Shirdi Saibaba Sansthan: Tax Exemption on Anonymous Donations - Bombay HC

Mumbai, Oct 8 (PTI) The Bombay High Court on Tuesday held that the Shri Saibaba Sansthan Trust, which administers the famous temple at Shirdi in Maharashtra, was eligible for tax exemption on anonymous donations as it was both a religious and charitable trust.
A division bench of Justices Girish Kulkarni and Somasekhar Sunderesan dismissed an appeal filed by the Income Tax department challenging an October 2023 decision of an I-Tax Appellate Tribunal (ITAT), which held that since the trust is both a charitable and religious body, it is eligible for exemption from income tax on its anonymous donations.
The HC concurred with the tribunal and noted the Sanstha was both a religious and charitable trust and hence any anonymous donation received by such a body would be eligible/entitled to the benefit of an exemption from tax.
The Sansthan is the governing and administrative body of the Shree Saibaba's Samadhi Temple and all others temples on its premises at Shirdi in Ahilyanagar district of western Maharashtra.
Under Section 115BBC(1) of the Income Tax Act, a charitable institution was liable to pay tax on anonymous donations.
"We are of the clear opinion that the assessee (Sanstha) certainly is a religious and charitable trust. Hence, the assessee rightly and legitimately claimed an entitlement for tax exemption," the HC observed.
As per the department, till 2019, the trust received overall donations of more than Rs 400 crore, but only Rs 2.30 crore was spent for religious purposes.
Whereas major expenses are for educational institutions, hospitals and medical facilities, which show it is only a charitable trust, it argued.
The Sansthan claimed it had both charitable and religious obligations, hence it cannot be said that it is purely a charitable trust.
As per the assessing officer of the IT department, between 2015 and 2019, the trust received huge amounts as anonymous donations. This amount cannot be exempted from tax, the department noted.