GURU NANAK MISSION HOSPITAL & EDUCATIONAL TRUST, AMBALA CITY,AMBALA CITY vs. THE CIT (EXEMPTIONS), CHANDIGARH, CHANDIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHANDIGARH VIRTUAL HEARING BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI RAJESH DAMODARLAL SHARMA, JM 1. आयकरअपीलसं. / ITA No.1308/CHANDI/2026 & 2. आयकरअपीलसं. / ITA No.1309/CHANDI/2026 Guru Nanak Mission Hospital & CIT (Exemptions) बनाम/ Educational Trust Room No.1, 5th Floor 430-A, Model Town CR Building, Himalaya Marg Vs. Ambala City, Haryana – 134003 Sector – 17E, Chandigarh – 160017 �ायीलेखासं./जीआइआरसं./PAN/GIR No. AAATG-3024-E (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Sudhir Sehgal (Advocate) – Ld. AR ��थ�कीओरसे/Respondent by : Smt. Jaishree Sharma (CIT) - Ld. DR सुनवाईकीतारीख/Date of Hearing : 06-08-2026 घोषणाकीतारीख /Date of Pronouncement 18-08-2026 : आदेश / O R D E R Rajesh Damodarlal Sharma (Judicial Member) 1. Aforesaid appeals by assessee are connected appeals. First, we take up ITA No.1308/Chandi/2026 which arises out of an order passed by Ld. Commissioner of Income Tax (Exemption), Chandigarh, [CIT(E)] on 29-01-2026 granting registration to the assessee-trust u/s 12AB(1)(b) for AYs 2027-28 to 2031-32. The only grievance of the assessee is that it has been accorded the status of Religious Entity as against the claim of the assessee that it was religious cum charitable

trust. The registry has noted delay of 45 days / 15 days in the appeals, which stand condoned. 2. During hearing, it is the contention of Ld. AR that the assessee is engaged in running schools and hospital which are not, at all, connected with religious activities. It has been stated that the status of the assessee has been accorded as religious entity without confronting specific issues to the assessee. To support, the same, Ld. AR referred to financial statements of the assessee-trust. The Ld. AR also contended that the impugned orders do not identify any expenditure incurred on religious activity. Therefore, the conclusion of Ld. CIT(E) is against the facts and circumstances of the case. The Ld. AR also stated that no effective opportunity of hearing was granted by Ld. CIT(E) before holding the assessee-trust to be a religious entity and therefore, the stated facts could be considered again by Ld. CIT(E). The Ld. CIT-DR opposed any interference in the impugned order. 3. Upon careful consideration of assessee’s paper-book and financial statements, we find substantial force in the argument of Ld. AR and accordingly, inclined to accept the plea of Ld. AR. Apparently the issue that the assessee was a religious entity was nowhere been confronted to the assessee which was in violation of the principles of natural justice. When the financial statements and other documents were duly been furnished by the assessee along with its nature of activities wherein the assessee claimed its status to be a charitable entity, Ld. CIT(E) could not have held the assessee to be religious

entity without confronting specific issues to the assessee. Therefore, we set aside the impugned order for de novo consideration of Ld. CIT(E) in the light of assessee’s financial statements and other documents with a direction to the assessee to plead and prove its case forthwith. The appeal stand allowed for statistical purposes. 4. In ITA No.1309/Chandi/2026, the assessee is aggrieved by denial of approval u/s 80G(5)(ii). The approval has been denied on the ground that assessee’s object clause of Memorandum of Association include religious activities. However, no factual examination of financial statements has been done and the conclusion is not based on actual facts. No doubt, Explanation-3 provides that charitable purpose does not include a purpose which is wholly or substantially wholly of a religious nature. However, sub-section (5B), which has non-obstante clause, deems an institution to continue to satisfy the requirement of Section 80G(5) wherein religious-nature expenditure in a previous year does not exceed five per cent of trust’s total income for that year. No such exercise has been carried out in the impugned order and no such findings have been brought on record. Under these circumstances, we set aside the impugned order and restore this appeal also back to Ld. CIT(E) on similar lines. The appeal stand allowed for statistical purposes.

-Sd- -Sd- (MANOJ KUMAR AGGARWAL) (RAJESH DAMODARLAL SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 18-08-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR – 9A CHANDIGARH