The Delhi High Court has held that the religious institutions are also engaged in charitable activities which are very much part of religious activities and such activities along with organising spiritual lectures has held to be religious.
The respondent-assessee was created Trust, by its founder Brhamrishi Shree Kumar Swamiji also called as “Gurudevji‟. The assessee filed return in the status of “Trust” declaring “NIL” income. The AO noted that in the year under consideration, the assessee was mainly involved in imparting spiritual education through lectures/samagams (congregation) and on TV channels; and had also established a temple of Hindu Gods/Goddesses for the general public.
Further, after analysing the objects of the Trust as mentioned in the Trust Deed, the AO concluded that the assessee was not created for religious purposes and since its income was applied for purposes other than for which it was created, He held that Gurudevji is a person specified under Section 13(3) of the Act, had applied its income for his benefit in violation of Section 13(1)(c) of the Act and forfeited the exemption under Section 11 and 12 of the Act. He held that the assessee had received the donation, out of which identity of donors in respect of donation could not be proved and the same was treated as unexplained/anonymous donation in terms of section 115BBC of the Act.
The appeal preferred by Revenue, against the order of CIT (A), was rejected by the Income Tax Appellate Tribunal (ITAT), in the light of the judgement of Hon’ble Apex Court in the case of CIT vs. Bhagwan Shree Laxmi Naraindham Trust. The Tribunal upheld the findings of CIT (A) on the disallowance of 1/3rd expenditure on the telecast of Samagams, holding that such expenditure was for the public at large and cannot be held to be benefiting Gurudevji. It has held that the religious institutions like assessee are also engaged in charitable activities which are very much part of religious activities and such activities along with organising spiritual lectures have been held to be religious and this they have examined in the context of objects of the assessee trust.
The appellant submits that the ITAT has largely relied upon its previous order in Assessee‟s own case and the decision of this Court in ITA 269/2015 without adverting to the merits of the present case. He further submitted that assessee‟s entire activities have been found to be largely for religious purposes and it is therefore not entitled to the benefits under Section 11(1) of the Act; as purely religious activities are beyond the objects mentioned in the Trust Deed. Further submitted that the activities relating to T.V. telecast, benefited Gurudevji who comes within the ambit of Section 13 (3) of the Act
While dismissing the appeal, the division bench comprising of Justice Vipin Sanghi and Justice Sanjeev Narula held that the activities undertaken by the assessee can be included in the broad conspectus of religious activities and in the context of Hindu Religion, such activities cannot be confined to activities incidental to a place of worship like a temple. The findings of the Tribunal on this aspect, do not call for any interference. The observations of the Tribunal of disallowances of 1/3rd expenditure for telecast of samagams, are reasonable and they do not warrant any interference. There is no evidence on record to construe that the gurudevji “has derived any personal benefit” which would justify the Revenue to invoke the provisions of Section 13(1)(c)(ii) of the Act to deny assessee the benefit of the expenditure.