GURMAT PARCHAR TRUST,HIMACHAL PRADESH vs. CIT(E) WARD, SOLAN, HIMACHAL PRADESH

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ITA 597/CHANDI/2026Status: DisposedITAT Chandigarh12 August 2026AY 2027-283 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(E) did not conduct a factual examination of the financial statements and that the conclusion was not based on actual facts. The Tribunal noted that Section 80G(5B) allows for religious expenditure up to 5% of total income, a consideration absent in the impugned order. Therefore, the order was set aside for de novo consideration.

What were the facts?

The assessee, Gurmat Prachar Trust, filed an application seeking approval under Section 80G(5)(ii). The CIT(E) rejected the application, opining that the trust was established for religious purposes based on its aims and Explanation 3 to Section 80G. The assessee appealed this rejection.

What were the issues?

Whether the CIT(E) properly considered the provisions of Section 80G(5B) regarding the percentage of religious expenditure when rejecting the approval application for the trust.

Which sections of the Income-tax Act were involved?

Section 80G(5)(ii),Section 80G(5B)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI RAJESH DAMODARLAL SHARMA, JM

आदेश / O R D E R RAJESH DAMODARLAL SHARMA (Judicial Member) 1. Aggrieved by rejection of an application as filed by the assessee seeking approval u/s 80(5)(ii) vide impugned order dated 20.01.2026 of Ld. Commissioner of Income Tax (Exemption), Chandigarh, [CIT(E)], the assessee is in further appeal before us. 2. Upon perusal of impugned order, it could be seen that Ld. CIT(E) has quoted the aims of the trust and invoked Explanation 3 to form an opinion that the assessee was established for religious purpose.

Accordingly, the approval was denied. Aggrieved, the assessee in further appeal before us. 3. Upon careful consideration, we find that no factual examination of financial statements has been done by Ld. CIT(E) and the aforesaid 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. Apparently, the said issue was not confronted to the assessee. On these facts, we set aside the impugned order and restore the appeal back to Ld. CIT(E) for de novo consideration of assessee’s application in the light of our above observations. 4. The appeal stand allowed for statistical purposes. Order pronounced on 13th August, 2026

-Sd- -Sd- (MANOJ KUMAR AGGARWAL) (RAJESH DAMODARLAL SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER AS Dated: 13-08-2026

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

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ITAT CHANDIGARH

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