Sai Baba Sansthan Trust-Shirdi Entitled To Income Tax Exemption On Anonymous Donations: Bombay HC
The Bombay High Court has upheld the order of the Income Tax Appellate Tribunal (ITAT) which held that, Sai Baba Sansthan Trust-Shirdi is entitled to the benefit of income tax exemption on anonymous donations.
The Court was hearing a batch of appeals preferred under Section 260A of the Income Tax Act, 1961 (ITA) against the common order of the Income Tax Appellate Tribunal (ITAT) by which it rejected the appeals against the order of the Commissioner of Income Tax (Appeals) [CIT(A)].
A Division Bench of Justice G.S. Kulkarni and Justice Somasekhar Sundaresan observed, “From a cumulative reading of the objects of the assessee, read with the provisions of the Sai Baba Trust Act which is a special legislation promulgated by the State Legislature reflecting the objects and activities of the assessee, as also, considering the provisions of the Bombay Public Trusts Act, we are of the clear opinion that the assessee certainly is a religious and charitable trust, hence, the assessee rightly and legitimately claimed an entitlement under sub-section 2(b) of Section 115BBC of the Act. Such entitlement of the assessee is rightly recognized by the CIT (A) and the Tribunal.”
Advocate Dinesh Gulabani appeared on behalf of the appellant while Senior Advocate S. Ganesh appeared on behalf of the respondent.
In this case, the substantial questions of law as raised in the proceedings, revolved around the applicability of the provisions of Section 115BBC(1) of the ITA in respect of “anonymous donations” received by the respondent/assessee. Such donations were sought to be taxed primarily on the ground that the respondent is a charitable institution falling within the purview of Section 80G of the ITA. The decision of the Assessing Officer (AO) to tax the anonymous donations under Section 115BBC(1) on the premise of the assessee also being registered under the provisions of Section 80G of the Act, was negatived by the CIT(A), which was confirmed by the Tribunal.
Against such current findings of the appellate forums, the appeal was filed. The assessee is a public trust which was initially constituted in the year 1953 when it was registered as the “Shirdi Sansthan of Shri Sai Baba” trust under the Bombay Public Trusts Act, 1950. By an order in 1982 passed by the High Court, the administration of the Trust was vested in the “Board of Management”, constituted by the Charity Commissioner, Government of Maharashtra. Thereafter in 2004, the State Legislature enacted Shri Sai Baba Sansthan Trust (Shirdi) Act, 2004 which reconstituted the public trust. Under such enactment, the assessee is designated/described as the “Shri Sai Baba Sansthan Trust (Shirdi)”.
The High Court after hearing the contentions of the counsel, noted, “It may be observed that the Revenue is not in a position to dislodge the factual position as concurrently recorded by the CIT(A) as also by the Tribunal that the assessee is a religious and charitable trust.”
The Court said that the entire thrust of the submissions on behalf of the Revenue is referring to the provisions of Section 80G, as applied by the AO to contend that once the respondent/assesssee is registered under Section 80G, it would only be a charitable institution and would fall outside the provision of sub-section 2 (b) of Section 115BBC of the ITA.
“We are afraid to accept such contentions in as much as, the provisions of Section 80G cannot be intermixed, from what is provided by Section 115BBC(2)(b) of the Act. Both the provisions stand compartmentalized and are independent of each other. It would be too far-fetch to reach to a conclusion that merely the assessee being registered under Section 80G of the Act, it cannot be a religious trust, so as to fall outside the purview of Section 115BBC (2)(b) of the Act”, it added.
Furthermore, the Court observed that the very foundation of the operation and effect of Section 115BBC(2)(b) is a conclusive ascertainment, and a factual determination of a trust being religious and charitable as ascertained from the contents of the trust deed. It added that, once such requirement is satisfied, any anonymous donation received by such trust would be eligible/entitled to the benefit of an exemption from tax, by the applicability of sub-section 2(b) of Section 115BBC.
“… we find that the view taken by the CIT (A) and as confirmed by the Tribunal, is correct in law and facts. Thus, no substantial question of law arises for consideration in these appeals. We find no merit in these appeals”, it concluded.
Accordingly, the High Court rejected the appeals and upheld the order of the Tribunal.
Cause Title- Commissioner of Income Tax (Exemptions), Mumbai v. Shree Sai Baba Sansthan Trust – Shirdi (Neutral Citation: 2024:BHC-OS:15682-DB)
Appearance:
Appellant: Advocate Dinesh Gulabani
Respondent: Senior Advocate S. Ganesh, Advocates Ashwin Shete, Srivastav, and Anvi Vasani.
