There is good news for the Shri Saibaba Sansthan Trust that manages the famous temple in Shirdi, Maharashtra. The Bombay High Court held that the Trust was eligible for tax exemption on anonymous donations. This is because it is both a religious and charitable trust. According to PTI news, on Tuesday, a division bench of Justices Girish Kulkarni and Somashekhar Sundaresan dismissed an appeal filed by the Income Tax Department, challenging the October 2023 decision of the Income Tax Appellate Tribunal. It said that since the trust is both a charitable and a religious body, it is eligible for income tax exemption on its anonymous donations.
The institution is both a religious and charitable trust
Reportedly, the Bombay High Court agreed with the tribunal and held that the institution is both a religious and a charitable trust and hence any anonymous donation received by such a body would be eligible/entitled to the benefit of tax exemption. The Sri Saibaba Sansthan Trust is the governing and administrative body of the Sri Saibaba Samadhi Temple at Shirdi in the Ahilyanagar district of western Maharashtra and all other temples located on its campus. Under section 115BBC(1) of the Income Tax Act, a charitable institution was liable to pay tax on anonymous donations.
Income Tax Department's claim
The Bombay High Court said that we are of the clear view that the taxpayer (institution) is definitely a religious and charitable trust. Therefore, the taxpayer has correctly and validly claimed the right to tax exemption. According to the Income Tax Department, till 2019, the trust received total donations of more than Rs 400 crore, but only Rs 2.30 crore was spent for religious purposes. While the major expenditure is for educational institutions, hospitals and medical facilities, which shows that it is just a charitable trust, it argued.
The trust received a lot of anonymous donations
Sri Saibaba Sansthan Trust claimed that it has both charitable and religious responsibilities, hence it cannot be said that it is purely a charitable trust. According to the Assessing Officer of the Income Tax Department, between 2015 and 2019, the Trust received a huge amount of money in the form of anonymous donations. The department said that this amount cannot be exempted from tax.
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