Rajesh Balia, J.
1. We have heard the learned counsel for the parties.
2. The petitioner is aggrieved with the order dt. 13th Oct., 1998 passed by the CIT, Jodhpur under Section 80G(5) of the IT Act, 1961 holding that some of the clauses of the trust reveals that these clauses pertain to wholly religious purposes and, therefore, in view of Expln. 3 to Section 80G, the trust does not fall within the ambit of Section 80G(2)(iv) r/w Section 80G(5) so as to permit special deduction to donors to the said trust.
3. The learned counsel for the petitioner urged that prior to this order, a trust was recognised as a trust wholly and substantially for charitable purposes, notwithstanding the purposes referred to in the order of the CIT. A very insignificant amount of its income has been spent on the religious purposes. The trust may be deemed eligible for deduction under Section 80G(5), for its donors. Learned counsel for the petitioner placed reliance on the decision of Supreme Court in Addl. CFT v. Surat Art Silk Cloth Manufacturers Association : [1980]121ITR1(SC) , wherein the Hon'ble apex Court has said that :
'If the primary or dominant purpose of the trust was charitable, another object which by itself may not be charitable but which was merely ancillary or incidental to the primary or dominant purpose would not prevent the trust or the institution from being a valid charity.'
The aforesaid judgment was given in the context of consisting definition of charitable purposes in Section 2(15) of IT Act, 1961.
4. The Expln. 3 to Section 80G reads as under:
'Explanation 3 : In this section, 'charitable purpose' does not include any purpose the whole or substantially the whole of which is of a religious nature.'
The Supreme Court has construed the aforesaid Provision in Upper Ganges Sugar Mills Ltd. and Ors. v. CIT : [1997]227ITR578(SC) in an appeal against the judgment of Calcutta High Court in CIT v. Upper Ganges Sugar Mills Ltd. : [1985]154ITR308(Cal) which has answered in negative and in favour of the Revenue, the following question on a reference to it under Section 256 of the IT Act, 1961 :
'Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled to the relief under Section 80G on the donations paid to Vishwa Mangal Trust?'
The trust amongst other numerous of its charitable purposes, had one of its object as under :
'Clause 2(h) : to establish, maintain and to grant and/or aid to public places of worship and prayer halls.'
This was construed by the Calcutta High Court to be wholly religious purpose notwithstanding that the purpose was not restricted in its expense to particular religion or to a sect of particular religion, but was meant for all the religion in the world, and it was held that donation to such trust are not entitled to specific deduction under Section 80G.
5. Construing the Expln. 3 to Section 80G and considering the aforesaid decision of Supreme Court in Surat Art Silk case (supra), the Supreme Court said as under:
'Section 80G applies to donations to any institution or fund established in India 'for a charitable purpose'. 'Charitable purpose, for the purpose of the section, does not include any purpose the whole or substantially the whole of which is of a religious nature'. Explanation 3, which uses this phraseology, take note of the fact that an institution or fund established for a charitable purpose may have a number of objects. If any of these objects is wholly, or substantially wholly, or a religious character, the Institution or fund falls outside the scope of Section 80G and a donation to it does not secure the advantage of the deduction that it gives.'
After referring to the decision in Surat Art Silk Cloth Manufacturers Association (supra), the Supreme Court has further said and reiterated as under :
'Section 80G sets out the deductions to be made, in accordance with and subject to its provisions, in computing the total income of an assessee in respect of donations to certain funds, charitable institutions, etc. It applies, by reason of Sub-section (5) thereof, to any other fund or any institution to which the Section applies [Sub-section 2(a)(iv)] if it is established in India 'for a charitable purpose' and fulfils the condition, inter alia, that it 'is not expressed to be for the benefit of any particular religious community or caste'. Explanation. 3 states, In this Section, 'charitable purpose' does not include any purpose the whole or substantially the whole of which is of a religious nature'.'
6. In view of the aforesaid unequivocal declaration by the Supreme Court that for the purpose of applying Expln. 3, one has to read each and every object and not to consider the trust deed as a whole, there is no room to interfere in the conclusion reached by the CIT. The CIT has quoted object items No. l, 2, 3, 4 and 5 and Sub-clause 4 of other objects and also preamble of the trust which goes to show that the petitioner-trust has its many objects which are wholly and substantially religious, therefore, the mere fact that insignificant amount has been spent on non-religious charity, does not entitle the donors to claim deduction under Section 80G to it for the assessment period under question.
7. However, before parting with the case, we may notice that since the judgment was delivered in Upper Ganges Sugar Mills Ltd. (supra), the Parliament has intervened and inserted Sub-section (5B) in Section 80G w.e.f., 1st April, 2000, which reads as under:
'(5B) Notwithstanding anything contained in clause (ii) of Sub-section (5) and Expln. 3 an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply.'
8. The aforesaid provisions is a non obstante clause and overrides Expln. 3 and declares that to the extent any institution or fund incurs not exceeding five per cent of its total income for religious purpose, it does fall within the ambit of Section 80G and it shall be deemed to be a institution to which Section 80G apply. To such institution restriction of Expln. 3 will not attract. Thus, the position w.e.f., 1st April, 2000 would be that notwithstanding one or more clauses of the trust deed being wholly or substantially religious, if the income-expenditure ratio in respect of expenses incurred on such purposes falls within the ambit of Sub-section (5B), it shall still be treated to be a institution to which provisions of Section 80G would apply and donations to which would qualify for deduction.
9. Since, this Petition relates to the asst. yrs. 1994-95 to 1997-98 before the insertion of Sub-section (5B) in Section 80G w.e.f, 1st April, 2000 and it does not have retrospective effect, the petitioner is not entitled to any relief for the assessment years in question.
10. This Petition fails and is hereby dismissed.
11. No Orders as to costs.