Exemption under s 80G

The assessee filed an application in Form No.10G seeking approval u/s 80G of the Act on the ground that it is a trust established by way of a trust deed for the purpose of propagating Sufism. The trust has been granted registration u/s 12(A) as a “Religious Trust” The AO, after going through the provision of the trust deed, held that the objects and the activities of the trust are substantially religious in nature and therefore the assessee does not meet the condition laid out in s 80G(5) and specifically s 80G(5)(ii), s 80G(5)(iii) and s 80G(5B), and rejected the application for recognition under s 80G. The Tribunal upheld the order of the AO. Being aggrieved, the assessee has filed the present appeal.

The issue is whether the trust preaching Sufism, a part of the Islam religion, is entitled to claim benefits under s 80G as a charitable organisation.

Sufism is a part of Islam. Probably, it is a wing propagating Islam. In the memorandum of the Trust Deed, the aims and objects of the trust, Sufism has been defined as one, which teaches humanism, love, brotherhood and oneness and believes in creating a world citizenship through “Tauheed”. It is further stated that Sufism is a way of life to achieve perfection in manners, cultivate and culture of the mind and heart with purity of thought and good behaviour, through possession of all virtues and negation of all vices by a process of self-annihilation, self-realisation, self-sacrifice and surrender of will before the supreme will of almighty Allah. Merely because the said document contains the aspects of culture, social and non-political organisation, it will not come under the category of Charitable Institution. The contents of the said document make it very clear that the whole object is to spread and preach Islam, a religion. Therefore, the authorities were justified in declining to grant recognition. There is a specific bar for granting such an exemption to such a religious trust. The orders passed by the authorities are legal and valid and do not call for any interference.

Trust preaching Sufism is not entitled to claim benefits under s 80G as a charitable organisation as held by KarHC in International Sufi Centre v DIT (Exemptions) In favour of: The Revenue; ITA No. 436 of 2010

Decided on: 25 January 2011