[2013] 37 taxmann.com 169 (Article)
INCOME-TAX EXEMPTION FOR INSTITUTIONS HOLDING PROPERTIES FOR PUBLIC RELIGIOUS PURPOSES
T.N. PANDEY
Ex-Chairman, CBDT
In this article the author has thoroughly examined the provisions of sections 2(15), 11 to 13 of the I.T. Act, 1961, dealing with exemption on incomes of funds or institutions, holding property for charitable/religious purposes. He has established, on the basis of analysis of legal provisions and case-laws that in both the situations exemption cannot be denied, if the property generating income is held for public benefit. Only income yielding properties held for private religious purposes or for benefit of people of a particular caste or community can be denied exemption.
Introduction
1. The words religion/religious occur in the context of law relating to charities/charitable institutions in the Income-tax Act, 1961 (Act hereinafter).
The term 'charitable purpose' has been defined in section 2(15) of the Act in an inclusive manner and includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest and the advancement of any other object of general public utility. There is no mention of religion or religious purpose in the definition of 'charitable purpose' except that if there is a monument or place of artistic or historic interest, may be a temple, mosque or church, the activities relating to their preservation would be considered as activities relating to charitable purpose.
2. Relevant provisions in the Act.
2.1 Exemption under section 10(23C) of the Act - The word 'religious' for the first time has been used in the context of charities appearing in sub-clause (v) of section 10(23C). This sub-clause reads as under:—
"(v) any trust (including any other legal obligation) or institution wholly for public religious purposes or wholly for public religious and charitable purposes, which may be approved by the prescribed authority, having regard to the manner in which the affairs of the trust or institution are administered and supervised for ensuring that the income accruing thereto is properly applied for the objects thereof".
The word 'religious', though used in this provision of the Act for the first time, yet has not been defined in section 10, giving exemption to income of trusts covered by this clause or in any other section of the Act.
2.2 Section 11 (granting exemption of income from properties held for charitable or religious purposes) - In section 11, the word 'religious' has been used along with the word 'charitable' at various places, but there is no definition of the word 'religious' in this section also.
2.3 Section 80G - This section permits deductions in computing the total income of an assessee regarding donations to certain funds, charitable institutions, etc., to the extent prescribed in the section. Sub-section (5) of this section referring to sub-clause (iv) of clause (a) of sub-section (2) [i.e., any other fund or any institution to which this section applies] prescribes certain conditions to be satisfied by such fund or institution before the donors to such fund can claim deductions from their total income for the donations made to the prescribed extent. One such condition mentioned is in sub-clause (iii), provides that to enable the donor to claim deduction, the fund or institution should not be expressed to be for the benefit of any particular religious community or caste.
2.3-1 Explanation 3 to sub-section (5C) of section 80G - It reads as under:
"Explanation 3 - In this section, 'charitable purpose' does not include any purpose the whole or substantially the whole of which is of a religious nature".
Use of word 'religion'/'religious'
3. The word 'religion'/'religious' has not been defined in the Act in the context of the aforesaid provisions of the Act, though the word 'religious', which is a derivative of the word 'religion', has been used in the above-mentioned provisions in the Act. Hence, for understanding the relevance of the use of the word 'religious' in the above-stated provisions of the Act, it is necessary to explore the meaning of the term 'religious'.
The above-stated provisions have to be interpreted in two separate categories, namely,—
| (i) | where the word 'religion' has been used; and | |
| (ii) | where it has been said more specifically that the institution or fund is not expressed for the benefit of any particular religious community or caste instead of using mere word 'religious'. |
3.1 Meaning of the word religion/religious - The word 'religion' in its primary sense imports, as applied to moral questions, only a recognition of a conscious duty to obey principles of conduct. In such sense, we suppose there is no one, who will admit that he is without religion. Religion is said to be morality with a sanction drawn from a future state of rewards and punishment. Religion is certainly a matter of faith with individuals and is not necessarily theistic. So, the terms 'religion' or 'religious' cannot be considered to be tagged to a particular sect or persons or communities.
3.1-1 Dictionary meaning of the term 'religion' - In Advanced Law Lexicon, the Encyclopedic Law Dictionary by P. Ramanatha Aiyar (3rd edition), the term 'religion' at page 4043 has been defined as under:—
"Religion. (Religio). Virtue, as founded on reverence of God, and expectation of future rewards and punishments; a system of divine faith and worship as opposed to others. (Johns) That habit of reverence towards the Divine Nature, whereby we are enabled and inclined to serve and worship him, after such a manner as we conceive most acceptable to him, is called religion (Tomlin). Specific system of belief, worship, conduct involving a code of ethics and philosophy. Indian Constitution grants every person fundamental right to freely profess, practice and propagate religion [Constitutional and Parliamentary Term]".
In the "Words and Phrases", Permanent Edition, 36A, p.461 onwards, religion has been defined, inter alia, as follows:-
"The term 'religion' as used in tax exemption law, simply includes: (1) a belief, not ne-cessarily referring to supernatural powers; (2) a cult, involving a gregarious association openly expressing the belief; (3) a system of moral practice directly resulting from an adherence to the belief; and (4) an organization within the cult designed to observe the tenets or belief, the content of such belief being of no moment".
3.1-2 Meaning of term 'religion' deduced from case laws - After quoting the aforesaid definition of the term 'religion' given in the Words and Phrases, Justice Misra (as he then was) for the Supreme Court in the case of S.P. Mittal v. Union of India AIR 1983 SC 1 observed that the aforesaid terms of 'religion' and 'religious' were judicially considered in the Commissioner, Hindu Religious Endowments v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt AIR 1954 SC 282 wherein the following propositions of law have been laid down by B.K. Mukerjea, J. (as he then was), which have been consistently followed in later cases and can be regarded as well settled:—
| "(1) | Religion means a system of beliefs or doctrines, which are regarded by those, who profess that religion as conducive to their spiritual well-being; | |
| (2) | A religion is not merely an opinion, doctrine or belief. It has its outward expression in acts as well; | |
| (3) | Religion need not be theistic". |
3.1-3 Judicial interpretation of the term 'religion'
3.1.3-1 WILLES J BAXTER v. LANGLEY 38 LJMC 5 - What is religion? Is it not what a man honestly believes in and approves of and thinks? It is duty to inculcate on others, whether with regard to this world or the next a belief in any system of retribution by an overruling power. It must, I think include the principle of gratitude to an active power, who can confer blessings [Willes J. Baxter (supra)].
3.1.3-2 IN RAMANASRAMAM v. COMMISSIONER FOR HINDU RELIGIOUS & CHARITABLE ENDOWMENTS AIR 1961 MAD. 265 - The term 'religion', whatever its best definition, clearly refers to certain characteristic, types of data (beliefs, practices, feelings, moods, attitudes, etc.). It primarily involves some immediate consciousness of transcendent realities of supreme personal worth vitally influencing life and thought, expressing themselves in forms, which are conditioned by the entire stage of development reached by the individual and his environments and tending to become more explicit and static in mythologies, theologies, philosophies and scientific doctrines.—Ramanasramam (supra) [Madras Hindu Religious & Charitable Endowments Act (19 of 1951), S.6(17)].
3.1.3-3 IN A.S. NARAYANA DEEKSHITULU v. STATE OF A.P. AIR 1996 SC 1765 - Religion is that which binds a man with his customs, his creator or super force. Essentially, religion is a matter of personal faith and belief of personal relations of an individual with what he regards as Cosmos, his Maker or his Creator, which he believes regulates the existence of insentient beings and the forces of the universe. Religion is not necessarily theistic—A.S. Narayana Deekshitulu (supra). See also Trivikram Narain Singh v. State of U.P., AIR 1987 All. 362.
3.1.3-4 IN CIT v. RADHASWAMI SATSANG SABHA [1954] 25 ITR 472 (All.) - A charitable trust for the benefit of the Satsangis, a religious sect and as such forms a cross section of the public, was regarded as a trust for an object of general public utility [Radhaswami Satsang Sabha (supra)].
The Supreme Court in Radhasoami Satsang v. CIT [1992] 193 ITR 321/60 Taxman 248, at 326, held that Radhasoami Satsang, an institution, whose object was to propagate the religion known by the name of Radhasoami, was held to be religious one and the assessee was entitled to the exemption under section 11 of the I.T. Act, 1961.
Charitable and religious purposes
4. The foregoing discussion regarding religion [from which the word religious has been derived] shows that the term has not been interpreted in a narrow way in common parlance, dictionary and in judicial interpretations. In sections 11, 12 & 13, a distinction has been drawn between 'charitable purpose' and 'religious purposes', but there is no definition of the term 'religious purpose' in the Act. Even the Constitution of India, which by article 25 provides for freedom of conscience and freedom of profession, practice and propagation of religion or article 26, which gives freedom to manage religious affairs does not contain any definition of 'religion'. Generally interpreted, it would encompass within its fold all institutions or funds, which are for the advancement, support or propagation of a religion and its tenets.
How religion is to be understood in the context of I.T. legislation ?
5. Section 11(1)(a) provides for exemption to the "income derived from property held under trust wholly for charitable or religious purposes…..". This indicates that religious trusts/endowments are as good as 'charitable trusts/endowments' because these are mentioned together. In various provisions mentioned earlier, the terms 'charitable purpose' and 'religious purpose' have been used side-by-side and on the principle of ejusdem generis; the meaning of these terms can be understood in identical way. Hence, if the benefit of religious endowments too enures for the benefit of the public, then the religious trusts/endow-ments too will be entitled to the exemption provided by section 11 of the Act.
The fact that the income derived from property held for religious purposes (subject to the conditions prescribed) will also be entitled to exemption is further clear from the following ruling of the Supreme Court:
A religious trust could be 'public' or 'private'. Section 13(1)(a) bars exemption to any private religious trust, which does not enure for the benefit of the public. A trust for a private family deity to which the public or a particular class has no access, is, therefore, taxable. A charitable trust will not, however, loose exemption merely because a discretion is given to the trustees to give preference to the members of a particular religious community or caste. This was laid down by the Supreme Court in Trustees of the Charity Fund v. CIT [1959] 36 ITR 513.
Section 80G(5)(iii) makes a distinction in cases of institutions or funds, which are for the benefit of any particular religious community or caste - say for Hindus, Muslims, Christians or for Brahmins, etc. Donors to such trusts are debarred from claiming benefit of deduction from income for donations made to such trusts. Conversely, it follows that for donations made to religious bodies, which do not fall in the category mentioned in section 80G(5)(iii), benefit of deduction under section 80G can be claimed. Thus, it could be said that a public religious trust, not meant for the benefit of a particular community, caste or section, will be entitled to claim exemption on its income in the same way as a public charitable trust.
According to ruling in Deoki Nandan v. Murlidhar, AIR 1957 SC 133, a religious endowment must be held to be private or public, according to whether the beneficiaries thereunder are specific persons or general public or sections thereof. When property is dedicated to the worship of a family idol, it is a private and not a public endowment, as the persons who are entitled to worship at the shrine of the deity can only be the members of the family and that would be an ascertained group of individuals. But where the beneficiaries are not members of a family or a specified individual, then the endowment can only be regarded as public, intended to benefit the general body of worshippers.
5.1 Support of the aforesaid view through the provisions of the Societies Registration Act, 1860 - Preamble of the Societies Registration Act, 1860 is as under:—
"Whereas, it is expedient that provision should be made for improving the legal condition of societies established for the promotion of literature, science, or the fine arts, or for the diffusion of useful knowledge, the diffusion of political education, or for charitable purposes".
Section 20 of the said Act of 1860 reads as under:—
"The following societies may be registered under this Act:
Charitable societies, the military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts, for instruction, the diffusion of useful knowledge, the diffusion of political education, the foundation of maintenance of libraries or reading-rooms for general use among the members or open to the public, or public museums and galleries of paintings and other work of art, collection of natural history, mechanical and philosophical inventions, instruments or designs".
5.2 Interpretation of 'Charitable purpose' by the Allahabad High Court - The Allahabad High Court has held that religious purpose can also be a charitable purpose. This follows from the Preamble to the Societies Registration Act (supra) for registration of societies for preservation of literature, science or fine arts or for diffusion of knowledge or for charitable purposes. While interpreting the words 'charitable purposes' under the Act of 1860, the Division Bench of the Allahabad High Court in Anjuman Islamic of Muttra v. Nasir-Ud-Din[1906] ILR 28 All. 384 observed as under:—
"It is clear that a religious purpose may be a charitable purpose and that a society for religious purpose would ordinarily be a society for charitable purposes…. As observed in In reWhite v. White [1983] 2 Ch 41 (CA), any mode of promoting the welfare of mankind would be a charitable object… It is well-known that charitable purposes are not restricted to the giving of alms or other charitable reliefs, but the words have a much wider legal meaning. We do not think that the Indian Legi-slature makes a distinction between religious purposes and charitable purposes".
In the Anjuman Islamic of Muttra case (supra), the Court was of opinion that where a society was formed for certain purposes, whose paramount object was charitable, the fact that some of the purposes might not have been strictly charitable but religious would not render the society, nonetheless a charitable society, if the purpose was one intended to benefit the public or a considerable portion of the public. A subsequent decision of the Allahabad High Court in Shanti Sarup v. Radhaswami Satsang Sabha AIR 1969 All. 248 held that a society some objects of which are charitable and some are religious but the paramount object of which is charitable may be validly registered under the Societies Registration Act, 1860.
5.3 'Charitable purpose' interpreted by the Madras High Court in Khaji Muhammad Hussain Sahib v. Majiday Mahmood - The Madras High Court in Khaji Muhammad Hussain Sahib v. Jamait Managing Committee AIR 1940 Mad 167, held that a society for religious purposes would ordinarily be a society for charitable purposes and, therefore, its registration under the Societies Registration Act be legal. The Court took the view that the Indian Legislature had made no distinction between religious and charitable purposes. According to the Madras High Court, "improvement of Islamic education and rendering of pecuniary help to poor Musaffirs" were charitable purposes.
5.4 The Calcutta High Court's ruling on religious objects of a trust registered under the Societies Registration Act - The Calcutta High Court in M.C. Bandopadhya v. State of West Bengal (1985-86) 90 CWN 306, pr.33 (DB), agreeing with the above principles laid down by the Allahabad High Court and the Madras High Court, said that the fact that Sri Ramakrishna Mission was registered under the Societies Registration Act would not preclude the said Mission from having religious purposes among its objects.
There is also a considerable substance in the contention that advancement of religion has all along been recognized both in English and in Indian law as one of the principal four Divisions of Charity [vide Halsbury's Laws of England, 4th Edn., para 513]. The Court also observed that the Societies Registration Act, 1860 does not contain any express provision excluding religious purpose as one of the objects of charity. Further, the Memorandum of Association of the Ramakrishna Mission has since been revised under the West Bengal Societies Registration Act, 1961 (section 4 of which expressly provide that the objects of the society may relate to the promotion of literature, arts, science or religion….).
Thus, the expression 'charitable purpose' in section 2(15) (supra) is wide enough to include public religious purposes also, though there is no separate phrase for this expression.
6. Other relevant case Laws
6.1 CIT v. Sri Jagannath Jew [1977] 107 ITR 9 (SC) - In Sri Jajannath Jew (supra), a question arose under section 4(3)(i) of the Indian I.T. Act, 1922 in the context of a trust of a pious Hindu (Raja Rajendra Mullick Bahadur of Calcutta), where he made dedication not only for the Thakoorbaree but he gave directions to the trustees for spending large amounts on charitable objects like feeding the poor, maintenance of a garden, art gallery, aviary, menagerie, taking care of birds and non-carnivous animals. Even though the amount spent on pooja was small, the dedication to the deity was held to be complete because of the dominant religious and charitable purpose behind this trust. Justice Krishna Iyer for the Supreme Court pointed out that a preponderant part of the income was spent on general public charitable causes like of the poor feeding art gallery, aviary, menagerie and keeping a garden. Together with the cost of rituals, the budget was dominantly religio-charitable. The Court pointed out: the fact that the property is ordinarily described as debutter is a piece of evidence in favour of dedication, but not conclusive. Though inconclusive, it carried weight in the light of what may be called the mission of the disposition, which was inspired by devotion to 'my thakoor' and animated by a general religious fulfilment. The donor was not tied down by bigotry to performance of pujas, important though they were. A more cosmic and liberal view of Hinduism informed his soul and so in his declaration to Sree Jagannathjee, he addressed to the managers many directions of a broadly religious and charitable character. His injunction to feed the poor was Narayana seva, for worship of God through service of man in a land, where the divinity in Daridra Narayana was conceptually common place and, while it was overtly secular, the motive sprang from spiritual sources. It was religion to love the poor. Likewise, his insistence on the aviary and the menagerie and throwing open both to the people to see and delight was not a mundane mania but had deeper religious roots. Hinduism worships all creations: "Peace be unto all bipeds and even so to all quadrupeds". Indeed, the love of sub-human brethren is high religion.
Justice Krishna Iyer further observed in the above-mentioned case as under:-
"In sum, the primary intendment was to dedicate as debuttar and to direct fulfilment of uplifting religious and para-religious purposes, the focus being on worship of Sree Jagannathjee and the fallout some subsidiary, yet significant, charitable items. The finer note struck by the felt necessities of his soul was divinized and humanized, the central object being Sree Jagannathjee, the Lord of the Universe. The religious uses related to Sree Jagannathjee could not be narrowly restricted to rituals but must be spread out to embrace universal good, especially when the mind of a Hindu highly evolved and committed to a religion, whose sweep is Vasundhaiva Kutumbakam [all creation] is His family".
6.2 Shiv Mandir Devsttan Panch Committee Sanstan v. CIT [2013] 56 SOT 456/[2012] 27 taxmann.com 100 (Nagpur)
6.2.1 Facts of the case - The appeal filed by the assessee related to the grant of approval under section 80G(5)(vi) of the Act. The brief facts of the case were that Shiv Mandir Devsttan Panch Committee Sanstan, Nagpur filed an application in Form No.10GT on 9-7-2008, seeking approval under section 80G(5)(vi) of the Act. The copy of the accounts for the year 31-3-2008 was also filed. As per this, the assessee had incurred total expenditure amounting to Rs. 82,977/-, which consisted of building maintenance expenses of Rs. 23,530/-, free food expenses of Rs. 34,399/-, festival prayer and daily expenses of Rs. 18,328/-, tailoring training expenses of Rs. 1,225/-, yoga training expenses of Rs. 2,475/- and free distribution of opticals of Rs. 3,020/-.
The CIT took the view that that the expenses for building maintenance, free food expenses and festival prayer and daily expenses related to the religious object. Only balance sum of Rs.6,700/- was incurred for non-religious objects. In view of the Explanation 3 to section 80G, read with sub-section (5B), he took the view that since the expenditure on religious object exceeds 5% of the total income of the assessee-trust, he did not approve of the Sanstan under section 80G(5)(vi).
6.2.2 Contentions made :
6.2.2-1 SANSTAN'S CONTENTIONS - It was claimed by the Sanstan that it was carrying on charitable activities and the expenditure incurred did not relate to religious activities. Hence, the limit of 5% would not apply to its case.
6.2.2-2 I.T. DEPTT.'S CONTENTIONS - Sanstan was carrying on religious activities and had spent money for the maintenance of the temples and, therefore, the Commissioner had rightly denied the approval under section 80G(5).
6.2-3 Issues for the consideration of the Tribunal - The Tribunal was required to consider whether the Sanstan was a religious institution to which the limit of 5% would apply?
6.2.3-1 TRIBUNAL'S DECISION - The objects of the Sanstan nowhere prescribed that Sanstan had been constituted for propagation of a particular religion for merely worshipping of the idols of Shiva, Hanumanji and Goddess Durga and maintenance of temple for them could not be regarded as propagation of a particular religion, as the temple was open to every one - not merely for the persons of a particular community - say Hindus.
| ♦ | Lod Shiva, Hanumanji, Goddess Durga do not represent any particular religion; they are merely regarded to be the superpowers of the universe. | |
| ♦ | No material or evidence had been brought on record by the department, which might prove that any person coming, worshipping and maintaining the temple had to follow a particular code of ethical rules and had to carry out the prescribed rituals and observances, ceremonies and modes of worship. The entry was not restricted to a particular group of persons. Anybody whether he wanted to worship or not and wanted to maintain the temple or not could come to the temple and avail of all the facilities available to the public at large. | |
| ♦ | Until and unless the activities, for which the trust was established, involved the activity merely for religious purpose, it could not be said that the assessee had not complied with the condition No.(iii) enumerated under section 80G(5). | |
| ♦ | All the building maintenance expenses, free food expenses and festival, prayer and daily expenses could not be regarded to be the one incurred for religious objects, even if the object was regarded to be religious one. It could not be denied that in the building the assessee was running yoga centre, tailoring training centre as well as food for the needy and optical centre for the poor. | |
| ♦ | Commissioner must be aware of the fact that the Hindus consist of a number of communities having the different Gods, who are being worshipped in a different manner, different rituals and different ethical codes. Even the worship of God is not essential for a person, who has adopted Hinduism as a way of life. Thus, Hinduism holds within its fold men of divergent views and traditions, who have very little in common except a vague faith in what may be called the fundamentals of the Hinduism. The word 'community' means a society of people living in the same place, under the same laws and regulations and who have common rights and privileges. This may apply to Christianity or Muslims but not to Hinduism. Therefore, it cannot be said that the Hindu is a separate community or a separate religion. | |
| ♦ | Technically, Hindu is neither a religion nor a community. Therefore, expenses incurred for worshipping of Lord Shiva, Hanuman, Goddess Durga and for maintenance of temple cannot be regarded to be for religious purpose. Under these facts and circumstances, the Commissioner was not correct, in law, in not granting the approval to the assessee-trust under section 80G. |
For the above-mentioned reasons, the order of the Commissioner was set aside and he had been directed to grant approval to the Sanstan under section 80G(5)(vi) of the Act.
6.2.3.1-1 AN APPRAISAL OF THE TRIBUNAL'S DECISION - The case was squarely covered by the decision of the Supreme Court in the case of Shri Jagannath Jew's (supra) decision and, hence, the Tribunal could be said to have come to a correct decision. However, some of the observations of the Tribunal raised debatable issues on which arguments could be raised. These have been considered in later paras.
Observations regarding Hindus, Hinduism and about the Gods for whom the temple was built, could be debatable issues. As for Hindus, under the Hindu law, purposes held to be religious ones are: installation, conservation and worshiping of an idol [Bhupathi Nath v. Ram LalILR 37 Cal. 138, Smt.Ganeshi Devi Rami Devi Charity Trust v. CIT [1969] 71 ITR 696 (Cal.).
However, the temple does not become a place for worship for a particular religious community or caste if it is open to every one, despite being a temple for Hindu Gods/Goddesses. The Bangalore Bench of the Tribunal on the facts of the case observed in ITO v. Carmelite Convent [1993] 45 ITD 221 (FB) that the main object of the society was offering prayers to the public showed that it was for the general public utility.
In the case before the Tribunal, the temple was not wholly for religious purpose, as besides worship of deities, many other activities for general public benefit were being carried on. In this context, a reference to the decision of the Bombay High Court in the case of Bai Hirbai Rahim Aloo Paroo & Kesarbai DharamseyKakoo Charitable & Religious Trust v. CIT [1968] 68 ITR 821 can be made. In this decision, the expression 'wholly for religious purposes' has been interpreted to mean a religious purpose within meaning of personal law applicable to assessee. The dominant purpose of the trust created in this case by a 'Khoja lady' was religious. But one of the clauses provided for holding an 'annual majlis' (religious meeting) of all relations and acquaintances of the lady in remembrance of the anniversary of Imam Hussain Sahib, the very founder of their sect, in the name of her deceased husband and on that occasion she feasted those relations and acquaintances. The question was whether the trust was wholly for religious purposes. It was held that among the Khojas Imam Hussain Sahib was the object of very special veneration.
Even though the commemoration may be the death anniversary of a near rela-tion or may be of the Imam himself, feasting does take place and sweets are dis-tributed and the sweets or the food are not necessarily distributed only among the poor. The feature that there is to be a feast or that the feast is to be at a private house cannot detract from the benefication not would it show that it was for that reason not a public religious endowment. The holding of a meeting of the relations and acquaintances and feasting them in the name of her late husband, would still be a valid religious purpose and not a private purpose.
The discussion in foregoing paragraphs shows that the exemption to an Institution or a Trust can be denied only when the purpose is communal or sectarian. It was held by the Madras High Court in K.A. Mohideen Pitechai v. GTO [1988] 173 ITR 96/39 Taxman 306 that unless the purpose for which a trust is created is sectarian and communal, even that it may mention a particular auspicious day and that it may be of a religious character, yet that would not take away the purpose for which it was created i.e., a charitable purpose.
The Supreme Court in Sri Jagannath Jew's case (supra) has settled the issue that there is no antitheses between religion and charity. It has also been held that, although compassion for living creatures motivates all religions, it is also practical spirituality as it has an elevating moral influence, fostering a deep sense of fellow feeling and fraternity. Such acts not only fulfil our cherished human values, but they equally promote public good and welfare and are, therefore, dominantly religio-charitable [see CIT v. Swastik Textile Trading Co. (P) Ltd.[1978] 113 ITR 852 (Guj).
Conclusion
7. On the basis of the foregoing discussion, the issues discussed could be summed up as follows :—
Though the two phrases 'charitable purposes' and 'religious purposes' have been used in section 11, granting exemption to income from properties held for such purposes has been used in sections 11, 12 & 13 at various places. Both the phrases entitle the Institutions/Trusts to exemption if their activities are for public purposes and public good. The conditions to be satisfied for claiming exemption in both the cases would be identical. Mere puja of certain idols relating to Hindu religion installed in a temple along with various other activities for the benefit of public will not disentitle an Institution or a Fund from claiming exemption on its income on the ground that it is a religious Institution/Fund. This view is supported by the Supreme Court's decision in Sri Jagannath Jew's case (supra) and recent decision of the ITAT, Nagpur Bench. Exemption can be denied only if the purpose is non-secular (communal or sectarian). Recognition under section 80G can be denied by the CIT only if the Institution/Trust is for the benefit of a particular religious community or caste - not only general ground that it is of a religious character. 5% limit prescribed under section 80G(5)(vi) will not apply in cases of public religious trusts/institutions.
Regards
Prarthana Jalan
__._,_.___
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