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TMI Blog2017 (4) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... ct clauses (b) and (c), in my opinion carries much strength. Object clause (d) onwards can be considered only as incidental to clause (b) and (c). Whether publication and distribution of religious books can be considered a religious activity? - Held that:- In my opinion assessee which was pursuing printing, publishing and distribution of Christian literature and tracts as its main activity, could be considered only as a religious one. In my opinion lower authorities fell in error by applying section 2(15) to it, when said Section has no applicability on religious institutions. In respect of Cochin branch, there was a suit filed by the assessee against its Manager who claimed ownership to the said branch. As for the Trivandrum branch, assessee had entrusted its operation to CSI Diocese of South Kerala through an MOU dated 01.04.2004. It has also not been disputed by the Revenue that the said branch was running in a loss. In any case accounts of these branches were not incorporated since 31.03.2005 and the position continued so since many years. In other words, Revenue had accepted the factual position with regard to these branches in the earlier years and the claim for exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Devasahayam who was the Bishop in Madras also retired in August 2014 and the new Bishop was elected and consecrated only in March 2016. Although Rev Or V Devasahayam continued as the president of the petitioner trust during the interim period no major decisions or action was initiated until the new Bishop took charge. During the year 2014-15 there was also a change in the auditor of the petitioner trust when CA John Ravindran was appointed as the auditor of the petitioner trust for financial year 2013-14. As mentioned earlier since the General Secretary and the other Board members had no exposure to facing Income Tax appeal proceedings or the procedure involved therein, the fact of pending appeal proceedings in respect of earlier years and the status thereof was not brought to the notice of the newly appointed auditor, CA John Ravindran until in March 2016 during the assessment proceedings for AY 2013- 14. Thereafter CA John Ravindran with great efforts culled out the details of the pending appeal proceedings of the earlier years and the status thereof. The entire process involved communicating with the previous auditor and the previous General Secretary and culling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prohibit it from carrying on an exclusive business in printing, publishing and sale of books. Further, as per ld. Assessing Officer major source of its income were from sale of books. Ld. Assessing Officer put the assessee on notice as why it should not be denied exemption claimed by it u/s.11A of the Act. Though the assessee submitted before ld. Assessing Officer that it was a Christian Religious Society publishing and selling Christian literature to the public, and other activities were only ancillary and incidental to this, it was not accepted by the ld. Assessing Officer. According to the ld. Assessing Officer, assessee was not only selling religious books, but also other books like dictionaries, books on social science, books on history etc. Further, as per ld. Assessing Officer there was no particular religious activity carried on by the assessee except selling of religious books. According to him, assessee could not be classified as a Religious society but only as an entity carrying on objects of general public utility. As per the ld. Assessing Officer, receipts of the assessee from its business activities while pursuing the objects of general public utility exceeded the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee selling religious books could not be construed as an activity in the nature of trade, commerce or business. Further, as per the assessee it s main activity was distribution of religious books and tracts and only a small part of the books sold, dealt with subjects of History, Social Science and Literature. Contention of the assessee was that such secular books were displayed to attract attention of the pubic to the Christian literature. As per the assessee its activities were not in the nature of public utility, but were purely religious. Contention of the assessee was that even if some of the objects in its memorandum enabled it to do activities that could benefit general public, its actual activities were confined to printing and distributing religious books. According to the assessee it was not hit by substituted Sec. 2(15) which came into effect on 01.04.2009. 8. In so far as non incorporation of results of its Cochin and Trivandrum branches were concerned, submission of the assessee was that its Trivandrum branch was incurring loss continuously and CSI Diocese of South Kerala had undertook to run the Trivandrum shop for a small profit share of 25%. Further, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the ld. Authorised Representative strongly assailing the orders of the lower authorities reiterated the contentions taken by the assessee before the lower authorities. According to her, assessee was a company registered u/s.25 of the Act and not a trust. Further, according to ld. Authorised Representative assessee s activities squarely fell within the meaning of religion . It was not a case of general public utility. Relying on the judgment of Hon ble Andhra Pradesh in the case of Arsha Vijinanna Trust (supra), ld. Authorised Representative submitted that selling books relating to Ramayana and Mahabharata were considered as a religious activity. According to her, publication and sale of biblical books could not be considered as trade, commerce or business. 13. In so far as non incorporation of Trivandrum and Cochin accounts were concerned, ld. Authorised Representative submitted that such non inclusion was not willful. According to her, this did not affect the surplus of the assessee since both these branches were continuously incurring loss. Ld. Authorised Representative also pointed out that accounts of both Trivandrum and Cochin branches were not being incorporated since l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grants of money, paper and literature to Protestant Christian Churches, Missions, Missionaries and other throughout India d. To carry on business as proprietors and publishers of newspapers, journals, magazines, books and other literary works and undertaking of a religious. educational or useful character. e. To carry on business as printers, booksellers, bookbinders, paper makers, stationers; engravers, photographers, photographic printers, stereotypers, electrotypers, lithographers. mechanists or mechanical engineers, ink manufacturers, and any other business or manufacture that may seem for or conducive to the objects of the Association. i.To subscribe or guarantee money for charitable or benevolent objects or for any exhibition for any public, general or useful object in India. m. To borrow or raise money at interest on the issue of or upon bonds, debentures, debenture stock, bills of exchange, promissory notes, or other obligations or securities of the Association or upon mortgage or charge of the property of the Association or otherwise in such manner as may seem expedient. n. To undertake and execute any trust or any agency business which may seem di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r an assessee which was selling texts of all Vedas, Vedangas, Upangas and leading Darshanas, Ithihasaas and books like Ramayana, Mahabharatha and Bhagavatham, and works on Indian philosophy, lectures, art and all works on Indian culture, would be eligible for recognition under section 80G(5) of the Act. Assessee while seeking recognition u/s.80G of the Act had claimed that it was not a religious trust. However, Hon ble Andhra Pradesh High Court held that publication of such books was only a religious activity. Their Lordship held that concerned assessee was a religious trust. In the same vein, in my opinion, printing and publishing of Christian books can only be considered as a religious activity. That the activity pursued by the assessee was intended to promote Christian religion has not been disputed. Requirements that are to be satisfied for an organization to be considered as religious have been set out by Hon ble Apex Court in the case of Radhasoami Satsang vs. CIT 193 ITR 321. Their Lordships after considering the judgment in the case of Acharya jagdishwaranand Avadhuta Ors. Vs. CIT (1983) 4 SCC 522 had held as under; The words religious denomination in Art. 26 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... religion or caste. This interpretation is quite possible because the words used in s. 13(1)(b) refers to trusts for charitable purposes while a distinction is noted in other provisions like s. 13(1)(c), which refers to a trust for charitable or religious purposes . There is similar reference under s. 13(1)(d) as well. Hence the prohibition under cl. (b) cannot possibly cover religious institutions. It stands to reason that a religious institution, even if public, may not be able to avoid the brand of a particular religion. In other words, when public religious institutions are exempt, it cannot possibly mean that they should not be of any particular religion. As said earlier, there is no definition of the term 'religion' or 'religious purpose' under the Act. A religion generally has its basis in a system of beliefs and doctrines, which are regarded by those who profess that religion to be conducive to their spiritual well-being. In a sense, 'religious purpose' can be said to be wider in its meaning than the words 'charitable purpose'. When it is used in the context of gifts of property, it means all acts of piety and benevolence. Under the Hindu l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scriminate against any citizen on the ground of religion only . In Indira Nehru Gandhi vs. Raj Narain AIR 1975 SC 2299, Chandrachud, J. explained the basic feature of secularism saying that the State shall have no religion of its own and all persons shall be equally entitled to the freedom of conscience and the right to freely profess, practice and propagate religion. Thus pursuing a religious purpose through printing and distribution of religious books, of a religion of choice, can in no way be considered as a taboo or against public policy. 21. This raises the issue whether a public religious institution, which is printing and distributing religious books can be discriminated against, on the ground of religion. As already mentioned, 'Religion' in its broadest sense includes all forms of belief in the existence of superior beings capable of exercising power over the human race. As commonly accepted, it means the formal recognition of a universal God. It does not mean mere fundamentalism. The Supreme Court in the case of Commissioner, Hindu Reglious Endowments vs. Sri Lakshmindra Thirtha Swamiar of Shirur Math AIR 1954 SC 282, has discussed the meaning and concept of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the status of the company u/s.25 of the Act was not under trust. Therefore the case laws relied on by the lower authorities for coming to a conclusion that no amendments could have been made to the objects of the assessee have no applicability. These case laws are relevant only for a trust. Assessee being a company u/s.25 of the Act, it could change its objects as per the prescription under the Companies Act. Even otherwise letter dated 21.09.1973 issued by CIT, intimating acceptance of assessee s application for registration u/s.12A(a) of the Act does not contain in it any condition requiring the assessee to obtain a prior permission before amending its objects. 23. Coming to the question, whether the failure of the assessee to incorporate the results of its two branches in Cochin and Trivandrum would be fatal to its claim for exemption, what I find is that in respect of Cochin branch, there was a suit filed by the assessee against its Manager who claimed ownership to the said branch. As for the Trivandrum branch, assessee had entrusted its operation to CSI Diocese of South Kerala through an MOU dated 01.04.2004. It has also not been disputed by the Revenue that the said branch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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