The Hindu Business Line : Charity as an inner journey

Can a trust devoted to teaching meditation and yoga be eligible for tax exemption? Yes, ruled the Bombay High Court in the Rajneesh Foundation case.

Tax law confers several benefits on charitable organisations. The essential condition is that they should benefit the community at large. There can be no such thing as a private charitable trust, and an eleemosynary (charitable) element is not essential. The term `charitable trust' embodies objectives such as uplift of poor, education, medical relief, and activities of general public utility. Whether a public trust falls within any of these categories is a matter of debate. Education need not necessarily be of the generally understood classical pattern, that is, of school or college. A trust propagating art through public performances, dramatics, music, etc., would qualify under the educational category. And one set up for the promotion of cricket or other sport, maintenance of public swimming bath or a public recreation ground serves an object for general public utility, as it promotes public health. In this context, can a trust devoted to teaching mediation and yoga be eligible for tax exemption?

Rajneesh Foundation case

This question came up in Rajneesh Foundation 280 ITR 553 (Bombay). Acharaya Rajneesh attained samadhi in 1990. He had established a public charitable trust for teaching and propagating his philosophy. The trust was registered under the Bombay Public Trusts Act. Income was earned by publication of books.

After his demise, the Foundation was trying to project and perpetuate his image. Exemption was claimed on the ground that the primary object of the trust was to spread and impart teaching of the philosophers, thinkers, and scholars, including Rajneesh, for the mental, spiritual, moral and physical betterment of human beings with the object of self-realisation.

Court ruling

Allowing the claim for exemption, the Bombay High Court observed: "The philosophy and teaching of Acharya Rajneesh have become more acceptable to people during the last few years. Admittedly, the main thrust of the respondent is on meditation and nobody can dispute that in Indian meditation has been a very important source for physical, mental and spiritual well-being of human beings... When a large number of people feel that meditation is a great source for physical, mental and spiritual well-being, it must be held to be an activity for the advancement of general public utility."

The Foundation did not claim to provide relief to the poor, education or medical assistance. All that it claimed was that its activities were meant for the advancement of other objects of general public utility and realisation of self-consciousness. The Bombay High Court referred to the Supreme Court's observations with regard to Saibaba of Shiridi, exempting from the levy of sales tax, sale of books containing the message of Saibaba. The Bombay High Court ruled that the Rajneesh Foundation was entitled to be considered a public charitable trust exempt under Section 11 of the Income-Tax Act, 1961.

Incidentally, in this case, the Commissioner of Income-Tax (CIT) had granted registration to the Foundation under Section 12AA of the Act. An order was also passed allowing the benefit of deduction under Section 80G for donations to the Rajeneesh Foundation. If on the basis of the trust deed, the Government could give exemption based on registrations under Sections 12AA and 80G, the court thought the Appellate Tribunal was fully justified in holding that the Foundation was entitled to get exemption under Section 11 and the objects should be considered charitable.

This is a landmark ruling. Courts in India have now accepted the teaching of yoga and meditation as objects worthy of recognition as public charitable purpose.

(The author is a former Chief Commissioner of Income-Tax.)