Ground of Appeal-
That the Commissioner of Income-tax (Appeals) erred on facts and in law in holding that the appellant’s activities in relation to ‘propagation of yoga’ does not qualify as providing `medical relief’ or ‘imparting education’, but was purely in the nature of object of general public utility under section 2(15) of the Act.
Held by ITAT
Yoga a form of ‘medical relief’:
One of the primary contentions of the assessing officer/CIT(A) in denying exemption under sections 11/12 of the Act, is that Yoga as a system, does not provide any ‘medical relief, but can at best be categorized as an object of general public utility.
In forming such conclusion, the CIT(A) has relied upon the decision of the Bombay High Court in the case of CIT vs. Rajneesh Foundation: 280 ITR 533 and held that yoga do not fall under “education” or “medical relief’.
In this regard, it is respectfully submitted that Yoga, is one of the well recognized traditional system of physical exercise and meditation for attaining physical wellbeing and is a complete medicinal science in itself.
Various features, methods, aspects and benefits of yoga have been highlighted by various authors in various publications and literature, one such publication being “Yog in synergy with medical science” written by Ayurved Acharya Balkrishna. The said publication was documented on the basis of clinical tests which were conducted in the most scientific manner showing the clinical effect of yoga on the participants in various yoga camps. The said study portray without any ambiguity that yoga camps organized by the institution, conducted under the supervision of ualified doctors and full trained o a instructors were held to cure physical ailments of the participants. The aforesaid publication also documents the feedback/testimonies of various people who were suffering from various chronic diseases and have benefited from yoga. (Refer pages 53 to 131 of the paperbook)
It may also be mentioned here that there are various publications which clearly highlight yoga as a means to cure several ailments/ diseases.
Further, it is imperative to mention here that Yoga is now a ‘ recognized system of medicine’, which is now well established by the legislation of the Clinical Establishments (Registration and Regulation) Act, 2010 (Bill was introduced in the year 2007 and legislated in the year 2010). (refer pages 132 to 138 of the paperbook).
The aforesaid Act, it is pertinent to mention here has been enacted by the Central Government to provide for registration and regulation of all clinical establishments in the country with a view to prescribing the minimum standards of facilities and services provided by them.
Section 2(h) of the said Act defines “recognized system of medicine” to include Yoga. The relevant extract of the said section is reproduced hereunder:
“recognized system of medicine” means Allopathy, Yoga, Naturopathy, Ayurveda, Homoeopathy, Siddha and Unani system of medicines or any other system of medicine as may be recognized by the Central Government.” (emphasis supplied)
Kind attention of the Hon’ble Bench is also invited to information on Yoga available on the website of Department of Ayush (Minister of Health and Family Welfare) [Source: http://www.indianmedicine.nic. in].
Reference, in this regard, is specifically made to the following information on Yoga as available on the aforesaid website:
The concepts and practices of Yoga originated in India about several thousand years ago. Its founders were great Saints and Sages. The great Yogis presented rational interpretation of their experiences of Yoga and brought about a practical and scientifically sound method within every one’s reach. Yoga today, is no longer restricted to hermits, saints, and sages; it has entered into our everyday lives and has aroused a worldwide awakening and acceptance in the last few decades. The science of Yoga and its techniques have now been reoriented to suit modern sociological needs and lifestyles. Experts of various branches of medicine including modern medical sciences are realising the role of these techniques in the prevention and mitigation of diseases and promotion of health.
Yoga is one of the six systems of Vedic philosophy. Maharishi Patanjali, rightly called “The Father of Yoga” compiled and refined various aspects of Yoga systematically in his “Yoga Sutras” (aphorisms). He advocated the eight folds path of Yoga, popularly known as “Ashtanga Yoga” for all-round development of human beings. They are: – Yama, Niyama, Asana, Pranayama, Pratyahara, Dharana, Dhyana and Samadhi. These components advocate certain restraints and observances, physical discipline, breath regulations, restraining the sense organs, contemplation, meditation and samadhi. These steps are believed to have a potential for improvement of physical health by enhancing circulation of oxygenated blood in the body, retraining the sense organs thereby inducing tranquility and serenity of mind. The practice of Yoga prevents psychosomatic disorders and improves an individuals resistance and ability to endure stressful situations.” (emphasis supplied)
Other information downloaded from the aforesaid website, it is respectfully submitted, also makes it patently clear that Yoga is one of the recognized system/ method of providing medical relief. (Refer pages 139 to 196 of the paperbook)
It may further be pertinent to note that the US National Center for Complementary and Alternative Medicine (NCCAM) has recognized yoga as a Complementary and Alternative Medicine (CAM) to prevent and treat diseases.
NCCAM defines CAM as a group of diverse medical and health care systems, practices, and products that are not generally considered part of conventional medicine (also called Western or allopathic medicine).
A survey released in December 2008 by NCCAM found that yoga was the sixth most commonly used alternative therapy in the United States during 2007, with 6.1 percent of the population participating. The said study also states that Yoga has been used as supplementary therapy for diverse conditions such as cancer, diabetes, asthma, and AIDS and the scope of medical issues where yoga is used as a complementary therapy continues to grow. (Refer pages 197 to 200 of the paperbook)
It may also be pertinent to mention here that the Standing Committee of Human Resource Department (HRD) Ministry has recommended that Yoga be made compulsory for all school going children in the country. The said report further provides that Yoga is one of the core components of Health and Physical Education. (Refer pages 201 to 205 of the paperbook)
It may also be worth noting that the Madhya Pradesh Government has introduced various formal `Alternative Medicine Courses’ in the field of Yoga which inter-alia includes M.Sc. in Human Consciousness and Yogic Science, Ph.D in Yogic Science, M. Phil in Yogis Science, P. G. Diploma in Yoga etc. This only goes to prove that Yoga is now a well accepted medical science which is effective in providing medical relief to numerous diseases. (Refer pages 206 to 207 of the paperbook)
In September 2012, the Harvard University of USA came forward to introduce Yog and Ayurved subjects in their university in collaboration with Swami Ramdevji in the wake of dreadful diseases being cured by Swamiji’s Pranayam and his Ayurved medicines (Source: wikipedia.org/wiki/Ramdev). (Refer pages 208 to 210 of the paperbook)
Further, the term ‘medical’ as defined in Major Law Lexicon by P. Ramanatha Aiyar (2010 Edition) is re-produced as under:
“of pertaining to or having to do with the art of healing disease, or the science of medicine; containing medicine; used in medicine” (emphasis supplied)
On perusal of the aforesaid, it may be observed that the term ‘medical’ has been defined very broadly. The definition clearly provides that the ‘art of healing any disease’ constitutes medical relief and the same need not be restricted to conventional methods of treatment.
Yoga, thus, as a system of medicine, has been successful in curing various dreadful diseases and providing relief to the sufferings of people. Thus, it undoubtedly qualifies as a form of ‘medical relief’ as provided in section 2(15) of the Act.
Decision in Raineesh Foundation – not applicable
Further, with respect to the reliance placed by the CIT(A)’s on the judgment of the Bombay High Court in the case of Rajneesh Foundation (supra), it is respectfully submitted that the said decision was rendered prior to introduction of proviso to section 2(15), when there used to be no dispute in so far as classification of charitable objectives was concerned for the purpose of claiming exemption under sections 11/12 of the Act. Thus, this issue was never precipitated by the assessee before the Hon’ble Court.
Further, the CIT(A) is totally misplaced in placing reliance on the aforesaid judgment, which was rendered in context of classifying ‘meditation’ as a charitable objective for the purpose of section 2(15) of the Act. The Hon’ble High Court, in the given case adjudicated only on the issue of classification of ‘meditation’ and ‘preaching/propagation of philosophy’ as a charitable object falling under the category of ‘general public utility’, but has nowhere explicitly dealt with `yoga’, except for making passing references in respect of the same. The pertinent finding of the Court in this regard is reproduced hereunder:
“Admittedly, main thrust of the respondent is on meditation and nobody can dispute that in India meditation has been very important source for physical, mental and spiritual wellbeing of the human beings. Cognizance has to be taken that the meditation and Yoga are becoming more and more popular among the Indians who are now becoming conscious about their physical, mental and spiritual health. Not only in India, meditation and Yoga are being accepted in the Western Countries also as a great source for physical and mental health and spiritual attainment When a large number of people feel that meditation is a great source for physical, mental and spiritual well-being, it must be held to be an activity for the advancement of general public utility”. (emphasis supplied)
On perusal of the aforesaid, it will kindly be noticed that in the aforesaid case it was not at all the case of the assessee that meditation fell within the category of “medical relief’; in fact in the context of the pre-amended law it mattered little to the assessee in which category the objective of the assessee fell.
In fact, it is pertinent to note that the Court, in the aforesaid decision observed, “Not only in India, meditation and Yoga are being accepted in the Western Countries also as a great source for physical and mental health…..”; meaning thereby that yoga is a source for medical relief, as is the case of the assessee.
In view of the aforesaid, it is submitted that yoga, as a science, is a well recognized system of medicine, which has therapeutic effects in treating various serious ailments.
Thus, the predominant objective of the assessee trust being providing medical relief, though propagation of yoga for the purpose of treating/curing various diseases, undoubtedly falls under the category of providing ‘medical relief’ and accordingly exemption could not have been denied to the assessee on this ground.
That apart, the CIT(A)/ assessing officer further failed to appreciate that propagation of yoga by way of conducting yoga classes on a regular basis and in a systemized manner also falls under the category of ‘imparting of education’ as provided under section 2(15) of the Act, as elaborated hereunder:
The expression ‘education’ has not been defined under the Act, however reliance in this regard may be placed on various legal precedents as discussed hereunder:
The Supreme Court in the case of Lok Shikshana Trust: 101 ITR 234, explained the meaning of the word ‘education’ in the context of section 2(15) of the Act as under:
“We have set out above the relevant clauses of the trust deed and the material part of the communications sent by the Sole Trustee. It would appear therefrom that though a number o ob. ects includin • the settin • u o educational institutions were mentioned in the trust deed as the objects of the trust, supplying the Kannada speaking people with an organ of educated public opinion was also one of those objects. The communication sent by the Sole Trustee to the Income-tax Officer shows that the trust at present is carrying out only the last mentioned object of the trust, namely, supplying the Kannada speaking people with an organ or organs of educated public opinion. The concentration so far of the activities of the trust only on that object is in pursuance of clause 6 of the trust deed, according to which the original trustee shall have power and authority to spend and utilise the money and the property of the trust for any of the purposes of the trust in such manner as to him may appear proper.
The sense in which the word “education” has been used in section 2(15) is the systematic instruction, schooling or training given to the young in preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received The word “education” has not been used in that wide and extended sense, according to which every acquisition of further knowledge constitutes education. According to this wide and extended sense, travelling is education, because as a result of travelling you acquire fresh knowledge. Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge. Again, when you grow up and have dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the ways of the world. If you are not careful, your wallet is liable to be stolen or you are liable to be cheated by some unscrupulous person. The thief who removes your wallet and the swindler who cheats you teach you a lesson and in the process make you wiser though poorer. If you visit a night club, you get acquainted with and add to your knowledge about some of the not much revealed realities and mysteries of life. All this in a way is education in the great school of life. But that is not the sense in which the word “education” is used in clause (15) of section 2. What education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by normal schooling.” (Emphasis supplied)
The essence/ principle emanating from the aforesaid decision is that for an activity to be regarded as education, the same must:
Thus, any form of educational activity involving imparting-aii-iin in order to o develop the knowledge, skill, mind and character of students, is to be regarded as ‘education’ covered under section 2(15) of the Act.
Following the aforesaid decision, the Delhi High Court in the case of Delhi Music Society vs. DGIT: 246 CTR 327/ 204 Taxman 231 (Del) held that since the assessee society was teaching and promoting all forms of music and dance – western, Indian or any other and was run like any school or educational institution in a systemic manner with regular classes, the same therefore, met the requirement of an educational institution within meaning of section 10(23C)(vi) of the Act.
Reliance in this regard may also be placed on the decision of the Tribunal in the case of ITO vs S.R.M. Foundation of India: 21 ITD 598 (Del), wherein the assessee was a spiritual regeneration movement foundation of India, which was registered under section 12A and under section 80G of the Act. It was founded by Maharishi Mahesh Yogi and had prescribed syllabus, trained teachers, and branches all over India to spread the system of transcendental meditation (TM) to people in all walks of life.
In the relevant assessment year, the assessee had claimed deduction under section 10(22) of the Act. The assessing officer held that the assessee was neither a university nor other educational institution recognized by a University or any State or Central Government. It was further observed that the assessee charged fee for education and received donations from the donees (course participants) for incurring expenses though the assessee had claimed that donations were made towards corpus. Thus, the assessing officer disallowed the assesse e’s claim for exemption.
On appeal, the Commissioner (Appeals) allowed the assessee’s claim. On further appeal by the Revenue before the Tribunal, it was held that, irrespective of the fact that the assessee was not an educational institute recognized by any University/State Government/Central Government, since the assessee had its own prescribed syllabus, trained teachers, branches all over India to spread system of ‘transcendental deep meditation’ among people in all walks of life, the same constituted imparting of ‘education’ and the assessee was entitled to exemption under section 10(22) of the Act. The pertinent findings of the Tribunal are re-produced as under:
“We have given our careful consideration to the able arguments addressed to us on both the sides It had to be examined whether the following prerequisites of section 10 (22) was satisfied in the present case :
As held by the Madras High Court in the case of Addl. CIT v. Aditanar Educational Institution  118 ITR 235 on the language of section 10(22) the principle of ejusdem generis can have no application. One has, therefore, only to fall back on the expression ‘or other educational institution.’
There is no requirement prescribed under section 10(22) that the institution should be recognised by a University or State or Central Government. Thus, the assessing officer’s insistence on any such recognition was not justified. It was not necessary that the institution should have a building. The word ‘institution’ has not been defined in the Act. Thus, the assessee could be treated as an institution. In the instant case the assessee’s foundation was dedicated to offering peace, harmony and happiness to everyone in all walks of life through the system of transcendental deep meditation. This system was developed by his Holiness Maharishi Mahesh Yogi whereby every normal man, regardless of caste, creed and denomination could easily reach the deeper levels of consciousness, unfold latent faculties and realise more complete happiness. The syllabus recommended by the assessee listed 33 lessons of what was termed as the science of creative intelligence. The assessee had also 23 branches throughout India where TM instructions were imparted to the students as part of then normal schooling. The optimistic instruction in TM was initially imparted to the trainers and then the qualified trainers imparted instructions to the trainees. The test of ‘Systematic schooling’ was, therefore, satisfied There was no purpose other than the educational so far as the assessee-foundation was concerned. Therefore, the second ingredient or prerequisite of section 10(22) was also satisfied. That the assessee foundation did not exist for the purpose of profit was also clear from the objects clause. This was also clear from the balance sheet and income and expenditure account. It was clear that the assessee-foundation duly established the requirements under section 10(22) and qualified for the grant of exemption under section 10(22). The order of the Commissioner (Appeals) was, therefore, justified.” (emphasis supplied)
Further, according to Halsbury’s Laws of England (4th Edition, Volume 5, paragraph 522) the advancement and propagation of education and learning generally are charitable purposes, even in the absence of an element of poverty in the class of beneficiaries, but the trust must be for the benefit of a sufficient section of the community. Halsbury goes on to say further in paragraph 524 that the promotion of education in particular subjects, such as art, artistic taste, the appreciation of fine arts, music, commercial education, training for industrial employment, the art and science of Government, economic and sanitary science or psychological healing is charitable.
In the case of the assessee, the predominant objects of the trust are to provide practical and theoretical training in the field of yoga, which would ultimately provide medical relief to the society at large. In pursuance of the said objective, the assessee trust has imparted yoga education by means of organising yog shivirs/ camps across the country on daily/weekly/monthly basis in a systemized/ organized manner in order to provide medical relief to people who cannot afford modern medical method or have been subjected to ill effects of modern medicine. Such Yoga education was given in the shivirs/ camps by Yoga Gurus (i. e. Yoga teachers).
The aforesaid systemized/ organized manner of providing yoga knowledge, it is submitted, clearly tantamount to “education” as explained by the apex Court in the case of Lok Shikshana (supra).
In the impugned order the CIT(A), has referred to the assessee receiving donations and issuing donation coupons for yoga camps and held that the same is like a ticket to avail facilities.
The CIT(A), however, failed to appreciate that the assessee organizes yoga science camps in furtherance of its predominant object of providing medical relief and imparting yoga education. The ad-hoc committees issues donation coupons in the denomination of Rs. Nil (i.e. free), Rs.100, Rs.500, Rs.1100 and Rs.2100 to various voluntary donors who attend the camps, which is nothing but small donations given by the voluntary donors who attend the shivir/ camps. The CIT(A) has referred to donation coupons without appreciating that yoga shivir/ camp is open to all and not merely restricted to persons who volunteer to donate to the charitable cause of the assessee.
It may further be pertinent to note that donations which have been received from participants of such camps, were purely voluntary, depending upon the paying capacity and willingness of such participants. Further, there was no hard and fast rule that the participants had to mandatorily make donations for the purpose of participating in such camps. In this regard, the Hon’ble Bench may also kindly note that there have been various yog camps which have been conducted in the assessment year under consideration, where no donations have been collected at all.
The aforesaid facts, in our respectful submission, lead to the inescapable conclusion that the only underlying intention of the assessee was to provide ‘medical relief’ to the society at large and there was no quid pro quo in the matter of collecting donation and providing the benefit of yog.
Besides, the live telecast of these yog camps/shivirs, it is further submitted, reach es audiences all over the nation who get the benefit of yog teaching ‘free of cost’.
The parallel drawn by the CIT(A) between ticket for availing certain facilities and donation coupon is, thus, it is submitted, fallacious.
It may also not be out of place to mention that the assessee has also applied substantial amounts in setting up of `Patanjali University’, a deemed university set up under The University of Patanjali Act, 2006, inter alia, for having courses in MA (Yoga Science), MSC (Yoga Science), BA (Yoga Science), Post Graduate Diploma in Panchkarma, Post Graduate Diploma in Yoga Science and Post Graduate Diploma in Yoga Health and Cultural Tourism. The University became operational on September, 2009.
In this regard, it is further respectfully submitted that the reliance placed by the CIT(A) on the decision of the Chennai bench of the Tribunal in the case of Raja Sir Annalai Chetiar Foundation vs. DIT(E): ITA No. 1817/Mds/2010 [Refer pages 1175 to 1177 of the case law paper book] is highly misplaced and distinguishable on facts, as in the said case the assessee was denied registration under section 12AA of the Act on the ground that the assessee was not undertaking any charitable activities in so far as there was no fee concession provided to the deserving students and no initiative was undertaken to provide free education to the economically weaker sections of the society and the fee structure of the assessee- trust itself contemplated an element of profit in the educational activities to be carried on. It was on considering this aspect that the Tribunal held that the institution was run on purely commercial lines and did not involve any element of ‘charity’ and thus, the action of the DIT(E) in denying registration under section 12AA of the Act was upheld.
However, in the instant case, the assessing officer/CIT(A) have nowhere alleged that the assessee has undertaken the activity of imparting education through `Patanjali University’ on purely commercial lines. On the contrary, the fact is that the assessee charges fee on concessional basis in order to encourage the economically weaker sections of the society to pursue courses in Ayurveda/Yoga. Thus, the reliance placed by the CIT(A) on the aforesaid decision is highly misplaced and of no consequence.
Thus, in view of the aforesaid, it is respectfully submitted that imparting of yoga training through well structured yoga shivirs/ camps also falls under the category of imparting `education’, one of the charitable objects defined under section 2(15) of the Act and accordingly the assessee’s activities are not hit by the proviso inserted in the definition of “charitable purpose” as contained in the said section.
Ground of Appeal
That the Commissioner of Income-tax (Appeals) erred on facts and in law in holding that the voluntary contribution received by the appellant, including donations received through Yoga Camps and Yoga Samitis were not eligible for exemption under sections 11/12 of the Act.
Held by ITAT
We find that Rs.13,68,99,745/-received was alleged as annoynimous donation under section 115BBC of the Act. It was alleged that the assessee had not maintained record consisting of name and address of the donors. The Assessing Officer observed that Rs.6.61 crores was received through sale of coupons from 22 Yoga camps, which was organized publically as well as telecasted on TV channels. Assessing Officer further observed that Rs.5.99 crores were received during the relevant assessment year where identity of donors was not verifiable. And the remaining Rs.1,07,73,438/- was received from others. The Assessing Officer accordingly made addition of Rs.13.68 crores. The explanation of the assessee remained that assessee organizes Yoga shivirs / camps for providing medical relief through Yoga and also imparting Yoga education/training. Such camps/shivirs are organized through ad-hoc committees especially set up by the assessee for organizing Yoga camps/shivirs and also through separate / independent Yoga samities spread across the country under the over-all guidance / support of the assessee. Such Yoga camps/shivirs are attended by thousand of persons across various sections of the society. Two types of camps/shivirs are normally organized viz. residential camp and non-residential camps. It was explained that during such camps voluntary donations are received by various persons who attend the Yoga shivirs/camps. During the year Rs.6,61,27,782/- was received from non-residential camps [received through Yog Samitees], Rs.5,99,98,525/- was received from Yoga teacher camps and Rs.1,07,73,438/- was received from others totaling to Rs.13,68,99,745/- in question. It was further explained that in the Yoga camps organized by the assessee through ad-hoc committees, donation coupons in the denomination of Rs.NIL (i.e. free), Rs.100/-, Rs.500/-, Rs.1100/- and Rs.2100/- were issued to various voluntary dodnors who attended the camps. Such voluntary donors were duly supported by the affidavits of the presidents of various Yoga camps organizing committee, which were furnished before the Assessing Officer and a reference of page Nos. 503 to 569 of the paper book filed on behalf of the assessee was made in support. It was further explained that Yoga camps are organized publically and are telecasted from time to time by various TV channels and entire recordings of Yoga camps in the form of 4 DVDs were filed before the Assessing Officer.
We find that the only allegation of the Revenue on the issue is that assessee had not maintained the details of the donors to make it verifiable. Hereinabove we have noted the break-up of donations of Rs.13,68,99,745/-. There is no dispute on organizing Yoga shivirs/camps by the assessee nor is there any dispute that the assessee had noted names and addresses of the donors. The Assessing Officer held these details maintained by the assessee are not verifiable. There is no doubt that these Yoga camps are attended by the persons in thousands still the assessee has maintained names and address communicated by the donors, but without verifying the same the Assessing Officer has summarily concluded that the said donations were in the nature of anonymous donations as defined under section 115BBC of the Act. The assessee had also furnished affidavits of organisors of ad-hoc committees through whom the assessee had organized Yoga camps made available at page Nos. 503 to 569 of the paper book, but the Assessing Officer did not bother himself to verify the same even on test-check basis. In absence of such efforts by the Assessing Officer, we are of the view that the authorities below were not justified in making and sustaining the treatment of receipt of Rs.13.68 crores as annonymous donation. Undisputedly, in almost all donations name and address of the donors have been maintained and thus bonafide of the assessee cannot be doubted where such detail has remained to be maintained in some cases. Such donations worth Rs.1,07,73,438/- has also not been alleged to spent on other than the objects of the assessee trust. We, thus, while setting aside orders of the authorities below in this regard, direct the Assessing Officer to accept the claimed receipt as donation.