- (1.) THIS appeal by the Revenue under Section 260A of the Income Tax Act, 1961 ('Act') is directed against the order dated 20th August 2014 passed by the Income Tax Appellate Tribunal ('ITAT') in ITA No. 5812/Del/2012 for the Assessment Year ('AY') 2009 -10.
(2.) THE Assessee, Bhagwan Shree Laxmi Narain Dham Trust ('Trust'), was accorded registration under Section 12A of the Act on 20th May 2005. The Assessee -Trust was set up on 30th December 2002 to carry out various charitable, spiritual and religious objects as set out in the trust deed. Some of the objects of the Trust as set out in the Trust Deed are as under: (i) To establish, promote, set -up, run, maintain assist finance, support and/or help in setting up and/or maintaining and/or running schools, and other institutions orphanages, widow home, poor houses or other establishments of relief and/or help to the poor, old and infirm people. (vii) To arrange, establish, manage and supervise orphanages, old age homes, night shelters, hospitals, dharmshala, nariniketan and mahila ashram etc. (viii) To give spiritual lectures to mental disturbed person and spiritual lecture to all kinds of human beings. (xi) To do all other activities for the interest of the human beings to help in physical, mentally and financially. (xii) To give provide and/or render food, medicine and other help and/or assistance in any shape or form to the poor deserving and needy person. To give provide and/or render monetary and/or other help and assistance for the relief of persons and animals affected by natural and other calamities such as food, fire, famine, cyclone, earthquake, storm, accident, pestilence drought, cyclone, epidemic and the likes to give donations, subscriptions or contributions to institutions, establishments centres of persons doing relief work on such occasions. (xiv) To open found, establish, manage, promote, set -up, run, maintain, assist, finance, support and/or help in the setting up and/or maintaining and/or running schools, colleges, arts and science medical, para medical and technical, lecture halls and other establishments or institutions etc. for advancement of education and knowledge in arts, science, literature, humanities and all other useful subjects in all their manifestation. (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." 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 115BBC 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.
(3.) THE Commissioner of Income Tax (Appeals) ['CIT (A) '] by an order dated 3rd September 2012 confirmed the action of the AO. THE CIT (AO analysed inter alia Circular No. 14 issued by the Central Board of Direct Taxes (CBDT) explaining the scope of Section 115BBC 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: - "To give spiritual lecture to mentally disturbed persons and spiritual lecture to all kinds of human being." From the object itself it is evident that appellant society's object is in the nature of spreading spirituality in the Society. So, it cannot be held as 'religious society'.";