SHRI BADHAMATA ADHYATMIK EVAM SANSKRUTIK SEVA TRUST,KANADKHEDA, TANA vs. EXEPTION WARD, UDAIPUR

ITA 745/JPR/2026Status: DisposedITAT Jaipur08 October 2026AY 2025-268 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the impugned order of the CIT(E) and restored the application to the CIT(E)'s file for a fresh decision. Regarding the first issue, the Tribunal held that while the objects of the trust are relevant, the insertion of section 80G(5B) with effect from 01.04.2000 means that the presence of a religious object is no longer decisive if religious expenditure is within five per cent of total income. The Tribunal found that the CIT(E)'s conclusion that all objects were religious or related to a particular community was not supported by the trust deed, which included charitable objects like running a hospital and dispensaries. The CIT(E) also misread section 80G(5B) and did not deal with the assessee's reply. On the second issue, the Tribunal noted that the CIT(E) had not quantified the religious expenditure or identified the base (total income) as required by section 80G(5B). The assessee's claim of bifurcation and inclusion of charitable expenditure needed examination. The Tribunal rejected the assessee's claim that the impugned order mentioned a fifty per cent limit. For the third issue, the Tribunal acknowledged that registration under section 12A is relevant, but since the outcome of the renewal application was not on record, this aspect also needed fresh examination by the CIT(E). The Tribunal directed the CIT(E) to examine all aspects, call for necessary material, and provide a reasonable opportunity of being heard to the assessee. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Shri Badhamata Adhyatmik Evam Sanskrutik Seva Trust, filed an appeal against the order of the learned Commissioner of Income Tax (Exemption), Jaipur (CIT(E)), dated 29.01.2026. The CIT(E) rejected the assessee's application in Form No. 10AB for approval under section 80G(5) of the Income Tax Act, 1961, for the assessment year 2025-26. The assessee is a trust with objects that include both religious and charitable activities. The CIT(E) rejected the application primarily on three grounds: the objects of the trust were considered religious, not charitable; expenditure of a religious nature exceeded the prescribed limit; and the assessee lacked valid registration under section 12A of the Act. The appeal was filed within the time limit prescribed by section 253(3) of the Act.

What were the issues?

The Tribunal had to decide three questions: 1. Whether the objects of the trust, by themselves, disqualify it from being considered under section 80G(5) of the Act. The assessee argued that it is a religious cum charitable trust, enjoying 80G approval since inception, with mainly charitable objects and limited religious aspects. It contended that religious expenditure is within the prescribed limit and that the CIT(E) erred in considering the objects as solely religious. The revenue, relying on the impugned order and the decision in Upper Ganges Sugar Mills Ltd. v. CIT [1997] 227 ITR 578 (SC), argued that the objects are religious and that the trust falls outside the scope of section 80G. 2. Whether the trust has incurred expenditure of a religious nature beyond the limit specified in section 80G(5B) of the Act. The assessee claimed that religious expenditure is within the five per cent limit and that some expenses were wrongly clubbed, with a bifurcation provided. The revenue contended that religious expenditure exceeds five per cent. The CIT(E) had rejected the application on this ground without quantifying the expenditure or identifying the base. 3. The effect of the registration under section 12A of the Act on the application for 80G approval. The assessee argued it has had 12A registration since inception, with a renewal application filed. The revenue contended that the assessee did not hold a valid 12A registration on the date of the order, which is a precondition for 80G approval.

Which sections of the Income-tax Act were involved?

Section 80G(5),Section 80G(5B),Section 12A,Section 12A(1)(ac)(vi),Section 253(3),Section 11,Section 12

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, JAIPUR

Before: Shri Kuldip Singh & Shri Prakash

PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

This appeal by the Assessee is directed against the order of the learned Commissioner of Income Tax (Exemption), Jaipur [hereinafter referred to as "the learned CIT(E)"] dated 29.01.2026 passed in Form No. 10AD, by which the application of the assessee in Form No. 10AB for approval under section 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") has been rejected. The impugned order was received by the assessee on 30.01.2026 and Shri Badhamata Adhyatmik Evam Sanskrutik Seva Trust the appeal was filed on 28.03.2026. It is within the time allowed by section 253(3)

The order continues below.

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