The Income Tax Appeals Tribunal (ITAT) has authorized contributions made to the Shiromoni Gurdwara Parbandhak Committee (SGPC) to be exempt from income tax, as its activities are not limited to a religion in particular.
According to the court, philanthropic or charitable work cannot continue without the contribution of members of the community / society. The Sikh Rehat Maryada (the code of conduct and conventions for Sikhism) also recommends donating 10 percent of one’s income to charity. The basic concept of charity is to do so without revealing one’s identity and without knowing who would benefit from it.
“Analyzing from all angles, in our opinion, the appraised is entitled to benefit from section 80G (5) (iii) of the Income Tax Act, 1961, and it would be wrong to allege that the SGPC was formed for the benefit of a particular religion ”, declared the court in its order of August 16, while authorizing the registration as from the date of the request. She further noted that the total expenditure incurred for religious activities was less than 5%.
According to the SGPC website, it is called the “Mini Parliament” of the Sikhs and was established under the Sikh Gurdwaras Law of 1925. It manages 83 historic gurdwaras and 200 more in the states of Punjab, Haryana , Himachal Pradesh and Chandigarh. It also manages, through trusts, more than 100 educational institutions in addition to carrying out various types of charitable work.
Section 80G of the Income Tax Act allows a deduction for donations to certain funds and charitable institutions. To be eligible for benefits under the section, the institution or fund must be established in India for charitable purposes. However, if the institution or fund is declared to be for the benefit of a particular religious community or caste, then the deduction will not be available.
The SGPC moved the ITAT after the Income Tax Commissioner (CIT) rejected an application filed under section 80G. While rejecting the request, the CIT said: “The primary objective of the SGPC is the management and administration of the Gurdwaras, that is, purely religious affairs. Therefore, the dominant object of the SGPC is religious in nature. The institution is expressly established for the benefit of the Sikh religious community. The order also mentioned that the granting of the deduction does not comply with the provisions of Article 80G. However, the court disagreed with these arguments.
“We must keep in mind the distinction between the management of Gurudwara property, income and endowment, and the performance of religious duties / ceremonial business by the Committee of Gurudwara,” he said.
He added that the functioning of schools, cancer hospitals, general hospitals, foster homes, langar (community kitchen), flood relief camps and pandemic relief camps are for the benefit of all communities / religions. He also noted that the teaching, administrative and other staff of the institutions run by the assessor had obtained employment on the basis of their professional qualification, regardless of religion, caste, creed, color, sex, race, etc. Admissions to educational institutions are also given on merit and not on the basis of religion, caste, creed, color, sex, race, etc., he said. note.