Sec. 80G approval denied to a society working for upliftment of Sikh community explicitly

Approval under section 80G could not be given to a society working only for upliftment of Sikh community and barring an outsider from becoming its member.

Facts:

a)  The assessee-society had applied for approval under section80G(5)(vi).

b)  The commissioner rejected the application of approval on ground that society was created for the benefit of a particular religious community and, thus, it did not fulfill the conditions of clause (iii) of section 80G(5).

c)  The aggrieved-assessee filed the instant appeal.

The Tribunal held in favour of revenue as under:

1)  The assessee-society was working only for upliftment of Sikh community and was imparting various types of education to them;

2)  Only a Sikh could become a member of the general community of the assessee-society who was controlling the entire administration of the institutions run by the society; which was contrary to the provisions of section 80G(5)(iii);

3)  The assessee had not filed any documentary evidence to establish that it was not only working for upliftment of the Sikhs but also for general community. There was no evidence to establish that a non-Sikh could become member of General Council of the assessee-society;

4)  The objects of the assessee-society and its name (i.e. ‘Sangat Sahib Bhai Pheru Sikh Educational Society, Faridkot’), clearly established that it was not doing any charitable work for general community and it was using its funds only for Sikh community;

5)  The assessee-society did not fulfill the conditions prescribed under section 80G(5)(iii) and, therefore, it was not entitled to the approval under section 80G(5)(iv). - Sangat Sahib Bhai Pheru Sikh Educational Society v. CIT [2014] 43 taxmann.com 368 (Amritsar - Trib.)

Organizing 'sankirtan' and 'bhandara' is charitable in nature; HC allows sec. 12AA registration to trust

Facts:

1)  The assessee-trust had filed application before CIT for purposes of registration under section 12AA and approval under section80G ;

2)  The CIT held that the objects like Akhand Naam Sankirtan, Thakur Sewa of Shri Girdhari Ji and organization of bhandaras on all important religious festivals were purely religious objects in nature and not in accordance with section 2(15);

3)  Accordingly, its registration application under section 12AA and approval request under section 80G were rejected. On appeal, the Tribunal held in favour of assessee. Aggrieved-CIT filed the instant appeal.

The High Court held in favour of assessee as under:

1) From the objects of the trust it could not be said that the object and purpose of establishment of trust was not genuine and that activities as delineated in the object were not carried out by the trust;

2)  'Akhand Naam Sankirtan' is one type of meditation and yoga and activity like bhandara are for providing food to persons, irrespective of any caste or religion, thus, unless it was proved that it was for any particular community or group of persons, registration under section 12AA could not be rejected;

3) Thus, no error of law was found in finding of Tribunal. – CIT v. Sri Radha Raman Niwas Trust [2014] 42 taxmann.com 77 (Allahabad)