SHRI HARI HAR CHARITABLE AND WELFARE TRUST,FARIDABAD vs. ITO, FARIDABAD

ITA 7241/DEL/2025Status: DisposedITAT Delhi29 September 2026AY 2026-275 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal considered the findings of the CIT(E) and the arguments of both parties. It noted that Section 80G(5B) of the Income Tax Act allows a charitable trust or institution to apply up to 5% of its total income in a year towards religious purposes without losing its tax exemptions under Section 80G. The Tribunal found that the CIT(E) had not brought on record the percentage of total income spent by the Trust on religious activities. Therefore, the Tribunal was of the considered view that the matter should be remanded back to the CIT(E) to verify this aspect after providing the assessee with an adequate opportunity of being heard. The assessee was also directed to file all necessary details and documents before the CIT(E) in a timely manner. No issue was expressly left undecided.

What were the facts?

The assessee, Shri Hari Har Charitable and Welfare Trust, filed an appeal against the order dated 25.09.2025 passed by the Commissioner of Income Tax (Exemptions), Chandigarh. The CIT(E) rejected the Trust's application for approval under Section 80G(5)(iii) of the Income Tax Act, 1961. The grounds of appeal raised by the assessee primarily contested the CIT(E)'s findings that the Trust incurred expenditure on religious events and that a clause in its Trust Deed referring to religious activities disqualified it. The assessee argued that its dominant purpose is charitable, its religious activities clause is general and enabling, and it has not acted upon it. The CIT(E) relied on the judgment in Upper Ganges Sugar Mills Ltd vs CIT. The amount in dispute is not specified. The appeal was heard on 22.09.2026 and pronounced on 29.09.2026.

What were the issues?

1. Whether the learned CIT(E) erred in rejecting the appellant's application for approval under Section 80G(5)(iii) of the Income Tax Act, 1961, on the grounds that the Trust is established for charitable purposes and not for the benefit of any particular religious community or caste, as envisaged under the said provision. Assessee's Contention: The Trust is established for charitable purposes and not for the benefit of any particular religious community or caste. The clause in the Trust Deed referring to religious activities is general and enabling, not mandatory, and has never been acted upon. The dominant purpose is charitable, evident from its objects and actual activities, which fall within medical relief and advancement of general public utility under Section 2(15). The CIT(E) erred in invoking Explanation 3 to Section 80G and relying on Upper Ganges Sugar Mills Ltd vs CIT, which is distinguishable. Revenue's Contention: The learned DR relied on the order of the CIT(E) who rejected the application for spending money for religious purposes, without specifying the percentage spent on such activities.

Which sections of the Income-tax Act were involved?

Section 80G,Section 2(15),Section 80G(5)(iii),Section 80G(5B)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES ‘C’: NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI KRINWANT SAHAY

Hearing: 22.09.2026Pronounced: 29.09.2026

PER KRINWANT SAHAY, AM:

Appeal in this case has been filed by the assessee against the order dated 25.09.2025 passed by the ld. Commissioner of Income Tax (Exemptions), Chandigarh.

2 Shri Hari Har Charitable and Welfare Trust

2.

Grounds of appeal taken by the assessee are as under:

“1. That the learned Commissioner of Income Tax Exemptions has erred in law and on facts in rejecting the appellant Application for approval under Section 80G sub section 5 clause iii of the Income Tax Act, 1961 without appreciating that the appellant trust is established for

The order continues below.

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