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Facts
The assessee applied for approval under Section 80G(5)(iii) of the Income Tax Act, 1961. The CIT(E) rejected the application, citing non-filing of documents regarding beneficiary trusts, and that donations were for religious purposes like 'Vedi' construction.
Held
The Tribunal held that no specific direction was issued to the assessee to file evidence of beneficiary trusts' status and objects. It also noted that activities like Yoga and 'Hawan' are part of the Indian spiritual system, and religious activity does not negate benefits if the trust has a composite activity.
Key Issues
Whether rejection of approval under Section 80G(5)(iii) was justified solely on the basis of donations for religious activities and incomplete beneficiary trust documentation, when specific directions were not issued to the assessee.
Sections Cited
80G(5)(iii), 14A, 80G
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES: G : NEW DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: G : NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER Assessment Years: NA Seema and S.K. Jain Foundation, Vs CIT (Exemptions), Mahak Farm, Mandi Road, Delhi. Sultanpur, Delhi – 110 030. PAN: ABHTS3588D (Appellant) (Respondent) Assessee by : Shri Mukesh Chand, Advocate Revenue by : Shri Mahesh Kumar, CIT-DR Date of Hearing : 03.07.2025 Date of Pronouncement : 18.07.2025 ORDER PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 23.09.2024 of the Ld. Commissioner of Income-tax (Exemption), New Delhi, rejecting application for approval u/s 80G(5)(iii) of the Income-tax Act, 1961.
On hearing both the sides, we find that while passing the impugned order, the ld. CIT(E) has observed as follows; “The applicant has filed an application dated 04.03.2024 in Form 10AB for approval u/s 80G(5)((iii) under section code 14A of the Income Tax Act, 1961. The applicant was issued a questionnaire dated 15.04.2024 with a request to furnish certain details / documents / clarifications in support of its claim of approval u/s 80G(5). The case was fixed for compliance on 30.04.2024. In response, the applicant has filed details by way of copy of trust deed, declarations, bank statement, financial for the period from 19.07.2023 to 31.03.2024. It is noted that dissolution clause is not there in the trust deed. Further, after going through the financials submitted, it is found that during the year the trust has not conducted any charitable activity but has only donated Rs.2,11,000/- is total to two other trusts. However, the status/objects of these trust/societies are not provided. The applicant has donated of Rs.2,00,000/- to Shree Mahavir Chatyalaya on account of “construction of Vedi” which is religious in nature. The applicant has also given its projections & proposal for future under which he has planned to spend money for temple construction. Considering all above, the applicant is not found to satisfy conditions for obtaining approval u/s 80G. In light of the above, the application filed in Form 10AB for grant of approval u/s 80G(5)((iii) is hereby rejected.”
Ld. CIT(E) has primarily held that necessary documents were not filed of the beneficiary trusts so the status/objects of these trust/societies are not provided and assistance for construction of “Vedi” is religious in nature. We are of considered view that there is nothing in order to show that any specific direction was issued to assessee to file the evidences of the status/objects of beneficiary trust/societies. At the same time like Yoga, ‘Hawan’ is not something completely a religious activity of any particular religion but very much part of Indian spiritual system of knowledge and practice. Further, Ld. CIT(E) should also have kept in mind that where trust is doing composite 2