VISWAJAYAM FOUNDATION,CHENNAI vs. CIT EXEMPTIONS, CHENNAI

Aggrieved, assessee has filed the present appeal before the Tribunal. Before us, the assessee trust has filed a paper-book enclosing therein the financials of the trust and the case laws relied on. The Ld. AR submitted that the CIT(E) erred in rejecting the application solely on the ground that the assessee was a religious or 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 trust has been engaged in genuine charitable activities since 2013, including providing sanitation and hygiene care services in Government Hospitals, particularly in the Hematology Ward/BMT Ward at the Institute of Child Health Hospital, Egmore, Chennai, besides undertaking scholarship programmes,

The Ld.DR supported the order of the CIT(E).

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 assessee is a religious-cum-charitable trust and, therefore, is not eligible for approval u/s.80G(5) of the Act. From the material placed on record, it is seen that the assessee has contended that its dominant objects and activities are charitable in nature, comprising medical relief, sanitation and hygiene services in Government Hospitals, scholarship programmes, annadanam and other welfare activities. 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

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

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 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.”

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 trust is described as a 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 any examination of the trust deed,

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