SHREE VARDHAMANJAIN TATVA GYAN KENDRA TRUST,CHENNAI vs. ITO, EXEMPTIONS WARD-2, CHENNAI

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ITA 2766/CHNY/2026Status: DisposedITAT Chennai14 August 20267 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that a trust being religious-cum-charitable is not a bar for Section 80G approval, especially considering Section 80G(5B). The CIT(E) was not justified in rejecting the application solely on this ground without proper examination.

What were the facts?

The assessee, a trust, applied for approval under Section 80G of the Income Tax Act. The CIT(E) rejected the application, viewing the trust as a religious-cum-charitable entity ineligible for approval.

What were the issues?

Whether a trust with religious and charitable objects is ineligible for Section 80G approval. Whether the CIT(E) properly examined the trust's dominant objects and activities before rejection.

Which sections of the Income-tax Act were involved?

Section 80G,Section 80G(5B),Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI INTURI RAMA RAO

Hearing: 13.08.2026Pronounced: 14.08.2026

आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Exemption), Chennai dated 30.03.2026, rejecting Form No.10AB filed for seeking approval u/s.80G of the Income Tax Act, 1961 (hereinafter the ‘Act’).

- 2 - ITA No.2766/CHNY/2026 Shree Vardhaman Jain Tatva Gyan Kendran 2. Brief facts of the case are as follows:- The assessee is a trust. It filed an online application in Form No.10AB on 26.09.2025 seeking approval u/s.80G of the Act. During the course of proceedings, the CIT(E) was of the view that the assessee-trust is in the nature of a “religious-cum-charitable” trust and that trusts established for religious or religious-cum-charitable purposes are not eligible for approval u/s.80G(5) of the Act. Accordingly, the CIT(E), vide the impugned order, rejected the assessee’s application for approval u/s.80G of the Act.

3.

Aggrieved, assessee has filed the present appeal before the Tribunal. The Ld. AR submitted that the CIT(E) erred in rejecting the application solely on the ground that the activity of the assessee trust is in the nature of religious-cum-charitable trust. It was contended that the dominant objects of the trust and the activities actually carried on by it are wholly charitable in nature. The Ld. AR submitted that the assessee had earlier been granted approval u/s.80G of the Act under the erstwhile regime and that there had been no change in its objects or activities. The assessee also continues to hold valid registration u/s.12AB of the Act, wherein its charitable nature and genuineness of activities had already been examined and accepted. The Ld. AR submitted that the CIT(E) erred in treating the assessee as a “religious-cum-charitable” institution. The dominant objects of the

- 3 - ITA No.2766/CHNY/2026 Shree Vardhaman Jain Tatva Gyan Kendran assessee trust are educational, cultural and research-oriented and there is no mandate in its Memorandum or Bye-laws for preaching or propagation of Jainism. The study and dissemination of Jain philosophy and its principles constitute dissemination of ethical, philosophical and cultural knowledge and are beneficial to society at large. It was further submitted that the assessee’s libraries, study centres, research activities, publications, lectures, exhibitions, scholarships and educational assistance are open to the public without discrimination based on religion, caste or creed. The membership conditions relate only to the management of the Society and do not restrict the beneficiaries of its activities. The Ld. AR, therefore, submitted that the CIT(E) had not brought any cogent material to establish that the dominant purpose of the assessee was religious and had rejected the application without properly examining the documents and activities. The Ld.AR placed his reliance on the orders of the Ahmedabad Bench of the Tribunal in the case of Shree Sthanakvasi Jain Sangh Jivrajpark vs. CIT(E) in ITA No.372/Ahd/2025 (order dated 08.10.2025) and the Chennai Bench of the Tribunal in the case of St.George Trust vs. CIT(E) in ITA No.1795/CHNY/2024. The Ld.AR accordingly prayed that the rejection of approval u/s.80G of the Act be set aside and the application be allowed.

- 4 - ITA No.2766/CHNY/2026 Shree Vardhaman Jain Tatva Gyan Kendran 4. The Ld.DR supported the order of the CIT(E).

5.

We have heard the rival submissions and perused the material available on record. The sole reason assigned by the CIT(E) for rejecting the assessee's application for approval u/s.80G(5) of the Act is that the activity of the assessee trust is in the nature of religious- cum-charitable trust and, therefore, is not eligible for approval u/s.80G(5) of the Act. The Ld. AR contended that the dominant objects and activities of the assessee-trust are charitable in nature. It was submitted that the dominant objects of the trust are educational, cultural and research-oriented and that its activities are intended for the benefit of the public at large. Merely because certain activities have a nexus with Jain philosophy, the same, by itself, cannot lead to the conclusion that the assessee is established exclusively for religious purposes. The Ld. AR further pointed out that the assessee’s libraries, study centres, research activities, publications, lectures, exhibitions and educational assistance are not confined to any particular religious community. It is also the claim of the assessee that it had earlier been granted approval u/s.80G and that no adverse finding has been recorded by the CIT(E) regarding the genuineness of its activities or application of its funds for non-charitable purposes.

- 5 - ITA No.2766/CHNY/2026 Shree Vardhaman Jain Tatva Gyan Kendran 6. We find that the Hon'ble Bombay High Court in CIT(E) vs. Shree Sai Baba Sansthan Trust, Shirdi reported in (2024) 167 taxmann.com 304 (Bombay) has held that there is no legal bar for a trust to be both religious and charitable and that a narrow interpretation excluding every religious-cum-charitable trust from the ambit of section 80G is not warranted. The Hon'ble High Court has further observed that section 80G(5B) of the Act itself recognizes that an institution may incur expenditure of a religious nature within the prescribed limit and yet continue to be eligible for the benefit of section 80G. The relevant finding of the Hon’ble Bombay High Court reads as follows: “24. At the outset, it needs to be observed that the basis, on which the Assessing Officer proceeded to tax the anonymous donations received by the assessee, is by applying the provisions of Section 80G of the Act which pertains to deduction in respect of donations to certain funds, charitable institutions, etc. It is not in dispute that the assessee is registered for the donors to be benefited u/s.80G qua the donations which would be made to the assessee. Section 80G confers a benefit of deduction being allowed in respect of donations inter alia to charitable institutions. Thus, the assessee by virtue of its establishment/registration as a public trust, which also provides for charitable objects, has obtained registration u/s.80G of the Act. The object of Section 80G is not only to provide a benefit to tax payers in availing deduction of the charity they would make, by offering donations to charitable institutions, but also to enable the charitable trust/entity to implement/carry out their objects of welfare and well being of the society at large. A charitable institution may achieve several objects which are intended for collective benefit of the society, and it is with such purpose charitable institutions receive donations to advance charitable and philanthropic purposes. This has been legislatively recognized in terms of Section 80G of the Act.

25.

In the context of the present proceedings, sub-section (5B) of Section 80G is relevant which provides that notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation 3, an institution or fund which

- 6 - ITA No.2766/CHNY/2026 Shree Vardhaman Jain Tatva Gyan Kendran 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 the previous year shall be deemed to be an institution or fund to which the provisions of Section 80G apply. Thus, implicit in Section 80G is the recognition of a trust which has religious activities. This to the effect that insofar as the religious activities of such trust are concerned, if such trust incurs expenditure during any previous year, of an amount not exceeding five percent of its total income, such institution would be regarded as an institution to which the provisions of Section 80G apply. Sub-section (5B) was inserted by the Finance Act, 1999 with effect from 01 April 2000, since then it has held the field. It is for such reason, it would not be acceptable that Revenue takes a position that Section 80G would exclude religious trust and/or Section 80G applies only to charitable institutions. In any event, in our opinion, such reading of Section 80G that it would exclude religious and charitable entities, would not be the correct reading of the said provision. As fairly stated on behalf of the Revenue, there is no bar for a charitable trust also to be a religious trust. In fact, a trust being both religious or charitable or vise-versa is well-accepted phenomena. There can be many examples of such combination. For such reason, a myopic reading of Section 80G would be wholly impermissible.”

7.

In the light of the above legal position, we are of the considered view that the CIT(E) was not justified in rejecting the assessee's application solely on the basis that the activities of the trust is in the nature of religious-cum-charitable trust, without examining whether its predominant objects and actual activities are charitable in nature and whether the conditions prescribed u/s.80G of the Act are otherwise satisfied. The impugned order does not disclose the actual activities carried on by the assessee or the applicability of section 80G(5B) of the Act. Accordingly, in the interest of justice, we set aside the impugned order and restore the matter to the file of the CIT(E) for

- 7 - ITA No.2766/CHNY/2026 Shree Vardhaman Jain Tatva Gyan Kendran fresh adjudication. The CIT(E) shall examine the objects of the trust, the nature of its activities and the applicability of the provisions of section 80G of the Act, including section 80G(5B) of the Act, in the light of aforesaid judicial pronouncement and thereafter pass a speaking order in accordance with law after affording the assessee a reasonable opportunity of being heard. The assessee shall extend full cooperation and furnish all requisite details in support of its claim. It is ordered accordingly.

8.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 14th August, 2026 at Chennai.

Sd/- Sd/- (इंटूर� रामा राव) (जॉज� जॉज� के) (GEORGE GEORGE K) (INTURI RAMA RAO) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 14th August, 2026 RSR, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Chennai 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.08.17 15:24:54 +05'30'

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