BABA TEJA SINGH RADHASWAMI SATSANG TRUST,VILLAGE SAIDPUR, BHATTIKAY vs. CIT EXEMPTIONS , CHANDIGARH

ITA 185/ASR/2026Status: DisposedITAT Amritsar31 August 2026AY 2026-275 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the Commissioner of Income Tax (Exemption) arrived at an incorrect conclusion without appreciating the audited financials, which clearly indicated no expenditure on religious activities. The reliance on the decision in Upper Ganges Sugar Mills Ltd v CIT was deemed unjustified as the assessee's objects were wholly and substantially charitable, not religious. The Tribunal observed that the religious activity clause in the trust deed was a 'dormant clause' with no actual expenditure incurred. In the absence of any such expenditure, rejection of approval under Section 80G(5) was not justified. The Tribunal also referred to the Rajasthan High Court decision in Umaid Charitable Trust v UOL, emphasizing that the dominant object of the trust and the actual expenditure are crucial. Furthermore, Section 80G(5B) permits expenditure up to 5% of total income for religious purposes. Considering the financials showing NIL expenses for religious activity and the lack of a show cause notice, the Tribunal set aside the matter to the CIT(E) for fresh reconsideration of the application after providing a proper opportunity of being heard. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Baba Teja Singh Radhaswami Satsang Trust, filed an application for approval under Section 80G(5)(ii) of the Income Tax Act, 1961, for Assessment Year 2026-27. The Commissioner of Income Tax (Exemption) rejected the application vide order dated 10/12/2025. The rejection was based on the allegation that the trust's objects were of a religious cum charitable nature. The assessee contended that it is a public charitable trust registered in 1984 and engaged in various charitable activities like free medical aid, running a 'langar', distributing clothes, organizing blood donation camps, maintaining old age homes, and running an educational institution. Audited financials for FY 2022-23 and 2023-24 showed no expenditure on religious purposes, with all expenses directed towards charitable activities. The assessee also claimed that no opportunity of show cause was provided before rejection.

What were the issues?

1. Whether the Commissioner of Income Tax (Exemption) was justified in rejecting the assessee's application for approval under Section 80G(5)(ii) of the Income Tax Act, 1961, on the ground that the trust's objects are of a religious cum charitable nature, despite audited financials showing no expenditure on religious activities? Assessee's contentions: - The trust is engaged in purely charitable activities as evidenced by its audited financials for FY 2022-23 and 2023-24, which show nil expenditure on religious purposes. - There was a categorical disclosure in Form 10AB that no expenditure was incurred on religious activities. - The Commissioner rejected the approval without providing an opportunity of show cause as required by Section 80G. - The dominant object of the trust is charitable, and actual expenditure should be viewed in light of these objects (relied on Umaid Charitable Trust v UOL). - A charitable institution is permitted to incur up to 5% of its total income for religious purposes without losing eligibility for Section 80G (relied on Section 80G(5B) read with CBDT Circular 779). Revenue's contentions: - The Revenue relied on the order of the learned CIT(E).

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

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. 185/ Asr/2026

Assessment Year: 2026-27

Baba Teja Singh Radhaswami Vs. | CIT, (Exemption), Satsang Trust, Vill Saidpur Bhattikay

Amritsar 143116. Chandigarh.

[PAN:- AAATB1069N]

(Appellant) (Respondent) Appellant by Sh. Rohit Kapur Adv Respondent by Mrs. Roshanta Kumari Meena,CIT. DR. Date of Hearing 23.07.2026

Date of Pronouncement 31.08.2026

ORDER : ITA 185 _/ASR/ 2026. Per: Udayan Dasgupta, JM:

ITA NO : 188/ ASR / 2026

Asst year : 2026-27

1.

This appeal is filed by the assessee against the rejection of the application dated 30/09/2025 seeking approval u/s 80G(5)(ii) of the Act vide order of ld CIT ( E ) dated 10/12/2025, on the allegation that objects of the trust are of religious cum charitable

LTA. No. 185/ Asr/2026 Assessment Year: 2026-27

Page —2 nature ( para 2.1 of CIT ( E) order ), and she relied on the decision of the Hon’ble Apex court in the case of “ Upper Ganges Sugar Mills Ltd v CIT [1997] 93 Taxman 645 (SC) ”.

2.

In course of hearing the Ld A/R of the assessee , submitted that the trust is

The order continues below.

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