SHREE GOW RAKSHNI SABHA REGD. LUDHIANA,LUDHIANA vs. THE CIT(EXEMPTIONS) CHANDIGARH, CHANDIGARH

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ITA 431/CHANDI/2026Status: DisposedITAT Chandigarh16 April 2026AY 2026-20278 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(Exemptions) should have considered the allowance for expenditure up to 5% on religious purposes by a charitable organization. The appeals were remanded back to the CIT(Exemptions) for reconsideration of the facts and verification of religious expenditure within the permissible limit.

What were the facts?

The assessee, Shree Gow Rakshni Sabha, a registered society, had its applications for registration under Section 12A and approval under Section 80G rejected by the CIT(Exemptions). The CIT(Exemptions) found the assessee to be engaged in religious activities, thus disentitling it from charitable status.

What were the issues?

Whether the assessee's activities are primarily charitable or religious, and if religious expenditure falls within permissible limits for charitable status.

Which sections of the Income-tax Act were involved?

Section 12A,Section 80G,Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘B’, CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI KRINWANT SAHAY

Hearing: 09.04.2026Pronounced: 15.04.2026

Per Krinwant Sahay, AM : The Captioned appeals have been preferred by the Assessee against the separate orders of the Ld. Commissioner of Income Tax Exemptions, Chandigarh dated 4.2.2026 and 10.02.2026 respectively with regard of the rejection of

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applications of the Assessee under section 12A and 80G of the Income Tax Act, 1961 (in short 'the Act') respectively.

2.

Grounds of appeal, as raised by the Assessee are as under: -

ITA No. 430/Chd/2026

1.

That the Ld. CIT (Exemptions) has erred in granting the registration u/s 12AB(1)(b) of the Income Tax Act as 'Religious Entity’ is against the registered entity as religious-cum-charitable society. 2. That the CIT(Ex.) has grossly failed to follow the judgment of the Apex Court in the case of Animal Care Society (2018) 99 taxmann.com 233 and the judgment of Bombay High Court in the case of DIT vs. Bombay Panjrapole Trust (2015) 59 taxmann.com 364, in which, it has been held that "maintaining gaushalas and tending services to other animals and birds is to be considered as charitable." 3. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. ITA No. 431/Chd/2026

1.

That the Ld. CIT (Exemptions) has erred in not granting approval u/s 80G (5)(ii) of the Income Tax Act as sought by the assessee society and also cancelling the approval as granted since Asstt. Year 2022-23 to date without issuing any notice/show cause notice to the assessee. 2. That the finding of the Ld. CIT (Exemptions) that the assessee is clearly engaged in religious activities, and cannot be considered

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to be charitable Society, is against the facts and circumstances of the case. 3. That the Ld. CIT (Exemptions) has failed to appreciate that the assessee had been granted status of charitable-cum Religious Society by the Ld. CIT (Exemptions) and changing the status without assigning any reason is not proper. 4. That the finding of the Ld. CIT (Exemptions) that the activities of the assessee of religious nature is totally void-ab-initio and reliance by her explanation-3 is misconceived and against the object of the society. 5. That the Ld. CIT (Exemptions) has failed to appreciate that the aim and object of assessee society is to build & maintain shelters for the Cows, Cremation grounds, Medical/ Science and Yogic Education for the general public and opening up and running of Education/ Healthcare/ Medical institutions for the children/ people belonging to needy and weaker/ backward sections of the Society. 6. That the CIT(Ex.) has ignored the judgment of the Apex Court in the case of Animal Care Society (2018) 99 taxmann.com 233 and the judgment of Bombay High Court in the case of DIT vs. Bombay Panjrapole Trust (2015) 59 taxmann.com 364 wherein it has been held that "maintaining gaushalas and tending services to other animals and birds is to be considered as charitable."the order of Ld. C.I.T. (Appeals) is bad and against the facts and Law. 7. That the Ld. CIT (Exemptions) has erred in relying upon the judgment of Apex Court in the case of Upper Ganging Sugar Mill Ltd., reported in 93 taxmann 643 (1997) since none of the object of the society are wholly or substantially of religious nature.

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8.

That further, the Ld. CIT (Exemptions) has failed to appreciate that on Form No. 10AB, the expenditure on religious nature is just 1.36% of the total receipts and 2.08% in financial year 2023-24 and, thus, no case has been made out by the CIT (Exemptions) that it is wholly or substantially religious in nature as per explanation-3. 8. That the Ld. CIT (Exemptions) has exceeded jurisdiction by cancelling the existing registration with retrospective effect, even, though, the application for renewal related solely for grant of registration under section 80G(5) (ii) from Assessment Year 2027-28 and subsequent years. 9. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.

3.

Brief facts of the case, as per the order of the Ld. CIT(E), are that the Assessee, Shree Gow Rakshni Sabha (Regd.), Ludhiana is a Society registered under the Societies Registration Act, 1860 on 30th May, 1912. The Assessee society is engaged in purely charitable and welfare activities, primarily operating a large-scale Gaushala wherein more than 1600 cows are given shelter, for protection, maintenance, and medical treatment of sick, abandoned, and stray cows. Apart from the Gaushala, the Assessee also maintains a cremation ground, provides ration aid to widows irrespective of caste or

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creed, offers scholarships for education of poor children. Further, the assessee society is not only maintaining a cremation ground but also contributes to humanity by carrying out cremation for unclaimed dead bodies on its own cost. During the last four years, the assessee has done cremation for various unclaimed dead bodies.

3.1 The Assessee Society has been duly registered u/s 12A of the Income Tax Act, 1961 since 1976 and has held valid registration u/s 80G for decades, with timely renewals. Further, the assessee converted its status from 'Charitable Entity' to 'Charitable cum Religious Entity' and the same was duly intimated by the Assessee to the then Joint Commissioner of Income Tax (OSD) (Exemptions) Circle - 1, Chandigarh vide letter filed on 19.02.2018

3.2 In compliance with the amended provisions, the Assessee filed applications for renewal of registration u/s 12A and renewal of approval u/s 80G before the Ld. CIT(Exemptions), Chandigarh. Both applications were filed under the status of "Religious cum Charitable" as

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per the historical records since there is no option of 'Charitable cum Religious' in the application form.

3.3 However, despite the Assessee furnished all requisite details including Audited Financial Statements, bank statements, activity notes, photographs, and replies to questionnaire, the Ld. CIT(E) passed the contradictory orders in both the appeals and aggrieved by these orders the Assessee has filed the present appeals before this Tribunal.

4.

During proceedings before us, the main argument of the Ld. Counsel of Assessee was that the Ld. CIT(E) has not considered the availability of expenditure upto 5% done for religious purposes by any charitable trust. In fact, it was claimed that the Assessee has not spent more than 2% on religious activities and, therefore, the findings of the Ld. CIT(E) that the Assessee has made expenditure for religious purposes and, therefore, the exemption has been denied is not as per law.

5.

Per contra, the Ld. DR relied on the orders of the CIT(E).

6.

We have conspired the findings given by the Ld. CIT(E) in her orders and we have also considered the brief facts and

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arguments made by the ld. Counsel for the Assessee during the proceedings before us. We are of this considered view that the Ld. CIT(E) should have considered the availability of expenditure upto 5% for religious purposes by a religious charitable organization, which has not been done in this case. Accordingly, both these appeals are remanded back to the CIT(E) with the direction to reconsider the facts brought on record by the Assessee and to verify that the expenditure was incurred for religious purposes within the availability of 5% of total expenses. The assessee society is directed to participate in the proceedings and furnish all requisite information, documents and supporting evidence as may be called for by the learned CIT(E).

7.

Accordingly, the matters in both the cases are restored to the file of the learned CIT(E) for fresh consideration in the light of the above directions. Needless to say, that the ld. CIT(E) will give proper opportunity to the Assessee to present its case and to furnish necessary evidences and details. The Assessee is also directed to present its case before the Ld. CIT(E) as and when called for and will not contribute in unnecessary delay in the hearing of the appeal.

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8.

In the result, both the appeals of the Assessee stand allowed for statistical purposes.

Order Pronounced on 15. 04.2026.

Sd/- Sd/- ( LALIET KUMAR ) ( KRINWANT SAHAY) Judicial Member Accountant Member “आर.के.”

आदेश क� ��त�ल�प अ�े�षत / Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File

सहायक पंजीकार/ Assistant Registrar

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