Bombay HC upholds tribunal finding that Shirdi trust eligible for I-T exemption on anonymous donations

A part seat of Justices Girish S Kulkarni and Somsekhar Sundaresan rejected an entreaty by Commissioner of Income Tax (Exemptions), Mumbai, challenging the October 25, 2023 determination of ITAT. It had concluded the proceeding and had reserved its verdict connected July 24, this year.

The I-T section had argued that the Trust received wide donations of Rs 400 crore till 2019. However, lone Rs 2.3 crore was spent for spiritual purposes, and large expenses were for acquisition institutions, hospitals and aesculapian facilities.

This shows, the section argued, that the Trust was lone a charitable 1 and not a spiritual organisation, portion it was receiving donations lone due to the fact that of the religion of the devotees. The I-T section had said that arsenic per the assessing serviceman of the I-T department, betwixt 2015 and 2019, the spot received immense amounts arsenic anonymous donations and the aforesaid cannot beryllium exempted from being taxed.

However, the Trust claimed that it had some charitable and spiritual obligations and that it was rightfully exempted from being taxed.
On July 24, the seat had remarked that the Trust was receiving donations owed to the religion of devotees, irrespective of them being anonymous oregon not.

Justice Kulkarni had questioned the I-T section however it could power the sentiments of galore devotees who support visiting the temple and marque donations, including anonymous donations.

The Trust, done elder advocator S Ganesh, asserted that wherever immoderate instauration existed for charitable arsenic good arsenic spiritual intent and the expenditure for spiritual intent for a twelvemonth was little than 5 % of its full income, past specified Trust was eligible to get exemption nether Section 80G of the Act.

“A Trust being some spiritual oregon charitable oregon vice-versa is simply a well-accepted phenomena. There tin beryllium galore examples of specified combinations. For specified reason, a myopic speechmaking of Section 80G would beryllium wholly impermissible,” the seat noted.

The Tribunal had noted that the Sai Baba Trust besides indulged successful attraction of the temple, behaviour and show of rituals and ceremonies and providing darshan facilities for devotees, offering of prayers and performing spiritual festivals. The ITAT had besides observed that the Trust was regarded arsenic spiritual spot successful the authorities for tourists and nationalist astatine large.

“Therefore, attack by the I-T section would magnitude to an inappropriate speechmaking of the provisions of Section 80G arsenic besides Section 115BBC(2)(b) of the Act.”

The bench, portion holding ITAT’s determination to beryllium ‘correct successful instrumentality and facts,’ held that the Sai Baba Trust formed nether peculiar authorities of authorities legislature, is “certainly a spiritual and charitable trust, hence the assessee rightly and legitimately claimed an entitlement nether sub-section 2(b) of Section 115BBC of the Act. Such entitlement of the assessee is rightly recognised by the Commissioner of Income Tax (CIT) Appeals and the Tribunal.”