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Tuesday, 15 September 2015 16:52

Section 115BBC - Anonymous donations would qualify for deduction. Held that Assessee by no means ceases to be a religious institution when carrying on charitable activities along with organising of spiritual lectures - Delhi High Court

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1. In carrying on charitable activities along with organising of spiritual lectures, the Assessee by no means ceases to be a religious institution

2. The question cannot be addressed within the narrow scope of the specific wording of some of the clauses of the Trust Deed but in the overall context of the actual activities in which the Trust is involved in including imparting spiritual education to the persons of all castes and religions, organizing Samagams, distribution of free medicines and clothes to the needy and destitute, provision of free ambulance service for needy and destitute patients and so on


1. The Assessee, Bhagwan Shree Laxmi Narain Dham Trust („Trust‟), was accorded registration under Section 12A of the Act on 20th May 2005

2. Assessee filed its return of income accompanied by an audit report, balance sheet, income and expenditure account etc

3. The case of the Assessee was picked up for scrutiny. It was found by the Assessing Officer (AO) that for the AY in question, the Assessee had received Rs.5,28,84,204 by way of donations

4. The details of donors to the extent of Rs.27,25,306 were not explained

5. The Assessee explained that during the AY in question it was mainly involved in imparting of spiritual education through the lectures/samagam delivered by Brahmarishi Shree Kumar Swami Ji and in distribution of medicines and clothes to the needy and destitute

6. The AO, therefore, proceeded to invoke Section 115BBC of the Act and add the aforementioned sum to the income of the Assessee. It was held by the AO in the order dated 26th December 2011 that although the legislature had exempted wholly public religious trusts from the provision of Section 115 BBC of the Act, “the case of the Assessee is not of public religious trust but a case of spiritual organization. Therefore, the case of the Assessee is clearly hit by the provision of Section 115BBC

7. A sum of Rs.27,25,306 was, therefore, treated as anonymous donations and brought to tax as per the provisions of Section 115BBC of the Act

8. The Commissioner of Income Tax (Appeals) [„CIT (A)‟] by an order dated 3rd September 2012 confirmed the action of the AO

9. Assessee moved to the ITAT and held that the Revenue had incorrectly applied Section 115BBC to the facts of the Assessee‟s case and allowed the appeal in favour of the assessee

10. Revenue moved to High Court and after hearing both the parties decided in favour of the assessee


It might well be that a Hindu religious institution like the Assessee is also engaged in charitable activities which are very much part of religious activity. In carrying on charitable activities along with organising of spiritual lectures, the Assessee by no means ceases to be a religious institution. The activities described by the Assessee as having been undertaken by it during the AY in question can be included in the broad conspectus of Hindu religious activity when viewed in the context of the objects of the Trust and its activities in general

Cases referred to

1. Commissioner of Income-Tax v. Dawoodi Bohra Jamat (2014) 364 ITR 31 (SC)

2. The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar 1954 AIR 282 SC

3. Ratilal Panachand Gandhi v. The State of Bombay AIR 1954 SC 388

4. Sastri Yagnapurushadji v. Muldas Bhudardas Vaishya AIR 1966 SC 1119

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