- Upper Ganges Sugar Mills Ltd.
vs Commissioner Of Income Tax, 1997 [Paras
3,5,7,10]
Facts
The assessee had made a donation of Rs 25,000 to the Vishwa Mangal Trust. The
assessee claimed a deduction under Section 80-G in respect of that donation. The claim
was allowed by the Income Tax Officer on 27-12-1976. The assessment was then
reopened under Section 147(b) of the Income Tax Act and on 30-12-1977 the Income
Tax Officer disallowed the claim. The Appellate Assistant Commissioner dismissed the
assessee's appeal. The Income Tax Appellate Tribunal allowed the appeal preferred by
the assessee against the order of the Appellate Assistant Commissioner. Thereafter it
referred the question set out above to the High Court. The High Court reversed the view
of the Tribunal.
Holding
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 80-G.
- Tirumala Tirupathi Devasthanam vs Chief Commissioner Of Income-Tax, 2001
[Paras 1,3,5]
The petitioner institution maintained 10 temples and 22 educational institutions, peer
home and bala mandir specified in Andhra Pradesh Charitable and Hindu Religious
Institutions and Endowments Act, 1987. The petitioner provided free food, free
accommodation, free transport to the pilgrims irrespective of caste and religion on the
simple declaration of faith in the Lord.
The Hon'ble High Court, while allowing the writ petition and setting aside the order of
the Commissioner of not granting exemption to the petitioner and directing him to
consider the application de novo in light of Hon'ble Court's order, held that 'section 80G
of the Income-tax Act, 1861, provides for deduction in respect of donations to certain
funds and institutions. It applies to donations to any institution or fund established in
India for charitable purpose and if it fulfils the following conditions, namely the
instrument under which the institution is constituted does not or rules governing the
institution or fund do not, contain any provision for the transfer or application at any time
of the whole or any part of the income or assets of the institution or fund for any purpose
other than a charitable purpose.
Sub-section (5) read with Explanation 3 makes it clear that the Commissioner can refuse
to grant recognition under section 80G of the Act only in the event of finding that the
claimed charitable purpose includes any purpose the whole or substantially the whole of
which is of a religious nature'. It was held that in the present case there was no such
finding and hence the Commissioner ought not have refused the claim of petitioner
- Sri Channamallikarjuna Trust v. CIT, 2022 [Paras 9,13,14,15]
Facts
The Assessee applied for a grant of registration u/s.12AA of the Act and filed form
No.10A of the Act for grant of registration as a "Charitable Association" for establishing
and carrying on charitable activities for the overall benefit of the community at the outset
at Gangavathi and all over Karnataka and for the benefit of the public at large mainly
promoting education, sports and environment protection. The Assessee also applied for
grant of recognition u/s.80G of the Act. Section 80G applies only to charitable trusts or
institutions. It does not apply to religious trusts or institutions whereas scheme of
exemption u/s 12A applies to both charitable as well as religious trusts. Section 80G of
the Income Tax Act'1961 provides deduction while computing the total income in the
hands of donor. It provides deduction in respect of donations to certain funds, charitable
institutions, etc.
The CIT rejected the application on the ground that the Assessee was set up for
"religious" purposes. On appeal by the Assessee to the Tribunal, the Tribunal held
reversing the order of CIT that the objects of the Assessee are not for advancement,
support or propagation of a particular religion.
Holding -
The objects and purposes of the Assessee are both charitable and religious, the Assessee
does not exist exclusively for the benefit of a particular religious community. The objects
do not channel the benefits to any community and thus, would not fall as an institution
existing solely for religious purpose. In that view of the matter, we are of the view that
the Assessee is a charitable and religious trust that does not benefit any specific religious
community and therefore, it cannot be held that it exists solely for religious purpose. It
cannot be characterized as a religious object, especially when it does not distinguish
between caste, creed, race, religion, etc.
