Suhas Chandra Sen, J. - (1.) The Income-tax Appellate Tribunal has referred the following question of law for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessee was entitled to the relief under Section 80G on the donations paid to Vishwa Mangal Trust ?"
(2.) This reference raises a question of construction of the third Explanation to Section 80G(5) of the I.T. Act, 1961. Section 80G allows deduction in respect of donations made to a charitable trust. The third Explanation makes it clear that "charitable purpose" does not include any purpose the whole or substantially the whole of which is of a religious nature.
(3.) The present reference relates to the assessment year 1973-74, By an assessment order of December 27, 1976, the ITO had allowed deductions under Section 80G on a donation of Rs. 25,000 paid by the assessee company (M/s. Upper Ganges Sugar Mills Ltd., Calcutta) to the Vishwa Mangal Trust. Subsequently, the proceedings were reopened. The trust deed of Vishwa Mangal Trust was examined. The ITO found that Clause 2(h) contained an object which was wholly of a religious nature and accordingly was not a charitable purpose. The deduction claimed under Section 80G was held not allowable. The assessment order was modified accordingly.;