SHRI BHAVNATH CHARITABLE TRUST MONPAR,BHAVNAGAR vs. THE CIT(EXEMPTION), AHMEDABAD

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ITA 2059/AHD/2025Status: DisposedITAT Ahmedabad29 May 20263 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal observed that the CIT(Exemption) did not examine whether the religious expenditure exceeded the 5% limit. Therefore, the matter was remanded to the CIT(Exemption) to verify this specific aspect.

What were the facts?

The assessee trust applied for registration under Section 80G(5). The CIT(Exemption) rejected the application, stating the trust's objects were not purely charitable. The assessee argued that expenditure on religious activities up to 5% of total income is permissible.

What were the issues?

Whether the rejection of registration under Section 80G was justified without verifying if religious expenditure exceeded the permissible limit of 5% of total income.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE

For Appellant: Shri Mohit Balani, AR
For Respondent: Shri Vijay Kumar Singh, CIT. DR
Hearing: 30.04.2026Pronounced: 29.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No.2059/Ahd/2025 (Assessment Year: N.A) Shri Bhavnath Charitable Trust The Commissioner of Vs. Monpar, Income Tax(Exemption), Via Thaliya Monpar Mahuva, Ahmedabad. Bhavnagar-364145 [PAN :ABGTS7847 A] (Appellant) .. (Respondent) Appellant by : Shri Mohit Balani, AR Respondent by: Shri Vijay Kumar Singh, CIT. DR Date of Hearing 30.04.2026 Date of Pronouncement 29.05.2026 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER:-

Delay Condoned This appeal is filed by the Assessee against the appellate order dated 27.03.2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad, relating to the Assessment Year N.A.

2.

The assessee has raised the following grounds of appeal:

1.

Learned CIT(E) has erred in law and on the facts of the case in passing the impugned order, rejecting the registration u/s.80G of the Act. 2. Learned CIT(A) has erred in law and on the facts of the cae in passing the order u/s.80G of the Act in gross violation of principle of natural justice.

ITA No. 2059/Ahd/2025 Asst. Year : N.A - 2–

3.

Your Appellant reserves the right to add, alter, modify or delete any ground of appeal.

3.

The assessee Trust filed an application in Form 10AB seeking final approval under Section 80G(5). The CIT(Exemption) rejected the application on the ground that the Trust’s objects are not purely charitable in nature. The assessee-trust failed to submit substantial documentary evidence regarding activities of the trust.

4.

Aggrieved by the said order, the assessee is in appeal before the Tribunal.

5.

Before us, the learned counsel for the assessee submitted the Section 80G(5B) of the Act specifically provides that where a trust incurs expenditure of a religious nature not exceeding 5% of its total income during the previous year, such trust shall still be deemed to be an institution to which the provisions of Section 80G apply.

6.

We have heard the rival submissions and perused the material available on record. In the present case, we observe that the learned CIT(Exemption) rejected the application solely on the ground that the objects of the Trust are religious in nature. However, the learned CIT(Exemption) has not recorded any specific finding as to whether the expenditure incurred by the assessee towards religious activities exceeds 5% of the total income, as contemplated under Section 80G(5B) of the Act. As per the statute, a trust is permitted to incur expenditure up to 5% of its total income for religious purposes. Therefore, the relevant aspect to be examined was whether the

ITA No. 2059/Ahd/2025 Asst. Year : N.A - 3– assessee had exceeded the statutory limit of 5% on religious expenses, as stipulated under the provisions of the Act. Having considered the facts on record, we are of the view that the interest of justice would be served by remanding the matter to the learned CIT(Exemption) for the limited purpose of examining whether the religious expenditure incurred by the assessee-trust exceeds the prescribed limit of 5% and accordingly reconsider the application of the assessee in accordance with law. The assessee is directed to comply with the notices issued by the authorities and shall not seek unnecessary adjournments.

7.

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

The order is pronounced in the open Court on 29.05.2026.

Sd/- Sd/- (DR. B.R.R. KUMAR) (SUCHITRA KAMBLE) VICE-PRESIDENT JUDICIAL MEMBER (True Copy (True Copy)) (True Copy) Ahmedabad; Dated 29.05.2026 MV आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant ��थ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy

सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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