SARDARNI MOHINDER KAUR CHARITABLE MEMORIAL TRUST,CHANDIGARH vs. CIT EXEMPTION CHANDIGARH, CHANDIGARH

ITA 1061/CHANDI/2026Status: DisposedITAT Chandigarh30 September 2026AY 2026-273 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed both appeals. Regarding the classification under Section 12AB(1)(b), the Tribunal noted that while the trust deed allowed for donations to religious places, the financial analysis showed that religious donations constituted 16.9% of total donations and 16.4% of total expenses. Crucially, the Tribunal examined Section 80G(5B) which limits expenditure of a religious nature to 5% of total income. In this case, donations for religious purposes exceeded this prescribed limit. Consequently, as per Explanation 3 to Section 80G, the institution is deemed to be one where charitable purposes do not include any purpose which is wholly or substantially of a religious nature. This unambiguous language of the Act led to the rejection of both appeals. The operative direction was dismissal of both appeals.

What were the facts?

The assessee, Sardarni Mohinder Kaur Charitable Memorial Trust, filed two appeals (ITA Nos. 1061/Chd/2026 and 1062/Chd/2026) against the orders of the Ld. CIT(E), Chandigarh, dated 11/02/2026 and 12/02/2026, respectively. The first appeal challenged the classification of the trust as a religious entity under Section 12AB(1)(b) of the Income Tax Act, 1961, arguing its objects were charitable. The second appeal challenged the rejection of its application for approval under Section 80G(5) of the Act. For FY 2024-25, the trust had total receipts of Rs. 1,660,640, including interest income of Rs. 1,415,625 and donations of Rs. 2,45,015. Expenses incurred were Rs. 1,336,946.50, with significant amounts for education, religious purposes, and sports. The trust deed permitted donations to religious places as one of its activities.

What were the issues?

1. Whether the learned CIT(E) erred in classifying the trust as a religious entity, when its objects are charitable, and whether the assessee was provided an adequate opportunity to explain its categorization, under Section 12AB(1)(b) of the Income Tax Act, 1961. 2. Whether the learned CIT(E) erred in rejecting the application for approval under Section 80G(5) of the Income Tax Act, 1961. Assessee's Contentions: - The trust's objects are charitable, and it also makes donations for purposes other than religious ones, making the CIT(E)'s classification as solely religious incorrect. Revenue's Contentions: - The revenue relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 12AB(1)(b),Section 80G(5),Section 80G(5B)

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

ITA No. 1061 /Chd/ 2026
ITA No. 1062 /Chd/ 2026

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपीलीय अिधकरण,च"ीगढ़ "ायपीठ “बी”,च"ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: HYBRID MODE "ी लिलत कुमार, "ाियक सद" एवं "ी िवजय वमा" , लेखा सद" BEFORE: SHRI. LALIET KUMAR, JM & SHRI. VIJAY VARMA, AM आयकर अपील सं./ ITA No. 1061 /Chd/ 2026 िनधा"रण वष" / Assessment Year : 2026-27 Sardarni Mohinder Kaur Charitable बनाम The CIT Memorial Trust Exemption H.No. 1030, Chandigarh G.P.O Chandigarh "ायी लेखा सं./PAN NO: AAATS3976R अपीलाथ"/Appellant ""थ"/Respondent आयकर अपील सं./ ITA No. 1062 /Chd/ 2026 िनधा"रण वष" / Assessment Year : 2026-27 Sardarni Mohinder Kaur Charitable बनाम The CIT Memorial Trust Exemption H.No. 1030, Chandigarh G.P.O Chandigarh "ायी लेखा सं./PAN NO: AAATS3976R अपीलाथ"/Appellant ""थ"/Respondent िनधा"रती की ओर से/Assessee by : Shri Ajay Jain, C.A राज" की ओर से/ Revenue by : Smt. Vandana Vijay Mohite, CIT, DR (Virtual Mode) सुनवाई की तारीख/Date of Hearing : 29/09/2026 उदघोषणा की तारीख/Date of Pronouncement : 30/09/2026 आदेश/Order PER VIJAY VARMA, A.M: Both the above appeals have been filed by the Assessee against the respective orders of the Ld. CIT(E), Chandigarh dt. 11/02/2026 and 12/02/2026 respectively.

2.

Since

The order continues below.

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