SHREE ADYA KATYAYANI SHAKTI PEETH MANDIR TRUST,DELHI vs. CIT EXEMPTION, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’, NEW DELHI Before Sh. S. Rifaur Rahman, Accountant Member & Sh. Raj Kumar Chauhan, Judicial Member ITA No. 5557/Del/2026 : Asstt. Year: 2026-27 Shree Adya Katyayani Shakti Peeth Vs CIT(Exemptions), Mandir Trust, P.O. Chhatarpur, New Delhi-110002 New Delhi-110074 (APPELLANT) (RESPONDENT) PAN No. AAATP0498F Assessee by: None Revenue by: Sh. Vikram Singh Sharma, CIT-DR Date of Hearing: 22.06.2026 Date of Pronouncement: 18.09.2026 ORDER Per Raj Kumar Chauhan, Judicial Member: The appeal of the assessee is directed against the order dated 10.03.2026 of ld. CIT(Exemption), Delhi wherein the application filed by the assessee/appellant dated 30.09.2025 in Form 10AB for approval u/s 80G of the Income Tax Act 1961 (hereinafter referred to as “the Act”), was rejected on the ground that the applicant is engaged in religious activities and therefore not eligible for approval u/s 80G of the Act.

2 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust sub-section (5) of section 80G of the Income Tax Act, 1961. 2. That the appellant craves leave to add, amend, alter or substitute any or all grounds of appeal before or at the time of hearing.” 3. On the date of hearing, no one appeared on behalf of the assessee.

3 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust expenditure exceeding 5% of its total receipts which attract section 80G(5B) of the Act. Hence, the ld. CIT-DR pleaded for dismissal of the appeal.

4 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust approval u/s 12AB(1)(b) of the Act by the order dated 10.03.2026 for the assessment year 2027-28 to 2031-2032. In column (2), the nature of activities in the said approval is mentioned charitable. Admittedly, the appellant is registered as a charitable institution vide approval granted u/s 12AB order dated 10.03.2026 of the ld. CIT(E), Delhi. Since, section 12AB approval has already been granted by the order of the same date when the approval u/s 80G has been denied, it seems that the ld. CIT(E) for unjustified reasons denied the approval notwithstanding the approval u/s 12AB of the Act of the same authority. In that regard, we may rely upon the case of Hon’ble Gujarat High Court in CIT(E) Vs. Rajkot Jilla Gayatri Parivar Trust (2020) 117 taxmann.com 121 (Guj.) [SLP dismissed by SC in [2020] 117 taxmann.com 122 (SC)] wherein it was held that “the issue is now squarely covered by a decision of the Supreme Court in the case of CIT vs. Lok Sewa Sansthan Samiti Sonebhadra [2019] 105 taxmann.com 203/263 Taxman 495. It is not in dispute that the respondent - assessee stands registered as a Charitable Institution under section 12-A of the Act. In such circumstances, as a natural corollary, the application under section 80G(5) of the Act would also be liable to be allowed.”

5 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust detail and after detailed discussion on all aspects of a case of similar nature has decided in favour of assessee trust by directing the ld. CIT(E) to grant approval in four weeks u/s 80G of the Act. The relevant observations contained in Para 3 to 9 are extracted below as under: “3. Ld. Counsel for the assessee has submitted that without examining the financials of the assessee ld. Prescribed authority has concluded about religious activities being conducted by the assessee while that is not the case. It was submitted that after decision of Upper Ganges Sugar Mills Ltd. Vs. CIT (supra) there has been amendment in the Act, and our attention was drawn to sub-section (5B) of Section 80G inserted by Finance Act, 1994 w.e.f 01.04.1994 which provides that wherein institutions make expenditure in the relevant year, which is of religious nature for an amount not exceeding 5% of its total income in that previous year then, for the previous year, the institution shall be deemed exempted u/s 80G. Ld. Counsel relied decisions in CIT (Exemptions) Vs. Tulshishyam Mandir Society, Junagadh (2026) (6) TMI 832 – Gujarat High Court; and Coordinate Bench decision in Shri 108 Gupti SagarDham Jain Society Vs. CIT (Exemption), Chandigarh vide ITA No.7551/Del/2025 dated 26.05.2026; and Coordinate Bench decision in Shri Baba Balakpuri Ji Charitable Society Vs. ITO Exemption vide ITA No. 5833/Del/2025 order 18.02.2026; Anjuman- E-Himayath-EIslam Vs. CIT, Exemption, Chennai vide ITA No. 3951/Chny/2025 dated 10.04.2026; and Shree ModeshwariDvsthan Society Ahmedabad Vs. CIT (Exemption) vide ITA No. 145/Ahd/2025; and BhatidhamSeva Society Vs. CIT (Exemption) vide ITA No. 33/AHD/2025 dated 08.01.2026; and Sri Guru Nanak Devji Religious And Charitable Society Vs. CIT (Exemptions) vide ITA No. 384/CTK/2018 dated 24.05.2021 to contend that Hon’ble Delhi High Courts and Coordinate Benches have consistently taken a view that if the religious expenditure are within the statutory limit, approval u/s 80G of the Act cannot be denied. 3.1 Ld. DR vehemently supported the impugned order of ld. CIT(E). 4. Appreciating the contention and after perusal of material on record we are of the considered view that ld. Prescribed authority has nowhere analysed financials of the assessee to draw inference with regard to the

6 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust activities of the assessee being religious in nature and only on the basis of objectives in the memorandum of association such a conclusion has been drawn. In this regard, we are of the considered view that memorandum of association containing articles with regard to objects and scope of activities are generally framed keeping in mind the long term perspective of the Society and such institutions try to include and extend their activities to all spheres of charitable activities and also for the reason to avoid seeking amendments in the objectives. 4.1 Thus, without actually indicating as to what activities of religious nature have been taken up by institution, merely on the basis of reference to some objectives, mentioned in the objective documents, which may be religious too, the denial of approval is not justified. More so, when it is the case of renewal of approval and wherein it is merely necessary to examine the financials of immediately previous years to allege expenditure were made on religious activities. 5. In the case of assessee our attention has been drawn to the total computation of income and financials and reports for year ending 31.03.2021 to 31.03.2025 available at page No. 40-101 of the paper book and the same show that actually no expenditure on alleged religious activities has been incurred. Rather, it is established that the Society maintained two set of financials, one for Baba Banda Singh Bahadur Public School and another for remaining activities of the Society and the financials of the applicant Society do not show any expenditure was made for religious purposes. The decisions relied by the ld. Counsel with regard to benefit of sub-section (5B) of Section 80G of the Act certainly deserves to be relied by us. 6. Further, having perused the Bye Laws of assessee made available at page 14-39 of the PB and which are also reproduced in the impugned order, we are of the considered view that assessee sufficiently establishes that there is actually no case of alleged religious activities. The same reflect that the primary object is to enhance cohesion between different communities, to work for establishing religious sentiment in Indian children and to promote their allegiance towards Indian culture. Further they have objective of running hospital while keeping itself away from all political activities in every manner. Thus, without doubt primary objectives of the society are charitable in nature and only because it refers to construction or maintenance of Mandir & Gurudwara or other places of pilgrimage does not make its activity religious in nature as there is nothing that

7 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust while constructing these places of worship or managing these places of worship or places of pilgrimage there is any indication of discrimination of the beneficiaries on the basis of their personal religion. More so when places of worship of different faiths are to be run along with educational institutions an medical facilities, there cannot be justification to allege that assessee before us is engaged in religious activity. 7. We are of the considered view that ld. Tax authorities while examining the scope of religious activities in context to grant of benefit of approval u/s 80G(5)(ii) of the Act should be circumspect to the predominant and actual intention of the applicant institution, as religions have in their foundation a philosophy of larger benefit to all forms of life and character building of individuals. Thus every religious activity cannot be looked with culpability to deny approval. Religion is a way of life intrinsically linked to the societal integration and peace and also dignity of an individual. It is only when there is an indication that intention of a religious activity is to segregate and benefit people on the basis of caste, creed, or their way of life or religious sentiment, or to propagate particular religious belief to exclusion of other or proselytisation then certainly the objective of establishing or maintaining any religious institution or place of worship and pilgimages, will make said religious activity, a prohibited activity, to deny approval. The activity, though emanating out of religious order cannot be alleged to be religious activity, while the colour actually is secular. A distinction must always be made between a practice which is religious and a practice in regard to a matter which is purely secular and has no element of religiosity associated with it. 8. In fact, to our mind, since the Act does not define ‘religious activity’, thus while examining the application of approval u/s 80G, to satisfy if the assessee is engaged or not, in religious activity, the Essential Religious Practices (ERP) test, doctrine settled by the Hon’ble Supreme Court of India in 1954 during the Shirur Mutt case AIR 1954 SC 282, to decide which religious rituals and activities receive protection under Articles 25 and 26 of the Constitution, should broadly be the parameters to examine if the said activity is religious, so as to deny the approval of benefit of section 80G of the Act. It is only in case of expenses on ERP are made, then that should be examined to establish that the predominant objective is religious activity. Activities like establishing and running hospital, educational institutions, places of rehabilitation of bovine or other animals, Dharamshala, maintaining amenities at religious places of worship or pilgrimages,

8 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust and such like public utility activities, if are taken up by any institution, trust or society, which also serves any place of worship, by performing essential practices of a religion, then what is material is to examine what is the predominant object and proportionality of expenditures. 9. In the light of aforesaid, discussion made by us, we find that ld. CIT(E) has given a very narrow interpretation to scope of Section 80G, and has thus erroneously dismissed the application of the assessee. We thus, allow the appeal of the assessee. The ld. CIT(E) is directed to grant the approval, in a period of 4 weeks from receipt of this order.” 9. Regarding the exceeding of expenditure more than 5% on the religious activity, we have noticed that the similar issue was before the co-ordinate bench in the case of Om Welfare Society Vs. CIT(E) in ITA Nos. 8278 & 8279/Del./2025 order dated 06.08.2026 where one of us i.e. Hon’ble A.M. has delivered the order and has discussed that the ld. CIT(E) cannot assume the character of Assessing Officer for evaluating the relevant expenditure exceeding, if any, because it is essentially an exercise which can be looked into and carried out during the assessment proceedings by the Assessing Officer. Para 10 & 11 of the said order are relevant and extracted below as under:

“10. Further, the Hon’ble Punjab & Haryana High Court in the case of Yadvindra Public School Association (supra) had relied on the decision of Hon’ble Supreme Court in the case of Ananda Social & Educational Trust case. We observed that the similar view was expressed by the various courts that at the time of granting registration, ld. CIT(E) has to satisfy himself on the objects of the trust and genuineness of the activities, he cannot extend himself to the shoes of the Assessing Officer. At this stage if any activities carried on by an institution which is charitable in nature and its activities are genuine,

9 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust unless there is any deviation which are not considered to be charitable, the relevant expenditure to the extent of non-charitable activities, the same can be disallowed at assessment stage. In the present case, looking at the substantial activities carried on by the assessee to impart the education merely on certain deviation of funds to other institution which are interest bearing funds, that itself cannot be the reason to reject the registration. The competent authority has to verify only charitable objects and its activities in terms of case objects to grant registration and should not indulge in finding reasons to reject the applications for grant of registration. Therefore, in our considered view the assessee has been granted registration over the years and it deserves to be granted registration therefore, we direct the ld. CIT(E) to grant registration and if there is any deviation, the Assessing Officer may be directed to do the needful at the assessment stage. Therefore, we are inclined to direct accordingly. 11. The other appeal relates to registration u/s 80G which were denied for the reasons that the application for registration u/s 12AB was denied. Since, we are directed to grant the registration u/s 12AB, we direct the ld. CIT(E) to evaluate the grant of registration u/s 80G as per law. In the result, the appeal filed by the assessee is allowed as per above terms.” 10. Respectfully following the judgments of the co-ordinate Bench in ITA No. 1835/Del/2026 and ITA Nos. 8278 & 8279/Del/2025 referred (supra), we have noticed that the facts and circumstances are identical before us in the appeal wherein the denial of approval u/s 80G of the Act is simply on the ground that the applicant trust has incurred expenditure beyond 5% under the head “sewadar expenses”. We have further noticed that the ld. CIT(E) in para 4 of the impugned order has noted “further applicant also submitted that expenditure under the head “sewadar expenses” is only a traditional term used by trust for its staff members reflecting

10 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust the spirit of “sewa” as per the trust’s philosophy.” In para 6 of the impugned order, ld. CIT(E) has noted that the main religious objects of the trust are to maintain and upkeep existing temples and to maintain various temples and maintain the dignity of the entities, and therefore proceeded to hold that the applicant was engaged in religious activities and thus not eligible for approval u/s 80G of the Act. In our opinion, the said observation of ld. CIT(E) and rejection of the approval u/s 80G of the Act are misplaced and misconceived and in that regard we rely upon para 7 of the ld. co-ordinate bench in ITA No. 1835/Del/2026 (supra) wherein it was held that “thus every religious activity cannot be looked with culpability to deny the approval. Religion is a way of life intrinsically linked to the societal integration and peace and also dignity of an individual. It is only when there is an indication that intention of religious activities to segregate and benefit people on the basis of caste, creed or their way of life or religious sentiment or to propagate particular religious belief to the exclusion of others or proselytisation, then certainly the objective of establishing or maintaining any religious institution or place of worship and pilgrimages, will make said religious activity, a prohibited activity, to deny approval”. While respectfully following the observation of the ld. co-ordinate bench in the above order, we are of the considered opinion that the ld. CIT(E) has

11 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust unjustifiably denied the approval u/s 80G of the Act, notwithstanding that the approval u/s 12AB on the similar objective of the trust was granted by the same authority.

12 ITA No. 5557/Del/2026 Shree Adya Katyayani Shakti Peeth Mandir Trust 13. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 18/09/2026. Sd/- Sd/- (S. Rifaur Rahman) (Raj Kumar Chauhan) Accountant Member Judicial Member Dated: 18/09/2026 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR