All India Pingalwara Charitable ... vs Department Of Income Tax on 25 February, 2016

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Income Tax Appellate Tribunal - Amritsar

All India Pingalwara Charitable ... vs Department Of Income Tax on 25 February, 2016

             IN THE INCOME TAX APPELLATE TRIBUNAL,
                   AMRITSAR BENCH; AMRITSAR

             BEFORE SH. A.D. JAIN, JUDICIAL MEMBER
            AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER

                     ITA Nos.212 & 431(Asr)/2014
                 Assessment years:2010-11 & 2011-12
                             PAN: AAATA2237R

Dt. Commr. Income Tax, vs. All India Pingalwara Charitable Society,
Circle-IV,                 Tehsilpura, G.T.Road,
Amritsar.                  Amritsar.
(Appellant)                (Respondent)


                        Appellant by: Smt. Ratinder Kaur, DR
                        Respondent by: Sh. Salil Kapoor, Advocate

                        Date of hearing: 23/11/2015
                        Date of pronouncement: 25/02/2016

                              ORDER


PER A.D. JAIN, JM:

These are the Department's appeals for the assessment years 2010-11 & 2011 -12 against the ld. CIT(A)'s action of deleting addition of Rs.1,16,89,535 (for AY 2010-11) and Rs.2,63,82,236/- (for AY 2011-12).

2. The issue involved being common for both the assessment years, for facility, the facts are being taken from the record for the assessment year 2010-11.

3. The assessee is a charitable society and is registered under section 12AA of the I.T. Act, 1961. The assessee is also registered u/s 80G of the Act. The assessee is stated to have been engaged in charitable activities.

The case of the assessee was selected for scrutiny under the CBDT 2 guidelines. After examining the books of account produced and after going through the detailed list of donations in golaks for the AY 2010-11, the AO noticed that the assessee was stated to be in receipt of golak donations amounting to Rs.1,99,86,858/-. As per the AO, the total annual donations of RS.16,59,47,049/- comprised of the following items:

I) donations received in cash Rs.9,06,53,538/-

2) donations received in kind Rs. 83,57,943/-

3)       Grants in aid                           Rs.   13,43,631/-
4)       Foreign donations                       Rs. 6,55,91,637/-
                                                 Rs.16,59,47,049
       5% of this amount comes to RS.82,97,532/-

3.1. After carrying out a comparison the total golak donations stated at RS.1,99,86,888/- as per list supplied with the appellant's reply dated 22.01.2013, and RS.82,97,352/- being 5% of Rs.16,59,47,049/-, the resultant difference of Rs.1,16,89,535/-, according to the AO, represented excess amount as per provisions of section 115BC of the Act. The assessee was required by the AO to explain as to why the same may not be taxed in accordance with the provisions of section 115BBC of the Act. In response thereto, the assessee filed reply dated 26.02.2013, as incorporated at pages 4 & 5 of the assessment order. The only difference of opinion arose between the assessee's version and the AO's opinion based on the dictionary meaning of the word 'charity', as given in the Oxford Dictionary, the AO proposed to tax the anonymous donations in accordance with the provisions of Section 115BBC(1), as against the 3 assessee's version that the same being cash received through golak, did not partake the character of the anonymous donations covered u/s 115BBC(2) of the Act. Accordingly, the AO brought to tax the above difference of Rs.1,16,89,535/- by invoking the provisions of section 115BBC(3) of the Act, as the quantity of amount received was beyond the ambit of anonymous donations.

4. Before the ld. CIT(A), the assessee filed written submissions, the gist whereof has been extracted by the CIT(A) in his order for the assessment year 2010-11, as follows:

"5.1 As mentioned by the assessee, a Godly Man Bhagat Puran Singh Ji had started helping the homeless, disabled, handicapped, crippled, insane, mentally retarded, young or old persons, suffering from incurable disesases, after migration of 1947 and many others got motivated and attracted by his efforts and thus the Appellant Society came in to existence with the sole object of helping such persons and it was allotted a shelter outside city of Amritsar by the Municipal Corporation, Amritsar with the approval of the Punjab Government for accommodation of such 'Pingalas'(Handicapped).

5.2 It was further mentioned that the number of in-mates, children, yound and old suffering from various disabilities as mentioned above, who were being served by the Pingalwara Society was more than 1600 during the previous year and this was itself a religious activity by any concept of any religion of the World and , therefore, the provisions of Section 115BBC(1) were not applicable to the charities received by Pingalwara Society through Society through Golaks or/otherwise.

5.2.1. All the inmates of the Pingalwara Society were hundred percent orphans as they had no relations to support them and they were provided, shelter, food and clothing by the Pingalwara Society only absolutely free of cost i.e without charging any fee. It was itself a religious under any religion of the World. 5.2.2 The society was rendereing Manav Sewa for which charities had to be collected and the kind hearted people gave charities only for that which was a religious purpose carried on by 4 the Pingalwara Society through Manav Sewa. Famous Persian Poet Sheikh Saadi has said in Persian.

"Bandai Bajuz Khaidmat--e- Khalak neest"

This means worship {of God} without serving the Khalkat (Creation) is empty and meaningless.

MUSLIM FAITH Zakaa^i.e. Charity for the welfare of downtrodden is one of the fwe tenants of Islam. As per Internet Information, Zakaat has been ordered and mentioned 30 times in the Holy Book of Quran. Copy of Print of one reference is attached as specimen. SIKHISM Under Sikhism, great stress has been laid by all groups on Sewa i.e. service to Manking and have talked the followers to spend Dasvand for charitable purposes.

5.2.3 Dasvand is one of the orders from the Seikh Gurus and is part of Sikh Religion. It literally means tenth part of the income should be given for religious purpose including to help the poor. It is part of Rehatnama ordered by the Sikh Gurus. Photocopy from the book 'Lecture - Maha Chaanan' of Page 109 is attached in this context. This, in Punjabi, reads as under:

"kirat karan jog sikhan layee kamai kami zaroori karar de ke gurmati ne angheen, beemar te lawaris birdhan da prabhadh kita hai te uh is tarah ke lodvandan di madad layi har kirat karan wale sikh nyu aapni kamayee vichon aamdan da daswan hisa dena faraz karar de ditta hai. Is lazmi bhaicharak bandhan (tax) da naam dasvand hai. Dasvand har sikh nu dena farz dasseya hai. Satguran ne amritdhari Sing layee taan khas taur te hidayat kiti hai.

HINDUISM-Some Quotations "In Chapter 9 of Menu-Samriti which is the source and foundation of 5.2.4 Hindu Law, it is laid down in Sanskrit.

"Saruesham Api Tu Nyayam Datu Shaktya Manishina Grasachhadan Mat Yantam Patito Hay Dadat Bhavet. "

Hindi Translation Which means Bhudhiman Manushaya ka Kartavaya hai ki Viklangon ka aayu prayant yathashakti bhojan- uastra aadi aniuarya roop se dena hi nyayochit hai, aisa kartavaya paalan na karne wala paapi kahlayega.

Another Shalok "Par ye vishastirant shreshnama - Riqved - 7. 7.6"

Hindi Translation Manushaya sewa karte huye sansar- saagar ko paar kar haate hai.

"Sewa Dharama Param Gehna" - Need Shatak by Bhartari Hari Hindi Translation 5 5.3. Hon'ble the Supreme Court, while dealing with the religious or charitable purposes it is observed by the Supreme Court in the case of Ramchandra Shukla v. Shree Mahadeoji, AIR 1970 SC 458, that there is no line of demarcation in the Hindu system between religion and charity. Indeed, charity is regarded as part of religion.

5.4. Reliance is already placed on the case of CIT vs. Barkate Saifiyah Society reported at 213 ITR 492 (Guj.) and findings reproduced in our letter dated 14.10.2013.

5.5. As already submitted in our earlier letter, the provision of taxing anonymous donations is not applicable to trusts or institutions wholly for religious purpose or wholly for charitable and religious purpose. The religious purposes and charitable purposes overlap in cases iike Appellant Pingalwara Society where Manav Sewa or Service to Manking particularly taking care of the orphans and destitudes, homeless, disabled, handicapped, crippled, insane, mentally retarded, young or old persons, suffering from incurable diseases, was carried out as matter of religion and the charities were received for that purpose."

6. I have carefully considered the appellant's submissions in the backdrop of case laws quoted in support thereto and have also gone through the AO's findings contained in his above referred assessment order. The appeal is hereby disposed off by recording adjudications and by giving consolidated findings:-:

6.1. Hon'ble Gujarat High Court had discussed issue of 'religious purpose and charitable purpose' in the case of CIT v. Barkate Salfaijhia Society, reported in 213 ITR 492 [Guj.] from which discussion, relevant to present issue is being reproduced hereunder:-

1. The Phrase "religious purpose" includes relief of the poor, education, medical relief, and the advancement (sic).

2. However, the phrase charitable purpose is defined u/s 2(15) of the Act which reads as under:

3. It is to be noted that definition of the phrase "charitable purpose" is inclusive and it covers a wider field than the field covered by the words "religious purpose". Further, in some cases, even a religious activity by a particular sect would be a charitable activity; for some, supply of fodder to animals and cattle is a religious object, while to others it may be a charitable purpose, according to Hindu religious activity.

Similarly, Khairat under the Mohamedan law woidd be 6 considered to be a religious activity. The said activities may be for a charitable purpose to some. Hence, in many cases, both the purposes may be overlapping. The purposes may have both the elements, charity as well as religious.

4. While dealing with what is "religious" or "charitable purpose"

it is observed by the Supreme Court in the case of Ramchandra Shukla v. Shree Mahadeoji, AIR 1970 SC 458, that there is no line of demarcation in the Hindu system between religion and charity. Indeed, charity is regarded as part of religion. While discussing this aspect, the Supreme Court has further observed as under (at page 464):

5. "Hindu piety found expression in gifts to idols to religious institutions and for all purposes considered meritorious in the Hindu social and religious system. Therefore, although courts in India have for a long time adopted the technical meaning of charitable trusts and charitable purposes which the courts in England have placed upon the term "charity" in the status of Elizabeth, and, therefore, all purposes which according to English law are charitable will be charitable under Hindu law. The Hindu concept of charity is so comprehensive that there are other purposes in addition which are recognized as charitable purposes. Hence, what are purely religious purposes and what religious purposes will be charitable purposes must be decided as observed by Mukherjea in Hindu Law Religious and Charitable Trust, Second Edn., page 11, there is no line of demarcation in the Hindu system between religion and charity.Indeed, charity is regarded as part of religion, for, gift both for religious and charitable purposes are impelled by the desire to acquire religious merit.

'According to Pandit Prannath Saraswati, these fell under two heads, Istha and Purta. The former meant sacrifices, and sacrificial gifts and the latter meant charities. Among the Istha acts are Vedic sacrifices, gifts to the priests at the time of such sacrifices, preservations of vedas, religious austerity, rectitude, vaisvadev sacrifices and hospitality. Among the Purta acts are construction and maintenance of temples, tanks, wells, planting of groves, gifts of food, dharamshalas, places for drinking water, relief of the sick, and promotion of education and hearing, (cf Pandit Prannath Saraswati's Hindu Law of Endowments, 1897, pages 26+27). Istha and puria are in fact registered as the common duties of the twice born class, (cf Pandit Prannath Saraswati, page 27)."

6. In view of the aforesaid discussions, it can be said that a trust can be either for religious purposes or for charitable purposes or it can be for both charitable and religious purposes.

"Hence the words "trust for charitable purpose" would include even trust for advancement of religion. At this stage, we would note that the definition of charitable purpose under the Income- tax Act goes much further than the definition of charity to be derived from the English cases because it specifically includes medical relief and embraces all objects of general public utility subject to the condition imposed by the restrictive words "not involwng the carrying on of any activity for profit".

While dealing with section 11, a Division Bench of this court in the case in the case of Addl. CIT v. A.A. Bibijiwala Trust (1975) 100 ITR 516, has observed as follows (at page 523):

''Similarly, in the case before us also, the property is settled upon wakf that is, for purposes which are considered to be religious, pious or charitable according to the notions of members of the Dawoodi Bohra community and further the income in the corpus of these properties settled upon trust must be used for Dawat purposes, that is, for the benefit of the Dawoodi Bohra community. Though the words of clauses 6,7 and 8 are very wide in terms, in fact, that apparently wide discretion of the Mullaji Saheb is bound down by the two factors, namely, that this is a wakf, a dedication by a Mussalman of property for purposes which, according to the notion of Mussalmans, are pious, religious or charitable, and secondly, it must be used for Dawat purposes, that is, for purposes which go to benefit the Dawoodi Bohra community. With these two limitations operating on him, even the apparently wide discretion conferred upon the Mullaji Sahab as Dai-ul- Mutlak for the time being is confined within the four corners of these two overriding factors and in view of these two overriding factors it must be held, that the properties in question settled by the two deeds of January 12,1937, were settled upon trust for charitable or religious objects and were, therefore, entitled to exemption under section 11(1 )(a) of the Act of 1961. We must take it clear that the real controversy between the parties is regarding exemption u/s 1 l(l)(a) of the act of 1961 and not whether the trusts are wholly religious or wholly charitable. Even if the trusts are partly religious and partly charitable, so long as no part of the income or corpus can be utilized for a purpose which is not either charitable or religious, there is no doubt that the exemption u/s ll(l)(a) will be available to the assessee. In the instant case, we find that, in spite of the 8 apparently wide language of the clauses of the dead of trust, in fact reading the trust deed as a whole, it transpires, particularly in the light of the decision of the Bombay High Court in Advocate- General of Bombay v. Yusuf Ali, AIR 1921 Bom 338, that the apparently wide discretion has to be exercised within the four corners of the wakf and for Dawat purposes. What are Dawat purposes have been described byMarten. J., at page 1102, in Advocate-General of Bombay v. Yusuf Ali, AIR 1921 Bom 338, and, in our opinion, it is only within the four corners of Dawat purposes as recognized by the Dawoodi Bohra community that the Mullaji Saheb can use the corpus or the income of this fund".

5. The ld. CIT(A) deleted the addition by holding as under:

6. I have carefully considered the appellant's submissions in the backdrop of case laws quoted in support thereto and have also gone through the AO's findings contained in his above referred assessment order. The appeal is hereby disposed off by recording adjudications and by giving consolidated findings:-:

6.1 Hon'ble Gujarat High Court had discussed issue of 'religious purpose and charitable purpose' in the case of CIT v. Barkate Salfaijhia Society, reported in 213 ITR 492 [Guj.] from which discussion, relevant to present issue is being reproduced hereunder:-

1. The Phrase "religious purpose" includes relief of the poor, education, medical relief, and the advancement (sic).

2. However, the phrase charitable purpose is defined u/s 2(15) of the Act which reads as under:

3. It is to be noted that definition of the phrase "charitable purpose" is inclusive and it covers a wider field than the field covered by the words "religious purpose". Further, in some cases, even a religious activity by a particular sect would be a charitable activity; for some, supply of fodder to animals and cattle is a religious object, while to others it may be a charitable purpose, according to Hindu religious activity.

Similarly, Khairat under the Mohamedan law woidd be considered to be a religious activity. The said activities may be for a charitable purpose to some. Hence, in many cases, both the purposes may be overlapping. The purposes may have both the elements, charity as well as religious.

4. While dealing with what is "religious" or "charitable purpose"

it is observed by the Supreme Court in the case of Ramchandra Shukla v. Shree Mahadeoji, AIR 1970 SC 458, that there is no line of demarcation in the Hindu system between religion and charity. Indeed, charity is regarded as part of religion. While discussing this aspect, the Supreme Court has further observed as under (at page 464):

6. In view of the aforesaid discussions, it can be said that a trust can be either for religious purposes or for charitable purposes or it can be for both charitable and religious purposes.

"Hence the words "trust for charitable purpose" would include even trust for advancement of religion. At this stage, we would note that the definition of charitable purpose under the Income-tax Act goes much further than the definition of charity to be derived from the English cases because it specifically includes medical relief and embraces all objects of general public utility subject to the condition imposed by the restrictive words "not involwng the carrying on of any activity for profit".

While dealing with section 11, a Division Bench of this court in the case in the case of Addl. CIT v. A.A. Bibijiwala Trust (1975) 100 ITR 516, has observed as follows (at page 523):

''Similarly, in the case before us also, the property is settled upon wakf that is, for purposes which are considered to be religious, pious or charitable according to the notions of members of the Dawoodi Bohra community and further the income in the corpus of these properties settled upon trust must be used for Dawat purposes, that is, for the benefit of the Dawoodi Bohra community. Though the words of clauses 6,7 and 8 are very wide in terms, in fact, that apparently wide discretion of the Mullaji Saheb is bound down by the two factors, namely, that this is a wakf, a dedication by a Mussalman of property for purposes which, according to the notion of Mussalmans, are pious, religious or charitable, and secondly, it must be used for Dawat purposes, that is, for purposes which go to benefit the Dawoodi Bohra community. With these two limitations operating on him, even the apparently wide discretion conferred upon the Mullaji Sahab as Dai-ul- Mutlak for the time being is confined within the four corners of these two overriding factors and in view of these two overriding factors it must be held, that the properties in question settled by the two deeds of January 12,1937, were settled upon trust for charitable or religious objects and were, therefore, entitled to exemption under section 11(1 )(a) of the Act of 1961. We must take it clear that the real controversy between the parties is regarding exemption u/s 1 l(l)(a) of the act of 1961 and not whether the trusts are wholly religious or wholly charitable. Even if the trusts are partly religious and partly charitable, so long as no part of the income or corpus can be utilized for a purpose which is not either charitable or religious, there is no doubt that the exemption u/s ll(l)(a) will be available to the assessee. In the instant case, we find that, in spite of the apparently wide language of the clauses of the dead of trust, in fact reading the trust deed as a whole, it transpires, particularly in the light of the decision of the Bombay High Court in Advocate-General of Bombay v. Yusuf Ali, AIR 1921 Bom 338, that the apparently wide discretion has to be exercised within the four corners of the wakf and for Dawat 11 purposes. What are Dawat purposes have been described byMarten. J., at page 1102, in Advocate-General of Bombay v. Yusuf Ali, AIR 1921 Bom 338, and, in our opinion, it is only within the four corners of Dawat purposes as recognized by the Dawoodi Bohra community that the Mullaji Saheb can use the corpus or the income of this fund".

7. Thus, it can be seen that from the fact of the assessee trust and the case law discussed above that the assessee Trust has been established wholly for religious and charitable purposes. The Hon'ble Supreme Court has held thatjdiere is nomine of demarcation in thecase ofin the Hindu system between religion and charity in the case of Ramchandra Shukla v. Shree Mahadeoji AIR 1970 (SC) 458. Thus religious purpose also includes relief of the poor, education, medical relief, etc. In view of the above discussion, the assessee trust is established wholly for religious and charitable purposes and as such falls under section 115BBC(2)(b)_ as j/'has not received any anonymous donation amounts with specific directions that such donation is fore any university or other educational institution, or any hospital or other medical institutions run by such trusts or institution. In view of above, provisions of Section 115BBC of the IT act, 1961 are not applicable to the assessee trust. In view of the above, the addition made by the Assessing Officer, of Rs. 1,16,89,535/- is hereby deleted. "

6. The ld. DR contended that the ld. CIT(A) has erred in law in deleting the addition made by the AO at Rs.1,16,89,535/- by invoking the provisions of section 115BBC(1)(i) of the Act. She further submitted that the ld. CIT(A) was not correct in treating the assessee trust to be covered under the provisions of section 115BBC(2)(b), ignoring the fact that the assessee is registered as a charitable trust and not as a religious and charitable trust.

7. The ld. counsel for the assessee, on the other hand, submitted that the amounts in question, deposited in the golaks installed in front of the Gurudwara, amounted to religious charity, which comes under the provisions of section 115BBC(2)(b) of the I.T. Act, 1961 and they cannot 12 be said to be anonymous donations; that charity is different from donation and in the present case, the amounts received represent charity and not donation. It has been submitted that in the earlier years, no such addition has been made by the Department and the facts in the year under consideration have not undergone any change from the said earlier years.

8. Having heard the rival contentions in the light of the material placed on record, it is seen that the ld. CIT(A) deleted the addition, relying on the decision of the Hon'ble Gujarat High Court in the case of "CIT vs. Barkate Saifiyah Society", 213 ITR 493 (Guj.) No decision to the contrary has been cited.

9. The ld. CIT(A) also relied on the decision of the Hon'ble Supreme Court in the case of "Pat. Ram Chandra Shukla vs. Shree Mhahadeoji, Mahabirji and Hazrat Alikanur vs. Ors.", 1969 SCC (3) 700, wherein, it has been held that there is no line of demarcation in the Hindu system between religion and charity. Again, no contrary decision has been cited or brought on record by the department.

10. It is on the above basis, that the ld. CIT(A) has held that 'religious purpose' also includes relief to the poor, education, and medical relief, etc.

11. In "CIT vs. Paramhans Ashram Trust", 203 ITR 711 (Raj.), the Hon'ble Rajasthan High Court held that the trust was created for the objects (1) maintenance of the existing dharamshalas, help of Agarwals 13 and their widows and children, (2) feeding of mendicants, and (3) construction of new dharamshalas and schools and help to destitutes. It was also noted that the activities carried on by the assessee-trust were in consonance with the aims and objects of the trust and the trust was registered with the Charity Commissioner. On these facts, the Appellate Assistant Commissioner had upheld the trust as a Public Charitable and Religious Trust and the question of law referred to the Hon'ble High Court was as under:

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the decision of the Appellate Assistant Commissioner that the assessee is a public charitable and religious trust and its income is entitled to exemption u/s 11 of the Income Tax Act, 1961."

The Hon'ble High Court had answered the question in favour of the assessee.

12. In "Bombay Panjrapole Trust, Mumbai vs. Department of Income Tax", vide order dated 15.05.2013, passed by the Mumbai Bench of the Tribunal, it was held as under:

" 3. Assessee is a Charitable Trust engaged in maintaining gaushalas, tending to other animals and birds doing research in animal husbandry and conducting schools and classes to educate the people in these fields. During the assessment proceedings, the AO found that it had collections i.e., Dharmau Box Collection and Dharmun (other collection) which were at Rs. 5.80 Lakhs and Rs. 1.02 Crores respectively on which the AO sought the assessee's reply. After considering the reply of the assessee, AO added (Dharmau Box Collection) Rs. 5,80,980/- and Rs. 74,02,187/- (part of other collection to the total income of the assessee.

4. Assessee preferred an appeal before the Fist Appellate Authority (FAA). After considering the submissions of the assessee, FAA held that the AO had nowhere said that the activity of the appellant trust was not for charitable purpose, that AO had also 14 not said that the trust had anywhere indulged in any other activity, which was not covered by object of appellant trust, that the AO has mainly relied upon the provisions of Section 115BBC of the Act introduced on statute by Finance Act, 2006 w.e.f. 01-04-

2007, that the AO had misunderstood the intention of the law, while applying the provisions of Section 115BBC of the Act, that the said provision had not been brought on statute with the intention to check donations of meager amount of Rs. 10/- to Rs.150/-, that the AO was not justified in invoking the provision of Section 115BBC of the Act, for taxing anonymous donations, which itself was not permitted as per Section 115BBC(2) of the Act, that appellant trust hold the registration u/s. 12A of the Act in continuation and that the amount of Rs. 84,36,407/- had been utilised by appellant trust for the cause of appellant trust only, that entire receipt was utilised by appellant trust for the purpose of object of the trust, that purpose behind introduction of Section 115BBC of the Act by Finance Bill, 2006 and the back ground behind introduction of this new provision was to ensure misuse of receiving anonymous or pseudonymous donations by charitable institution and trust, that the facts and situation in the case under consideration was anonymous donations which were received by the appellant trust from regular visitors for providing some eatable like green grass, golladdu and dana to the animals and birds in the campus of the appellant trust, that the trust had maintained the details of such donations received on purchase of green grass, laddu and dana of Rs. 150/-, wherein the trust maintained account of identity of prayer indicating the name and address of such persons, that by any stretch of imagination, donations could not be considered as misuse of provisions in receiving donation or unaccounted money received by the assessee-trust. Following his own order for the year 2007-08, FAA deleted the addition made by the AO."

13. The Tribunal dismissed the Departmental appeal, observing as follows:

"11.From the order of the CIT(A), we find that the assessee is running veterinary hospital for treatment of wounded and sick animals and birds. If we strictly accept the submissions of the DR, then we must also accept the situations where we will find wounded and dead animals on the roads, in open, and at houses, rotting, spreading foul smell and diseases. Therefore, accordingly, the DR would accept a situation like this. We find that this trust has been inn existence for the last 176 years doing and performing a 15 public good and service to humanity with sincere and intentions, not even asking people to make contributions. Whatever contributions by way of donations are coming, are coming in small donations, which are put by public at large in donation boxes (dharmau)."

14. In "CIT vs. Dawoodi Bohara Jamat" 364 ITR 31, the Hon'ble Supreme Court observed as under:

"The assessee was a registered public trust under the M.P. Public Trusts Act, 1951. It filed an application for registration before the Commissioner as envisaged under section 12A, read with section 12AA for availing the exemption under section 11.

• The Commissioner opined that the assessee was a charitable trust and since the object and purpose of the trust was confined only to a particular religious community, the same would attract the provisions of section 13(1 )(b) and, therefore, prayer made for registration of the trust was declined.

• The Tribunal after going through the objects of the assessee-trust came to the conclusion that the assessee was a public religious trust as the objects of the trust were wholly religious in nature and thus, the provisions of section 13(l)(b) which were otherwise applicable in case of charitable trust would not be applicable.

• The Tribunal therefore, held that the assessee was entitled to claim registration under sections 12A and 12AA.

• The High Court primarily, was of the view that the decision of the Tribunal was rendered purely on the factual matrix of the case and, therefore, it would be improper to disturb the finding of fact so arrived by the Tribunal. Secondly, the court concluded that the provisions of section 13(1 )(b) would not be applicable to the assessee trust as the trust was not created or established for the benefit of any particular religious community or caste. Consequently, the revenue's appeal was dismissed."

15. In the aforesaid case, the Hon'ble Supreme Court held as follows:

"34. Indubitably, the word 'charity' connotes altruism in thought and action and involves an idea of benefiting others rather than oneself. (Andhra Chamber of Commerce (supra)). It also cannot be lost sight of that the supreme goal of all religions is philanthropy 16 which could be manifested in various forms. It is held that gifts for religious purposes are prima facie gifts for charitable purposes. (Schoales v. Schoales [1930] 2 Ch. 75 (CA); White v. White [1893] 2 Ch. 41 (CA))

35. Unlike the phrase "charitable purpose", "religious purpose" is not defined under the Act. According to lexicographers, the term religious would mean "of or relating to religion." (Merriam Webster Dictionary, Macmillan English Dictionary). The Shorter Oxford English Dictionary defines the term as follows:

"Devoted to religion; exhibiting the spiritual or practical effects of religion, following the requirements of religion; pious, godly, devout."

In Kanga, Palkhivala and Vyas, Law and Practice of Income Tax, Vol. 1, Ed. 9th (at p. 544) religious purposes are indicated to include the advancement, support or propagation of a religion and tenets. Thus, a religious purpose would be one relating to a particular religion and broadly would encompass objects relating to observance of rituals and ceremonies, propagation of tenets of the religion and other allied activities of the religious community. An example of such would entail activities such as the dance performances (Garba) or distribution of food specifically for people on fast during the Hindu festivities of Navratri.

36. In certain cases, the activities of the trust may contain elements of both: religious and charitable and thus, both the purposes may be over lapping. More so when the religious activity carried on by a particular section of people would be a charitable activity for or towards other members of the community and also public at large. For example, the practice of optional charity in the form of Khairat or Sadaquah under Mohammadan Law would be covered under both charitable as well as religious purpose. Further, while providing food and fodder to animals especially cow is religious activity for Hindus, it would be charitable in respect to non- Hindus as well. Similarly, service of water to the thirsty would find mention as religious activity in sacred texts and at the same time would qualify as a charitable activity.

37. The Tribunal has analysed the objects of the trust in the light of the holy scriptures and Quran and recorded its satisfaction as follows:

"16...The objects of the assessee-trust reproduced above clearly refer to the religion and are | supported by reference 17 made to different pages of Holy Quran. The learned Counsel for the assessee referred to the true copies of several pages of Holy Quran written by two of the authors referred to above in which giving of food in days of hunger or orphan is considered as highly religious ' ceremony. Reference is also made that who will give to the people or poor then Allah will give them in return and, i.e., who will give loan then Allah will give double to them. Likewise, for helping the needy people for religious activities and to carry out religious activities or spend for good, spending wealth in the way of Allah, bestowing mercy, teaching were considered to be highly religious activities. On going through several true pages of Holy Quran written by the authors referred to above, we are satisfied that the learned Counsel for the assessee was justified in contending that all the objects of the assessee-trust are solely religious in nature because each of them refers either to religious occasions, religious education or to religious activities. The learned Counsel for the assessee also explained that the words 'Shariat-e-Mohammadiyah' means the path shown by prophet Mohammed. Therefore, the objects of Shariat-e- Mohammadiyah are identical with those of 'Dawat-e- Hadiyah'. For Dawoodi Bohras, true path shown by the pfophet is the one indicated and shown by their living guide Dai-al-Mutlaq of the time who is the living and visible guide for Dawoodi Bohras. It is an undisputed fact that for the people believing in Islam, writings in Quran are words of J Allah for them. The directions given in the Holy Quran are considered by the people of Islamic faith . as orders from Allah and the people of Islamic faith obey such orders as holy and religious. The learned Counsel for the assessee has been able to demonstrate that all the objects of the assessee-trust, as noted above, came out from the writings in Quran and as such these are the orders for them while observing Islamic faith."

38. Unquestionably, objects (c) and (f) which provide for the activities completely religious in nature and restricted to the specific community of the respondent-trust are objects with religious purpose only. However, in respect to the other objects, in our view the fact that the said objects trace their source to the Holy Quran and resolve to abide by the path of godliness shown by Allah would not be sufficient to conclude that the entire purpose and activities of the trust would be purely religious in color. The objects reflect the intent of the trust as observance of the tenets of Islam, but do not restrict the activities of the trust to religious obligations only and for the benefit of the members of the community. The Privy Council Trustees of The Tribune In re [1939] 7 ITR 415 has held that in judging 18 whether a certain purpose is of public benefit or not, the Courts must in general apply the standards of customary law and common public benefit or not, the Courts must in general apply the standards of customary law and common opinion amongst the community to which the parties interested belong to. Therefore, it is pertinent to analyse whether the customary law would restrict the charitable disposition of the intended activities in the objects.

39. The provision of food to the public on religious days of the community as per object (a) and (b), the establishment of Madarsa and organizations for dissemination of religious education under object (d) and rendering assistance to the needy and poor for religious activities under object (e) would reflect the essence of charity. The objects (a) and (b) provide for arrangement for nyaz and majlis (lunch and dinner) on the religious occasion of the birth anniversary and Urs Mubarak of Awliya-e-Quiram (SA) and the Saints of the Dawoodji Bohra community and for arrangement of lunch and dinner on religious occasions and auspicious days of the Dawoodi Bohra community, respectively. Nyaz refers to the food a person makes and offers to others on any particular occasion on the occasion of the death of a saint and Majhlis implies a place of gathering or meeting. The activity of providing for food on certain specific occasions and other religious and auspicious events of the Dawoodi Bohra community do not restrict the benefit to the members of the community .-Neither the religious tenets nor the objects as expressed limit the service of food on the said occasions only to the members of the specific community. Thus, the activity of Nyaz pat- formed by the respondent-trust does not delineate a separate class but extends the benefit of free service of food to public at large irrespective of their religion, caste or sect and thereby qualifies as a charitable purpose which would entail general public utility.

40. Further, establishment of Madarsa or institutions to impart religious education to the masses would qualify as a charitable purpose qualifying under the head of education under the provisions of Section 2(15) of the Act. The institutions established to spread religious awareness by means of education though established to promote and further religious thought could not be restricted to religious purposes. The House of Lords in Barralet v. IR 54 TC 446, has observed that "the study and dissemination of ethical principles and the cultivation of rational religious sentiment" would fall in the category of educational purposes. The Madarsa as a Mohommedan institution of teaching does not confine instruction to only dissipation of religious teachings but also contributes to the holistic education of an individual. Therefore, it cannot be said that the object (d) would embody a restrictive purpose of religious activities only. Similarly, 19 assistance by the respondent-trust to the needy and poor for religious activities would not divest the trust of its altruist character."

16. It was thus held that the objects of the Trust exhibited the dual tenor of religious and charitable purpose and activities.

17. In "Bhagwan Shree Laxmi Narain vs. ITO (E), Trust Ward-III, Delhi", vide order dated 20.08.2014 (copy placed on record), passed in ITA No.5812/Del/2012, for AY 2009-10, co-authored by one of us - the ld. AM, it has been held as follows:

"10.7. On a consideration of the above alongwith the findings recorded in the assessment order which have been extracted in para 2 & 3 of this order, it is seen that while considering the explanation qua the anonymous donations which was claimed to be voluntary donations by the assessee, the tax authorities have come to the incorrect conclusion that since the assessee was engaged in spiritual lectures which according to their understanding of the context in which the explanation was offered was mistakenly and erroneously considered to be a bar to the assessee in claiming that the rigours of sec. 115BBC were not attracted. The said conclusion has been arrived at by the tax authorities on considering the anonymous donations in the facts of the present case in the light of the newly inserted section 115BBC and the aforesaid Circular No.14 of the CBDT which explained the same. On considering the objects of the trust we are of the view that in the facts of the present case the tax authorities have proceeded on a very narrow and incorrect understanding in holding that the assessee trust was engaged in spreading spirituality and since section115BBC only exempts religious trust, a trust allegedly imparting spiritual knowledge was consequently not contemplated as an exception by the Legislature as much as it consequently is barred to claim exemption vis-à-vis the anonymous donation.

10.8. We have extracted the objects of the trust and on a careful consideration of the same, we hold that the conclusions drawn by the tax authorities are incorrect on facts and law. It is seen that only in clause (viii) of the objects of the trust, it is set out that the trust imparts spiritual lectures to "mentally disturbed" and "to all human 20 beings". On consideration of the same we find that the said aim has to be understood in the context of and read alongwith the other objects of the trust whose target groups are widows, orphans, old and infirm people, destitutes, illiterate, handi-capped, mentally retarded, providing food and shelter to poor and needy, night shelter, nari-niketan/ mahila ashram, weaker sections and all other groups who can be included in the phrase in "need of physical, mental and financial help" including and not exclusively affected on account of natural calamities. etc. like flood, fire, famine, drought, earth-quakes, storm, accident, pestilence, drought, epidemics etc. A perusal of the above enumerated list when taken in the contest of extreme devastating tragedies and the needs of destitute; old age; infirm etc needs no specific treatise to bring out the potential importance and benefits of spiritual lecture to the target group of mentally disturbed, destitute due to calamities, natural or man- made, age, orphaned, widowed etc. The potential benefit and succor to these target groups by way of some philosophy or imparting of belief that there is some power beyond all this which is watching out for them cannot either be under-estimated or over-emphasized and has to be considered in the proper perspective. The fact that these arguments/philosophy on the touchstone of science may fail and to some of us non-believers maybe only rhetoric is not a relevant consideration as what cannot be cured has to be endured, for a person on his last breath is no reason to callously subscribe to the philosophy that such a person should be deprived of the psychological comfort of believing that somewhere in the universe there may have been a greater purpose in going through the painful experience. The issue is not what we believe but what strength can be imparted to a potential destitute, sufferer. The objects of ameliorating their miseries, providing night shelter, self-help capability, knowledge distribution of food medicines etc coupled with solace in the name of God cannot be outrightly rejected and merely because the assessee is not limiting itself to disbursing food medicine, providing shelter etc and is also giving lectures on spirituality was not the kind of assessee contemplated under section 115BBC who was to be visited by the rigours of the said section.

10.9. We also hold on a consideration of the terms "religion"; "religious" "spirituality" and "spiritual", that in the context of the present case, no lengthy deliberations on the aforesaid terms is necessary. Suffice it to say that to our understanding the concept of religion divorced from spiritualism may be possible as it may be possible for religion to exist in a purely ritualistic manner but spiritualism divorced from religion is impossible to be visualized and conceived. In the facts of the present case lectures/discourses on the teachings of the prevalent and predominant religions of the country 21 are claimed to have been given as would be found from the written submissions extracted in the impugned order which have also been reproduced from the impugned order in the present proceedings. It has been stated that during these lectures voluntary donations by the attendees have been made which constitutes the anonymous donations. The department it is seen has considered these voluntary donations exigible to tax on the understanding that the assessee trust was not fulfilling the requirements of a public religious trust. We have seen and discussed at length and come to a conclusion that the objects of the trust and the context in which spiritual lectures espousing the philosophy i.e. the spirituality of the major and predominant religions of the country needs to considered in the light of the well-accepted and well-known fact that all the major religions of the world with one voice eulogise the importance of taking care of the old, infirm, disabled, visited by misfortune etc. on account of some natural or man-made calamity, widowed, orphaned etc. and these discussions/lectures are not divorced from religion as mankind is exhorted in the name of God and saints to take care of the weak and the needy. Accordingly considering the entire conspectus of facts, circumstances and position of law, we hold that the Revenue has incorrectly applied section 115BBC to the facts of the assessee's case.

10.10. In order to come to the said conclusion, we have relied upon the observation and findings of the Apex Court in the case of CIT, Ujjain vs Dawoodi Bohara Jamat and the ratio decidendi laid down therein which holds that it is the objects of the trust which are required to be seen and the standards to be applied for considering the same are those of the customary law and common opinion amongst the community to which the parties interested belong to. The present trust as it's very name suggests is formed by the community which has never looked down upon any other religion and over the times has constantly maintained and upheld the diverse and at times contradictory individual beliefs and practices of its followers with the attitude of live and let live as it is not a static religion but a living religion, a way of life. The religion of the community by its very practices, philosophy and tenets has celebrated and revered the importance of not only human life but also animal life and vegetation life so much so that even the inanimate is celebrated and revered consequently the environmental role and importance is emphasized in everyday practices as it too is regarded as a living environment, a living entity. Thus following the ratio of the Privy Council as considered by the Apex Court in CIT, Ujjain vs M/s Dawoodi Bohara Jamat and applying the standards of the customary law and common opinion of the community to which the trust belongs we hold that the nuanced distinction sought 22 to be drawn by the Revenue on facts is completely misplaced and consequently we find ourselves unable to uphold the same.

10.11.While coming to the said conclusion the objects of the trust have been considered vis-à-vis the relevant provision alongwith the Circular No.-14 and the observations and ratio decidendi of the Apex Court in Cit, Ujjain vs M/s Dawoodi Bohara Jamat and considering the rival stand of the parties in the context of the above on the facts of the present case, we hold that the claim of the assessee deserves to be allowed.

10.12.Before parting, we would briefly address the arguments of the Ld. Sr. DR namely that the trust should demonstrate by activities how the funds have been applied. It is seen that the said issue has not been raised by the AO whose order under consideration has been passed u/s 143(3). There is nothing on record to show that the said order was not passed after duly considering the relevant facts consequently in the facts of the present case, it is not an issue for our consideration. Moreover nothing has been placed before us by the Ld. Sr. Dr to show that the assessment order on which she is relying has been passed by the AO without considering the relevant facts. In the course of her arguments, Ld. Sr. DR has referred to the good old times where "Rishis" were not in the habit of collecting donations. Though the said argument was herself contradicted by the Ld. Sr. DR as she also stated that "guru dakshina" as the price for teaching/ taking a disciple/initiating a disciple was accepted, accordingly the argument advanced can be ignored however, we feel it necessary to point out that philanthropy is encouraged by almost all religions and the mendicants and sages not only as per Hindu mythology to which the Ld. Sr. DR refers but of almost all major religions of the world are stated to have depended on the alms and charity given by the town/village people. This is a well-accepted fact and the donor of the alms by almost all religions are exhorted ideally to remain unidentified. Mythology may not live up to the exacting standards of history as we understand but cannot be outrightly rejected as fairy tales or imagination as mythology can be described as history which has been carried through by word of mouth and also has a very important role in understanding history of people and nations. Thus not only mythology supports this general belief of an ideal donor who remains unidentified but even various religious written texts and treaties also idealise a donor who remains unidentified. The statute it is seen does not bar this in the case of wholly religious purposes trust or in the case of wholly religious and charitable purposes trust ....unless the other condition of section 115BBC(2)(b) are fulfilled with which we are not concerned in the facts of the present case.

10.13. For the sake of completeness, we also would deem it appropriate to address the decisions relied upon by the Ld. Sr. DR. Considering the same, we are pained to note that they have been cited carelessly without considering it necessary even to address how the facts are pari-materia and how the ratio-decidendi of the said decisions are relevant to the facts of the present proceedings. It is seen that the decision of the Apex Court in CIT v. Andhra Chamber of Commerce, 55 ITR 722 (SC) has no relevance to the facts of the present case. Apart from the fact that the decision proceeds on entirely different facts it is also seen that the issue has been decided in assessee's favour on the facts of that case. Similarly the decision of the Patna High Court in Bihar Institute of Mining and Mines Surveying vs CIT 208 ITR 608 (Patna) again has no relevance to the present proceedings as charging of a specified fee by the institution from the students appearing at some specified examination was held to be not constituting an act of advancement of general public utility as such could not be said to be a charitable activity. The ratio of the said decision has no relevance to the present proceedings. Same is the position of the decision of the Chennai Bench of the Tribunal which held in Professional Education and Research Foundation vs. DIR(E) 20 Taxman.com 47 (Chennai) that when education is carried on commercial lines it cannot claim the status of a charitable institution. None of these decisions help the Revenue in any manner whatsoever. The reliance placed upon the CIT, Ujjain vs Dawoodi Bohra Jamat by the Ld. Sr. DR in as much as proven facts be considered in fact goes against the arguments of the Ld. Sr. DR as the proven facts on record are that the AO holds that the assessee is covered within the scope of "general public utility" and qua the application of funds the AO has not found the assessee's activities wanting vis-à-vis the claimed objects set out in the trust."

18. In the present case, the assessee submitted that the All India Pingalwara Charitable Society is a Charitable Society:

"THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-IV, OLD C.R. BUILDING, MAQBOOL ROAD, AMRITSAR.

SUB: ASSESSMENT U/S 143(3) IN THE CASE OF THE ALL INDIA PINGALWARA CHARITABLE SOCIETY (REGD.L AMRITSAR FOR THE ASSESSMENT YEAR 2010-11 - REGARDING.

Dear Sir, In continuation of this office letter No: 1363/13, dated 05-02-2013.

1. That All India Pingalwara Charitable Society is a Charitable Society registered under Society registration Act 1860. Its objects are clear and transparent. The whole body/members of the Society work for welfare of the society.

2. That this society by its name as All India Pingalwara Charitable Society means serving and looking after the persons who have suffered from different diseases, in the form of insecurity, old- age and other disabled persons as mentioned in para(3) of Memorandum of Association of the Society. Relief of the poor encompasses a wide range of objects for the welfare of the economically and socially disadvantaged and needy. It will, therefore, include within its ambit purposes such as relief to destitutes, orphans, handicapped, disadvantaged -- women, children, old aged men and women and in need of aid.

3. That the Charitable Society has received charity through Golaks from the different places/Gurdwaras/Bus Stands as offered by different persons for the welfare of the physically, mentally and visually challenged persons -- men and women, old and young including those suffering from incurable diseases like, aids, cancer, hepatitis, T.B., etc., including abandoned children.

4. That the charity offered as mentioned in para(3) above is duly accounted for in tire books of accounts. That charity received is not anonymous donations. This is a charity and not any anonymous donation as referred by your good-self attracting the provisions of para2(b) section 115BBC of the Income Tax Act, 1961.

5. That your good-self can verify the genuine-ness of the society in any manner. Its founder Bhagat Puran Singh who established the society and also got it registered on 06-03-1957, with aims and dedication for mitigating the sufferings of the society / humanity.

6. That the society regularly maintains accounts of the all the amount of charity received through GOLAKS. The name and address of the place of GOLAKS from where the cash is received is duly recorded in the account-books. This cash is heated as CHARITY not as anonymous donations as treated by your good-self. On the GOLAK itself is written DAAN-PATRA (means CHARITY-BOX). When a person puts corns and very small amount in the GOLAK, he/she cannot mention his/her identity with the cash put in the GOLAKS.

7. That the Charity/Donation given by the people is meant for the 25 service of the PINGLA persons (DISABLED/HANDICAPPED PERSONS).

8. In the end, it is submitted that this is a PUBLIC CHARITABLE. SOCIETY which works for the welfare of the persons who actually deserve, irrespective of any particular religion, caste, creed or colour. It is therefore submitted that the society does not attract the provisions of section 115BBC of the Income Tax Act, 1961.

9. That with the humble submission of the hue facts, it is prayed that the assessment in the case may kindly be completed. Thanking you in Anticipation.

Yours faithfully, 26/02/2013 Sd/-

(Dr. Inderjit Kaur)"

19. As per its Memorandum of Association:

AMENDED COPY MEMORANDUM OF ASSOCIATION OF ALL INDIA PINGALWARA SOCIETY (Incorporated under Act. XXI of 1860)

1. The name of the Society is "All India Pingalwara Charitable Society (Regd.), Amritsar."

2. The registered office of the society shall be situated in Amritsar in the state of Punjab (India).

3. The objects for which the society is established are;-

(i) To look after, to help'and take care of the disabled, the patients, the physically handicapped, the infirm or aged persons, orphans, the poor students and others in distress, tire destitutes and the widows, the like persons without any discrimination or distinction of caste, creed, colour, riitionality, faith or religion and to promote their human dignity according, to the universal teachings of the Sikh Scripture, the Guru Granth, and the U.N. Charter of Human Rights.

(ii) To provide or arrange for accommodation and treatment for all inmates.

(iii) To acquire and purchase land and buildings and to set up, establish and run Pingalwaras for the beneficiaries.

(iv) To propagate the cause of the Society through direct or indirect publicity such as books, pamphlets, placards, posters, paintings, painted black-boards, cinema slides, 26 blocks and advertisements .through newspapers or magazines.

v) (a)' To open Schools anywhere in India for imparting free education to the poor strata of the society.

b) To open Schools for imparting special education to the mentally retarded children.

c) To provide education to the blind and to the deaf and dumb children and provide for their Rehabilitation.

vi) To open Prosthetic Centres and Orthotic Centres to rehabilitate the disabled persons.

vii) To develop nurseries and orchards for distributing free saplings and planting trees on common lands and public places in order to improve the environment.

viii) To do all such, other things as may be necessary and expedient for carrying.on the objects of the Society. " .

Rules and Regulations of All India Pingalwara Charitable Society

(i) That tills society by name "All India Pingalwara Society" was formed under the pattonage of Late Bhagat Puran Singh Ji the founder thereof for the purpose mentioned in Article 3 of the Memorandum of Association of the society.

(2) That the society shall consist: of the following seven members in all, including the following office bearers:-

1. Dr. Inderjit Kaur, Dhurl Gate,Sangrur. Patron President

2. Joginder Singn, DSP (Retd.), --

H. No.105, Dashmesh Nagar, Patiala.

Vice President

3. Ar. Mukhtar Singh Architect & Town Planner D-577, Ranjit Avenue, Amritsar Hon'ble Secretary

4. Dr. Jagdeepak Singh Member 20 Doctors' Colony,

20. So far as regards the activities of the assessee, the details therof are as follows:

"DETAILS OF MULTIFARIOUS ACTIVITIES OF P1NGALWARA ARE ENUMERATED AS UNDER.

Welfare:

a. Looking after 1614 inmates which include destitute children, sick, disabled, mentally challenged and old men and women. These inmates are accommodated in branches of Pingalwara at Amritsar, Pandori, Goindwal, Jalandhar, Sangrur and Palsora (Chandigarh).

b. Free medicines to the poor and needy people. c. Free help (Tricycles etc) to the handicapped. d. Medical and material aid to the victims of natural calamities. e. Artificial Limbs are provided free of cost to all needy person. f. Physiotherapy centre for indoors Patients. g. A home for the Senior Citizen at Sangrur & Manawala. h. A well equipped Ultrasound Centre for needy patients.

Education (Management of Schools):

a) Bhagat Puran Singh Adarsh School at Manawala. Free education (including uniform and books) is provided to the wards of under privileged sections of the society. It has 644 students on its rolls.

b) Bhagat Puran Singh School for the Deaf Children at Manawala. It has 81 students.

c) Bhagat Puran Singh School of Special Education. The school caters for the mentally and physically challenged educable inmates of the Pingalwara. 142 children get individual attention, care and love here.

d) Bhagat Puran Singh Adarsh School for the village poor of the Quadian area. This school is situated at Buttar Kaian and provides free education to 362 students.

e) Bhagat Puran Singh School, Panj Peer Amritsar for Slum. It has 56 students.

f)    Free books for the poor and needy students."
Environment:

a)       Vigorous drive to plant trees every year.
b)       Maintenance of a nursery to provide free saplings. Every year

over 60,000 saplings are distributed as a part of the tree plantation drive.

c) Distribution of free literature on various environmental issues.

d) Natural Farming (Pesticide free cultivation of crops).

Seminars:

a) Peace & Harmony through Righteousness-2004 28

b) Reconciliation Creating Partnership for Building Peace.

(Golden Institute Branch of Council of Parliament of World Religion-2005)

c) Rights of Persons with Disabilties-2006

d) Seminar on III Effects of Pesticides on Health-2006

e) Workshop on Natural Farming-2006

f) Seminar on AIDS Awareness-2007

g) Bhagat Puran Singh Memorial Seminar "Ecological Challenges and Social Responsibilities"-2008. Social:

a) Distribution of free literature on Religious, medical, social, ethical and environmental issues.

b) Printing & free distribution of literature on issues such as living habits, drugs, health, positive thinking-- aspects which improve a human beings quality of life.

Miscellaneous:

a) During the devastating floods of Punjab in 1988, Pingalwara collected money for the specific purposes and distributed relief among the needy and the affected people, also motivated the people in general and the youth in particular to come forward to give relief and solace to the people in distress.

b) During the disastrous earthquake in Latur (Maharashtra) in 1993, took truck load of food stuff, clothes, blankets, and medicines and distributed among the distressed and needy.

c) Distributed food stuff, clothes and blankets to J&K border residents who had vacated their homes on account of across the border shelling and terrorism.

d) Blood Donation Camps are organized every year at the Pingalwara on Bhagat Puran Singh ji Barsi Celebration Day and donated to the Govt. Hospital, Amritsar and Sri Guru Ram DassCharitable Hospital, Amritsar. 110 units of blood was collected during the camp in August 2011.

e) A Gaushala at Manawala Branch housing more than 100 cows.

f)     Cremation of unclaimed dead bodies.
g)    Donation of eyes of unclaimed dead bodies.
h)    Distribution of ration, clothes and blankets to flood    victim

in Jalandhar and Kapurthala Districts during 2008.

i)     Free Ration to poor & needy families.

Other details:
a)    All India Pingalwara Charitable Society is a Registered

Society, registered by Registrar of Companies vide letter No 29 130 of 1956-1957 as amended vide No. A-28/4540 dated 7-

7-98.

b) All donations to Pingalwara are exempted under Section 80G of Income Tax-ll Amritsar letter No CIT-IT/TECH/80G/2009- 10/129 dated 17/20 April 2009.

c) PAN Number of the All India Pingalwara Charitable Society is AAATA 2237R

d) Pingalwara has been exempted from payment of.VAT for all its purchases vide Govt, of Punjab Notification No. S.Q.36/P.A.8/2005/S.8/2011 dated 25th April, 2011.

e) FCRA (Foreign Contribution Regulation Act) 1976 Registration No. of Pingalwara is 115210002 The donations made to Pingalwara are exempt from Income Tax under Section 80G of I.T. Act. 1961 "

21. Section 115BC of the Act is reproduced as under:

"115BBC. (1) Where the total income of an assessee, being a person in receipt of income on behalf of any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or any hospital or other institution referred to in sub-clause (iiiae) or sub- clause (via) or any fund or institution referred to in sub-clause (iv) or any trust or institution referred to in sub-clause (v) of clause (23C) of section 10 or any trust or institution referred to in section 11, includes any income by way of any anonymous donation, the income-tax payable shall be the aggregate of-

(i) the amount of income tax calculated at the rate of thirty per cent on the aggregate of anonymous donations received in excess of the higher of the following namely:-

(A) five per cent of the total donations received by the assessee; or (B) one lakh rupees, and

(ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the aggregate of anonymous donations received.

(2) The provisions of sub-section (1) shall not apply to any anonymous donation received by-

(a) any trust or institution created or established wholly for religious purposes.

(b) any trust or institution created or established wholly for religious and charitable purposes other than any anonymous donation made with a specific direction that such donation is for any university or other educational institution or any hospital or other medical institution run by such trust or institution.

(3) For the purpose of this section, "anonymous donation" means any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed."

22. This section was inserted in the Income Tax Act by Finance Act, 2006 and sub clauses (i) & (ii) of sub-section (1) were substituted w.e.f.

01.04.2010. The object of bringing this law in the Statute Book w.e.f.

01.04.2006 is well explained in the Memorandum explaining the provisions of the Finance Bill, 2006, reported in 281 ITR (St.) Page 148 and (St.) Page 185. For sake of convenience, it is reproduced as under:

"Income of wholly charitable or religious trusts or institutions or partly charitable or religious trusts or institutions is exempt under the Income-tax Act subject to fulfillment of certain conditions.

In order to tax unaccounted money being contributed to these institutions by way of religious trusts or institutions is exempt under the Income Tax Act subject to fulfillment of certain conditions.

In order to tax unaccounted money being contributed to these institutions by way of anonymous donations, it is proposed to insert a new section 115BBC so as to provide that any income by way of anonymous donations of the entities referred to in that section shall be include in the total income and taxed at the rate of 30 per cent."

23. From the above, it is clear that the object was to catch the 'unaccounted money' which was brought in as Tax Free Income in the hands of the Charitable Trusts and this law was never meant for taxing the Petty Charities. The Legislature intended to tax the unaccounted money or black money which was brought in the books of charitable 31 trusts in bulk and this law was not meant for taxing the small and general charities collected by the Genuine Charitable Trusts.

24. The object of the amendment has further been made clear by the Hon'ble Finance Minister, in his Budget Speech, reported at 281 ITR (St.) 57 in the said ITR. The relevant para 168 thereof reads as under:-

'The Standing Committee on Finance has expressed concern that many charitable institutions misuse the provisions of the Income-tax Act. I propose to focus on one misuse, namely, receiving anonymous or pseudonymous donations. Accordingly, I propose that anonymous or pseudonymous donations to wholly charitable institutions will be taxed at the highest marginal rate. Such donations to partly religious and partly charitable institutions / trusts will be taxed only if the donation is specifically for an educational or medical purpose. However, I make it clear that such donations to wholly religious institutions and religious trusts will not be covered by the new provision."

25. Further, CBDT Circular 14 dated 28.12.2006 explains the provisions of section 115BBC, as follows:

"25.2 With a view to prevent channelisation of unaccounted money to these institutions by way of anonymous donations, a new section 115BBC has been inserted to provide that any income of a wholly charitable trust or institution by way of anonymous donation shall be included in its total income and taxed at the rate of 30 per cent. Anonymous donation made to wholly charitable and religious trusts or institutions, i.e. mixed purpose trusts or institutions shall be taxed only if it is for any university or other educational institution or any hospital or other medical institution run by them. Anonymous donation to wholly religious trusts or institutions will not be taxed.

25.3 Anonymous donation has been defined in the new section to mean any voluntary contribution referred to in section 2(24)( iia) of the Act, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as maybe prescribed.

25.4 Consequential amendments have been made in section 10(23C) and section 13 to provide that any income by way of any anonymous donation which is taxable under section 115BBC, shall be included in the total income of the assessee."

26. Moreover, as contended, the concept and importance of charity, against the backdrop of the Indian Society, has been in existence from time memorial in all religions, without exception. The assessee, in this regard, has cited Zakaat from Islam, Dasvand from Sikhisim and the recognition of this concept from Manu-Samriti, the original magnum opus on the Indian social system. That this concept has continued to be accepted and practiced in India all along down the ages, and thus it is firmly entrenched in our society, cannot be questioned.

27. All the above has been extensively considered in the above decisions cited. Two of them, i.e., "Barkate Saifiyah Society" (supra) and "Pt. Ram Chandra Shukla" (supra) have been followed by the ld. CIT(A). The ld. CIT(A), though, did not have the benefit of "Bhagwan Shree Laxmi Narain" (supra), since this decision was rendered post the CIT(A)'s order. The decision of the ITAT, Delhi Bench in the case of "Bhagwan Shree Laxmi Narain" (supra), as confirmed by the Hon'ble High Court, has considered this matter in much detail. "Dawoodi Bohra Jamat"

(supra), handed down by the Hon'ble Supreme Court, has been followed.

The Department has remained unable to persuade us to deviate therefrom.

28. Accordingly, we hold that the ld. CIT(A) has correctly deleted the addition for both the assessment years under consideration. Our observations are, mutatis mutandis, squarely applicable to both the years, since the issues in both the appeals are common, as noted in the opening portion of this order.

29. In view of the above, finding the grievance of the department to be shorn of merit, it is rejected. Both the orders under appeal are upheld.

30. In the result, both the appeals are dismissed.

Order pronounced in the open court on 25/02/2016.

                   Sd/-                                Sd/-
            (T.S. KAPOOR)                            (A.D. JAIN)
       ACCOUNTANT MEMBER                       JUDICIAL MEMBER
Dated:     25/02/2016
/skr/
Copy of order forwarded to:

1. The Assessee:M/s. All India Pingalwara Charitable Society, Amritsar.

2. The DCIT, Circle-IV, Amritsar.

3. The CIT(A), Amritsar.

4. The CIT, Amritsar.

5. The Sr. DR, ITAT, ASR.

True copy By order (Assistant Registrar) Income Tax Appellate Tribunal Amritsar Bench: Amritsar.

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Income Tax Appellate Tribunal - Amritsar

All India Pingalwara Charitable ... vs Department Of Income Tax on 25 February, 2016