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TMI Blog1982 (1) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds in the appeal memo, particularly, against the other directions given by the Commissioner to the ITO. However, at the time of the hearing of the appeal before the Division Bench on 18-3-1981 all other grounds were specifically given up. The ground that survived for consideration in this appeal, thus, is--- "That the learned Commissioner erred in disallowing the relief allowed to the company in respect of donation to Vishwamangal Trust." 3. This question, it is common ground, had come up for consideration before the Tribunal in the case of New India Sugar Mills Ltd., and in some other cases, and has been decided in favour of the assessee. However, the Division Bench, which heard the appeal originally, felt that the Tribunal's decision in those cases, perhaps, required reconsideration. Reference was made to the President, ITAT, for constituting a larger bench under section 255(3) which was done. This is how the appeal has come up before the Special Bench. 4. Before proceeding with the appeal, it may be stated, in fairness to Shri R.N. Bajoria, the learned counsel for the assessee, that he requested the Special Bench to verify from the records whether the other grounds were r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject contemplated in clause 2(h) of the deed of trust is only an ancillary object and not a separate and independent one. 2. Assuming that it is not so, the object contemplated therein is so wide that it does not even smack of religious nature as the "religious nature" is understood in common parlance or in the strict legal sense. 3. Explanation 3 to section 80G though clarifies "charitable purpose" used in section 80G(5)(ii), the effect of qualification has been very much diluted on account of the expression used therein, namely, "any purpose the whole or substantially the whole of which is of a religious nature". 7A. For the purpose of showing that the object referred to in clause 2(h) of the deed of trust is not an independent object of the trust, Shri Bajoria placed reliance on the decision of the Supreme Court in the case of CIT v. Bar Council of Maharashtra [1981] 130 ITR 28, the relevant observation, being at page 37, is as under : "... It is true that sub-section (2) provides that a State Bar Council may constitute one or more funds for the purpose of giving financial assistance to organise welfare schemes for the indigent, disabled or other advocates ; but it is an opt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, thus, urged that the object in clause 2(h) in the deed of trust should not be considered in isolation and if all the objects of the trust are taken together, there would be no difficulty in holding that the object contemplated in this clause is not really a separate and independent object. 8. Referring to clause 2(h) of the deed of trust, the learned counsel submitted that it was impossible to read anything religious in the said object. The said clause does not refer to any religious as such. On the other hand, it contemplates establishing and maintaining public places of worship and prayer halls, available to all without any restriction whatsoever. Anything established or maintained for the purpose of all religious communities, according to him, is not and cannot be held to be of religious nature in the sense in which the expression "religious nature" is understood in common parlance or in strict legal sense. Stating that clause 2(h) was very wide and highly secular, Shri Bajoria referred to the instances of Mahesh Yogi, Ramakrishna Mission, etc., to show that though all those institutions were religious in the sense that their ultimate aim was to uplift the humanity or to aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result of which Explanation 3 was added to the provisions to show that each one of the objects of the trust has to be charitable in nature and that the object was to nullify the High Court's decision under the Gift-tax Act where it was held that the expression charitable purpose was wide enough to cover religious purpose also. For this purpose, he also referred to, and relied upon, the observations of the Supreme Court in Surat Art Silk Cloth Manufacturers' Association's case at page 3, which read as under: "(2) Where the main or primary objects are distributive, each and every one of the objects must be charitable in order that the trust or institution may be upheld as a valid charity. But if the primary or dominant purpose of a trust or institution is charitable, another object which by itself may not be charitable but which is merely ancillary or incidental to the primary or dominant purpose would not prevent the trust or institution from being a valid charity." And the observations of the Delhi High Court in the cases of Jaipur Charitable Trust v. CIT [1981] 127 ITR 620 and Jagdamba Charity Trust v. CIT [1981] 128 ITR 377 for the purpose of showing that where the main or prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 3, may or may not have been satisfied. 14. For this purpose, it would be necessary to refer to clause 2(h) and clause 3 of the deed of trust and section 80G(2)(iv), section 80G(5)(ii) and Explanation 3 to that section which read as under: "2(h) To establish, maintain and to grant and/or aid to public places of worship and prayer balls. 3. The trustees shall from time to time collect funds which and/or the income thereof will be utilised for the objects aforesaid. All investments and properties of the trust for the time being held by the trustees is hereinafter referred to as the trust fund. " "80G(1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section,--- (2) the sums referred to in sub-section (1) shall be the following, namely:--- (a) any sums paid by the assessee in the previous year as donation to (iv) any other fund or any institution to which this section applies; or (5) This section applies to donation to any institution 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 follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the object referred to in clause 2(h) of the deed of trust, we are inclined to accept Shri Bajoria's submission for the present that the object contemplated in this case is secular. It does not become religious merely because the expressions "worship" and "prayer" are very much associated with religion in common parlance, there being no suggestion that these expressions are associated with a particular religion only in contradistinction with other religions. 17. As stated by us earlier, the donation made by the assessee to the trust in this case falls under the category referred to in clause (iv) of sub-section (2) of section 80G and, therefore, all the five conditions laid down in section 80G(5) have to be satisfied before such a donation will qualify for relief under section 80G(1). There being no dispute that all conditions except condition No. (ii) are satisfied, it becomes necessary to examine what exactly is the nature and scope of that condition. Here again, it is common ground that but for Explanation 3 which has restricted the meaning of the expression "charitable purposes" used in this condition; the condition would have been satisfied. Accordingly, it would be proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conscientiousness ; pious affection or attachment---1691. 7. The religious sanction or obligation of an oath, etc.---1704," And "religious" means: "A adj. 1. Imbued with religion; exhibiting the spiritual or practical effects of religion ; pious, godly. 2. Of persons : Bound by monastic vows ; belonging to a religious order ME. b. Of things, places, etc.: Of, belonging to, or connected with, a monastic order ME. 3. Of the nature of, pertaining or appropriate to, concerned or connected with, religion 1538. b. (Chiefly poet.) Regarded as sacred---1618. 4. transf. Scrupulous exact, strict, conscientious---1599." According to Black's Law Dictionary "religion" means:---"Man's relation to Divinity, to reverence, worship, obedience, and submission to mandates and precepts of supernatural or superior beings. In its broadest sense, it includes all forms of belief in the existence of superior beings exercising power over human beings by volition, imposing rules of conduct, with future rewards and punishments, Bond uniting man to God, and a virtue whose purpose is to render God worship due him as source of all being and principle of all Government of things. As used in constitutional provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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