Trust working for a particular community not eligible for approval under section 80G(5)

IN THE ITAT AMRITSAR BENCH (THIRD MEMBER)

Ramanujam Spiritual Public Charitable Trust

v/s.

Commissioner of Income-tax-I, Amritsar

IT Appeal No. 378 (Asr.) of 2009

June 8, 2012

ORDER

H.S. Sidhu, Judicial Member

The assessee has filed the present appeal against the order dated July, 2009 passed by the learned Commissioner of Income-tax-I, Amritsar under section 80G(5) read with section 254 of the Income-tax Act, 1961 (hereinafter referred as ‘the Act’).

2. The facts narrated by the learned CIT-I, Amritsar are that the assessee-trust filed its application dated 26-3-2008 for renewal of approval under section 80G(5) of the Act, which was rejected by the learned CIT-I, Amritsar vide his order dated 26-8-2008 on the ground that one of the objects No.4 made it absolutely clear that the trust has been established for a particular religious purpose for the followers of the deity who have to be only “Hindus” because the said object makes it clear that if any trustee renounces the Hindu religion or transfers of any portion of trust property in violation of the conditions herein before recited, then “he or she shall for the purpose of this deed be considered to be dead and the person next after him or her entitled to succeed as Trustee, shall succeed”. The learned CIT-I, Amritsar also observed in the order dated 26-8-2008 that before rejecting the trust’s application, its reply along with a paper written on 20-12-1993 but signed on 1-8-2008 stated to be corrigendum to the trust deed were duly considered and the same are an afterthought and self-serving document, which has no legal binding.

2.1 The assessee challenged the order dated 26-8-2008 before the Tribunal, who vide its order dated 19-12-2008 passed in I.T.A. No. 512(ASR)/2008 remitted back the issue to the Commissioner of Income-tax-I, Amritsar to decide afresh in accordance with law after taking into consideration the corrigendum filed by the assessee and the effect thereof on the objects of the Trust for the purpose of renewal of approval under section 80G(5) of the Act.

2.2 In compliance of the same, the learned CIT-I, Amritsar issued notice to the assessee asking the assessee-trust to produce books of account for the assessment years 2007-08, 2008-09 and 1-4-2009 onwards, minute book and details of other charitable activities done in addition to construction of temple along with original copy of corrigendum.

2.3 In compliance of the same, the authorized representative of the assessee appeared and produced cash book and other information required by the learned CIT-I, Amritsar and also submitted its reply dated 22-3-2009 mainly stated that on 1-8-2008 as per minute book and the corrigendum of the Trust Deed dated 1-8-2008, the objects of the trust was changed and one of the new object was construction of the Dharamshala and the trust has started construction of Dharamshala right thereafter on land measuring 10000 sq. ft. already with the trust and the donations received after 1-8-2008 have been spent on the construction of Dharamshala. The assessee further stated in its reply dated 24-3-2009 that since the trust is doing charitable work w.e.f. 1-8-2008 as per the provisions of law of the land and the judgment pronounced by the Hon’ble Supreme Court of India, the assessee requested that the renewal of registration u/s.80G of the Act may kindly be granted.

2.4 After going through the reply filed by the assessee, the learned CIT-I, Amritsar is of the view that the corrigendum dated 1-8-2008 is an attempt to delete the clause 4 of the original Trust Deed. Needless to mention that original Trust Deed contained provision for spending the income or assets of the Trust for purposes other than charitable. The learned CIT-I, Amritsar in the impugned order specifically held that the Trust was expressly established for the benefit of a particular religious community. These are prohibited by the conditions laid down in clauses (iii) and (iv) of section 80G (5) of the Act. The corrigendum aforesaid brought into existence virtually a new trust which has totally changed the complexion and objectives of the Trust, In fact, a new trust should have been constituted which the assessee has not done to reap the benefits of section 80G retrospectively. The learned CIT-I, Amritsar also held in the impugned order that the corrigendum submitted later on is an afterthought and a self serving document submitted especially when put to question by this office and it is just to enjoy the benefits under section 80G of the Act retrospectively. The learned CIT-I, Amritsar also supported his view by the decision of the Hon’ble Allahabad High Court in the case of Shervani Charitable Trust v. CIT [1968] 69 ITR 750 wherein it is held that the trustees do not have any power to override the Trust Deed through a resolution by virtue of which the non-charitable portion of the income could also be applied to charitable purposes.

2.5 Keeping in view the aforesaid finding, the learned CIT-I, Amritsar finally rejected the application filed by the assessee by passing the impugned order in the month of July, 2009.

3. Aggrieved by the same, the assessee has filed the present appeal.

4. The learned counsel for the assessee stated that the learned CIT-I, Amritsar has passed an illegal order, which is bad in law and liable to be cancelled because the learned CIT-I, Amritsar has wrongly treated the corrigendum to the original Trust Deed is nothing but an afterthought and not treating in letter and spirit the judgment of ITAT, Amritsar Bench dated 19-12-2008 passed in the case of the assessee while challenging the order dated 27-8-2008 passed by the same CIT-I, Amritsar in which he has rejected the assessee’s application for the renewal of approval under section 80G(5) of the Act by giving exactly similar finding as he has given in the impugned order. He further stated that the learned CIT-I, Amritsar has not appreciated the order dated 19-12-2008 and wrongly rejected the application of the assessee, which is contrary to the decision of the jurisdictional Bench passed in the case of Maj. Gen. (Retd.) Kanwarjit Singh v. Asstt. CIT, [2006] 10 SOT 19 (ASR) (URO), which he has attached at page 12 of the paper book. He stated that in the aforesaid case, this Bench has held that the decision of the higher judicial authority must be followed and practice of treating the precedent as absolutely binding is necessary to secure certainty of law. But in the present case, the learned CIT-I, Amritsar has not followed the order dated 19-12-2008 passed by the I.T.A.T., Amritsar and passed the impugned order, as he has already passed on 27-8-2008 while rejecting the assessee’s application for renewal of approval under section 80G(5) of the Act. He has also filed a copy of supplementary deed of Ramanujam Spiritual Public Charitable Trust and copy of affidavit of Shri Ravi Sharma S/o Shri Bishan Dass, Accountant of the Trust. He has also filed a paper book containing pages 1 to 27 in which he has attached a copy of Tribunal’s order dated 19-12-2008 at pages 1 to 6, copy of CIT’s order dated 27-8-2008 at pages 7 to 10, copy of letter dated 23-3-2009 at page 11, copy of letter dated 7-4-2009 at page 12, copy of cash book for period ending 31-3-2008 at page 13, copy of ledger for the period ending 31-3-2008 at page 14, copy of cash book from 1-4-2009 onwards (1-4-2009 to 30-5-2009) at page 15, copy of ledger from 1-4-2009 onwards at pages 16 to 17, copy of balance sheet as on 31-3-2008 at page 18, copy of original trust deed dated 20-12-1993 at pages 19 to 24, copy of corrigendum dated 1-8-2008 at page 25 and copy of Minute book dated 1-8-2008 at pages 26 to 27 of the paper book. He has also filed Paper Book No.2 containing pages 1 to 17 in which he has attached brief facts at page 1, Notes on Public Charitable Trust at pages 2 to 9, section dealing with donation u/s.80G at pages 10 to 11 and copy of judgment of ITAT, Amritsar Bench, Amritsar at pages 12 to 17 of the Paper Book No.2.

4.1 He further argued that the learned CIT-I, Amritsar has already granted many times exemption under section 80G of the Act to the assessee trust on the unamended deed of the Trust and lastly granted the same exemption on 14-9-2005 w.e.f. 1-4-2005 to 31-3-2008 but he has wrongly rejected the exemption under section 80G of the Act to the assessee without any valid reason. He further stated that when the ITAT at page 5, para 9 of the order dated 19-12-2008 has already held that there is nothing preventing the assessee from filing such corrigendum and thereby amending its objects. He further stated that the Bench also held that the learned CIT-I, Amritsar erroneously rejected such corrigendum as merely an afterthought and not having any binding force and this cannot be sustained in the absence of any provision of law prohibiting the assessee from amending the original Trust Deed by way of corrigendum. The learned counsel for the assessee stated that the learned CIT-I, Amritsar has not followed the order of the jurisdictional I.T.A.T., which is violation of judicial discipline, therefore, the impugned order deserves to be cancelled and the direction may be issued to the learned CIT-I, Amritsar to grant exemption under section 80G of the Act as requested by the assessee-trust.

5. On the contrary, the learned D.R. relied upon the impugned order passed by the learned CIT-I, Amritsar, specifically the finding given at page No. 5 of the impugned order. No other argument has been advanced by the learned D.R.

6. We have heard both the parties and perused the relevant material available with us. We have also thoroughly gone through the supplementary Deed of the Trust in which the assessee had rectified the Trust Deed dated 20-12-1993 and decided to change the objects of the Trust by passing a resolution on 1-8-2008 and also corrigendum written on 1-8-2008 w.e.f. 1-8-2008. An affidavit filed by Shri Ravi Sharma, Accountant of the Trust along with the order of the ITAT dated 19-12-2008 and various other documentary evidence filed by the assessee in the paper books. It is an admitted fact that the assessee has made a deed of public charitable trust on 20-12-1993, which is registered one. It is also admitted that the assessee has made one supplementary deed stating therein that the objects stated in the Trust Deed dated 20-12-1993 is not possible to continue in future and it has been decided to change the objects. Accordingly, a resolution was passed and recorded in the minute book on 1-8-2008 and also corrigendum was written on 1-8-2008 w.e.f. 1-8-2008 wherein it has been decided to involve this trust in the acts of service to the society. The assessee has also added additional four objects which include construction of Dharamshalas, Community Halls, setting up and running of charitable hospital and others. In the Supplementary Deed, the assessee also deleted right from the beginning clause 4 of the original Trust Deed dated 20-12-1993. For the sake of convenience, clause 4 of the original Trust Deed dated 20-12-1993 and the relevant portion of the Supplementary Deed are reproduced as under:-

“Clause 4 of the original Trust Deed dated 20-12-1993:-

4. If any Trustee renounces the Hindu religion or transfers any portion of the Trust Properties in violation of the condition hereinbefore recited, then he or she shall for the purpose of this deed be considered to be deed and the person next after him or her entitled to succeed as Trustee, shall succeed. The Trustees for the time being shall hold the Trust Properties and mange the same to the best advantage of the Trust.”

“Relevant portion of the Supplementary Deed:-

Whereas it has been felt that the object stated in the trust deed dated 20-12-1993 is not possible to continue in future and it has been decided to change the objects accordingly a resolution was passed and recorded in the minute book on 1-8-2008 and also corrigendum was written on 1-8-2008 w.e.f. 1-8-2008 wherein it has been decided to involve this trust in the acts of service to the society which includes-

 (i)  Construction of Dharamshalas, Community Halls.

(ii)  Setting up and running of charitable hospital.

(iii)  Helping the deserving parents to solemnize the marriage of their daughters.

(iv)  Advancement of any other objectives of general public utility, not involving the carrying of any activity for profits, as the law may regard as public charitable purposes.

That the clause No.4 of the original Trust deed dated 20th December, 1993 stands deleted right from beginning as if it was never been the part of the trust deed.

This supplementary deed is executed on 20-4-2010 w.e.f. from 1-8-2008 is signed by the trustees in the presence of the following witnesses. Self drat CB Acharya.

	1. Witnesses		Trustees
	Sd/-		Sd/-
	AMIT HANDA 175 Rani Ka Bagh, Amritsar,		1. (Bhawna Ramanjum)

	2. Sd/-		2. Sd/-
	(MANORMA RANI)		(CB. Acharya)
	W/o Sh. C.L. Sharma,
	H.No.6, Gali No.2,		3. Sd/-
	Vijay Nagar, Asr.		(Janak Ram Sharma)”

7. After going through clause 4 of the original Trust Deed dated 20-12-1993 and the corrigendum dated 1-8-2008 as well as additionally added activities of the assessee trust along with documentary evidence filed by the assessee from page Nos. 14 to 18 of the paper book in which the assessee has shown the utilization of funds for the construction of Dharamshalas, we are of the considered opinion that the learned CIT-I, Amritsar has passed the impugned order without thoroughly considering the supporting evidence available with him. We have also gone through the order dated 19-12-2008 passed in I.T.A. No. 512(ASR)/2008 in the case of the assessee-trust, wherein this Bench has held in paras 9 and 10, page 5 and the view taken in the impugned order has already been rejected by this Bench, relevant paras 9 and 10, page 5 are reproduced as under:-

“9. Firstly, though the learned CIT has been of the view that the corrigendum filed by the assessee was just an afterthought, he has failed to take into consideration that there is nothing preventing the assessee from filing such corrigendum and thereby amending its objects. No provision of law has been cited by the learned CIT to reject the said corrigendum. In our considered opinion, the learned CIT erroneously rejected the said corrigendum as a mere afterthought and not having any binding force. This cannot be sustained in the absence of any provision of law prohibiting the assessee from amending the original Trust Deed by way of corrigendum. Moreover, after rejecting the corrigendum as an afterthought, the learned CIT erroneously went on to further consider the merits of the issue and to decide thereupon.

10. In view of the above, the matter is remitted to the file of the learned CIT to be decided afresh in accordance with law after taking into consideration the corrigendum filed by the assessee and the effect thereof on the objects of the Trust for the purpose of renewal of approval under section 80-G(5) of the Income tax Act.”

8. In compliance of the order dated 19-12-2008, the learned CIT-I, Amritsar has passed the impugned order, which is also exactly the same, which he has already passed on 27-8-2008. The relevant portion of the impugned order dated 27-8-2008 and the impugned order under appeal are as under:-

“Impugned Order dated 27-8-2008.

Keeping in view this strong emphasis on a particular religion the representative of the Trust, Sh. Anil Aggarwal during he hearing before me on 10-7-2008 was asked to explain how the trust can be treated to have been established for charitable purposes in view of conditions laid down in section 80G[5](iii) read with Explanation 3 which makes it quite clear that the institution or fund has not to be expressly established for the benefit of any religion, community or caste. The Explanation 3 has put a further strong rider against granting registration to any trust or institution or fond for any purpose which does not include any purpose for wholly or substantially to whole of which is religious nature. Sh. Anil Aggarwal’s attention was also invited to Hon’ble Supreme Court’s decision in the case of Upper Ganges Sugar Mills Ltd. and others v. CIT cited at 227 ITR 578. The Hon’ble Supreme Court has held that establishment of public places of worship and prayer halls are religious purpose, hence donation to such institution and trust was not held to qualify for deduction u/s.80-G. Registration to any institution or fund whose purpose include whole or substantially the whole of which is religious nature, thus is not to be allowed for the purpose of section 80-G. In response to this query, Sh. Aggarwal has submitted before me that the trust was formed with the object of constructing a temple at Varindhavan for the worship and undertaking the spiritual education to the public in general. He also submitted a paper written on 20-12-1993 but signed on 1-8-2008 which he says is a corrigendum to the trust deed. Vide this corrigendum, clause-4 of the original trust deed has been deleted and the objects of the trust have been changed. I have considered Sh. Aggarwal’s argument and the paper which is produced before me. The corrigendum is nothing but an afterthought and self serving document which has no legal binding. Hence it under no circumstances change the basic character and objects of the trust and it remains a trust for a temple with a deity which is confined only to a particular community for worship. Secondly the strong stipulation in the trust deed that a trustee who renounces Hindu religion ceases to remain the trustee is enough evidence that trust is established for a particular religious purpose. The provisions of section 80G(5) read with section 2(15) under the circumstances make it abundantly clear that trust or fond will not qualify to be approved u/s.80-G for getting donations made exempt from the tax. The argument that my predecessor has granted registration under the same circumstances is not relevant because any order erroneously or inadvertently passed is not binding while reconsidering the case or granting renewal.

In the facts and under the circumstances of the case it is declared that in view of sub-section 5(iii) read with Explanation 3 of section 80-G of the Income-tax Act, 1961, the trust is not entitled to be registered for the purpose of section 80-G and no approval is accordingly given and application filed for the said purpose is hereby rejected.”

“Impugned order dated July, 2009:

The above discussion is summed up as under:-

 (i)  The accounts of the assessee are silent as to the nature of the expenditure incurred for any charitable purposes.

(ii)  The corrigendum has been submitted by it only when it has been questioned about the trust being overwhelmingly by religious in nature, thus not entitled to benefits of section 80G. The so called corrigendum was an afterthought.

(iii) In view of the decision of Hon’ble Allahabad High Court in the case of Shervani Charitable Trust v. CIT [1968] reported as 69 ITR 750 (All.), the trustees cannot convert a partial trust into a wholly charitable trust. The trustees do not have any power to override the trust deed through a resolution by virtue of which the non charitable portion of the income could also be applied to charitable purposes. It is a trust distinct from a wholly charitable trust on the basis of provisions of original trust deed dated 20th December, 1993.

In view of the above discussed factual and legal position of the case, and section 5(iii) r/w Explanation 3 of section 80G of the I.T. Act, it is declared that the trust is not entitled to be registered for the purpose of section 80G and no approval is accordingly given and the application filed for the said purpose is hereby rejected.”

9. After going through the impugned order as well as order dated 27-8-2008 passed by the learned CIT-I, Amritsar, we are of the considered opinion that there is no change in both the orders. These are almost similarly worded orders, which show that the learned CIT-I, Amritsar has not taken into consideration thoroughly the order of the I.T.A.T. dated 19-12-2008. Thus the impugned order is not sustainable in the eye of law and is in violation of judicial discipline as held in the case of Maj. Gen. (Retd.) Kanwarjit Singh Gill (supra). We have also reproduced clause 4 of the original deed of the assessee-trust dated 20-12-1993 as well as the corrigendum written on 1-8-2008 w.e.f. 1-8-2008 wherein the trust has deleted clause 4 of the original Trust Deed right from the beginning as if it was never binding part of the Trust Deed along with the finding of this Bench in page 5, paras 9 and 10 of the order dated 19-12-2008 in which this Bench has held that there is nothing preventing the assessee from filing such corrigendum and thereby amending its objects. This Bench has also held that the findings of the CIT-I, Amritsar rejecting the corrigendum as a mere afterthought and not having any binding force has already been adjudicated and rejected and in spite of the same, the learned CIT-I, Amritsar has given similar finding in the impugned order. If the Revenue is aggrieved against the finding given by this Bench in the order dated 19-12-2008, they can challenge the same before the Hon’ble High Court or they can adopt the prescribed procedure under the law but in the case of the assessee, the same has not been done by the department, meaning thereby that the department has accepted the order dated 19-12-2008, it has become final and the finding given in the order dated 19-12-2008 is binding upon the learned CIT-I, Amritsar but he has passed the impugned order while repeating the same finding which he has already given in the order dated 27-8-2008. As argued by the learned counsel for the assessee that the trust has applied for renewal of approval under section 80G(5) of the Act vide application on Form No.10G filed on 26-3-2008, it is very much clear that the assessee has already enjoying the exemption under section 80G of the Act up to 31-3-2008 on the aims and objects of the assessee prior to the issuance of the corrigendum but we fail to understand why the learned CIT-I, Amritsar has refused to grant the exemption to the assessee when the assessee has amended the original trust deed by involving the trust into the act of services to the general society by way of constructing the Dharamshalas, Community Halls, setting up and running of charitable hospital, helping the deserving parents to solemnize the marriage of their daughters and others which are purely charitable in nature for the general public and not for a particular religion or caste.

10. Keeping in view the aforesaid discussion, we are of the considered opinion that the impugned order passed by the learned CIT-I, Amritsar is contrary to the law and facts on the file, therefore, deserves to be cancelled and we cancel the same with direction to the CIT-I, Amritsar to grant approval of renewal of exemption under section 80G(5) of the Act for three years w.e.f. 1-4-2008 to 31-3-2011, as he has already given the exemption under section 80G of the Act upto 31-3-2008.

11. In the result, the appeal filed by the assessee is allowed.

Mehar Singh, Accountant Member – The proposed appellate order, authored by my esteemed Ld. Brother, Sh. H.S. Sidhu, the Ld. Judicial Member, has been carefully perused and considered by me. I also had discussions and deliberations, on the core issues, for adjudication, in the instant appeal. In spite of my best efforts, I am unable to convince the Ld. J.M., on the issue of amendment effected by the settlers, to the original Trust Deed, without there being any provisions for such amendment, in the original Trust Deed and without observance of the prescribed procedure, as laid down under section 26 of the Specific Relief Act, 1963 and section 92 of the Civil Procedure Code 1908 and also contrary to the several direct decisions of the Hon’ble Supreme Court and Jurisdictional High Court on the issue. Further, both the original and supplementary Trust Deeds contravene the express provisions of section 80G(5)(iii) r.w. Explanation 3 to section 80G(5C) of the Act and, hence, the impugned order of the CIT, cannot be set aside but to be upheld. Therefore, I propose to write a separate dissenting order, in the following manner.

2. The assessee filed the present appeal against the order of the Commissioner of Income Tax-1, Amritsar, dated 30th July, 2009, passed under section 80G(5) read with section 254 of the Income-tax Act, 1961 (hereinafter referred to in short as ‘the Act’).

3. The brief facts of the present case as culled out from the relevant available records are that the Ld. CIT-1, Amritsar, passed order under section 80G of the Income-tax Act, 1961, on 26.08.2008, whereby the application for renewal of approval under section 80G(5) was rejected by him, placing reliance, on the decision of the Hon’ble Supreme Court, in the case of Upper Ganges Sugar Mills Ltd. v. CIT [1997] 227 ITR 578/93 Taxman 645. The Ld. CIT-1, also recorded explicit finding while rejecting application for renewal that granting of registration by his predecessor under similar circumstances, is not relevant, as any order erroneously passed cannot be binding, on the Income-tax authorities considering renewal in this case. The Tribunal, in ITA No.521(Asr)/2008, vide order dated 19th Dec.,2008, remitted the matter, to the file of the CIT-1, to decide the issue afresh, in accordance with law, after taking into consideration the corrigendum filed by the assessee and the effect thereof, on the objects of the Trust, for the purpose of renewal of approval under section 80G(5) of the Act. The CIT-1, Amritsar, in pursuance of Tribunal’s order passed order dated 30th July, 2009, under section 80G(5), read with section 254 of the Act, whereby after detailed discussions on the issue in question and considering the corrigendum made by the assessee trust, as also after placing reliance, on the decision of the Hon’ble Allahabad High Court, in the case of Shervani Charitable Trust (supra), gave clear finding that the Trust is not entitled to be registered for the purpose of section 80G of the Act. Hence, no approval for renewal, was granted and the application filed by the assessee trust, was rejected, by the CIT, vide said order.

3.1 The main finding of the Ld. CIT-1, in the impugned order under appeal, on consideration of corrigendum, in question, specifically highlighted that the settlers cannot override the aims and objects, as contained in the original Trust Deed, executed by the settlers in terms of which the Trust was expressed to be for the benefit of a particular religious community, and, hence, contravenes the provisions of section 80G(5)(iii) of the Act, read with Explanation-3 of section 80G of the Act. Aggrieved by such finding and rejection of the application of the assessee trust, the present appeal was filed before us.

4. In the course of present appellate proceedings, the Ld. Counsel for the assessee, filed two paper books containing pages to 1 to 27 and pages 1 to 17. The Ld. AR also filed written submission, in the paper book bearing paper book No.2, which is reproduced hereunder, for the purpose of proper appreciation of the same:

“This is an appeal against order of the Ld. CIT again rejecting the renewal u/s 80G of the Act on remitting the matter back to CIT by the Hon’ble Court”.

The brief facts of the case are that up to 31.03.08 the trust was granted renewal u/s 80G. An application was again filed for renewal which was rejected earlier by the CIT. The reason was that the trust was doing religious activity and in view of Explanation 3 to section 80G of the Income-tax Act, the renewal was rejected.

During the course of proceedings the trust filed a corrigendum in which the objects was changed w.e.f. 1.08.2008 which the CIT rejected being an afterthough. Against that order this Hon’ble Court accepted assessee’s appeal and restored the matter back to the file of CIT with a specific direction that the order be passed after considering the corrigendum.

First ground of appeal is that the Ld. CIT has erred in again considering the corrigendum as afterthought.

1. This is violation of Judicial discipline. It has to be followed by the subordinate courts. Cases relied on:

  (i)  In (2006) 101 TTJ 538 in Maj. Gen. (Retd.) Kanwaljit Singh Gill v. Asstt. Commr. of Income-tax (ITAT, Asr Bench, Asr).

 (ii)  Union of India v. Kamlakshi Finance Corporation Ltd. AIR 1992 SC (AT) 712.

(iii) Assistant Controller of Central Excise v. Dunlop India Ltd. [1985] 154 ITR 172 (SC).

2. Lower Authorities cannot travel beyond directions –

Cases relied on:

(i) Karta Singh v. CIT [1978] 111 ITR 18 (Pb)

 1.  objects changed, in Corrigendum written on 01.08.2008 w.e.f. 01.08.2008, is purely charitable in nature for the general public and not for a particular religion or caste.

 2.  A supplementary deed is also written on 20.04,2010 incorporating the objects stated in the corrigendum written earlier and got registered with the Sub-Registrar, Amritsar w.e.f. 01.08.2008. An application under rules 29 of the Income Tax Appellate Tribunal already filed.

 3.  Cases relied on for the “objects of general public utility” .

 (i)  [2008] 307 ITR 226 (Raj.)

(ii)  Radha Soami Satsung v. CIT [1992] 193 ITR 321

(iii) Smt. Ganesha Devi Rami Devi Charity Trust v. CIT [1969] 71 ITR 696 (Cal)

(iv) CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC)

(v)  Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234 (SC)

(vi) CIT v. Bar Council of Maharashtra [1981] 130 ITR 28 (SC).”

4.1 Further, the assessee annexed to the paper book ‘Notes on Public Charitable Trust’ for formation of a Trust and its instrument. The assessee has also referred to section 2(15) of the Act. The assessee filed a copy of the decision of the ITAT, Amritsar Bench, in the case Maj. Gen. (Retd.) Kanwarjit Singh Gill (supra). The paper book contains following decisions, on which the assessee placed reliance:

 (i)  CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC)

(ii)  Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234 (SC).

(iii) CIT v. Bar Council of Maharashtra [1981] 130 ITR 28/6 Taxman 1 (SC).

4.2 He, further, referred to certain decisions supporting the doctrine of binding judicial precedent as mentioned in the written submission. The Ld. Counsel for the assessee, further, argued and contended that the Trust is competent to amend clause (4) of the original Trust Deed and to add new objects to the said Trust Deed by way of passing resolution.

5. The Ld. ‘DR’, on the other hand, vehemently contended that the objects contained in the Original Trust cannot be amended, as there is no provisions, in the original Trust Deed, for such amendment, addition or deletion. He referred to page-3 of the impugned order of the CIT, to support his contention. The Ld. ‘DR’, placed reliance on the order passed by the CIT u/s 80G of the Act.

6. I have carefully perused and considered the rival submissions, relevant paper books filed by the assessee and the case laws cited therein, as also the impugned order passed by the CIT, including the original Trust Deed, corrigendum to original Trust Deed and the supplementary Trust Deed.

6.1 The assessee trust placed reliance on the following decisions:

 (i)  Maj. Gen. (Retd.) Kanwaljit Singh Gill (supra).

(ii) Union of India v. Kamlakshi Finance Corporation Ltd. AIR 1992 SC 771.

(iii) Assistant Controller of Central Excise v. Dunlop India Ltd. [1985] 154 ITR 172 (SC).

(iv)  Kartar Singh v. CIT [1978] 111 ITR 84 (Punj. & Har.).

6.2. A careful perusal of the cases relied upon by the assessee reveals that there is fundamental principle of judicial propriety and discipline that judicial precedent should be respected. Under article 141 of the Constitution of India, law as interpreted by the Hon’ble Supreme Court in any matter is binding on all courts and Tribunals in India. In India, there exists judicial hierarchy and the decisions in terms of such hierarchy are binding and the same should be respected by the subordinate courts and tribunals. In view of this, the case laws cited by the assessee, pertain to doctrine of binding precedents. The doctrine is equally applicable to the facts of the present case. The importance of judicial discipline has been stressed by the Hon’ble Supreme Court, in a number of decisions. The word ‘precedent’ means a legal decision or form of proceedings serving as an authoritative rule or pattern in future or similar analogous cases. It is absolutely necessary for maintaining judicial discipline and rule of law that judicial precedent are taken as binding by the lower authorities.

6.3 Now, coming to the applicability of the decisions cited by the Assessee, on the issue of binding nature of judicial precedent, it is submitted, as discussed, in detail, in this order that the settlers deleted clause No.4 of the original Trust Deed and added certain new objects to the said Trust Deed. This amendment has been effected by the settlers of the said Trust Deed, without any power or jurisdiction conferred on them, in the said original Trust Deed. Consequently, judicial precedents of the Supreme Court, on this issue, are binding in nature and to be respectfully followed in preference to the decision of any lower appellate authority. The Hon’ble Supreme Court, in the following cases, clearly held that original Trust Deed cannot be amended .

 (i)  Sri Agasthyar Trust v. CIT [1999] 236 ITR 23/103 Taxman 363 (SC)

(ii)  CIT v. Palghat Shadi Mahal Trust [2002] 254 ITR 212/120 Taxman 889 (SC)

(iii) CIT v. Kamla Town Trust [1996] 217 ITR 699/84 Taxman 248 (SC)

6.4 The trust deed cannot be amended in view of the non-availability of such power or jurisdiction in the said trust deed itself. These cases rendered by the Hon’ble Supreme Court, have been discussed, in detail, in this order, in the ensuing paragraphs.

6.5 In view of the factual discussions of the case and having regard to the binding judicial precedent within the meaning of article 141 of the Constitution of India, the said decisions of Hon’ble Supreme Court, mentioned in para 6.3. above are binding in nature, on all courts and tribunals, in the territory of India, and also in the light of case-laws of binding precedent cited by the assessee, as indicated in para 6.1 above. Needless to say that the case laws relied upon by the assessee, in the context of binding nature of judicial precedent covers the factual decision of the present case, on the issue of amendment, to the original Trust Deed and, hence, the same are binding on all courts and tribunal in the country and, hence, respectfully followed. In view of this clear factual position of the present case, the above cited decisions, as relied upon by the assessee, does not support its case, in the face of clear judicial verdicts of the Hon’ble Apex Court, in the cases referred to above and discussed in detail in the ensuring paragraphs of this order.

6.6 The assessee trust placed reliance on the decision of the Hon’ble Calcutta High Court, in the case of Smt. Ganeshi Devi Rami Devi Charity Trust v. CIT [1969] 71 ITR 696, wherein it was held that the implication, therefore, is that if the Trust or Fund is controlled by a body of persons, which is not a public body, but mere benefit of a public, it will still be charitable trust or fund.

6.7 The assessee has failed to pin-point how the fact-situation of the present case fits in the ratio of the decision of the Hon’ble Calcutta High Court (supra). In the present case, the core ratio is whether original trust deed, which does not contain any provision for amendment or addition or deletion can be amended by mere resolution, without following due process of law and ignoring the direct decisions of the Hon’ble Supreme Court, discussed earlier. Further, the original trust deed, as also the unauthorisedly amended trust deed contravenes the express provisions of section 80G(5)(iii) of the Act, and hence, the case laws relied upon by the assessee are not applicable to the fact-situation of the present case.

6.8 The assessee trust, further, placed reliance on the decision of the Hon’ble Supreme Court, in the case of Radhasoami Satsang v. CIT [1992] 193 ITR 321/60 Taxman 248, wherein as quoted by the assessee-trust itself, it has been held that for practical purposes written instrument becomes necessary under following cases.

“When the trust is created by a will irrespective of whether the trust is public or private or it relates to movable or immovable property.

This is because as per Indian Succession Act, a will has to be in writing.

When the trust is created in relation to an immovable property of the value of Rs.100 and upwards, in case of a private trust deed is not mandatory, even in respect of immovable property, but is optional.

Where the trust/association is being formed as a society or company, the instrument of trust; i.e. the memorandum of association, and Rules and Regulations has to be in writing.”

6.9 It is added that the text of the decision quoted by the assessee trust speaks about the impugned modalities of a trust, which is not under dispute, in the present appeal. Consequently, in the light of the text quoted by the assessee trust, the same is not applicable to the fact-situation of the present case, as the present case, is to be considered in the light of provisions of section 80G(5) of the Act.

6.10 The assessee, further, quoted provisions of section 2(15) and also placed reliance on the decision of the Hon’ble Supreme Court, in the case of Andhra Chamber of Commerce (supra), which defines the ‘charitable purpose’;

“The statutory definition is not exhaustive or exclusive. Even if the object or purpose may not be regarded as charitable in its popular signification as not tending to give relief to the poor or for advancement of education or medical relief, it would still be included in the expression “charitable purpose” if it advances an object of general public utility.”

6.11 The assessee also placed reliance on the decision of Hon’ble Supreme Court, in the case of Sole Trustee, Loka Shikshana Trust (supra), which defines the concept of charity, as under:

‘The very concept of ‘charity’ denotes altruistic thought and action. Its object must necessarily be to benefit others rather than one’s self. The action which flows from charitable thinking is always directed at benefiting others. It is his direction of though and effort and not the result of what is done in terms of financially measurable gain which determines that it is charitable. “

6.12 The assessee trust also placed reliance on the decision of the Hon’ble Supreme Court in the case of Andhra Chamber of Commerce (supra), which defines the object of General public utility as under:

“An object of general public utility means an object of public utility, which is available to the general public as distinct from any section of the public. The expression “object of general public utility” includes all objects which promote the welfare of the general public. Therefore, when the principal object of a chamber of commerce is to promote and protect trade, commerce and industry in India or any part of India, the said object can be said to be general utility and therefore, a charitable purpose.”

6.13 The assessee trust, further, placed reliance on the decision of the Hon’ble Supreme Court, in the case of Bar Council of Maharashtra (supra) which defines charitable purpose, as under:

“The State Bar Council is a body constituted for general public utility since the advancement of any object beneficial to even a section of public as distinguished from an individual or group of individuals would be an object of public utility and consequently a charitable purpose.”

7. A careful perusal and consideration of the decisions cited by the assessee clearly reveals that the same deal with the concept of charity and general public utility, as contained under section 2(15) of the Act. As the subject matter of the present case clearly focuses on approval for renewal, as contemplated under section 80G(5) of the Act, the case laws relied upon by the assessee are not appli6able to the express provisions of section 80G(5) and its sub clause (iii), which reads as:

“the institution or fund is not expressed to be for the benefit of any particular religious community or caste;”

7.1 The Ld. CIT, has rejected the application of the assessee for renewal under section 80G(5)(iii), on the plea that the Trust is expressed to be for the benefit of a particular religious community. Hence, the same violates the provisions of section 80G(5)(iii) r.w. Explanation -3 to section 80G(5C) of the Act. The case laws cited by the assessee-trust are not, on the subject, contained under section 80G(5) (iii) of the Act. Hence, the same are not applicable to the fact-situation of the present case. Moreover, the decisions of the Hon’ble Supreme Court, in the case(s) of Upper Ganges Sugar Mills Ltd. (supra), State of Kerala v. M.P. Shanti Verma Jain [1998] 231 ITR 787 (SC), Arsha Vijnana Trust v. D.P. Sharma, I.R.S., DIT (Exemption) [2007] 295 ITR 437/[2008] 171 Taxman 182 (AP) and Hon’ble Jurisdictional High Court of Punjab & Haryana, in the case of CIT v. Guryani Brij Balabh Kaur Trust [1980] 125 ITR 381/4 Taxman 13 (Punj. & Har.), are applicable to the fact-situation of the present case and directly deal with the provisions of section 80G(5)(iii) of the Act, which are relevant and subject matter of the present appeal.

7.2 The decisions relied upon by the assessee are not applicable to the fact situation of the present case. Income of a Charitable Trust is exempt according to the provisions of sections 11, 12, 12A, 12AA and 13 of the Act. The Trust should be one established in accordance with law and its objects would fall within the definition of term ‘Charitable purpose’, as contained under section 2(15) of the Act. Besides, there are specific provisions relating to public charitable/religious trust under section 10 of the Act. Provisions for exemption of public religious trust under section 11 or 10(23C)(v) are not meant for any particular religious purpose.

7.3 In the present case, the assessee trust has filed an application for approval of renewal, under under section 80G(5) of the Act, and, hence, the statutory conditions precedent, as contained under section 80G(5) (i) to (vi) are required to be complied with. These statutory pre-conditions under section 80G(5) are different and distinct from the statutory provisions, as contained under section 11, 12, 12A, 12AA & 13 of the Act. The assessee trust failed to comply with the statutory condition of section 80G(5)(iii) r.w. Explanation 3 to section 80G(5C) of the Act and non-compliance with the said condition led to rejection of the said application, by the CIT, in his impugned order. Therefore, the contention of the assessee-trust with reference to the provisions of section 2(15) read with section 12A, 12AA, 11 and 13, to support his case, for obtaining approval for renewal under section 80G(5) of the Act, cannot be supported. The case laws relied upon by the assessee are as under:

 (i)  Radhasoami Satsang (supra)

(ii)  Smt. Ganeshi Devi Rami Devi Charity Trust (supra)

(iii) Andhra Chamber of Commerce (supra)

(iv) Sole Trustee, Loka Shikshana Trust (supra)

(v)  Bar Council of Maharashtra (supra)

(vi) Umaid Charitable Trust v. Union of India [2008] 307 ITR 226/171 Taxman 94 (Raj.)

7.4 The above case laws cited by the assessee, define the concept of charitable purpose, as contained under section 2(15), which includes the advancement of any other object of general public utility and do not lay down any ruling on the express provisions of section 80G(5)(iii) of the Act, which is made the foundation, for rejection of the assessee’s application, by the CIT, in the order before the Bench. Provisions of section 80G(5)(iii) of the Act, are clear, where the CIT is satisfied that all the conditions laid down in clauses (i) to (v) of section 80G(5) of the Act are not fulfilled, he shall reject the application for approval after recording reasons for such rejection. In view of this, the CIT, rejected the application of the said Trust, on non-satisfaction of the conditions of section 80G(5)(iii) r.w. Explanation 3 to section 80G(5C) of the Act, as clearly recorded in the impugned order. In view of this, the case laws cited by the assessee are not applicable to the fact-situation of the present case, as the provisions of section 80G(5)(iii) read with Explanation-3, to section 80G(5C) of the Act, are the subject matter of the assessee’s appeal.

7.5 To support his contention, the Ld. Counsel for the assessee, also placed reliance, on the decision of the Hon’ble Rajasthan High Court, in the case of Umaid Charitable Trust (supra). On the special fact situation of the above case relied upon, the Hon’ble Court, recorded that there was no clause in the petitioner’s trust deed which indicated that income of the petitioner’s trust was to be applied wholly or substantially for any particular religion. In the present case, clause 5 of the trust deed specifically provided that the income of the “Trust Properties” would be first applied, for the repair and maintenance of the temple. Further, the preamble to the said trust deed clearly spells out the intention of settlers for construction of temple of deity Laxminarayan, for the purpose of worship of the said deity and adoration of the same, including holding of periodical festivals of the said deity. Each limb and text of the trust deed clearly manifested that the trust is expressed to be for the benefit of a particular religious community. Thus, it contravened the provisions of section 80G(5)(iii) r.w. Explanation 3 to section 80G(5C) of the Act. This view is supported by the decision of Hon’ble Supreme Court, in the case of Upper Ganges Sugar Mills Ltd. (supra) and in the case of V.M. Shanti Verma Jain (supra).

7.6 The neat and absolute nature of the present trust can be understood in terms of clause 4 which reads as under:

“clause 4. If any Trustee renounces the Hindu religion or transfers any portion of the Trust Properties in violation of the condition hereinbefore recited, then he or she shall for the purpose of this deed be considered to be dead and the person next after him or here entitled to succeed as Trustee, shall succeed. The Trustee for the time being shall hold the Trust Properties and manage the same to the best advantage of the Trust.”

However, this clause 4 was deleted with retrospective effect, from its inception, by way of mere resolution, and without jurisdiction.

7.7. The facts of the present case, as discussed in details, in this order are different and distinguishable vis-a-vis the facts of the case law relied upon by the assessee. The facts of the present trust are squarely covered by the decisions of the Hon’ble Supreme Court (supra) and Jurisdictional High Court, in the case of Guryani Brij Balabh Kaur Trust (supra). In view of this, the case relied upon by the assessee is not applicable to the facts of the present case.

7.8 The preamble of the said trust deed is key to open the lock to reveal the true nature of the trust. Thus, worshiping and adoration of the said deity and maintenance of repair of the Laxminarayan Temple cannot be construed as secular object or non-religious object of this trust. Needless to state that each religion such as Hinduism, Jainism, Sikhism, Islam and Christianity is clearly discernible, from its distinct place of worship such as temple, Gurudwara and mosque and its religious scriptures such Geeta, Upnishad, Veda, Sri Guru Granth Sahib and Bible etc.. Similar is the position in respect of various rituals and mode of prayer and worship, distinct and distinguishable from each religion. In view of this, particular religious community can be identified, in the light of such religious indicators. The present trust does not specify the metaphysical concept of religion as enunciated by Shankaracharya, but the wholly worldly and pragmatic concept of particular religious community. The religious aspect cannot be conceived in purely abstract terms devoid of ground realities. The original Trust Deed as well as the unauthorizedly amended trust deed are clearly expressed to be for the benefit of a particular religion community, as is evident from the detailed discussions, in the ensuing paragraphs of this order.

7.9 The practical and pragmatic but vital aspect of the religion has been adjudicated by the Hon’ble Supreme Court, in the case of Upper Ganges Sugar Mills Ltd. (supra), and in the case of V.M. Shanti Verma Jain (supra). Therefore, it is respectfully submitted that decisions of the Hon’ble Supreme Court, being binding on all courts and tribunals, in the territory of India under article 141 of the Constitution of India, is respectfully followed, as the decision of the Hon’ble Rajasthan High Court, is not applicable to the terms of object clause of the Trust in question. It is further added that India is not a theocratic state but secular state, as enshrined in the Constitution of India, the supreme law of the land. The State has no religion and no favour is conferred by the state, on any religion. Thus, the provisions of section 80G(5)(iii) along with other such provisions in the Act are in line with secular nature of Indian Republic. The concept of religion is well understood at the grass root level and by the law-makers. Certainly, it is not the highly technical or abstract concept of religion that is relevant and material. The unadulterated concept of religion, which is universal in its import, manifests that fundamental truth, in all the major religions of the world is one and only one and there is conspicuous discernibility of uniformity and universality of the basic truth in all the contemporary religions of the world. As discussed earlier, the text of the original and as well the unauthorizedly amended trust deed contravenes the provisions of section 80G(5)()iii) of the Act. In view of the above discussion, the case law relied upon by the assessee is not applicable to the facts of the present case.

7.10 It is apt to firstly address, to the neat and core issue in the present case. In this appeal, the basic issue for consideration and adjudication is whether the ‘Assessee Trust’ through its settlers or Trustees has power or jurisdiction, to effect amendment/deletion or addition to the Original Trust Deed, dated 20th Dec, 1993, even in the absence of no such provisions enshrined by the settlers therein. It is the undisputed fact floating on the surface of the relevant record that the said Trust Deed does not provide for any amendment, deletion or addition or alteration, to the original object clause, as enshrined therein.

7.11 The assessee filed additional evidence, vide letter dated 23.04.2010, in the shape of supplementary deed, to the impugned original Trust Deed. The supplementary Trust Deed goes to the root of the issue being legal in nature and to consider the same is essential for the disposal of this case. Hence, such additional evidence deserves to be admitted. A perusal of the text of the supplementary deed clearly reveals that it was made on 21st day of 2010 by the same persons, who were the settlers of the original Trust, created vide Trust Deed dated 20th Dec, 1993. In this context, it is evident that the opening sentence of the said supplementary deed does not mention the month of 2010 year, in which it was executed. However, the same was registered with Sub-Rgistrar-1, Amritsar, on 22.04.2010, after a gap of one year and eight months, from the purported resolution, dated 01.08.2008, as recorded at the back of the stamp paper. In the impugned supplementary deed, it is recorded that by way of resolution passed and recorded, in the minutes book, on 01.08.2008 and corrigendum written, on 01.08.2008, w.e.f. 01.08.2008, the dause-4 of the original Trust Deed dated, 20th Dec., 1993, was deleted and four other objects were added to the impugned original Trust Deed. The Ld. CIT, mentioned in para 4 of his order that the original trust deed was expressly established for the benefits of a particular religious community and, hence, it contravenes the statutory provisions of section 80G(5)(iii) of the Act. It was, further, observed by the CIT, in his order under section 80G of the Act that the corrigendum, in question, totally changed the complexion and objects of the original trust.

7.12 The Ld. CIT, further, observed that in-fact a new trust should have been constituted which the assessee has not done, to reap the benefit of section 80G retrospectively. It was, further, observed by the CIT that it would be pertinent to refer to Sl. No.4 of assessee’s application, in Form 10G, for grant of approval, under section 80G(5)(vi) of the Act, submitted on 20.3.2008. It was specifically pointed out by the CIT that this clause No.4 of assessee’s application, nowhere mention corrigendum to the original Trust Deed, if any, executed and annexed thereto. Consequently, the Ld. CIT recorded a finding that the corrigendum submitted, later on is an afterthought and self-serving document submitted for obtaining approval under section 80G of the Act, retrospectively,

7.13 The above finding of the Ld. CIT, cannot be brushed aside, at the threshold stage, as it contains substantive observation, in view of the factum that the original Trust Deed Executed, on 20th Dec, 1993, was got registered, on the same date, with the Office of the Sub-Registrar, Chandigarh. However, for the reasons best known to the assessee though corrigendum bears the date as 01.08.2008, but the same was got registered by the same settler after a period of one year and eight months from the said date i.e. on 21st day of 2010 ( name of the month is not mentioned in the Supplementary Deed). The assessee failed to assign any reason for such time latches in the matter. Thus, the findings of the CIT are not without substance.

7.14 The Ld. CIT, further, found that the trustees did not have any power to over-ride the trust deed through resolution by virtue of which non-charitable portion of the income could also be applied to the charitable purpose. The Ld. CIT, placed reliance on the decision of Hon’ble Allahabad High Court, in the case of Shervani Charitable Trust (supra), wherein it was held that the trust has no power to override the trust deed through resolution. Consequently, the Ld. CIT, held that the trust is not entitled for renewal under section 80G of the Act. The relevant part of the impugned order of the CIT is reproduced hereunder:

“4. As is evident from above, through corrigendum dated 01.08.2008 an attempt has been made to delete the clause-4 of the original trust deed. It is an attempt to undone the work already done. Needless to mention, the original trust deed contained provision for spending the income or assets of the trust for purposes other than charitable. Further, the trust was expressly established for the benefit of a particular religious community. These are prohibited by the conditions laid down in clause (iii) and (iv) of Section 80G(5) of the I.T. Act, 1961. The corrigendum aforesaid brought into existence virtually a new trust which has totally changed the complexion and objectives of the Trust. In fact, a new trust should have been constituted which the assessee has not done to reap the benefits of section 80G, retrospectively.

In this connection, it would be pertinent to refer to S.No.4 of assessee’s application in F. No. 10G for grant of approval under section 80G(vi) of the I.T. Act, 1961 submitted on 20.3.2008. This clause nowhere mentions the corrigendum, if any, executed and annexed thereto. In view thereof it can well be concluded that the corrigendum submitted later on is an afterthought and a self serving document submitted especially when put to question by this office and it is just to enjoy the benefits under section 80G of the Act, retrospectively. It is simply an act to undone the work which has already been done. It cannot override the aims and objects of the trust deed originally executed which are basically religious in nature. My view finds force from the decision pronounced by the Hon’ble Allahabad High Court in the case of Shervani Charitable Trust v. CIT [1968] 69 ITR 750 (All.) wherein it is held that the trustees do not have any power to override the trust deed through a resolution by virtue of which the non-charitable portion of the income could also be applied to charitable purposes.

The above discussion is summed up as under:

 (i)  The accounts of the assessee are silent as to the nature of the expenditure incurred for any charitable purposes.

(ii) The corrigendum has been submitted by it only when it has been questioned about the trust being overwhelmingly religious in nature, thus not entitled to benefits of Section 80G. The so called corrigendum was an after-thought.

(iii)  In view of the decision of Hon’ble Allahabad High Court in the case of Shervani Charitable Trust v. CIT [1968] reported as 69 ITR 750 (All.), the trustees cannot convert a partial trust into a wholly charitable trust. The trustees do not have any power to override the trust deed through a resolution by virtue of which the non-charitable portion of the income could also be applied to charitable purposes. It is a trust distinct from a wholly charitable trust on the basis of provisions of original trust deed dated 20th December, 1993.

In view of the above discussed factual and legal position of the case and section 5(iii) r/w Explanation 3 of section 80G of the Act, it is declared that the trust is not entitled to be registered for the purpose of section 80-G and no approval is accordingly given and the application filed for the said purpose is hereby rejected.”

7.15 A bare perusal of the factual matrix of the case and the text of the original Trust Deed, dated 20th Dec, 1993, clearly reveals that in this case, the Trustees or the Settlers are incompetent to delete clause 4 of the original Trust Deed, dated 20th Dec, 1993 and add certain new objects, to the original trust deed, by way of mere resolution, without following prescribed procedure for such amendment, through the competent Civil Court, under section 92 of Civil Procedure Code, 1908 or under section 26 of the Specific Relief Act, 1963, as the original trust deed, ingestion does not provide for any power or jurisdiction, for any amendment or alteration or deletion or addition.

7.16 It is legally settled proposition that once a Trust is created with certain specified objects, no one has the power to delete any of the original objects. This is founded on the very concept of Trust and its creation. A ‘Trust’ is an obligation annexed to the ownership of the property and arising out of confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another and the owner. The irrevocability of the Trust is an essential ingredient of a valid Trust, which has been violated by the settlers by way of effecting unauthorized alterations to the original Trust Deed. The Original Trust Deed, in the present case, does not confer any power on any one, to effect alteration or to make addition or deletion or to amend its original object clause, contained therein. In view of this, the authors or Trustees of this Trust does not have any jurisdiction, to delete clause 4 of the original trust deed and add other new objects, to the original Trust Deed. This view is upheld by several decisions of Hon’ble Supreme Court, which are binding, on all Courts and Tribunal within the territory of India, in view of Article 141 of the Constitution of India. This article of the Constitution of India lays the foundation of the Doctrine of binding precedent.

(i) In the case of Sri Agasthyar Trust (supra), it has been held as under:

“Charitable purposes – Charitable Trust – Exemption – Trust Established in 1941 by partnership deed executed by two partners of a partnership firm – Document executed in 1944 by sole trustee purporting to be a declaration of Trust and containing a clause which did no embody charitable purpose – Case arising subsequently with regard to donation to Trust -High Court and Supreme Court considering document executed in 1944 and holding that the trust was not charitable in nature -Original trust deed not brought to notice of Supreme Court and not considered by it – Supreme Court decision – not preclude Tribunal from considering entire material on record -Document executed in 1944 was non est because trustee had no power to alter provisions of Trust Deed – Trust established by original trust deed was charitable in nature -Hence trust entitled to exemption – Indian Income Tax Act, 1922, s.4(3)(i) Income Tax Act, 1961.

Held reversing the decision of the High Court that there was nothing to indicate that it was brought to the notice of the Supreme Court, in East India Industries’ case[1967] 65 ITR 611, that the trust had been created by virtue of the document dated November 28, 1941. In the judgment of the court there was no specific reference to this document. Although it was mentioned that the trust was created by the partners of the firm K. Rajagopal and Company, and that under the terms of the partnership deed it was setting apart 80 per cent of the profits for charitable and religious purposes, the only trust deed which was referred to was the one dated July 1, 1944. It was this deed which was analysed and construed and not the deed which was executed by the two founders of the trust. The judgment also did not indicate that the question relating to the validity of the deed dated July 1, 1944, was ever in issue before the Supreme Court. The decision in East India Industries’ case [1967] 65 ITR 611 (SC), did not and could not preclude the appellants from contending the deed dated July 1, 1944 was illegal and of no consequence and what was to be seen was whether the assessee was a public charitable trust on the basis of the partnership deed dated November 28,1941. The deed of 1941 originally gave the power to the founders to revoke the trust but this power was taken away by a subsequent document which was executed on August 26, 1943 was thereafter, that the trust became an irrevocable trust. The powers of the trustee in respect of the said trust continued to remain the same as set out in clause (8) of the partnership deed. The trustee was only required to carry out the objects of the trust and spend the trust funds for charitable purposes in the manner indicated therein. No power was given to the trustee to amend, alter, vary or change in any manner the objects of the trust as created in 1941. This being so, the document dated July 1, 1944 executed by the trustee was clearly without any authority and was non est. The trust as originally established by the deed dated November 28, 1941, remained unchanged or unaffected by the later document date July 1, 1944. Therefore, what had to be seen was whether, by reason of the partnership deed dated November 28, 1941, the trust which had been constituted was a public charitable trust or not. This question was gone into by the Madras High Court when it had to decide an appeal arising out of the judgment in a suit instituted by Nanjam Chettiar, one of the partners of the firm which had established the trust. Division Bench of that court by its judgment dated October 26, 1951, in the case of Jappa Chettiar (V.S.) v. K. Rajagopal Chetty, held that the dedication for the religious and charitable objects of the deed dated November 28, 1941, after the power to revoke had been withdrawn, was absolute and irrevocable. It included that there was a real dedication to charity and the plaintiff then was not entitled to a share in the funds set apart for charity or in the properties purchased therefrom. In view of the aforesaid decision, it could safely concluded that an irrevocable trust had been established by the partnership deed dated November 28, 1941. The objects of the trust were contained in clause (8) of the deed. None of the objects contained therein could be regarded as non-charitable. The Tribunal, therefore, was right in considering the said objects and in coming to the conclusion that the appellant was a public charitable trust. It was entitled to exemption under section 4(3)(i) of the Indian Income-tax Act, 1922 and section 11 of the Income-tax Act, 1961″.

7.17 The above decision, the Hon’ble Supreme Court clearly held that the document executed, in 1944, was non est and merely scrap of paper because trustee had no power to alter provisions of the Trust Deed. The ratio of the decision of the Hon’ble Supreme Court, is clearly applicable to the fact-situation of the present case, as the settlers of the Trust altered the object clause, without any power available with them to alter the same, in the original Trust Deed. Thus, in terms of the ratio of the Hon’ble Supreme Court, such amendment is non-est and invalid. In view of this, such conduct of the settlers in the form of the said amendment, cannot be taken to fasten any legal consequence, on the original Trust Deed. In the book Tudor on Charities (6th Edition) at page 131, it is stated as follows:

“When a charity has been founded and trusts have been declared, the founder has no power to revoke, vary or add to the trusts. This is irrespective of whether the trusts have been declared by the individual, or by a body of subscribers, or by the Trustees”, (extracted from page 32 of 236 ITR).

It may be observed that the Supreme Court, in the case of Sri Agasthyar Trust v CIT [1999] 236 ITR 23, have expressed their full agreement with the principle stated in the above passage of the Madras High Court vide P.33 of 236 ITR.

(ii) In another decision, in the case of Palghat Shadi Mahal Trust (supra), the Hon’ble Supreme Court, held as under:

“Charitable Trust – Trust for construction of a Shadi Mahal and Establishing other Institutions for Educational, Social and Economic advancement of Muslims – General Body meeting clarifying that the income and the Mahal shall be made available to all communities – Clarification clause of Trust Deed enabling Trustees to decide meaning and scope of clause of Trust deed-Amendment by General Body not permissible- Benefit under Trust available to all Muslims – Not limited to Muslims of Kerala who alone are of backward classes – Trust not covered by Expln. 2 to section 13 – Trust not exempt from Tax – Income Tax Act, 1961.”

(iii) Further, the Hon’ble Supreme Court, in the case of Kamla Town Trust (supra), held that any change in Trust Deed is not possible unless the deed itself provides for such change.

7.18 Thus, three decisions of the Apex Court, on identical issue are bindings on all court and Tribunal in the territory of India, as discussed earlier. Incidentally, decisions of Hon’ble High Courts, are discussed hereunder merely to demonstrate that there is uniformity, in the decisions of High Courts, also on the issue of amendment to Trust Deed where no such power is provided, in the original Trust Deed. The decision of the Hon’ble High Courts are not cited to establish the issue in question, as the same stands finally adjudicated and established by the three decisions of the Hon’ble Supreme Court, as discussed earlier. Further, it is added that no conflicting decision was brought as material or evidence against this well-settled proposition. Thus, the decisions of the Hon’ble Supreme Court, are cited and relied upon, to support the issue of amendability of the original Trust Deed, in a fact-situation where such Trust Deed does not confer any such power of amendment on settlers or the trustees.

(iv) The Hon’ble High Court of Madras, in the case of Sakthi Charities v. CIT [1984] 149 ITR 624/19 Taxman 100, on the issue of jurisdiction or power of Trustee/Settler to amend the original Trust Deed, held as under :

“That the founder of the trust did not provide for any alteration of the objects of the trust at any future time as the amending power contained in clause d. XXX of the trust deed did not cover—which was the objects clause. Further, once a trust had been founded with certain objects, those objects could not be deleted even by the founder of the trust though it was possible to add some other charitable objects without any detriment to the original objects. Consequently, the deed of rectification dated January 11,1969, deleting the objectionable objects could not be said to be valid in law.”

(v) In the case of Sakhti Charities (supra), it has been held as under:

“Where a trust deed contained charitable and non-charitable objects and the non-charitable objects of the trust deed were deleted subsequently with retrospective effect and a declaratory decree was obtained from the court, but the Tribunal refused exemption to the trust on the ground that the original trust deed did not empower the trustees to alter the objects clauses of the trust deed: Held, that the finding of the Tribunal was justified and that the trust was not entitled to exemption under section 11 of the Income-tax Act, 1961. The reference applications were liable to be dismissed.”

7.19 The issue of changing the basic complexion or objects of the Trust as set out in the original Trust Deed, in question, is further, analysed hereinafter. It is extremely difficult to amend a trust deed since a trust by its inherent nature is irrevocable. Therefore, it is important to provide the amendment clauses in the trust deed itself. There is no power or jurisdiction conferred on the settler or the trustee to amend the original Trust Deed, dated 24th Dec, 1993, as no such power is provided by the settlers of the Trust in the said Trust Deed.

7.20 However, it is pertinent to add here that if the amendment clauses provided in the trust deed are too wide, then the trust may not be treated as irrevocable, which is essential ingredient for a valid Trust. In the trust deed where there is no mention about amendment, the amendment has to be done with the permission of a civil court. Even the Civil Courts do not have unlimited powers of amendment. The civil Courts permit amendment under the doctrine of Cypres, which means the original intent of the settler should prevail. Therefore, only such amendments can be made which are in line with the original intent of the seller. It may, further, be noted that even the settler does not have powers to amend the trust deed.

7.21 It is generally a legally well settled principle of trust law that once a trust is created with certain objects, no one has the power to delete any of the original objects. Such legally settled proposition stands judicially upheld by three decisions of the Hon’ble Supreme Court. The Hon’ble Madras High Court, in Sakthi Charities (supra), laid down the same principle where a deed of rectification deleting certain original objects of a trust deed was held to be invalid. In another landmark decision on this issue was given by the Supreme Court in Palghat Shadi Mahal Trust (supra), where a trust was constituted for the educational, social and economic advancement of backward class Muslims. A general body resolution extended these objects to all communities irrespective of religion or creed. The Supreme Court held that this amendment would be invalid because it implied alteration in the object of the trust deed which was not contemplated by the settler.

7.22. It is highly apt to mention here that the Madras High Court, in Thanthi Trust v. ITO [1973] 91 ITR 261 observed, it is well established that the subsequent acts and conduct of the founder of trust cannot affect the trust if there has been already a complete dedication (complete handover of the property). If a valid and complete dedication has taken place, there would be no power left with the founder to revoke and no assertion on his part or the subsequent conduct of himself or his descendants contrary to such dedication would have the effect of nullifying it. If the trust has been really and validly created, any deviation by the founder of the trust or the trustees from the declared purposes would amount only to a breach of trust and would not detract from the declaration of trust. In this regard the Supreme Court, ruling in the case of Sri Agasthyar Trust (supra) is also relevant.

7.23 It should be kept in mind that the trustees inherently do not possess any power to amend the trust deed, for that matter even the settler does not have the power of any subsequent amendment. The power to amend shall be limited to the extent provided in the trust deed itself. Therefore, drafting of trust deed becomes very important and suitable clauses should be kept for future need of changes and contingencies. Further, care should be taken to ensure that the amendment clauses are not too wide or discretionary in nature which may render the trust invalid and revocable. However, it is undisputed fact that in this case, the settlers of the Trust did not provide for any amendment to the said original Trust Deed.

7.24 In view of the above legal and factual discussions and the binding decisions of the Hon’ble Supreme Court, as discussed above, the amendment in the form of deletion of clause (4 ) of the original trust deed and addition of certain other objects, to the said original trust deed is void ab-initio, as no power is conferred under such original trust deed, for such alteration, deletion or addition. In this context, it is pertinent to highlight that procedure for amendment to the Trust Deed is prescribed under section 26 of the Specific Relief Act, 1963 and Section 92 of Civil Procedure Code, 1908. The assessee trust, in the present case has not followed the said prescribed procedure, as the deletion of clause (4) from original trust deed is made by way of mere resolution, by trustees/settlers. Civil Courts or High Courts are competent to amend the Trust Deed, which does not provided for any amendment to the object clause.

7.25 A civil court has been conferred with the power to amend a trust deed and the Income Tax Officer has to take notice of such amendment. In the Kamla Town Trust (supra), the Hon’ble Supreme Court held that any change in Trust Deed is not possible unless the deed itself provides for such change. Approaching the Court of Law shall only be relevant, if a change is legally permissible. The Civil Courts have power to direct changes in the trust deed, in the spirit of the doctrine of Cypres which implies that the original intent of the settler should not fail. However, once a civil court has allowed amendment, it is not open on the part of the Income Tax Officer or any other person to challenge such rectification.

7.26 It is also a settled legal proposition that Trust Deed cannot be amended retrospectively, as held by the Full Bench of the Hon’ble Delhi High Court, in the case of Bhariguraj Charity Trust v. CIT [1997] 228 ITR 50, that any rectification would have only prospective operation and would not affect the assessment years in question, which were prior to the date of the Civil Court’s decree. This view is supported by the decision of the Hon’ble Supreme Court in the case of Kamla Town Trust (supra). In the present case, the Original Trust Deed, has been unauthorisedly amended retrospectively, as highlighted by the CIT. In this context, clause 1 of the Deed of corrigendum is of great legal significance which reads as under:

“1. That the clause No.4 of the original trust deed dated 20th Dec, 1993 stands deleted right from beginning as if this was never been the part of the trust deed.”

7.27 To sum up the issue, as discussed above in the light of decisions of the Hon’ble Supreme Courts, it is a legally settled proposition that where the original trust deed did not provide for any amendment, alteration, deletion or addition, in the deed itself, any amendment thereto, without following the procedure laid down in section 92 of Civil Procedure Code, 1908 and section 26 of the Specific Relief Act, 1963, no amendment can be effected to the original Trust Deed and if any amendment made, the same is invalid and, hence, the original trust deed, with its object clause, remains effective, operative and holds the field. The settlers or the trustees are not competent to alter the object clause of the Trust Deed “at will” as it denudes the valid trust from its basic ingredient of ‘irrevocability’. However, the impugned Trust Deed was amended without jurisdiction. In view of this, it is important to provide amendment clause in the trust deed itself. To be precise, in the present case, no such amendment ‘clause has been provided in the impugned Original Trust Deed. Consequently, there being no amendment clause, in the original trust deed, any amendment has to be done through a Civil Court. No such amendment has been carried out, in the impugned Original Trust Deed, through any civil court, in the instant case. The assessee-trust by mere resolution passed by the settlers, deleted the impugned clause (4) from right from the beginning as if this was never been the part of the trust deed and added new objects, contrary to the mandate of the settlers, as contained in the said Trust Deed and, hence, such deletion or addition is invalid. It is also an undisputed and legally settled proposition that the amendment made should be in line with the original intention of the settlers and should not negate or deviate from the original intention of the settlers. In the present case, the assessee trust demolished the clause No.4 of the original Trust Deed contrary to the intention of the settlers.

7.28 It is pertinent to mention here that the vital and paramount legally significant issue regarding amendment to the original Trust Deed, without any jurisdiction contained in the said Trust Deed, cannot be ignored lightly as it goes to the roots of the legal issue and is essential for the judicious disposal of the instant case. Needless to say that the settlers, in the present case, are not competent to make any amendment to the impugned original Trust Deed and, hence, amendment carried out by the settlers, is invalid being without jurisdiction. This view is supported by the decision of the Hon’ble Supreme Court, in the case of Arun Kumar v. Union of India [2006] 286 ITR 89/155 Taxman 659 (SC). The Hon’ble Supreme Court, held that if the jurisdictional fact does not exist, the court, authority or any officer cannot act. If a court or authority wrongly assumes existence of such fact, the same is without sanction of law. The underline principle is that by erroneously assuming the existence of such jurisdictional fact, no authority can confer upon itself jurisdiction, which it otherwise, does not possess. In the instant case, there is no jurisdiction conferred on the settlers, in the original Trust Deed and, hence, the settlers are incompetent to make any alteration or deletion to the original Trust Deed and if any carried out in such a fact situation, the same would be invalid and without any legal consequences. The source of jurisdiction in this case emanates from the original Trust Deed and the same is non-existence therein.

7.29 The legal impact of such unauthorized amendment has to be considered in the light of its impact on general administration of law, particularly on the interpretation of the relevant statutory provisions of section 80G(5) of the Act. In the present case, the said amended deed constitutes breach of trust, and runs contrary to the conceptual import of the term ‘Trust’. In the present case, the settlers acted against the intent of the original Trust.

8. In view of the above legal and factual discussions and having regard to the decisions of the Hon’ble Supreme Court, the amendment in the shape of deletion of clause (4) to the original trust deed and addition of certain other objects, to the original trust deed being invalid, the original object clause of the trust remains operative and intact. Thus, the impugned deletion of clause (4) to the original Trust Deed and additions of new objects are without jurisdiction and invalid and, hence, with no attendant legal consequence, on the original Trust and original Trust Deed, dated 20th Dec, 1993.

9. Next primary issue, for consideration, is whether on facts and in law of the case, such trust is entitled for approval, under section 80G(5) of the Act. A bare perusal of the trust deed dated, 20th Dec, 1993, clearly reveals that the trust has been expressed to be for the benefit of a particular religious community i.e. Hindu religious community. The trust has been formed, for the purpose of construction of Laxmi Narayan Temple, for doing worship of the Deity and holding periodical festivals of the Deity, including maintenance and upkeepment of the temple, as per object of the trust. The income of the Trust is firstly to be applied for the maintenance and repair of the Temple and to hold periodical festivals of the said deity. For the purpose of proper appreciation of the text and contents and true nature of the original object clause of the said trust deed, the same is reproduced hereunder:

(A) “Public Charitable Trust

This Deed of Public Charitable Trust is made on the 20th day of December, 1993 by the following persons whose names and addresses are hereunder stated:

 (1)  Bhawna Ramanuja, W/o Shri C.B. Ramanujam, resident of House No. 1536, Sector 34D, Chandigarh.

 (2)  Anant Shri Vibhushit Jagat Guru Ramanujachrya Swami C.B. Acharya S/O Shri Vishwak Sen Acharya, Resident of House No.1536, Sector 34-D, Chandigarh.

 (3)  Shri Janak Ram Sharma S/o Shri Shiv Dass Sharma, resident of House No.25/27, Kali Krishna Tagore Street, Calcutta-7.

The followers of Ramanujam Charyaya the great exponent of Vishitaadaitya Vedanta and a promoter of the concept of equality of man (hereinafter called as “Trustees” which expression shall unless excluded by or repugnant to the context be deemed to include the Trustee or Trustees for the time being of these presents and their successors in official. The name of the Trust shall be “Ramanujam Spiritual Public Charitable Trust.”

Whereas the Trustees are desirous of creating a Trust with Temple of deity at Varinda Van by the name of Laxmi Naryan in the said temple for undertaking spiritual mission to propagate the thoughts and philosophy of Ramanujam and for spiritual education of public in general and for the worship and adoration of the deity’

And Whereas the temple with the deity (Laxmi Narayan) will serve as a centre of spiritual education and social activities;

And Whereas the Trustees are absolutely seized and possessed of or otherwise well and sufficiently entitled to the immovable property comprised in first Schedule hereto and to the property comprised in second Schedule hereto and hereinafter referred to as “Trust Properties”:

And Whereas in pursuance of pious wish and desire and to consideration of religious service and benefits and for other good reasons and considerations, the Trustees dedicate the Trust Properties for the cost of construction of the said Temple and to secure the worship of the said deity and of making a public charitable trust of the said Trust Properties in the planner hereinafter appearing:

Now This Deed Witnesses and Hereby declare as follows:

 1.   In pursuance or the said desire, Trustees hereby grant, set apart, and dedicate the Trust Properties to the use of the said deity as provisions for worship of the said deity and periodical festivals of the deity and maintenance and upkeep of the temple, absolute for ever in the manner hereinafter contained.

 2.  That for the consideration as aforesaid, the Trustees do hereby divest themselves of all ownership, control and employment or the Trust Properties and grant, convey, transfer, give, assign, assure and dedicate the same absolutely and for ever unto and in favour of the deity, so as to vest the same in the said deity free from all encumbrances, in the manner hereinafter indicated and deliver possession thereof unto and in favour of the deity.

AND THE SAID Trustees do hereby constitute, appoint and nominate themselves as Trustees for the aforesaid properties.

 3.  The Trustees shall not have the power to sell or mortgage or charge or otherwise encumber the Trust Properties.

 4.  If any Trustee renounces the Hindu religion or transfers any portion of the Trust Properties in violation of the condition hereinbefore recited, then he or she shall for the purpose of this deed be considered to be dead and the person next after him or here entitled to succeed as Trustee, shall succeed. The Trustee for the time being shall hold the Trust Properties and manage the same to the best advantage of the Trust.

 5.  The income to the said Trust Properties shall be applied first in the maintenance and repair of the temple property and the payment of land, revenue, cesses, taxes and other outgoings in respect of the same and shall be spent in the daily worship of the said deity and in defraying the expenses of the usual festivals, with full liberty to apply a portion of such income to the improvement of the Trust Properties, as detailed in First Schedule (attached).

 6.  The Trustees shall cause accurate accounts to be kept of all moneys received and spent and of all matters in respect thereon in course of management of Trust properties and in relation to the carrying out of the objects and purposes of the Trust as well as of all aspects and effects of the Trust Properties. The Trustees have contributed Rs. 1,000/- (Rupees One Thousand only) each totalling initial deposit of Rs. 3,000/- as shown in Second Schedule.

In witness whereof both/all the three Trustees have set their hands on this deed of Public Charitable Trust at Chandigarh on this 20th Day of December, 1993, in the presence of following witnesses:

	Witness No. 1 Sd/-		Trustees:
	Raj Sharma		1. Bhawna Ramanujam
	Witness No.2 Sd/-		2. C.B. Acharya
	Sandeepan Giri		3. Janak Ram Sharma”

(B) The Minutes of the meeting held on 1.8.2008 by the Trustees are reproduced hereunder:

The meeting of the Trust was held on 1st August, 2008 at its office 2068/19, Gali & Bazar Tokrian, Amritsar, and discussed the progress of construction work. Further decided unanimously to delete the clause No.4 of the Original Trust Deed of 20th Dec, 1993 and the same stands deleted. That though the Trust was originally framed with the object of construction of a Temple at Varindhavan for undertaking spiritual education for Public in General the trustees decided to change the objects and has decided to involve the Trust in addition to that itself of the acts of service to the society which includes

 a.  Construction of Dharamshalas, Community Halls.

 b.  Setting up and running of Charitable Hospital

 c.  Helping the deserving parents to solemnize the marriage of their daughters.

 d.  Advancement of any other objectives of General Public utility, not involving the carrying on of any activity for profit, as the law may regard as Public Charitable purposes. It is decided to put into ‘Black and while. The meeting is chaired by Swami C.B. Acharya.

	Sd/-	Sd/-		Sd/-
	C.B. Ramanujam	Janak Raj		Vijay Sharma and three others “

(C) The corrigendum to the Trust Deed Dated 20th December, 1993, is reproduced hereunder:

“This Deed of corrigendum is executed at Amritsar this day of 01.08.2008 is as under:

That the trust has decided to amend/delete certain things as decided mutually as stated below:

  1.  That the clause No.4 of the original trust deed dated 20th Dec,, 1993 stands deleted right from beginning as if this was never been the part of the trust deed.

 2.   That the trust has decided to change the objects and has decided to involve itself in the acts of service to the society which includes

 a.  constructions of dharma shalas, community halls.

 b.  Setting up and running of charitable hospital.

 c.  Helping the deserving parents to solemnize the marriage of their daughters.

 d.  Advancement of any other objectives of general public utility, not involving the carrying on of any activity for profits, as the law may regard as public charitable purposes.

 3.  That the Trustees shall be life time trustees and in the event of death, insanity or having been incapacitated of any trustee, his legal heirs shall be appointed in his placed.

This corrigendum to the trust deed dated 20th Dec, 1993 is signed this day of 1st of August 8, 2008.

	Sd/-	Sd/-		Sd/-
	C.B. Ramanujam	JanakRaj		Bhawna Ramanujam etc.

(D) The Supplementary Trust Deed of Ramanujam Spiritual Public Charitable Trust, is also reproduced hereunder:

“This Deed of Public Charitable Trust is made on this 21st Day of 2010 by the following persons whose name and addresses are under stated

 1.  Bhawna Ramanujam W/o Sh. C.B. Ramamanujam r/o Yashodhnandan Dham, Chatti Karan Road, Varindhvan.

 2. Anant Shri Vibhushit Jagat Guru Ramanujacharya Swami C.B. Achrya S/o Sh. Vishwak Sen Achrya r/o Yashodhnandan Dham, Chhati Karan Road, Varindavan.

 3. Shri Janak Ram Sharma S/o Sh. Shiv Dass Sharma r/o House No.25/27, Kali Krishan Tagore Street, Kolkata-7.

Whereas the above trust with name Ramanujam Spiritual Public Charitable Trust was originally formed vide trust deed dated 20th Day of December, 1993 was registered with the Sub-Registrar, Chandigarh on 20.12.1993.

Whereas this trust is now working with registered office at House No. 198 c/o Varinder Mahajan, Tilak Nagar, Amritsar.

Whereas it has been felt that the object stated in the trust deed dated 20.12.1993 is not possible to continue in future and it has been decided to change the objects accordingly a resolution was passed and recorded in the minute book on 1.08.2008 and also corrigendum was written on 1.08.2008 w.e.f. 1.08.2008 wherein it has been decided to involve this trust in the acts of service to the society which includes:

 e.  Construction of Dharamshalas, Community Halls.

 f.  Setting up and running of Charitable Hospital

 g.  Helping the deserving parents to solemnize the marriage of their daughters.

 h.  Advancement of any other objectives of General Public Utility, not involving the carrying of any activity for profits, as the law may regard as Public Charitable purposes. It is decided to put into Black and while. The meeting is chaired by Swami C.B. Acharya.

That the clause No.4 of the original Trust Deed dated 20th Dec,1993 stands deleted right from beginning as if it was never been the part of the trust deed.”

9.1 The undated affidavit signed by deponent Ravi Sharma S/o Sh. Bishan Dass, duly attested by Notary on 18th March, 2010, was filed before Bench. It is pertinent to reproduce clause 10 of the said affidavit

“10. That before 31.08.2008 there was one object i.e. construction of Mandir and, therefore, only one utilization account was coming and no detailed narration was appearing in the books as utilization was only on account of construction of Mandir.”

9.2 A bare reading of the above clause of the said affidavit clearly establishes that the original Trust dated 20th Dec, 1993, was formed with sole object of construction of Laxmi Narayan temple, as discussed earlier, in detail. Such trust with the such object of construction of temple for the purpose of worshiping the said deity, application of the income from trust properties for repairs/maintenance of temple and holding periodical festivals of the deity, in the light of express provisions of section 80G(5)(iii) of the Act, which reads as “(iii) the institution or fund is not expressed to be for the benefit of any particular religious community” cannot be construed as “non-religious or secular” object. The Trust is patently expressed for the benefit of Hindu religious community and, hence, contravenes the express provisions of section 80G(5)(iii) of the Act. Needless to state here that Hindu Religion and Hindu religious community can be easily identified, with the name of its temples and distinct deity. So is the case with the present Trust Deed, under reference, which clearly speaks of the said temple and worship of the said deity etc.

9.3 The Deed of Public Charitable Trust was executed, on 20th Dec, 1993 by Bhawana Ramanujam W/o Sh. C.B. Ramanujam, Shri C.B. Acharya S/o Sh. Vishwak Sen Acharya, both resident of H/No.1536, Sector 34-D, Chandigarh and Sh. Janak Ram Shama S/o Sh. Shiv Dass Sharma of Calcutta. The name of the Trust shall be “Ramanujam Spiritual Public Charitable Trust”, as per the term of this Trust Deed, which was registered with Sub-Registrar, Chandigarh, on the same date i.e. 20th Dec, 1993.

9.4 The Trustees expressed desire of creating a Trust with Temple of deity at Virandavan by the name of Laxmi Narayan Temple to propagate the thoughts and philosophy of Ramanujam and for worship and adoration of the deity. The ‘trust properties’ as mentioned in Schedule ‘A’ to the Trust Deed was dedicated absolutely and for ever unto and in favour of the deity, free from all encumbrances and the possession was delivered thereof unto and in favour of the deity. It was stipulated, in clause 4 of this Trust and that if any trustee renounces the Hindu religion or transfer any portion of the Trust properties in isolation of the constitution stipulated in the deed then he or she shall for the purpose of this deed be considered to be dead. It is clearly stipulated in clause 5 of the said Trust Deed that the Trust properties shall be applied first in the maintenance and repair of the temple property.

10. The term religion is not defined under the Income-tax Act, 1961. The point for consideration, therefore, is what are the matters of religion and what are not. What are the matters of religious or non-religious nature. The Constitution of India also makes no attempt to define religion. However, there are well known religion with well known Deity, places of worship and and mode of prayers in India, like Jainism, Hinduism, Sikhism, Persian & Christianity etc. The expression ‘religion’ mentions that clause (b) of article 26 of the Constitution of India, includes not only the philosophical side of the religion but also religious practice, as laid down, in the tenets of nature – religious sects. Religious practices or performances of acts, in pursuance of religious belief are as much a part of a religion as faith or belief, in particular doctrine. Thus, if the tenants of the Jain or Parsi or Hindu religion laid down that the certain rites or ceremonies are to be performed at certain times and in a particular manner, it cannot be said that these are secular activities and not ‘religious activities’. In view of this, it is beyond doubt that the assessee trust is expressed to be for the benefit of a particular religious community, namely, the Hindu religious community and, hence, contravenes the provisions of section 80G(5)(iii) of the Act.

10.1 The republic of India was conceived and made secular from the very beginning. In the conception of secularism, the common element is the absence of state-sponsored or state favoured religion. The element has been bed-rock, in shaping the Constitution of India. The secularism is the basic feature of the Indian Constitution, hence, beyond the amendatory power of the Parliament. It is based on equal respect for all religion. The provisions of section 80G(5)(iii) of the Act, r.w. Explanation-3 to section 80G(5C) of the Act, are to be understood and interpreted in the light of secular character of Indian republic.

11. The object clause, of the said trust deed clearly spells out the sole object of the Trust. Such object of construction of temple and repair and maintenance of the same, out of the income of the Trust properties was created in consideration of religious service and benefits including other good reasons and consideration, for the purpose of worship of the said deity, can only be said purely as religious one expressed for the benefit of a particular religious community, which contravenes the express statutory provisions of section 80G(5)(iii) of the Act. In this context, a reference to Explanation 3 to section 80G(5C) is essential, which reads as “In this section, ‘Charitable purpose’ does not include any purpose the whole or substantially the whole of which is of religious nature”.

12. In view of the above factual discussion, it is established beyond doubt that the sole object of the original Trust dated 20th Dec, 1993 is wholly and both patently and latently expressed for the benefit of Hindu religious community and, hence, it contravenes the express provisions of section 80G(5)(iii) r.w. Explanation 3 to section 80G(5C) of the Act.

13. The above view is duly supported by the decisions of the Apex Court. The Hon’ble Supreme Court had to examine the eligibility for exemption of donations to a trust created with the object “to establish, maintain and to grant and/or aid to public places of worship and prayer halls”. If it could be treated, as an object which is not “religious”, it would qualify for exemption. If it were to be so treated as “religious” the donor does not get deduction under section 80G of the Act, in view of Explanation 3 to section 80G(5C) and section 80G(5)(iii) of the Act, which bars such deduction for charitable institutions established for religious objects. Even if any one of the objects of a public trust should be religious in nature, it stands disqualified. The Calcutta High Court, in CIT v. Upper Ganges Sugar Mills Ltd. [1985] 154 ITR 308/23 Taxman 546, had taken the view that “prayer and worship in common parlance denote religious activities”. It was of the view that prayer always has a religious significance. This decision was affirmed by the Supreme Court in Upper Ganges Sugar Mills Ltd. (supra). It was observed that it is true that such prayer halls may be available to all religions but on that account the object of setting up places of worship and prayer halls do not cease to be a religious object.

14. The factual matrix of the present case, as discussed above, in detail clearly establishes that the original Trust deed, dated 20th Dec, 1993, was created wholly for a particular religious community and, thus, it contravenes the express provisions of section 80G(5)(iii) of the Act. This view is fully supported and upheld by the Hon’ble Supreme Court, in the land mark decision, in the case of Upper Ganges Sugar Mills Ltd. (supra), as is evident from the text of the decision, reproduced hereunder:

” Donations – Special deduction – Scope of section 80G – Trust for charitable purposes – One of the purpose of trust which is religious – Donation to such a trust would not be entitled to special deduction under section 80G – Clause in trust deed permitting trusts to support prayer halls and place of worship – Trust Fell outside the ambit of section 80G.

Section 80G of the Income-tax Act, 1961 sets out the deduction to be made in accordance with and subject to its provisions in computing the total income of an assessee in respect of donations to certain funds, charitable institutions, etc. It applies, by reason of sub-section) thereof, to any other fund or any institution to which the section applies [sub-section (2)(a)(iv)] if it is established in India “for a charitable purpose” and fulfils the conditions, inter-alia that it “is not expressed to be for the benefit of any particular religious community or caste”. Explanation 3 states, “In this section, ‘charitable purpose’ does not include any purpose the whole or substantially the whole of which is of a religious nature”. Explanation 3 takes note of the fact that an institution or fund established for a charitable purpose may have a number of objects. If any one of the objects is wholly, or substantially wholly, of a religious character, the institution or fund falls outside the scope of section 80G and a donation to it does not secure the advantage of the deduction that it gives. Explanation 3 does not require the ascertainment of whether the whole or substantially the whole of the institution or fund’s charitable purpose is of a religious nature. If it did, it would read differently. It requires the entertainment of whether there is one purpose, within the institution or overall charitable purpose which is wholly, or substantially wholly, a Religious nature.

Held, accordingly, affirming the decision of the High Court, that clause 2(h) of the trust deed in question which permitted the trustees to support prayer halls and places of worship set out a purpose, the whole or substantially the whole of which was of a religious nature. Therefore, the trust and the donation by the assessee to it fell outside the scope of section 80G.

Decision of Calcutta High Court in CIT v. Ganges Sugar Mills Ltd. [1985] 154 ITR 308 affirmed.

To reiterate, Explanation 3 does not require the ascertainment of whether the whole or substantially the whole of the institution or fund’s charitable purpose is of a religious nature. If it did, it would read differently. It requires the ascertainment of whether there is one purpose within the institution or fund’s overall charitable purpose which is wholly or substantially wholly, of a religious nature. There is little doubt that clause 2(h) of the trust deed which permits the trustees to support prayer halls and places of worship sets out a purpose the whole or substantially the whole of which is of a religious nature, and this has not been seriously disputed. Therefore, in our view, the trust and the donation by the assessee to it fall outside the scope of section 80G”

14.1 In the present case, fact-situation of the case, in the light of object clause expressing clearly the intent of the settlers of the Trust, for construction of said temple of the said deity, for the purpose of worshiping the deity and its adoration, including holding periodical festivals for the deity, is squarely covered by this decision of the Hon’ble Supreme Court, wherein there was only one object out of dozens which was considered by the Court as religious one. Such an object clearly violates the provisions of section 80G(5)(iii) of the Act. Consequently, the impugned order of the CIT cannot be assailed, on facts, law and judicial precedent, laid down by the Hon’ble Supreme Court and express provisions of section 80G(5)(iii) r.w. Explanation 3 to section 80G (5C) of the Act.

14.2 The similar view has been upheld by the Hon’ble Supreme Court, in the case of V.M. Shanti Verma Jain (supra), wherein it was held that the trust is not eligible for exemption, as it intended to provide medical assistance, had, inter-alia, referred to the propagation of Jain religion and its tenants “ahimsa”, as one of the objects. The trust deed and the rules ran into more than 30 pages of which 6 pages of the trust deed narrated the philosophy of Jain Dharma. It is in this context that it was treated as a trust, which is not eligible for exemption.

18.3 Further, the Hon’ble Jurisdictional High Court, in the case of Guryani Brij Balabh Kaur Trust (supra), has clearly held that where ‘Samadhs’ are held in reverence and people at large come to pay homage and worship at the ‘Samadhs’, the maintenance of the same would be a public purpose of religious nature. Similarly, the purpose of holding of Mela at such Samadhs was to propagate and remind the people of the teachings of the Guru in whose memory the Mela was held, which was a religious and not a secular purpose.

14.3 Incidentally, it is pertinent to highlight similar view, on identical issue, upheld by the Hon’ble Andhra Pradesh High Court, in the case of Arsha Vijnana Trust (supra). The Hon’ble Andhra Pradesh High Court, held that the assessee trust published various books mostly Telgu and English and included the translation of Sanskrit Ramayana, Mahabharatha and Darshannas. The trust was given the benefit under section 80G of the Act, from its establishment, without interruption, till a notice was given in January, 2003 and order was subsequently passed holding the trust ineligible for renewal U/s 80G (5)(iii) of the Act. The Hon’ble High Court upheld the order of the Director and clearly held that the fact that benefit had been granted for a long, period of twenty years, by misconstruing the law, would not be a bar for the Director of Income-tax (Exemption), to pass an order, where an application for extension of grant of exemption was made before him. Relevant part of the decision is reproduced :

“Donation for charitable purposes – Effect of sub-section (5)(iii) – Section 80G – Trust publishing religious books – Not entitled to approval under section 80-G – Income Tax Act, 1961.

All donations made to charitable institutions are entitled to deductions in accordance with section 80G of the Act, with certain exemptions, one of the exemptions being under section 80G(5)(iii) which lays down that charitable purpose does not include any purpose of the whole or substantially the whole of which is of a religious purpose.

From the date of its constitution in 1983, the assessee-trust had published various books mostly in Telgu and English. These books included the translations of Sanskrit Ramayana, Mahabhartha Gita with Sankara Bhashyam. The trust was given benefit u/s 80G of the Act from its establishment without interruption till a notice was given in January, 2003, and an order was subsequently passed holding that the trust had contravened the provisions of section 80G(5)(iii) of the Act and accordingly the request for renewal of exemption was not granted. On a writ petition against the order:

Held, dismissing the petition, that the petitioner was not entitled to the benefit u/s 80G. The fact that the benefit had been granted for a long period of twenty years by misconstruing the law, would not be a bar for the Director of Income-tax (Exemptions) to pass an order when an application for extension of grant of exemption was made before him.”

14.4 Similarly, the Hon’ble Delhi High Court, in the case of Kirti Chand Tarawati Charitable Trust v. DIT (Exemption), [1998] 232 ITR 11/[1999] 105 Taxman 686, echoes the same view wherein it has been held, as under:

“Charitable Trust – Grant of approval by Commissioner – Approval not to be granted merely by looking at the instrument creating Trust – Real purpose of Trust as distinguished from ostensible purpose to be found – Renewal of recognition – Trust receiving donations for charitable purposes – Donations instead of being spent on charity utilised for investment to earn returns thereon – Returns utilised for religious purposes – Donations received utilized for construction of Temple and religious purposes – Commissioner denying renewal of recognition – justified – Income Tax Act, 1961 S. 80G.

Held, (i) that the first and foremost requirement which the institution or the fund has to satisfy is…”if it is established in India for charitable purpose”. The conditions contemplated by clause (i) to (vi) of section (5) are the conditions which the institution or the fund must additionally fulfil so as to be entitled to approval by the Commissioner. The enquiry “if it is established for a charitable purpose” is not confined and only to the contents of the instrument constituting the trust.

(ii) Though the objects of the trust as set out in the trust deed were charitable, yet the enquiry conducted by the Director of Income-tax (Exemption) had revealed that the trust was engaged mainly in the construction of a religious temple wherein no charitable activity was being carried on. It was also not disputed that the donations received by the trust by enjoying exemption under section 80G were invested by the petitioner, the income derived therefrom was utilized for a religious purpose.”

(iii) That, therefore, the order of the Director of Income-tax (Exemption) denying renewal of recognition under section 80G, to the petitioner trust from April 1, 1996, onwards was justified.”

14.5 The assessee trust argued and contended that it was granted exemption, in terms of the objects set out, in the unamended original trust deed, dated 20th Dec, 1993, cannot be denied renewal of the same, for subsequent period. Generally, speaking the principle of res judicata is not applicable to the income tax proceedings, as held by the Hon’ble Supreme Court, in plethora of decisions. The facts of the present case also clearly warrants non-application of the principle of res judicata, as the approval was granted u/s 80G, in the past, on misreading and misconstruction of the provisions of section 80G of the Act. The misconception and misinterpretation of such provisions of the Act led to miscarriage of justice and violation of such express provisions of the Act. The judicial conscience cannot allow perpetuation of such mistake. Further, it is no judicial heroism, to allow such mistake to perpetuate, on the foundation of misinterpretation of law in the past. The Hon’ble Supreme Court in the case of Union of India & v. Raghubir Singh [1989] 178 ITR 548 & Sri Agasthyar Trust (supra) has clearly held that if the previous decision is plainly erroneous, there is a duty of the court to review it and not perpetuate the mistake i.e. vital point, was not considered or when an earlier relevant statutory provisions were not considered. In the present case, the approval under section 80G of the Act, was granted by the earlier CIT, on misconception of statutory provisions of section 80G of the Act. Therefore, such misconception of the statutory provisions cannot be a fetter, on the power of the, subsequent competent authority i.e. CIT, to interpret the relevant provisions of the Act, correctly and to remove the perpetuation such mistake. This view is duly supported by the Hon’ble Andhra Pradesh High Court, in the case of Arsha Vijnana Trust (supra), wherein it was held that the benefit granted for a long period of 20 years by misconstruing the law, would not be a bar for the competent authority. It is established legal proposition that the benefit of section 80G granted in the past, by misconstruing the law cannot operate a bar for the CIT, to decline renewal under section 80G of the Act, on the basis of correct interpretation of presumption of section 80G of the Act.

14.6 In view of the above legal and factual discussions and also having regard to the clear decisions of the Hon’ble Supreme Court, being binding on all Courts and Tribunal in the territory of India and the express provisions of section 80G(5)(iii) of the Act, the impugned order of the CIT, is upheld.

15. Now, we turn to discuss the legal consequences of unauthorisedly amended original. Trust Deed, particularly deletion of clause (4) to the original Trust Deed and addition of certain other new objects. A bare reading of the original Trust Deed dated 20th Dec, 1993, as reproduced above, reveals that even in a situation of deletion of clause (4), the unauthorized Trust Deed remains a Trust, expressed to be for the benefit of a particular religious community i.e. Hindu religious community. This factum is established from a cursory reading of the Trust Deed, amended without jurisdiction. The preamble to the original Trust Deed whereby the settlers expressed desire of creating a Trust Temple for Deity by the name -‘Laxmi Narayan’ and construction of the said temple remains, integral part of the said amended Trust Deed. The immovable property, as comprised in the 1st Schedule to the said Trust Deed remains untouched. The income from the said Trust property is to be applied first, in the maintenance and repair of temple property, as also to be spent for the worship of the said Deity and in defraying of the usual expenses on holding festivals of the said deity, remains intact. Similarly, the construction of the temple and worship of the said Deity and adoration of the said Deity is still an integral part of unauthorisedly amended Trust Deed. Further, holding of periodical festivals of the Deity and offering daily worship, are still the organic part of the said Deed. These objects are purely religious in nature, inextricably linked to the Hindu religious community and its Deity ‘Laxmi Narayan’. There cannot be any dispute on this vital issue, in the present case. Hence, even the unauthorized amended Trust Deed contravenes the provisions of section 80G(5)(iii) of the Act, being expressed to be for the benefit of a particular religious community.

16. If the objects of a trust include Charitable as well as religious purpose, the deduction under section 80G of the Act, would not be permissible, in respect of donations made to such trust, as held by the Hon’ble Supreme Court, in the case of East India Industries (Madras) (P.) Ltd. v. CIT [1967] 65 ITR 611 (SC). In another case, Upper Ganges Sugar Mills Ltd. (supra), the Apex Court held that if anyone of the objects of a trust is wholly and substantially, of a religious character, it falls outside the scope of section 80G of the Act. The trust spent Rs. 41,69,890/- on the construction of the said temple, as is evident from page 18 of the paper book.

17. Further, after unauthorized and invalid amendment, as discussed in detail earlier, the trust remains wholly and substantially religious character. Hence, the above case laws are applicable to the present case.

17.1 The ratio of the decisions of the Hon’ble Supreme Court, in the case of Upper Ganges Sugar Mills Ltd. (supra), V.M. Shanti Verma Jain (supra) and Kamla Town Trust (supra), clearly held that out of dozen objects, if one object pertains to a particular religion, exemption or renewal under section 80G cannot be granted. Therefore, even authorisedly amended original Trust Deed remains pre-dominantly a Trust expressed to be for the benefit of Hindu religious community, consequently, violates the provisions of section 80G(5)(iii) of the Act, r.w. Explanation 3 to section 80G(5C)of the Act.

17.2 Further, the Hon’ble Jurisdictional High Court, in the case of Guryani Brij Balabh Kaur Trust (supra) has clearly held that where ‘Samadhs’ are held in reverence and people at large come to pay homage and worship at the ‘Samadhs’, the maintenance of the same would be a public purpose of religious nature. Similarly, the purpose of holding of Mela at such Samadhs was to propagate and remind the people of the teachings of the Guru in whose memory the Mela was held, which was a religious and not a secular purpose. The core-ratio of the decisions of Hon’ble Supreme Court, covers the fact-situation of the present case, wherein original Trust Deed, dated 20th Dec, 1993, which was unauthorisedly amended, contains a clear clause of holding Mela for the said Deity. Consequently, having regard to the unauthorisedly amended Trust Deed, with its dominant objectives as discussed above, the assessee Trust clearly contravenes the provisions of section 80G(5)(iii) read with Explanation 3 to section 80G(5C) of the Act. Consequently, in view of the above legal and factual discussions, even the unauthorisedly amended Trust Deed does not alter the position, as contained in the original Trust Deed, in view of the three decisions of the Hon’ble Supreme Court, as cited supra. In view of this, the unauthorisedly amended Trust Deed is also ineligible for renewal or exemption under section 80G of the Act.

18. Thus, having regard to the above detailed legal and factual discussions and following the decisions of the Hon’ble Supreme Court, and jurisdictional High Court, as discussed, at appropriate place, on relevant issues, the impugned order of the Ld. CIT is upheld and, consequently, the appeal of the assessee is dismissed.

19. In the result, the appeal filed by the assessee sands dismissed.

Reference under section 255(4) of the Income-tax Act, 1961

There is a difference of opinion amongst the Members constituting the Bench in the aforesaid appeal, therefore, the following questions need to be referred to the Hon’ble President for nominating the Third Member under section 255(4) of the Income tax Act, 1961:-

“(1) Whether on the facts and in the circumstances of the case and the record available, the assessee is entitled for grant of approval of renewal of exemption under section 80G(5) of the Income tax Act, 1961?

(2) Whether on the facts and in the circumstances of the case, the CIT can overlook the binding precedent of the order dated 19-12-2008 passed by the ITAT, Amritsar Bench in assessee’s own case in ITA No.512(ASR)/2008 in para Nos.9 and 10, page No.5, holding that the learned CIT erroneously rejected the said corrigendum as a mere afterthought and not having any binding force and in the absence of any provision of law prohibiting the assessee from amending the original Trust Deed by way of corrigendum?

(3) Whether on the facts and in the circumstances of the case, the learned CIT can refuse the approval of renewal of exemption under section 80G(5) of the Income-tax Act, 1961 on the ground that one of the objects No.4 that the assessee-trust has been established for a particular religious purpose for the followers of the diety, who have to be only Hindus, inspite of the fact that he has already granted the approval of renewal of exemption in many times under section 80G(5) of the Income-tax Act, 1961?”

In this case, the following questions of law are framed for consideration and adjudication of the Hon’ble Third Member;

  1. “Whether, on the facts and in the circumstances of the case, the settlers or the trustees are competent to effect valid amendment or deletion or addition to the object clause, contained in the original trust-deed, when there is no such power provided under the originally constituted trust and what are the legal consequences of such amendment ?”

  2. “Whether on the facts and in the circumstances of the case, the assessee-trust is entitled for approval, in terms of original Trust Deed and the amended one, under section 80G(5) of the Act, without compliance with the statutory conditions precedent of section 80G(5)(iii) read with explanation 3 to section 80G(5C) of the Act ?”

Statement under section 255 (4) of the Income-tax Act, 1961

 “1. Whether, on the facts and in the circumstances of the case, the settlers or the trustees are competent to effect valid amendment or deletion or addition to the object clause, contained in the original trust-deed, when there is no such power provided under the originally constituted trust and what are the legal consequences of such amendment?

  2. Whether on the facts and in the circumstances of the case, the assessee-trust is entitled for approval, in terms of original Trust Deed and the amended one, under section 80G(5) of the Act, without compliance with the statutory conditions precedent of section 80G(5)(iii) read with Explanation 3 to section 80G(5C) of the Act ?”

Statement under section 255 (4) of the Income Tax Act, 1961

“(1) Whether on the facts and in the circumstances of the case and the record available, the assessee is entitled for grant of approval of renewal of exemption under section 80G(5) of the Income-tax Act, 1961?

 (2) Whether on the facts and in the circumstances of the case, the CIT can overlook the binding precedent of the order dated 19-12-2008 passed by the ITAT, Amritsar Bench in assessee’s own case in ITA No.512(ASR)/2008 in para Nos. 9 and 10, page No.5, holding that the learned CIT erroneously rejected the said corrigendum as a mere afterthought and not having any binding force and in the absence of any provision of law prohibiting the assessee from amending the original Trust Deed by way of corrigendum?

 (3) Whether on the facts and in the circumstances of the case, the learned CIT can refuse the approval of renewal of exemption under section 80G(5) of the Income-tax Act, 1961 on the ground that one of the objects No. 4 that the assessee-trust has been established for a particular religious purpose for the followers of the diety, who have to be only Hindus, in spite of the fact that he has already granted the approval of renewal of exemption in many times under section 80G(5) of the Income tax Act, 1961?”

THIRD MEMBER ORDER

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H.L. Karwa, Vice-President (As a Third Member) – This appeal was heard by the Division Bench. The order was proposed by Ld. Judicial Member. The Ld. Accountant Member did not agree to the proposed order and proceeded to pass a separate order in the case. In the wake of difference of opinion between the Ld. JM and Ld. AM, the following questions were proposed by the Ld. AM to be referred to a Third Member:-

“1. Whether, on the facts and in the circumstances of the case, the settlers or the trustees are competent to effect valid amendment or deletion or addition to the object clause, contained in the original trust-deed, when there is no such power provided under the originally constituted trust and what are the legal consequences of such amendment? “

 2.  Whether on the facts and in the circumstances of the case, the assessee-trust is entitled for approval, in terms of original Trust Deed and the amended one, under section 80G(5) of the Act, without compliance with the statutory conditions precedent of section 80G(5)(iii) read with explanation 3 to section 80G(5C) of the Act ?”

2. Disagreeing with the aforesaid proposed questions for reference, the Ld. JM proposed different, questions which read as under:-

“(1)  Whether on the facts and in the circumstances of the case and the record available, the assessee is entitled for grant of approval of renewal of exemption under section 80G(5) of the Income-tax Act, 1961?

(2)  Whether on the facts and in the circumstances of the case, the CIT can overlook the binding precedent of the order dated 19-12-2008 passed by the ITAT, Amritsar Bench in assessee’s own case in ITA No.512(ASR)/2008 in para Nos. 9 and 10, page No.5, holding that the learned CIT erroneously rejected the said corrigendum as a mere afterthought and not having any binding force and in the absence of any provision of law prohibiting the assessee from amending the original Trust Deed by way of corrigendum?

(3) Whether on the facts and in the circumstances of the case, the learned CIT can refuse the approval of renewal of exemption under section 80G(5) of the Income tax Act, 1961 on the ground that one of the objects No. 4 that the assessee-trust has been established for a particular religious purpose for the followers of the diety, who have to be only Hindus, inspite of the fact that he has already granted the approval of renewal of exemption in many limes under section 80G(5) of the Income tax Act, 1961?”

3. The Hon’ble President, Income Tax Appellate Tribunal, Mumbai vide order dated 15.12.2010 nominated the Zonal Vice President as a Third Member u/s 255(4) of the Income Tax Act, 1961 to resolve the controversy.

4. At the very outset, I may point out that the controversy involved in the present appeal can be resolved with reference to the first question referred to by Ld. JM, which reads as under:-

“Whether on the facts and in the circumstances of the case and the record available, the assessee is entitled for grant of approval of renewal u/s 80G(5) of the Income Tax Act, 1961”?

5. Now, I proceed to decide the above question. In order to understand the real controversy, I think it necessary to narrate the brief facts of the case. The assessee Trust (Ramanujam Spiritual Charitable Trust) has been established vide Trust deed dated 20.12.1993 with the following objects and purposes:-

“Whereas the Trustees are desirous of creating a Trust with temple of deity at Vrinda Van by the name of Laxmi Narayan in the said temple for undertaking spiritual mission to propagate the thoughts and philosophy of Ramanujam and for spiritual education of public in general and for the worship and adoration of the diety;

And Whereas the temple with the deity (Laxmi Narayan) will serve as a centre of spiritual education and social activities;

And Whereas the Trustees are absolutely seized and possessed of or otherwise well and sufficiently entitled to the immovable properly comprised in first Schedule hereto and to the property comprised in Second Schedule hereto and hereinafter referred to as ”Trust Properties:”

And Wherease in pursuance of pious wish and desire and in consideration of religious service and benefits and for other good reasons and considerations, the Trustees dedicate the Trust properties for the cost of construction of said Temple and to secure the worship of the said deity and of making a Public Charitable Trust of the said Trust properties in the manner hereinafter appearing;-

Now This Deed Witnesses and Hereby Declare as follows:-

 1.  In pursuance of the said desire, Trustees hereby grant, set apart, dedicate the Trust properties to the use of the said dieiy as provisions for worship of the said diety and periodical festivals of the diety and maintenance and upkeep of the temple, absolute for ever in the manner herein after contained.

 2.  That for the consideration as aforesaid, the Trustees doth hereby divest themselves of all ownership, control and enjoyment of the Trust Properties and grant, convey, transfer, give, assign, assure and dedicate the same absolutely and for ever unto and in favour of the diety, so as to vest the same in the said diety free from all encumbrances, in the manner hereinafter indicated and deliver possession thereof unto and in favour of the diety AND THE SAID Trustees do hereby constitute, appoint and nominate themselves as Trustees for the aforesaid properties.

 3.  The Trustees shall not have the power to sell or mortgage or change or otherwise encumber the Trust properties.

 4.  If any Trustee, renounces the Hindu religion or transfers any portion of the Trust properties in violation of the condition hereinbefore recited, then he or she shall for the purpose of this deed be considered to be dead and the person next after him or her entitled to succeed as Trustee, shall succeed. The Trustees for the time being shall hold the Trust Properties and manage the same to the best advantage of the Trust.

 5.  The income to the said Trust Properties shall be applied first in the maintenance and repair of the temple property and the payment of land revenue, cesses, taxes and other outgoings in respect of the same and shall be spent in the daily worship of the said diety and in defraying the expenses of the usual festivals, with full liberty to apply a portion of such income to the improvement of the Trust Properties, as detailed in First Schedule (attached).

 6.  The Trustees shall cause accurate accounts to be kept of all moneys received and spent and of all matters in respect thereof in course of management of Trust Properties and in relation to the carrying out of the objects and purposes of the Trust as well as of all aspects and effects of the Trust Properties. The Trustees have contributed Rs. 1,000/- (Rs. One thousand only) each totalling initial deposit to Rs. 3,000/- as shown in Second Schedule.

6. The trust was registered with the Sub Registrar, Chandigarh on 20.12.1993 and up to 31.3.2008, the trust was granted renewal u/s 80G(5) of the Income-tax Act, 1961 (in short ‘the Act’) by CIT-I, Amritsar vide his order dated 14.9.2005. The Trust is having its registered office at H. No. 198, C/o Varinder Mahajan, Tilak Nagar, Amritsar. The assessee submitted an application dated 26.3.2008 before the CIT-I, Amritsar for renewal of approval u/s 80G(5), which has been rejected by the CIT-I, Amritsar vide order dated 26.8.2008, stating that the overwhelming aims and objects and the purpose of the trust are to engage in spiritual activities with particular emphasis on a specific and definite religious denomination. While referring to object No. 4 of the trust deed, the CIT observed that the said object make it absolutely clear that the Trust has been established for a particular religious purpose for the followers of the deity who have to be only “Hindus” because the said object makes it clear that if any trustee renounces the Hindu religion or transfers any portion of trust property in violation of the conditions herein before recited, then “he or she shall for the purpose of this deed be considered to be dead and the person next after him or her entitled to succeed as Trustee, shall succeed.”

6.1 On perusing the objects of the assessee’s Trust, the CIT found that in the objects, strong emphasis has been given to a particular religion and he, therefore, asked the assessee on 10.7.2008 to explain how the Trust can be treated to have been established for charitable purposes in view of the conditions laid down in section 80G(5)(iii) read with Explanation-3 of the Income Tax Act. 1961 (in short ‘the Act’) and the decision of the Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Ltd (supra). In response to the above query, the assessee Trust submitted that the Trust was formed with the object of constructing a temple at Brinda Van for the worship and undertaking the spiritual education to the public in general. Before the CIT, the assessee also submitted a paper written on 23.12.1993 but signed on 01.8.2008 which was claimed to be a Corrigendum to the Trust Deed. Vide this corrigendum, clause 4 of the original Trust deed had been deleted, thereby changing the objects of the Trust.

6.2 The Ld. CIT rejected the arguments advanced on behalf of the assessee stating that the corrigendum is nothing but an afterthought and self serving document not legally binding. He further observed that the said corrigendum did not in any manner change the basic character of the objects of the Trust and the Trust remained a trust for a temple with a deity which was confined only to a particular community for worship. He also observed that there is a strong stipulation in the trust deed that a trustee who renounces Hindu religion ceases to remain a trustee. According to him, this object (clause No.4 of Trust deed) is sufficient evidence to prove that the Trust was established for a particular religious purpose. He further observed that the provisions of section 80G(5) read with section 2(15) of the Act, under the circumstances make it clear that a trust or fund will not qualify to be approved u/s 80G for getting donations made exempt from tax. The argument made on behalf of the assessee that the approval for renewal had been given by earlier CIT under the similar circumstances has been rejected by the CIT holding that any order passed erroneously or inadvertently is not legally binding on the Income-tax Authorities while reconsidering the case for granting renewal. Keeping in view the provisions of sub section (5)(iii) read with Explanation 3 of Section 80G of the Act. the CIT vide order dated 26.8.2008 held that the trust is not entitled to be registered for the purpose of section 80G and rejected the application for approval of renewal u/s 80G of the Act.

6.3 The assessee’s Trust filed an appeal against the order of CIT dated 26.8.2008 before the Tribunal and the Tribunal vide its order dated 19,12.2008, passed in ITA No. 512/(ASR)/2008 remanded the matter to CIT with a direction to decide the matter afresh in accordance with law after taking into consideration the corrigendum filed by the assessee and the effect thereof on the objects of the trust for the purpose of renewal of approval u/s 80G(5) of the Act.

6.4 In pursuance of the order of the Tribunal dated 19.12.2008 passed in ITA Mo. 512(ASR)/2008, the CIT passed a fresh order u/s 80G(5) read with section 254 of the Act on 20.7.2009. The CIT passed a detailed order taking into consideration the corrigendum filed by the assessee and the effect thereof on the objects of the assessee’s Trust for the purpose of renewal of approval u/s 80G(5) of the Act. The CIT also relied on the decision of the Hon’ble Allahabad High Court in the case of Shervani Charitable Trust (supra). The relevant findings given by CIT are as under:-

“As is evident from above, through corrigendum dated 01.08.2008 an attempt has been made to delete the clause-4 of the original trust deed. It is an attempt to undone the work already done. Needless to mention, the original trust deed contained provision for spending the income or assets of the trust for purposes other than charitable. Further, the trust was expressly established for the benefit of a particular religious community. These are prohibited by the conditions laid down in clause (iii) and (iv) of Section 80G (51 of the Income Tax Act, 1961. The corrigendum aforesaid brought into existence virtually a new trust which has totally changed the complexion and objectives of the Trust.

In fact a new trust should have been constituted which the assessee has not done to reap the benefits of section 80G retrospectively.

In this connection it would be pertinent to refer to s. no. 4 of assessee’s application in F. No. 10G for grant of approval u/sec. 80G(5)(vi) of the Income Tax Act, 1961 submitted on 20.3.2008. This clause nowhere mentions the corrigendum, if any, executed and annexed thereto. In view thereof it can well be concluded that the corrigendum submitted later on is an afterthought and a self serving document submitted especially when put to question by this office and it is just to enjoy the benefits under section 80G of the Income Tax Act, 1961 retrospectively. It is simply an act to undone the work which has already been done. It cannot override the aims and objects of the trust deed originally executed which are basically religious in nature. My view finds force from the decision pronounced by the Hon’ble Allhabad High Court in the case of Shervani Charitable Trust v CIT [1968] 69ITR 750 (All.) wherein it is held that the trustees do not have any power to override the trust deed through a resolution by virtue of which the non-charitable portion of the income could also be applied to charitable purposes.

The above discussion is summed up as under:-

 (i)  The accounts of the assessee are silent as to the nature of the expenditure incurred for any charitable purposes.

(ii)  The corrigendum has been submitted by it only when it has been questioned about the trust being, overwhelmingly by religious in nature, thus not entitled to benefits of section 80G. The so called corrigendum was an after thought.

(iii) In view of the decision of Hon’ble Allahabad High Court in the case of Shervni Charitable Trust v CIT [1968] reported as 69 ITR 750 (All.), the trustees cannot convert a partial trust into a wholly charitable trust. The trustees do not have any power to override the trust deed through a resolution by virtue of which the non charitable portion of the income could also be applied to charitable purposes. It is a trust distinct front a wholly charitable trust on the basis of provisions of original trust deed dated 20th December, 1993.

In view of the above discussed factual and legal position of the case, and section 5(iii) r/w Explanation 3 of section 80G of the I.T. Act, it is declared that the trust is not entitled to be registered for the purpose of Section 80-G and no approval is accordingly given and the application filed for the said purpose is hereby rejected.”

6.5 Being aggrieved by the order of CIT-1, Amritsar dated 30.7.2009, the assessee preferred an appeal before the Tribunal.

7. While disposing off the appeal, a difference arose between the two Ld. Members of the Bench. The Ld JM took the view that the order passed by Ld. CIT-1, Amritsar was contrary to the law and facts on the file and, therefore, the impugned order was cancelled with a direction to the CIT-I, Amritsar to grant approval for renewal u/s 80G (5) of the Act for three years w.e.f. 01.04.2008 to 31.03.2011.

8. The Ld. AM in his dissent agreed with the findings of the CIT and upheld the order of CIT. He held that the aims and objects, as contained in the original Trust Deed dated 20.12.1993, executed by the trustees in terms of which trust was expressed to be for the benefit of a particular religious community definitely contravenes the provisions of section 80G(5)(iii) of the Act read with Explanation 3 of section 80G of the Act and, hence, ineligible for renewal of exemption u/s 80G of the Act. While holding so, the Ld. AM relied on the decision of Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Ltd. (supra). He further held that on perusal of the text of the original trust deed dated 20.12.1993, it would be clear that the Trustees or the Settlors are incompetent to delete clause (4) of objects of the original Trust Deed dated 20.12.1993 and add certain new objects, to the original Trust Deed, by way of mere resolution, without following prescribed procedure for such amendment, through the competent Civil Court, under section 92 of the Civil Procedure Code, 1908 or under section 26 of the Specific Relief Act, 1963, as the original trust deed, in question did not provide for any power or jurisdiction, for any amendment or alteration or deletion or addition. The Ld. AM has also held that it is well settled principle of Trust law that once a Trust is created with certain objects, no one has power to delete any object or whole of objects where no such power is provided, in the original Trust Deed. The Ld. AM has also taken note of Supplementary Trust Deed dated 21st day of 2010 (month not mentioned), which was filed first time before the Tribunal, and discussed the legal consequences of unauthorisedly amended original trust deed, particularly deletion of clause (4) of objects of the original Trust deed and addition of certain other new objects. He observed that even in a situation of deletion of clause (4) of objects of the original Trust Deed, the Trust remains a Trust, expressed to be for the benefit of particular religious community, i.e. Hindu religious community. In this regard, the Ld. AM observed that the preamble to the original Trust Deed whereby the said settlers expressed desire of creating a Trust Temple for Deity by the name – ‘Laxmi Narayan’ and construction of the said temple remains, integral part of the said amended Trust Deed. The immovable property, as comprised in the 1st Schedule to the said Trust Deed remains untouched. The income from the said Trust property is to be applied first, in the maintenance and repair of temple property, as also to be spent for the worship of the said Deity and in the defraying of the usual expenses of holding festivals of the said deity, remains intact. Similarly, the construction of the temple and worship of the said Deity and adoration of the said Deity is still an integral part of unauthorisidely amended Trust Deed Further, holding of periodical festivals of the Deity and offering daily worship, are still the organic part of the said Deed. These objects are purely religious in nature, inextricably linked to the Hindu religious community and its Deity ‘Laxmi Narayan’. According to Ld. AM, even the unauthorized amended Trust Deed contravenes the provisions of section 80G(5)(iii) read with Explanation 3 of the Act, being expressed to be for the benefit of a particular religious community.

9. I have heard Shri Anil Aggarwal, Advocate, Ld. Counsel for the assessee and Shri Laxman Singh Ld. CIT, DR at length. Shri Aggarwal contended that the Trust was created vide trust deed dated 20.12.1993. The trust was granted renewal of approval up to 31.3.2008. The assessee trust applied for renewal of approval u/s 80G(5) of the Act vide its application for renewal of approval dated 26.3.2008. Shri Aggarwal submitted that keeping in view the past record, the Ld. CIT ought to have accepted the application of the assessee for renewal of approval.

10. The next contention of Shri Aggarwal, Ld. Counsel for the assessee was that the Tribunal in its order dated 19.12.2008 in ITA No. 5l2/(ASR)/2008 has categorically held that the Ld. CIT(A) erroneously rejected the said corrigendum as a mere afterthought and not having any binding force. He further submitted that there is no rule or law preventing the assessee from amending the original trust deed by way of corrigendum. According to Shri Aggarwal, Ld. Counsel for the assessee, the decision given by the Tribunal in ITA No. 512/(ASR)/2008, being order of superior authority, is binding upon the CIT. Thus, there was no justification in treating the corrigendum to the original trust deed as an after thought and a self serving document by the authority below. He, therefore, submitted that the trust is entitled to grant of renewal of approval u/s 80G (5) of the Act.

11. Without prejudice to above, alternatively Shri Aggrwal, Ld. Counsel for the assessee submitted that on the basis of Corrigendum dated 1.08.2008 and supplementary Trust deed, the Trust is eligible for renewal of approval u/s 80G(5)of the Act.

12. Shri Laxman Singh, Ld. C1T DR vehemently argued that the assessee trust is not entitled to be registered for the purpose of section 80G and no approval for renewal could be granted in any manner. While referring to object No. 4 of the Trust deed dated 19.12.1993, Shri Laxman Singh, CIT DR submitted that the trust has been established for a particular religious community i.e. Hindu and, therefore, the trust could not be treated to have been established for charitable purposes in view of the conditions laid down in section 80G(5)(iii) read with Explanation 3 of the Act. Reliance was placed on the decision of the Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Ltd. (supra). He further submitted that corrigendum dated 1.8.2008 and so called supplementary trust deed dated 21st day of 2010 (date not mentioned) are non est and merely scrap of paper because neither the trustees nor the founders have power to alter the provisions of the original trust deed dated 19.12.1993 since no power has been given either to the trustees or to the founders to amend, alter, vary or change in any manner the objects of the trust as created in 1993. Reliance was placed on the decision of the Hon’ble Supreme Court in the case of Sri Agasthyar Trust (supra).

13. As regards the contention of Shri Aggarwal Ld. Counsel for the assessee that earlier CIT has granted renewal of approval u/s 80G of the Act, to the trust under the similar circumstances, Shri Laxman Singh CIT DR submitted that the same has no relevancy particularly when renewal of approval u/s 80G of the Act was granted by the earlier CIT on misconstruing of statutory provisions of section 80G of the Act. However, the successor CIT has correctly decided the issue as per the relevant provisions of the Act, and it was the solemn duty of the CIT to rectify the mistake rather than perpetuate the same. Reliance was placed on the following decisions:-

 1.  Raghubir Singh (supra).

 2.  Arsha Vijnana Trust (supra).

14. At the outset, it is observed that the trust is not entitled to grant approval of renewal u/s 80G(5) of the Act on the basis of original Trust Deed dated 20.12.1993. On the perusal of trust deed dated 20.12.1993, it would be clear that trust was created wholly for a particular purpose and religious community i.e. Hindu and not for charitable purposes and thus, it contravenes the conditions laid down in Section 80G(5)(iii) read with Explanation 3 of the Act. Section 80G(5)(iii) read with Explanation 3 read as under:-

“Deduction in respect of donations to certain funds, charitable institutions, etc.

80G (1) In computing the total income of the assessee, there shall be deducted, in accordance with and subject to the provisions of this section,-

………………………….

………………………….

(5) This section applies to donations to any institutions or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely –

 (i)  … … … …

(ii)  … … … …

(iii) the institution or fund is not expressed to be for the benefit of any particular religious community or case;

Explanation 3 – In this section, “charitable purpose” does not include any purpose the whole or substantially the whole of which is of a religious nature. “

15. In the original Trust Deed, it is stipulated that the trustees are desirous of creating a trust with temple of a deity at Vrinda Van by the name of ‘Laxmi Narayan’ in the said temple for undertaking spiritual mission to propagate the thoughts and philosophy of Ramanujam and for spiritual education of public in general and for the worship and adoration of the deity It is also provided in the trust deed that in pursuance of pious wish and desire and in the consideration of religious service and benefits and for other good reasons and considerations, the Trustees dedicate the Trust properties for the cost of construction of the said Temple and to secure the worship of the said deity and of making a Public Charitable Trust of the said Trust properties. It is also mentioned in clause 4 of the trust deed that if any Trustee renounces the Hindu religion or transfers any portion of the Trust properties in violation of the conditions stipulated in the deed then he or she shall for the purpose of this deed be considered to be dead. Clause 5 of the said trust deed provides that the trust properties shall be applied first in the maintenance and repair of the temple property and the payment of land revenue, cesses, taxes and other outgoings in respect of the same and shall be spent in the daily worship of the said deity and in defraying the expenses of the usual festivals, with full liberty to apply a portion of such income to the improvement of the Trust properties, as detailed in First Schedule (attached). Thus, the preamble and the object clauses of the trust deed dated 20.12.1993 indicate that Trust was created exclusively for a particular religion i.e. Hindu and not for charitable purposes.

16. The Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Ltd. (supra) while discussing the scope of section 80G of the Act held that if one of the purposes of the trust is of a religious character, the institution or fund falls outside the scope of section 80G and a donation to it does not secure the advantage of deduction that it gives. The Hon’ble Supreme Court (at page 581) held as under.-

“Section 80G applies to donations to any institution or fund established in India “for a charitable purpose”. “Charitable purpose, for the purposes of the section, does not include any purpose the whole or substantially the whole of which is of a religious nature “. Explanation 3, which uses this phraseology, takes note of the fact that an institution or fund established for a charitable purpose may have a number of objects. If any one of these objects is wholly, or substantially wholly, of a religious character, the institution or fund falls outside the scope of section 80G and a donation to it does not secure the advantage of the deduction that it gives.

The Hon’ble Supreme Court (at page 582) held as under:-

“To reiterate, Explanation 3 does not require the ascertainment of whether the whole or substantially the whole of the institution or fund’s charitable purpose is of a religious nature. If it did, it would read differently. It requires the ascertainment of whether there is one purpose within the institution or fund’s overall charitable purpose which is wholly, or substantially wholly, of a religious nature. There is little doubt that clause 2(h) of the trust deed which permits the trustees to support prayer halls and places of worship sets out a purpose the whole or substantially the whole of which is of a religious nature, and this has not been seriously disputed. Therefore, in our view, the trust and the donation by the assessee to it fall outside the scope of section 80G.”

In the above case, Hon’ble Supreme Court held that clause 2(h) of the trust deed in question which permitted the trustees to support prayer halls and places of worship set out a purpose, the whole or substantially the whole of which, was of a religious nature. Applying the ratio laid down by the Hon’ble Supreme Court in the case of Upper Ganges Sugar Mills Ltd. (supra), to the facts of present case, I am of the considered opinion that Trust is not entitled to any relief on the basis of original Trust Deed dated 20.12.1993.

17. The next argument of Shri Anil Aggarwal, Ld. Counsel for the assessee was that there was no justification in denying exemption u/s 80G(5) of the Act in terms of the objects set out in the original trust deed, dated 20.12.1993 particularly when the earlier CIT had granted registration and renewal of approval to trust for the purposes of Section 80G of the Act upto 31.03.2008 vide his order dated 14.9.2005. In my opinion, the above argument of Shri Aggarwal, Ld. Counsel for the assessee is also not tenable in view of the decisions relied upon by the Ld. CIT DR, Shri Laxman Singh, which are mentioned in earlier part (para 12) of the order.

18. In the case of Arsha Vijnana Trust (supra), the trust was given benefit u/s 80G of the Act on its establishment without interruption till a notice was given in January 2003 and an order was subsequently passed holding that the trust had contravened the provisions of section 80G(5) of the Act and accordingly request for renewal of exemption was not granted. On a writ petition against the order, the Hon’ble Andhra Pradesh High Court held (head note) as under.-

“Held, dismissing the petition, that the petitioner was not entitled to the benefit under section 80G. The fact that the benefit had been granted for a long period of twenty years by misconstruing the law, would not be a bar for the Director of Income-tax (Exemptions) to pass an order when an application for extension of grant of exemption was made before him. “

19. In view of the decision of the Hon’ble Andhra Pradesh High Court in the case of Arsha Vijnana Trust (supra), the arguments advanced by Shri Aggarwal, Ld. Counsel for the assessee deserve to be rejected.

20. The next argument of Shri Anil Aggarwal, Ld. Counsel for the assessee was that the Ld. CIT(A) has not appreciated the findings of the Tribunal in correct perspective given in order dated 19.12.2008 passed in ITA No. 512 /(Asr)/2008. According to Shri Aggarwal, Ld. Counsel for the assessee, in the above order, the Tribunal has categorically held that the Ld. CIT erroneously rejected the corrigendum as a mere after thought and not having any binding force. The Tribunal further held that this action of CIT cannot be sustained in the absence of any provision of law prohibiting the assessee from amending the original trust deed by way of corrigendum. Accordingly, Shri Aggarwal, Ld. Counsel for the assessee submitted that CIT being the subordinate authority was duty bound to follow the order of the Tribunal and he, therefore, submitted that findings of the CIT are contrary to law and precedents and the CIT ought to have allowed the claim of the assessee.

21. There is no dispute that the CIT is subordinate to Tribunal in judicial hierarchy. Therefore, CIT was duty bound to follow the order of the Tribunal. In my opinion, the CIT has passed a fresh order in compliance to the order of the Tribunal dated 19.12.2008. It is true that Tribunal remanded the matter to CIT with a direction to decide the same afresh in accordance with law after taking into consideration the Corrigendum filed by the assessee and effect thereof on the objects of the trust for the purpose of renewal of approval u/s 80G(5) of the Act. The Tribunal has nowhere directed the CIT to grant the renewal of approval u/s 80G on the basis of corrigendum dated 1.1.2008. Therefore, in the absence of such findings, the arguments advanced by Sh. Aggarwal, Ld. Counsel for the assessee are devoid of any merit. In the instant case, the counsel of the assessee has referred to certain words and sentences of the order of the Tribunal and claimed that the same is final verdict of the Tribunal. The view entertained by the Ld. counsel for the assessee is against law. It is well settled law that the order/judgment must be read as a whole and the observations from the order/judgment have to be considered in the light of the issue/s which were before the Tribunal. If the order of the Tribunal dated 19.12.2008 is read as a whole, the only irresistible conclusion which can be drawn is that the Tribunal after taking into consideration the facts and circumstances .of the case remanded the matter to CIT with a direction to decide the issue afresh in accordance with law after taking into consideration the corrigendum dated 1.8.2008 filed by the assessee and the effect thereof on the objects of the Trust for the purpose of renewal of approval u/s 80G (5) of the Act. In my considered opinion, a wrong conclusion drawn on behalf of the assessee relying on certain words or sentences of the order is not going to help it in any manner. I, therefore, do not see any merit in the arguments advanced by Shri Anil Aggarwal, Ld. Counsel for the assessee.

22. The alternative submission made by Shri Anil Aggarwal, Ld. Counsel for the assessee was that the trust is eligible for renewal of approval u/s 80G(5) of the Act on the basis of corrigendum dated 1.08.2008 and supplementary trust deed dated 21st day of 2010 (date note mentioned) registered on 22.4.2010 in the office of Sub-Registrar, Amritsar-I. He further contended that trust had withdrawn/deleted objectionable clause i.e. object No.4 of the original trust deed right from the beginning as if this was never been the part of the trust deed. Further, the trust has decided to change the objects and has decided to involve itself in the acts of the service to the society which includes construction of dharmashalas, community halls etc. which are mentioned in para 2 of the said corrigendum. Shri Aggarwal, Ld. Counsel for the assessee also submitted that a supplementary deed was also written on 21.04.2010 incorporating the objects stated in the corrigendum written earlier and was registered with Sub-Registrar, Amritsar w.e.f. 1.08.2008. He, therefore, submitted that objects mentioned in the corrigendum and also in the supplementary deed are purely charitable in nature for the general public and not for a particular religion or caste. Accordingly, it was submitted that trust is eligible for renewal of approval.

23. On the other hand, Shri Laxman Singh, Ld. DR submitted that the C1T has correctly held that the corrigendum is nothing but an after thought and self-serving document which is not legally binding. Shri Laxman Singh, Ld. DR has already contended that corrigendum dated 1.08.2008 and so called supplementary trust deed dated 21st day of 2010 are non est and merely scrap of paper because neither the trustees nor the founders have power to alter the objects of original trust deed dated 20.12.1993, since no power has been given either to trustees or to the founders to amend, alter, vary or change in any manner the objects of the trust as created in 1993.

24. In my considered opinion there is substantial force in the above submissions of Laxman Singh, Ld. DR keeping in view the decision of Hon’ble Supreme Court in the case of Sri Agasthyar Trust (supra), wherein the Hon’ble Supreme Court held (at pages 32 & 33) as under:-

“We have already observed, the deed of 1941 originally gave the power to the founders to revoke the trust but this power was taken away by a subsequent document which was executed on August 26, 1943. It is thereafter that the trust became an irrevocable trust. The powers of the trustee in respect of the said trust continued to remain the same as set out in clause (8) of the partnership deed which has been extracted hereinabove. The said trustee was only required to carry out the objects of the trust and spend the trust funds for charitable purposes in the manner indicated therein. No power was given to the trustee to amend, alter, vary or change in any manner the objects of the trust as created in 1941. The result of this is that neither the trustee nor the founders could bring about any change in the objects of the trust as set out in their partnership deed dated November 28, 1941. This being so, the document dated July 1, 1944, executed by the trustee was clearly without any authority and was non est. He had no right or jurisdiction to execute the document of July 1, 1944, which in effect changed the objects of the trust radically and in fact converted what was meant to be a public charitable trust to a non-charitable trust as held by this court in East India Industries’ case [1967] 65 ITR 611, when the deed dated July 1, 1944, was construed by it. It will be useful at this juncture to refer to the following passage from Tudor on Charities (6th edn.) at page 131, it is stated as follows :

“When a charity has been founded and trusts have been declared the founder has no power to revoke, vary or add to the trusts. This is so irrespective of whether the trusts have been declared by an individual, or by a body of subscribers, or by the trustees.”

When the founders of the trust have no power to alter or vary the terms of the trust, a trustee appointed to manage the properties of the trust for securing its object, can under no circumstances be regarded as having such a power specially when the original deed dated November 28, 1941, does not bestow such power on him. Such a question also came up for consideration before the Madras High Court in Thanthi Trust v. ITO [1973] 91 1TR 261. Dealing with the question whether the founder of a trust had power to revoke the same, the court observed as follows (pages 284-85) :

“It is well established that the subsequent acts and conduct of the founder of the trust cannot affect the trust if there has been already a complete dedication, (vide Krishnaswamy Pillai v. Kothandarama Naicken [1914] 27 MLJ 582; Sunder Singh Mallah Singh Sanathan Dharam High School Trust v. Managing Committee, Sunder Singh Mallah Singh Rajput High School [1938] 1 MU 359 ; AIR 1938 PC 73, and Gokuldoss Jamnadoss and Co. v. Lakshminarasimhalu Chetti [1940] 2 MLJ 409; AIR 1940 Mad 920). If a valid and complete dedication had taken place, there would be no power left in the founder to revoke and no assertion on his part or the subsequent conduct of himself or his descendants contrary to such dedication would have the effect of nullifying it. If the trust had been really and validly created, any deviation by the founder of the trust or the trustees from the declared purposes would amount only to a breach of trust and would not detract from the declaration of trust. Therefore, the subsequent conduct of the founder in dealing with the funds of the trust long after the creation of the trust may not put an end to the trust itself”

We are in full agreement with the principle stated in the aforesaid passage and we hold that the trustee had no authority or jurisdiction to execute a fresh trust deed and the document dated July 1, 1944, is of no consequence and is no more than a scrap of paper. The trust as originally established by the deed dated November 28, 1941, remained unchanged or unaffected by the later document dated July 1, 1944. “

25. From the above judgment of Hon’ble Supreme Court, it is clear that when the founders of the trust have no power to alter or vary the terms of the trust, a trustee appointed to manage the properties of the trust for securing its object, can under no circumstances be regarded as having such a power especially when the original trust deed does not bestow such power on him. In the above case, Hon’ble Supreme Court held that document executed in 1944 was non est and merely scrap of paper because trustees had no power to alter the provisions of the original trust deed. In the instant case, founders or trustees had altered the object clause, without any power available to them to alter the same as per the original trust deed. In my opinion, the Ld. A.M. has correctly concluded that such amendment carried out by the trustees or founders is non est and invalid. He has also held that such conduct of the trustee or settlers in the form of said amendment, cannot be taken to fasten any legal consequence on the original trust deed. It is also seen that the Ld. AM has discussed this issue in detail in paras 7.15 to 7.28 and para 8 of the dissent and he has quoted number of decisions in support of his view. In my opinion, the reasoning and logic given by Ld. A.M. in support of his view deserves to be accepted. I, therefore, agree with the above view of the Ld. A.M. in this matter. I am also in agreement with the view taken by Ld. A.M. that for the sake of argument if it is accepted that the trustees or settlers had power to amend or alter the original Trust Deed even then on the strength of Corrigendum and supplementary deed mentioned hereinabove, the trust is not eligible for renewal of approval u/s 80G of the Act. In this regard, the Ld. A.M has correctly observed that in a situation of deletion of clause 4 of the original Trust Deed, the Trust remains a Trust, expressed to be for the benefit of a particular community i.e Hindu religious community. In this regard, Ld. A.M. has observed that the preamble to the original Trust Deed whereby the said settlors expressed desire of creating a Trust Temple for Deity by the name – ‘Laxmi Narayan’ and construction of the said temple remains, integral part of the said amended Trust Deed. The Ld. A.M. has also observed that the immovable property, as comprised in the 1st Schedule to the said Trust Deed remains untouched. The income from the said Trust property is to be applied first, in the maintenance and repair of temple property, as also to be spent for the worship of the said Deity and in the defraying of the usual expenses of holding festivals of the said deity, remains intact. The Ld. A.M. has also observed that similarly, the construction of the temple and worship of the said Deity and adoration of the said Deity is still an integral part of unauthorisidely amended Trust Deed. Further, holding of periodical festivals of the Deity and offering daily worship, are still the organic part of the said Deed. The Ld. A.M. has correctly observed that these objects are purely religious in nature, inextricably linked to the Hindu religious community and its Deity ‘Laxmi Narayan’. According to Ld. AM, even the unauthorized amended Trust Deed/so called supplementary Trust Deed contravenes the provisions of section 80G(5)(iii) read with Explanation 3 of the Act, being expressed to be for the benefit of a particular religious community i.e. Hindu.

26. Viewed from any angle, I am in agreement with the views expressed by the Ld. A.M. in his dissent that in the facts and circumstances of the present case, the Trust is not entitled to renewal of approval u/s 80G(5) of the Act.

27. The matter may now be placed before the regular Bench for the disposal of the appeal in accordance with the majority opinion.

ORDER

---

Per Bench – While disposing of the appeal, there was a difference of opinion between the Members constituting the Division Bench and, therefore, the following questions were referred to the Third Member under section 255(4) of the Income-tax Act, 1961:

Statement u/s 255(4) of the Income Tax Act 1961

“1. Whether, on the facts and in the circumstances of the case, the settlers or the trustees are competent to effect valid amendment or deletion or addition to the object clause, contained in the original trust-deed, when there is no such power provided under the originally constituted trust and what are the legal consequences of such amendment ?

 2. Whether on the facts and in the circumstances of the case, the assessee-trust is entitled for approval, in terms of original Trust Deed and the amended one, under section 80G(5) of the Act, without compliance with the statutory conditions precedent of section 80G(5)(iii) read with explanation 3 to section 80G(5C) of the Act?”

Statement u/s 255(4) of the Income Tax Act 1961

“1. Whether on the facts and in the circumstances of the case and the record available, the assessee is entitled for grant of approval of renewal of exemption under section 80G(5) of the Income-tax Act, 1961?

 2.  Whether on the facts and in the circumstances of the case, the CIT can overlook the binding precedent of the order dated 19-12-2008 passed by the ITAT, Amritsar Bench in assessee’s own case in ITANo.512(ASR)/2008 in para Nos. 9 and 10, page No.5, holding that the learned CIT erroneously rejected the said corrigendum as a mere afterthought and not having any binding force and in the absence of any provision of law prohibiting the assessee from amending the original Trust Deed by way of corrigendum?

 3.  Whether on the facts and in the circumstances of the case, the learned CIT can refuse the approval of renewal of exemption under section 80G(5) of the Income-tax Act, 1961 on the ground that one of the objects No.4 that the assessee-trust has been established for a particular religious purpose for the followers of the diety, who have to be only Hindus, in spite of the fact that he has already granted the approval of renewal of exemption in many times under section 80G(5) of the Income-tax Act, 1961?”

2. The Hon’ble Vice President, Chandigarh Zone, Chandigarh, acting as a Third Member has agreed with the view of the Accountant Member. In conformity with the majority of view, the order of the CIT-I, Amritsar, is upheld and the Trust is not entitled to renewal of approval u/s 80G(5) of the Act. Consequently, the appeal of the assessee is dismissed.