High Court Of Gujarat
CIT vs. Chandra Charitable Trust
Sections 11, 13(1)(b)
R.S. Garg & M.R. Shah, JJ.
IT Ref. No. 234 of 1995
31st July, 2006
Mrs. Mona M. Bhatt, for the Applicant : R.K. Patel, for the Respondent
R.S. GARG, J. :
Mrs. Mona Bhatt, learned counsel for the Revenue and Mr. R.K. Patel, learned counsel for the assessee.
2. At the instance of the Revenue, the Tribunal has referred the following questions for our opinion :
“(1) Whether the Tribunal is right in law and on facts in holding that the assessee-trust is a religious trust entitled to the benefit of s. 11 ?
(2) Whether, the Tribunal is right in law and on facts in holding that Jainism is not a religion, and if Jainism is not a religion, the bar contained under s. 13(1)(b) would not apply in the present case ?
(3) Whether, the Tribunal is right in law and on facts of the case in holding that the fresh assessment made by the ITO pursuant to the order under s. 263 made by the CIT is redundant ?”
Learned counsel for the Revenue submits that s. 11 and s. 12 of the IT Act while provide certain exemption to charitable religious trusts, s. 13(1)(b), contradiction to ss. 11 and 12, denies exemption in particular situations. She submits that, according to s. 13(1)(b), exemption would not be available in the case of a trust for charitable purposes or a charitable institution created or established after the commencement of the Act, any income thereof if the trust or institution is created or established for the benefit of any particular religious community or caste. Referring to a Division Bench judgment of this Court in the matter of Shantagauri Ramniklal Trust & Ors. vs. CIT & Anr. (1999) 153 CTR (Guj) 145 : (1999) 239 ITR 528 (Guj), it is submitted that what are the requirements to be taken note of while deciding the question whether the trust is a religious charitable trust or not. Reliance is also placed on a judgment of the apex Court in the matter of Bal Patil & Anr. vs. Union of India & Ors. AIR 2005 SC 3172 to contend that Jainism is not a simple philosophy or a lifestyle but in fact it is a religion itself. Referring to certain covenants of the trust deed, it was submitted that as the basic purpose of creation of the trust was to promote the Jainism which is a religion or to help the caste/community which follows Jainism, and, if that be so, exemptions would not be available, but the case of the respondent-trust would be counted out of the exemption clause and would be included in exceptions. Shri Patel, learned counsel for the respondent-assessee, on the other hand, placed reliance upon yet another judgment of this Court in the matter of CIT vs. Barkate Saifiyah Society (1995) 213 ITR 492 (Guj) and submitted that exclusion from exemption under s. 13(1)(b) applies only to charitable trusts and charitable institutions and if the trust is charitable as well as religious in nature, the assessee would be entitled to exemption under s. 11 of the Act.
The question, that what should be the principle adopted and whether Jainism is a lifestyle or a religion, would lose much of its importance in view of the judgment of this Court in the matter of CIT vs. Barkate Saifiyah Society (supra). If Jainism is accepted to be a religion and from the covenants of the trust deed it can be spelt out that not only to propagate Jainism or help and assist maintenance of the temple, Sadhus, Sadhvis, Shraviks and Shravaks, yet other goals are set in the trust deed, then the trust would become a charitable trust, so also a religious trust or it can be addressed as a charitable religious trust, and, if that be so, s. 13(1)(b) would not be applicable. Once the basic question is answered against the interests of the Revenue, then the other questions can conveniently be decided against the interests of the Revenue. The reference stands disposed of accordingly. No costs.
[Citation : 294 ITR 86]