Andhra HC (Pre-Telangana)
Tirumala Tirupathi Devasthanam vs Chief Commissioner Of Income-Tax And ... on 21 August, 2001
Equivalent citations: [2001]251ITR849(AP)
JUDGMENT S.R. Nayak, J.
1. The petitioner is Tirumala Tirapati Devasthanam, Tirupati (for short "TTD"). In this writ petition, it has assailed the legality and validity of the order made by the Commissioner of Income-tax, Gun-tur, the second respondent herein, rejecting the petition filed by the petitioner under Section 80G of the Income-tax Act, 1961 (for short "the Act"), seeking recognition in respect of three schemes mentioned therein.
2. According to the petitioner, it is a charitable institution. It maintains ten temples specified in Schedule I, 22 educational institutions and Sri Venkateswara Poor Home and Sri Venkateswara Bala Mandir, specified in Schedule II to the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act,_1987 (for short "the Endowments Act"). The petitioner, apart from the institutions specified in Schedule II to the Endowments Act, also runs hospitals and three deaf and dumb schools. It is stated that on an average 30,000 piligrims visit Tirumala Hills every day. A provision is made to the pilgrims for free food, free accommodation, free hospital, transport and other facilities. These facilities are open to persons of all castes and religions on the simple declaration of faith in the Lord. So claiming the petitioner made an application under Section 80G of the Act seeking recognition in respect of three schemes, namely, (i) Sri Venkateswara Nitya Laddu Daana Endowment Scheme, (ii) Sri Venkateswara Balaji Archana Scheme, and (iii) Sri Venkateswara Udayasthamana Sarva Seva Scheme, which was rejected by the impugned order.
3. The impugned order of the second respondent reads :
"With reference to the correspondence resting with the above cited letters, this is to inform you that the matter has been considered at the Central Board of Direct Taxes level. Regrettably, recognition under Section 80G cannot be granted for charitable purposes only, when the trust is doing religious activities also.
Exemption under Section 80G is, therefore, not allowed to any of the above schemes."
4. While exercising the power under Section 80G of the Act, the Commissioner acts as a quasi-judicial authority. Therefore, the conclusion arrived at by him is expected to be supported by valid and cogent reasons. It is also expected that he should apply his mind to the facts of each case and give reasons either to grant or refuse recognition. This requirement is very much imperative on the part of the second respondent, particularly having regard to the statutory provisions under which he functions. Sub-section (1) of Section 80G of the Act provides for deduction of certain income from the total income. Sub-section (5) of Section 80G provides that Section 80G applies to donations 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 following conditions, among others, namely, the instrument under which the institution or fund is constituted does not, or the 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. This condition No. (ii) of Sub-section (5) if 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. Therefore, it has become absolutely necessary for the Commissioner to refer to and consider the multifarious activities carried on by the Tirumala Tirupathi Devasthanam administration and to come to the said conclusion. Unfortunately, in this case, the Commissioner does not seem to have applied his mind to the facts pleaded by the petitioner in its application. At any rate, the impugned order does not reflect either application of mind by the Commissioner or the factors or reasons that weighed with him in passing the impugned order.
5. In that view of the matter, we think it appropriate that the Commissioner should be directed to reconsider the application of the petitioner afresh and dispose of the same by a reasoned decision.
6. Accordingly, we allow the writ petition and set aside the order of the Commissioner dated March 19, 1992. The proceedings shall stand remitted to the Commissioner with a direction to dispose of the application of the petitioner de novo in the light of this order, and by a reasoned order, after giving an opportunity of being heard to the petitioner, within a period of three months from the date of receipt of a copy of this order. The petitioner is also permitted to file additional statement and material in support of its claim, if it so desires. No costs.