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(xvii) To promote, organize, administer, establish support maintain and/or grant and to person institution or society or organization is ever having for the objects of charitable purpose and to incur expenditure in connection therewith."

3. For the AY in question, the Assessee filed its return of income accompanied by an audit report, balance sheet, income and expenditure account etc. The case of the Assessee was picked up for scrutiny. It was found by the Assessing Officer (AO) that for the AY in question, the Assessee had received Rs.5,28,84,204 by way of donations. While the details of the names and addresses of the donors to the extent of Rs.5,01,588,98 was furnished, the details of donors to the extent of Rs.27,25,306 were not explained. The Assessee explained that during the AY in question it was mainly involved in imparting of spiritual education through the lectures/samagam delivered by Brahmarishi Shree Kumar Swami Ji and in distribution of medicines and clothes to the needy and destitute." The AO, therefore, proceeded to invoke Section 115BBC of the Act and add the aforementioned sum to the income of the Assessee. It was held by the AO in the order dated 26th December 2011 that although the legislature had exempted wholly public religious trusts from the provision of Section 115 BBC of the Act, "the case of the Assessee is not of public religious trust but a case of spiritual organization. Therefore, the case of the Assessee is clearly hit by the provision of Section 115BBC." A sum of Rs.27,25,306 was, therefore, treated as anonymous donations and brought to tax as per the provisions of Section 115BBC of the Act. Penalty proceedings under Section 271 (1) (c) were directed to be initiated separately.

4. The Commissioner of Income Tax (Appeals) [„CIT (A)‟] by an order dated 3rd September 2012 confirmed the action of the AO. THE CIT (A0 analysed inter alia Circular No. 14 issued by the Central Board of Direct Taxes (CBDT) explaining the scope of Section 115 BBC as well Section 2 (24) (iia) of the Act which defined 'voluntary contribution' and held:

"After analyzing the Circular No. 14 and definition of voluntary contribution as per Section 2(24)(iia) of the IT Act, it is apparent that organization spreading the spirituality cannot claim that it is exempt as per Section 115BBC of the IT Act as statute is very clear in this regard. have gone through the relevant section and I have found that trust of institutions created or established wholly for religious purpose are exempt. The instant case has been found to be established for the purpose of spirituality as per its Trust Deed dated 30-12-2002, wherein, at object No. viii it has been written as under:-

6. This Court has heard the submissions of Mr. Kamal Sawhney, learned Senior Standing counsel appearing for the Revenue and Mr. Mohan Parasaran, learned Senior counsel for the Assessee.

7. The central question to be considered is whether the ITAT erred in holding that the Revenue had wrongly applied Section 115 BBC of the Act to the case of the Assessee and erred in accepting that the Assessee-Trust was carrying out various religious activities?

8. It was submitted by Mr. Kamal Sawhney that none of the activities stated in Clause 5 of the Trust Deed can be said to be a purely religious activity. In other words charitable activities enumerated therein could not be said to be 'religious activities'. According to Mr. Sawhney, even giving of spiritual lectures would not strictly qualify as a religious activity.

9. The question posed arises in the context of the anonymous donations received by the Assessee Trust and the view of the AO that such donations would not be exempt within the scope of Section 115 BBC of the Act since the activity of the Trust was 'spiritual' and not 'religious'.

10. It is useful in this context to recapitulate the CBDT Circular No. 14 has explained the scope of Section 115 BBC, introduced with effect from 1st April 2007, as under:

"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 0 30 per cent. Anonymous donation made to wholly charitable and religious trusts of institutions, i.e. mixed purpose trusts of 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."