Addl. Commissioner of Income Tax vs Reliance Motor Co. Pvt. Ltd.

Ismail, J.—At the instance of the Additional Commissioner of Income Tax, Madras, the Income Tax Appellate Tribunal, Madras Bench, u/s

256(1) of the I.T. Act, 1961, has referred the following questions for the opinion of this court:

(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that S. Rm. M. CT. M. Tiruppani

Trust fulfills the condition laid down in Section 88(5)(iii) for the assessment year 1967-68 and that the donations paid by the assessee to it rank for

rebate u/s 88?

(2) Whether, oh the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that S. Rm. M. CT. M. Tiruppani Trust

fulfilled the condition laid down in Section 80G(5)(iii) for the assessment year 1968-69 and that the donations paid by the assessee to it rank for

deduction u/s 80G ? "" .

Though the questions are two in number and deal with two assessment years, it is the common case of both sides that the point is oiie because

Section 88(5)(iii) has been replaced by Section 80G(5)(iii) by the Finance (No. 2) Act of 1967. Section 80G(5)(iii) states:

(iii) the institution or fund is not expressed to be for the benefit of any particular religious community or caste.

There is an Expln, 3 to the entire section under which the expression "" charitable purpose"" occurring in the section does not include any purpose,

the whole or substantially the whole of which is of a religious nature.

In this case, for the year 1967-68, the assessee had made a donation of Rs. 2,500 to the Tiruppani Trust and in the assessment year 1968-69, it

had made a donation of Rs. 1,500. The question that came to be considered by the Tribunal was whether the assessee was entitled to rebate on

these donations u/s 88 for the former year, and u/s 80G for the latter year. The Tribunal states in para. 4 of its order that Clause 3 of the trust deed

pertaining to the Tiruppani Trust provided that the trustees in their discretion can expend the income of the trust for repairing or renovating old

Hindu temples or establish and maintain pasumadam and nandavanam for the use of Hindu temples, vedic or sastric schools. The Tribunal holds

that it was difficult to perceive any nexus between repairing or renovating old Hindu temples and the benefit which any particular religious

community or caste may derive as a result of such repairing or renovating old Hindu temples or establishing and maintaining pasumadam and

nandavanam, etc., need not necessarily result in any benefit to any particular religious community. Mr. J. Jayaraman, the learned counsel for the

revenue contends that this reasoning of the Tribunal, on the face of it, is erroneous because the repairing and renovation of old Hindu temples will

be exclusively for the benefit of the Hindu community and consequently it is an exclusive benefit to a particular religious community and, therefore,

the donations will not merit the rebate in view of the provisions contained in Section 80(G)(5)(iii) of the I.T. Act, 1961. We do not propose to

express any opinion on this argument in view of the course which we propose to adopt.

The Tribunal has not annexed a copy of the trust deed which constituted the Tiruppani Trust in question to the statement of the case ; nor has it

referred to the other objects of the trust. Before us, copies of the trust deed were produced by both sides and in those copies, other objects which

are not for the benefit of any particular religious community or caste, also find a place. It is not disputed before us that the question has to be

decided having regard to all the terms of the trust deed including all the objects for which the trust was created in view of the provisions contained

in Section 80G(5)(iii) read with Expln. 3 thereto. In view of the failure on the part of the Tribunal to consider the entire trust deed it has become

impossible for us to answer the questions referred to this court one way or the other. Therefore, leaving the Tribunal to go into the entire

controversy again so far as it has got a bearing on Section 80G(5)(iii), we return the reference without answering the questions referred to this

court. No order as to costs.