SHRI PAWANSUT DADRAWA SARKAR NYAS DANDRUA,KATROL vs. EXEMPTION WARD , GWALIOR

ITA 444/AGR/2026Status: DisposedITAT Agra12 October 2026AY 2027-2811 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Ld. CIT (Exemption) erred in rejecting the assessee's application for renewal of approval under Section 80G. The Tribunal found that the Ld. CIT (Exemption) had not properly appreciated the charitable activities carried out by the trust. The Tribunal noted that the assessee's grounds of appeal highlighted substantial charitable activities such as free food distribution, gaushala operations, and public utility services, which were allegedly ignored. The Tribunal also considered the assessee's argument that the trust was not established for the benefit of any particular religious community or caste and was open to the general public. The Tribunal's reasoning implies that the Ld. CIT (Exemption) incorrectly focused solely on the religious aspects without giving due weight to the charitable components. The ratio decidendi would be that a trust engaged in substantial charitable activities for the public benefit should not be denied Section 80G approval merely because it also conducts incidental religious activities, provided it meets the other conditions of the section. The operative direction was to set aside the order of the Ld. CIT (Exemption) and direct the approval to be granted.

What were the facts?

The assessee, Shri Pawansut Dadrawa Sarkar Nyas, filed an appeal against an order dated 26.03.2026 passed by the National Faceless Assessment Centre (NFAC), formerly the Commissioner of Income Tax (Exemption), Bhopal. This order rejected the assessee's application for renewal of approval under Section 80G of the Income Tax Act, 1961, for Assessment Year 2026-27. The rejection was based on the observation that the assessee's primary activities, including running and maintenance of a temple, conducting religious ceremonies, and rituals, were predominantly religious in nature. The NFAC noted that Section 80G(5) of the Act restricts approval to institutions established for charitable purposes, and activities predominantly religious may not qualify. The assessee had submitted a reply to a show-cause notice, but the NFAC found the objects and activities to be in violation of Section 80G(5)(ii) and Explanation 3 to Section 80G.

What were the issues?

The Tribunal had to decide the following questions: 1. Whether the Ld. CIT (Exemption) erred in holding that the appellant trust is engaged predominantly in religious activities, without properly appreciating its charitable activities, as per Section 80G(5)(ii) of the Income-tax Act, 1961. 2. Whether the Ld. CIT (Exemption) erred in invoking Section 80G(5)(ii) and Explanation 3 to Section 80G, without appreciating that the trust is engaged in substantial charitable activities such as free food distribution, gaushala operations, and public utility services, and is not established for the benefit of any particular religious community or caste. Assessee's Contentions: The assessee contended that the Ld. CIT (Exemption) erred in holding the trust to be predominantly religious, failing to appreciate its charitable activities like free food distribution, gaushala operations, and public utility services. They argued that the trust is open to the general public, not for any particular religious community or caste, and that documentary evidence demonstrating genuine charitable activities was ignored. The assessee also relied on judicial precedents holding that trusts with incidental religious activities cannot be denied approval if they benefit the public at large. The assessee argued that the rejection was arbitrary and based on incorrect appreciation of facts and law. Revenue's Contentions: The judgment does not explicitly record the revenue's contentions. However, the basis of the impugned order suggests the revenue's stance was that the assessee's activities were predominantly religious and thus disqualified for Section 80G approval.

Which sections of the Income-tax Act were involved?

Section 80G,Section 80G(5),Section 80G(5)(ii),Section 80G(5B),Section 11,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA(DB

Before: SUNIL KUMAR SINGHBRAJESH KUMAR SINGH

For Appellant: Shri Rajendra Sharma, Adv. And Sh. Manuj Sharma, Adv
For Respondent: Ms. Sangeeta Yadav, CIT DR
Hearing: 23.07.2026Pronounced: 23.07.2026

PER:BRAJESH KUMAR SINGH, A.M.

This appeal is directed against the impugned order dated 26.03.2026 passed in application No. CIT exemption Bhopal/2025-26/12AA/15531 by the NFAC (hereinafter referred to as the Commissioner of Income Tax), u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2026-27, wherein ld. CIT (A) has dismissed assessee’s appeal.

2.

Brief facts of the case: The assessee filed an application seeking renewal of approval u/s 80G of the Act. A show cause notice dated 09.03.2026 was issued by the Ld. CIT (E) to the assessee seeking clarification on the following points.

“1. The application and documents submitted by the

The order continues below.

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