Tax Exemption cannot be denied to Trust not meant for one particular religious community

By Editor4 Income Tax Judiciary September 14, 2017

TaxGuru Citation: 2017 taxguru.in 831
Case Name: CIT (Exemptions) Vs. M/s. Indian Society Of The Church Of Jesus Christ Of Latter Day Saints (Delhi High Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All High Courts, Delhi High Court

Upgrade to Basic or Premium to download.

Already Upgraded? Log in.

In the present case, the factual determination by the ITAT that (i) the programmes conducted by the Society “are open for public at large without any distinction of caste, creed or religion and the benefits of these programmes held at the meeting house are available to the general public at large and (ii) priests are not managing the affairs of the society, have not been shown by the Revenue to be perverse. It is not the percentage of expenditure on persons not belonging to the religious community that mattered. What was significant was that there were donations made by the Society for the general public utility. This showed that it was not exclusively for the benefit of one particular religious community.

The CIT (A) had proceeded on the basis that although the Assesse Society was for both religious and charitable purposes, since it was for the benefit of only one religious community the provision of Section 13 (1) (b) would apply to deny it exemption under Section 11 of the Act. The above conclusion was legally flawed. It was contrary to the decision of the Supreme Court in Dawoodi Bohra Jamat (supra) which held that even where the trust or society has both religious and charitable objects, “it needs to be examined whether such religious-charitable activity carried on by the trust only benefits a certain particular religious community or class or serves across the communities and for society at large”. In that case it was factually found that “the activities of the trust though both charitable and religious are not exclusively meant for a particular religious community” and, therefore Section 13 (1) (b) was not attracted. In the present case too, the factual finding of the ITAT is likewise. It has been found that the activities of the Assessee Society, though both religious and charitable, were not exclusively meant for one particular religious community. It was, therefore, rightly not denied exemption under Section 11 of the Act.