B.L. Chhibber, AM. - (1.) SMARCH, 2000 The vital issue raised in this appeal by the revenue is whether the assessee is a public charitable trust as claimed by it and is eligible for exemption under sections 11 and 12 of the Income Tax Act (hereinafter referred to as the Act).
(2.) On 11-12-1931, was born in village of Kuchwara, Madhya Pradesh, Rajneesh Chandra Mohan, who afterwards became Acharya Rajneesh. After obtaining his M.A. degree, Chandra Mohan taught at the Raipur Sanskrit College from 1957 to 1959 and was a professor of philosophy at the University of Jabalpur between 1960-66. He resigned his professorship in 1966 allegedly to devote himself to spiritual work. He is stated to have travelled extensively delivering lectures between the years 1958 and 1969, until he settled in Bombay in 1969. He is stated to have held a meditation camp for the first time in 1964 in Rajasthan. After 1969, many public lectures and appearances were ascribed to him. He also had written profusely on spiritual and allied subjects. Acharya Rajneesh took Mahasamadhi on 19-1-1990. By an indenture of trust dated 11-6-1969, Shri Himatlal Haribhai Joshi and Shri Ishwarlal Naranji Shah as settlers drew up a trust deed creating the trust known as "Jeevan Jagruti Kendra. To start with the registered office of the trust was at 29, Eastern Chambers, 3rd floor, 128, Poona Street, Bombay. Under clause 4 of the conditions of the trust deed, the activities of the trust could extend to the whole of India and to such other parts of the world as are decided upon by the trustees from time to time. Shri Rajneesh, according to clause 2 of the trust deed, was to be the advisor to the trust for life and as an advisor was to have powers mentioned in the trust deed. Clause 5 of the deed dealing with the aims and objects of the trust runs as under : "5. The aims and objects of the trust shall be : (a) to spread and impart the preaching of Acharya Shri Rajneeshji and other philosophers pertaining to all religions and/or main principles thereof and/or morals; (b) For the purpose to print, publish, sell, distribute other free or for price books, magazines, lectures, preachings, writings, periodicals, bulletins, journals and any other literature; (c) To conduct or arrange lectures, tours, shibirs, research programmes or programme of any kind approved by the Board either in India or abroad and for that purpose, to call Acharya Shri Rajneeshji and other philosophers at the cost of trust; (d) To start, promote, establish, maintain, control and/or conduct, gyana yagna, sadhana centres, seminars, discourses, study groups, lectures, reading rooms, libraries, schools, pathshalas research centres and other educational institutions and/or to arrange for the purpose with other schools/or educational institutions and for the purpose to do all acts, deeds and things necessary for the starting, conducting and/or promotion thereof; (e) To give loans, scholarships, freeships, prizes, honorarium, remuneration and/or monetary assistance and/or such other assistantship, arrangements, etc. to the philosophers, thinkers, writers, authors and/or students, taking interest in the lines and objects of the trust and rendering help for carrying the same out; (f) To establish, promote and maintain Ashram schools, colleges and such other institutions and for that purpose, to train students and teachers and to take an other steps for the purpose of putting into practice the ideals of education as laid down in the preceding para (a); (g) To establish, promote, improve, control, diffuse and impart medical knowledge by way of Sadhana and other suitable systems beneficial to physical and mental health; (h) To establish, promote and/or take over and conduct hospitals, health and medical centres or other such centres; (i) To donate and contribute and/or to enter into working arrangements of any kind with other establishments, institutions, organisations, bodies or centres having objects wholly or partly similar to those of the trust and which may be deemed to be the activity conducted for the purpose of popularising, implementing and practising the ideals and philosophy laid down in preceding para (a); (j) To maintain and safeguard the interest, objective and thinking of the trust and for that purpose to take all other steps that may be deemed necessary by the Board of trustees; (k) To enter into any arrangement with the government, local authorities other quasi-government bodies and other public or private bodies, organisations and/or institutions in order to promote and achieve and/or all of the aims and objects of the trust; (l) To accept donations either in cash or in kind and/or under any other arrangements and to raise moneys otherwise, for the purposes of carrying out the objects and activities of the trust and to accept subscriptions and gifts of movable or immovable properties for the same purpose; (m) To borrow and raise moneys for the purpose of carrying out the objects of the trust in such manner and from such persons as the trust may think fit; (n) to acquire land, purchase buildings, construct or take on lease or exchange or hire any movable or immovable properties or rights or privileges for the purpose of carrying out the objects of the trust; (o) To enter into contract, execute deeds and do all other things and to undertake any other activities as may be conductive, suitable or incidental to the work for the attainment of the objects of the trust or any of them or part of them; (p) To undertake and execute any trust which may be or indirectly conducive to any of the objects of the trust either gratuitously or otherwise; (q) To invest moneys belonging to the crust in such securities or otherwise and in such manner as laid down and/or provided for in the statutes and/or permission by the appropriate authorities from time to time; (r) To provide for the relief of poor people and people in distress or for national cause; and to provide for medical relief; (s) To maintain, run or otherwise arrange for Sadavrats, Dharmashalas, Rest houses, Kala Mandirs, Ball Mandirs, prayer halls, public gardens, public utilites, etc.; (t) To establish, promote or take such other activities for advancement and propagation of education, literature, science, colleges, educational institutions and to provide or establish scholarships, gifts in cash or kind for education or developing mind or body; (u) To promote and establish branches of the trust all over India and at such other places in the world as may be decided by the Board of trustees from time to time; (v) To purchase, acquire or take on lease or rent, land for agricultural activities, for imparting training and activities for the inmates and to achieve self-sufficiency thereby; (w) to accept by way of gifts, donations and/or otherwise any business on such terms and conditions they may be their absolute discretion agree upon. If the trustees accept any such gift or donation of a business or any such interest in business, the trustees at such time as they may deem proper or continue the share or interest in business donated to the trust and for that purpose, appoint chairman or some other trustee or trustees amongst themselves to represent the trust in such business and/or to become partner(s) in such business or behalf of the trust on such terms and conditions as the trustees in their absolute discretion deem proper,- (x) To train and take up such activities like handicrafts, spinning, weaving, leather-crafts or other arts and other activities so as to impart basic training to the inmates and to achieve self-sufficiency thereof; (y) Any other activities in furtherance of the aims of the trust and of general public utility. And provided always that the trustees shall have full power and absolute authority in their entire discretion to add to and introduce other specific public charitable objects not inconsistent with the objects and purposes to these presents to the advancement of the times and circumstances which may from time to time exist as they may consider desirable and in such case, such newly added objects so decided upon by the trustees shall be deemed to have been incorporated in the objects of these presents, hereinabove be deemed to be the object and considered charitable or otherwise, by any of the authority, the same shall stand deleted, and the trustees shall not spend any of the trust funds on the said objects."
(3.) THE trustees had power to accept donations and contributions from individuals or institutions. THE trustees under clause 7 have absolute power at their discretion (to deal with and to put into practice the objects mentioned hereinabove). Other clauses of the trust deed gave power to the trustees to deal with the movable and immovable properties, etc. to make rules and regulations for the day-to-day working to the trust. Clauses 11 and 12 dealing with the management of the property and other business of the trust are as under : "11. THE management of the property and other business of the trust shall be carried out by a Board of trustees of not less than 2 (two) and not more than 11 (eleven) members, as constituted and provided hereinafter : Acharya Shri Rajneeshji as the adviser of the trust shall nominate up to 5 (five) (may be at a time or from time to time but the total number of members so nominated shall not exceed 5) members on the Board of trustees and the trustees nominated shall constitute a committee for the time being and at the first meeting to be held after such nomination; the committee shall have powers to co-opt upto six members of trustees and thereafter the committee so constituted shall work as the Board of trustees. At the end of the year 50 per cent of the trustees shall retire by rotation. THE trustees to retire at the end of the year shall be decided by a secret ballot at the meeting of the Board and subsequently, the trustees longer in the office, shall retire. Acharya Shri Rajneeshji shall re-nominate the trustees retiring from the trustees nominated by him and the fresh Board of trustees after the nomination by Acharya Shree Rajneeshji shall co-opt the trustees in a vacancy caused by the trustees retired from the co-opted members. 12. Acharya Shri Rajneeshji shall be the adviser as aforesaid for the life and he shall have powers and rights to nominate up to 5 (five) trustees from time to time and shall have also the rights to remove any trustees so appointed by him and can appoint some other person as trustee within the number of trustees so required to be nominated by him. If and when Acharya Shri Rajneeshji ceases to hold office for any reason, the I trustees at that time present shall be the trustees and shall continue to remain trustees till any of them shall cease to hold office either on death, resignation or removed from office by the Board of trustees at its meeting on a resolution carried out on two-third majority of the members present and voting. Portion of clause 14 relevant for our purpose is as under : "THE Board of trustees at its discretion and as per the rules framed by them from time to time may on the application made in the prescribed form, approve of any person above 18 years of age, firm, association, trust or company either within India or outside who is interested and subscribes to the aims and objects of the trust as member. THE Board of trustees may from time to time at its discretion provide for different class of membership like patrons, life members, honorary members and/or ordinary members. THE Board of trustees at its discretion in consideration of any scheme of settlement or arrangement including amalgamation or otherwise, may also provided for the co-option of patrons and life members as patrons and life members of these presents. THE Board of trustees may from time to time frame rules for the election and/or nomination of executive council from amongst the different class of members and such council will look after such work as per the rules framed by the Board.;