) of objects of the original Trust Deed dated 20.12.1993 and add certain new objects, to the original Trust Deed, by way of mere resolution, without following prescribed procedure for such amendment, through the competent Civil Court, under section 92 of the Civil Procedure Code, 1908 or under section 26 of the Specific Relief Act, 1963, as the original trust deed, in question did not provide for any power or jurisdiction, for any amendment or alteration or deletion or addition. The Ld. AM has also held that it is well settled principle of Trust law that once a Trust is created with certain objects, no one has power to delete any object or whole of objects where no such power is provided, in the original Trust Deed. The Ld. AM has also taken note of Supplementary Trust Deed dated 21st day of 2010 (month not mentioned), which was filed first time before the Tribunal, and discussed the legal consequences of unauthorisedly amended original trust deed, particularly deletion of clause (4) of objects of the original Trust deed and addition of certain other new objects. He observed that even in a situation of deletion of clause (4) of objects of the orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of corrigendum. According to Shri Aggarwal, Ld. Counsel for the assessee, the decision given by the Tribunal in ITA No. 512/(ASR)/2008, being order of superior authority, is binding upon the CIT. Thus, there was no justification in treating the corrigendum to the original trust deed as an after thought and a self serving document by the authority below. He, therefore, submitted that the trust is entitled to grant of renewal of approval u/s 80G (5) of the Act. 11. Without prejudice to above, alternatively Shri Aggrwal, Ld. Counsel for the assessee submitted that on the basis of Corrigendum dated 1.08.2008 and supplementary Trust deed, the Trust is eligible for renewal of approval u/s 80G(5)of the Act. 12. Shri Laxman Singh, Ld. C1T DR vehemently argued that the assessee trust is not entitled to be registered for the purpose of section 80G and no approval for renewal could be granted in any manner. While referring to object No. 4 of the Trust deed dated 19.12.1993, Shri Laxman Singh, CIT DR submitted that the trust has been established for a particular religious community i.e. Hindu and, therefore, the trust could not be treated to have been established for charitable purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institutions or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely - (i) ... ... ... ... (ii) ... ... ... ... (iii) the institution or fund is not expressed to be for the benefit of any particular religious community or case; Explanation 3 - In this section, "charitable purpose" does not include any purpose the whole or substantially the whole of which is of a religious nature. " 15. In the original Trust Deed, it is stipulated that the trustees are desirous of creating a trust with temple of a deity at Vrinda Van by the name of 'Laxmi Narayan' in the said temple for undertaking spiritual mission to propagate the thoughts and philosophy of Ramanujam and for spiritual education of public in general and for the worship and adoration of the deity It is also provided in the trust deed that in pursuance of pious wish and desire and in the consideration of religious service and benefits and for other good reasons and considerations, the Trustees dedicate the Trust properties for the cost of construction of the said Temple and to secure t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferently. It requires the ascertainment of whether there is one purpose within the institution or fund's overall charitable purpose which is wholly, or substantially wholly, of a religious nature. There is little doubt that clause 2(h) of the trust deed which permits the trustees to support prayer halls and places of worship sets out a purpose the whole or substantially the whole of which is of a religious nature, and this has not been seriously disputed. Therefore, in our view, the trust and the donation by the assessee to it fall outside the scope of section 80G." In the above case, Hon'ble Supreme Court held that clause 2(h) of the trust deed in question which permitted the trustees to support prayer halls and places of worship set out a purpose, the whole or substantially the whole of which, was of a religious nature. Applying the ratio laid down by the Hon'ble Supreme Court in the case of Upper Ganges Sugar Mills Ltd. (supra), to the facts of present case, I am of the considered opinion that Trust is not entitled to any relief on the basis of original Trust Deed dated 20.12.1993. 17. The next argument of Shri Anil Aggarwal, Ld. Counsel for the assessee was that there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal and he, therefore, submitted that findings of the CIT are contrary to law and precedents and the CIT ought to have allowed the claim of the assessee. 21. There is no dispute that the CIT is subordinate to Tribunal in judicial hierarchy. Therefore, CIT was duty bound to follow the order of the Tribunal. In my opinion, the CIT has passed a fresh order in compliance to the order of the Tribunal dated 19.12.2008. It is true that Tribunal remanded the matter to CIT with a direction to decide the same afresh in accordance with law after taking into consideration the Corrigendum filed by the assessee and effect thereof on the objects of the trust for the purpose of renewal of approval u/s 80G(5) of the Act. The Tribunal has nowhere directed the CIT to grant the renewal of approval u/s 80G on the basis of corrigendum dated 1.1.2008. Therefore, in the absence of such findings, the arguments advanced by Sh. Aggarwal, Ld. Counsel for the assessee are devoid of any merit. In the instant case, the counsel of the assessee has referred to certain words and sentences of the order of the Tribunal and claimed that the same is final verdict of the Tribunal. The view entertained by the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. DR submitted that the C1T has correctly held that the corrigendum is nothing but an after thought and self-serving document which is not legally binding. Shri Laxman Singh, Ld. DR has already contended that corrigendum dated 1.08.2008 and so called supplementary trust deed dated 21st day of 2010 are non est and merely scrap of paper because neither the trustees nor the founders have power to alter the objects of original trust deed dated 20.12.1993, since no power has been given either to trustees or to the founders to amend, alter, vary or change in any manner the objects of the trust as created in 1993. 24. In my considered opinion there is substantial force in the above submissions of Laxman Singh, Ld. DR keeping in view the decision of Hon'ble Supreme Court in the case of Sri Agasthyar Trust (supra), wherein the Hon'ble Supreme Court held (at pages 32 & 33) as under:- "We have already observed, the deed of 1941 originally gave the power to the founders to revoke the trust but this power was taken away by a subsequent document which was executed on August 26, 1943. It is thereafter that the trust became an irrevocable trust. The powers of the trustee in respect of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hool [1938] 1 MU 359 ; AIR 1938 PC 73, and Gokuldoss Jamnadoss and Co. v. Lakshminarasimhalu Chetti [1940] 2 MLJ 409; AIR 1940 Mad 920). If a valid and complete dedication had taken place, there would be no power left in the founder to revoke and no assertion on his part or the subsequent conduct of himself or his descendants contrary to such dedication would have the effect of nullifying it. If the trust had been really and validly created, any deviation by the founder of the trust or the trustees from the declared purposes would amount only to a breach of trust and would not detract from the declaration of trust. Therefore, the subsequent conduct of the founder in dealing with the funds of the trust long after the creation of the trust may not put an end to the trust itself" We are in full agreement with the principle stated in the aforesaid passage and we hold that the trustee had no authority or jurisdiction to execute a fresh trust deed and the document dated July 1, 1944, is of no consequence and is no more than a scrap of paper. The trust as originally established by the deed dated November 28, 1941, remained unchanged or unaffected by the later document dated July 1, 1944. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from the said Trust property is to be applied first, in the maintenance and repair of temple property, as also to be spent for the worship of the said Deity and in the defraying of the usual expenses of holding festivals of the said deity, remains intact. The Ld. A.M. has also observed that similarly, the construction of the temple and worship of the said Deity and adoration of the said Deity is still an integral part of unauthorisidely amended Trust Deed. Further, holding of periodical festivals of the Deity and offering daily worship, are still the organic part of the said Deed. The Ld. A.M. has correctly observed that these objects are purely religious in nature, inextricably linked to the Hindu religious community and its Deity 'Laxmi Narayan'. According to Ld. AM, even the unauthorized amended Trust Deed/so called supplementary Trust Deed contravenes the provisions of section 80G(5)(iii) read with Explanation 3 of the Act, being expressed to be for the benefit of a particular religious community i.e. Hindu. 26. Viewed from any angle, I am in agreement with the views expressed by the Ld. A.M. in his dissent that in the facts and circumstances of the present case, the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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