Charitable and religious trust – Anonymous donations – Special rate of tax – Section 115BBC – A. Y. 2009-10 – Exception – Religious trust – Overall activities of trust to be seen – Charitable activity part of religious activity – Assessee is a public religious trust – Special rate not attracted

The assessee was a public religious trust. For the A. Y. 2009-10 the assessee had received anonymus donations to the extent of Rs. 27,25,306/-. The Assessing Officer applied the provisions of section 115BBC of the Incometax Act, 1961 and levied tax at the special rate. The Tribunal held that the Revenue had incorrectly applied section 115BBC to the facts of the assessee’s case.

On appeal by the Revenue, the Delhi High Court upheld the decision of the Tribunal and held as under:
“i) T he question of receipt of anonymus donations could not be addressed within the narrow scope of the specific wordings of some of the clauses of the trust deed but in the overall context of the actual activities in which the trust was involved in including imparting spiritual education to persons of all casts and religions, organizing samagams, distribution of free medicine and cloths to the needy and destitute, provision of free ambulance service for needy and destitute patients and so on.

ii) What can constitute religious activity in the context of Hindu religion need not be confined to the activities incidental to a place of worship like a temple. A Hindu religious institution like the assessee is also engaged in charitable activities which were very much part of the religious activity. In carrying on charitable activities along with organizing of spiritual lectures, the assessee by no means ceased to be religious institution. The activities described by the assessee as having been undertaken by it during the assessment year in question could be included in the broad conspectus of Hindu religious activity when viewed in the context of objects of the trust and its activities in general.

iii) Thus, the Tribunal was justified in coming to the conclusion that for the purpose of section 115BBC(2)(a) anonymus donations received by the assessee would qualify for deduction and it can not be included in its assessable income.”