SHRI RADHE KRISHNA SEWA SAMITI,DISTRICT MANSA vs. DCIT/ACIT CIRCLE I, BTD, BATHINDA

ITA 898/ASR/2025Status: DisposedITAT Amritsar31 August 2026AY 2025-268 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the rejection of the application for approval under Section 80G(5) by the CIT(E) was not justified. The Tribunal found that the assessee holds a valid 12AB registration as 'Charitable' and its audited financials show NIL expenditure on religious activities. The society is wholly engaged in educational activities, which are charitable under Section 2(15). The expenditures are related to running educational institutions. The dominant objects of the MOA are social welfare and educational development. The presence of a religious clause in the MOA was considered a 'dormant clause' with no actual spending. The Tribunal noted that Section 80G(5B) permits up to 5% expenditure on religious purposes without losing eligibility, and in this case, the expenditure was NIL. Therefore, there was no cause for apprehension of misuse. The Tribunal concluded that there was a non-application of mind by the CIT(E) to the facts on record and directed the CIT(E) to grant the approval under Section 80G(5). The appeal in ITA 898/ASR/2025 was allowed. The second appeal, ITA 952/ASR/2025, was dismissed as infructuous because it dealt with the same issue and was filed after the first appeal was decided in favor of the assessee.

What were the facts?

The assessee, Shri Radhe Krishna Sewa Samiti, filed an application for approval under Section 80G(5)(iv)(B) of the Income Tax Act, 1961 (the Act) on March 30, 2025. The Commissioner of Income Tax (Exemption), Chandigarh, rejected this application on September 23, 2025, citing that the assessee was engaged in religious activities, which are not considered charitable purposes under Section 80G(5). The assessee society is registered under the Societies Registration Act, 1860, and is engaged in running schools and colleges. It had previously received provisional approval under Section 80G(5)(iv) and final registration under Section 12AB. The dispute centers on the CIT(E)'s interpretation of a clause in the assessee's Memorandum of Association (MOA) and the actual activities undertaken. An earlier appeal, ITA No. 898/ASR/2025, was filed against the rejection of the application for AY 2025-26.

What were the issues?

1. Whether the rejection of the application for approval under Section 80G(5)(iv)(B) of the Act by the CIT(E) was justified, solely based on a clause in the Memorandum of Association (MOA) that mentioned religious worship, despite the assessee's primary activities being charitable (running educational institutions)? Assessee's Contentions: - The rejection was arbitrary, based on a single clause (h) of the MOA, without considering the MOA as a whole. - The assessee is substantially engaged in charitable activities, specifically running educational institutions like 'Adarsh School, Chauke'. - There was NIL expenditure on religious activities, as evidenced by audited financials, bank statements, and vouchers, which were examined by the CIT(E). - The CIT(E) erred in relying on the Supreme Court decision in Upper Ganges Sugar Mills vs CIT, as the assessee's objects are substantially charitable. - The CIT(E) granted registration under Section 12AB as 'Charitable' for AY 2027-28 to 2031-32, considering the same MOA. - Section 80G(5B) permits expenditure up to 5% of total income for religious purposes without losing approval, and in this case, expenditure was NIL. - Relied on Rajasthan High Court decision in Umaid Charitable Trust v UOI, stating the dominant object is crucial. Revenue's Contentions: - The Ld DR relied on the order of the Ld CIT(E).

Which sections of the Income-tax Act were involved?

Section 80G(5),Section 80G(5)(iv)(B),Section 80G(5B),Section 12AB,Section 2(15)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL

AMRITSAR BENCH,

AMRITSAR.

BEFORE SH. S. RIFAUR RAHMAN, ACCOUNTANT MEMBER

AND SH. UDAYAN DAS GUPTA, JUDICIAL MEMBER

I.T.A. No.898/ 952/ Asr/2025

Assessment Year: 2025-26 Shri Radhe Krishna Sewa Samiti , Vs. | CIT, (Exemption), Mansa Kanchain, Dt. Mansa 151505. Chandigarh. [PAN:- AAGTS2593E] (Appellant) (Respondent) Appellant by Sh. Mohit Dhiman CA Respondent by Mrs. Roshanta Kumari Meena,CIT. DR.

Date of Hearing

23.07.

2026

Date of Pronouncement 31.08.2026

ORDER : ITA 898 / ASR / 2025. Per: Udayan Dasgupta, JM:

This appeal is filed by the assessee against the order of the Ld CIT (E),

Chandigarh, dated 23/09/2025, rejecting the application for approval dated 30/03/2025, filed by the assessee in Form 10AB, u/s 80G(5)(iv)(B) of the Income Tax Act 1961( henceforth the Act ).

2.

Brief facts emerging from record are that the assessee is a registered society duly registered under under the hand of Addl Registrar of Soc

the “Societies Registration Act 1860

ieties , Punjab vide order dated

Page — 2 ITA 898/ASR/2025

Asst year ; 2025-26

21/03/2007 and is engaged in charitable activities engaged in running of school and colleges in the t

The order continues below.

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