Ashvalayana Vrunda Vs ITO (ITAT Bangalore)
The case of Ashvalayana Vrunda v. ITO concerns two appeals filed by the assessee, Ashvalayana Vrunda, a trust established with the primary objective of teaching and spreading Vedic education. The appeals were filed against two separate but related orders from the Commissioner of Income Tax (Exemptions) (CIT(E)), both dated September 29, 2022.
In the first order, the CIT(E) rejected the trust’s application for approval under Section 80G of the Income Tax Act, 1961, arguing that the trust was engaged in religious activities by teaching Vedas, which the CIT(E) considered to be Hindu religious scriptures. Consequently, in the second order, the CIT(E) granted the trust registration under Section 12A but categorized it as a “religious trust” instead of a “charitable trust.” The assessee appealed both decisions, challenging the classification of its activities as religious and the denial of the Section 80G exemption.
Key Arguments of the Assessee
The assessee, through its counsel, presented a multi-pronged argument to the ITAT:
- Vedas as Knowledge, Not Religion: The trust argued that the term “Veda” means “knowledge,” and its activities—teaching, imparting, and encouraging Vedic education—are educational and cultural in nature. The assessee highlighted that UNESCO had recognized the tradition of Vedic chanting as part of the “Intangible Cultural Heritage of Humanity.” The counsel contended that these activities are not confined to a particular religion and that the trust’s beneficiaries are the general public, regardless of their race, religion, caste, creed, or gender.
- Hinduism as a Way of Life: Relying on judicial precedents, the assessee argued that Hinduism is not a religion in the traditional sense but a “way of life.” The counsel cited the Supreme Court’s decision in Dr. Ramesh Yeshwant Prabhoo v. Shri Prabhakar Kashinath Kunte & Others and the Madras High Court’s ruling in TT Kuppuswamy Chettiar & Others v. State of Tamil Nadu, both of which underscored that Hinduism is a broad term encompassing a way of life and culture rather than a rigid, faith-based religion.
- Distinguishing from Outdated Precedents: The assessee’s counsel distinguished its case from the precedents relied upon by the CIT(E), particularly the Supreme Court’s ruling in CIT v. Upper Ganges Sugar Mills Ltd. The counsel pointed out that the trust in that case had an explicit object “to establish, maintain and to grant and / or aid to public places of worship and prayer halls,” which is a distinctly religious purpose. Ashvalayana Vrunda’s trust deed, in contrast, contained no such objects. The trust’s activities were limited to teaching recitation and pronunciation of Vedas, akin to teaching any other Sanskrit literature.
- No Restrictions on Beneficiaries: The trust deed explicitly stated that its benefits are for the general public, without discrimination based on caste, creed, or religion. The assessee submitted evidence of its activities, such as providing financial assistance and food kits to needy Vedic scholars and conducting workshops for the general public, further demonstrating its charitable nature.
The CIT(E)’s and ITAT’s Stances
The CIT(E) had concluded that because some of the trust’s objects were to teach Vedas—which the Commissioner considered “Hindu religious scriptures”—the trust’s purpose was religious. This determination, based on Explanation 3 to Section 80G, led to the rejection of the 80G application. The CIT(E) also relied on the Upper Ganges Sugar Mills judgment and a decision of the ITAT Cochin bench in Kasyapa Veda Research Foundation v. CIT, which held that teaching Vedas was a religious activity.
