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Facts
Agarwal Sabha, a society, applied for approval under Section 80G(5)(iii) of the Income Tax Act. The CIT(E) rejected the application, stating that the trust's objectives were primarily restricted to the benefit of the Agarwal caste, which violates Explanation 2 to Section 80G(5). The assessee argued that it also performed general public welfare activities.
Held
The Tribunal upheld the CIT(E)'s decision, finding that despite some activities for the general public, the predominant objectives of the trust were undeniably caste-specific. Therefore, the trust did not qualify for 80G approval as per the provisions of Explanation 2 to Section 80G(5).
Key Issues
Whether a trust with caste-specific objectives, despite some general welfare activities, qualifies for Section 80G approval under Explanation 2 to Section 80G(5).
Sections Cited
80G, 80G(5)
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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the ld. Commissioner of Income-tax (Exemption) (hereinafter referred to as the “Ld. CIT(E)”] dated 22.11.2024 against the rejection of the assessee’s claim for recognition u/s 80G of the Act.
Shri Ashok Kumar Agarwala appeared on behalf of the assessee and Shri Kapil Mandal, Sr. DR appeared on behalf of the revenue.
It was the submission by the ld. AR that the assessee society was functioning from the year 2008. It was the submission that the assessee had filed an application on 1st May, 2024 for approval u/s 80G(5)(iii) of the Act. The assessee had not provided the details as called for by the ld. CIT (E) originally and the tribunal had restored the issues to the file of the ld. CIT (E). Consequent to the order of the Tribunal, the ld. CIT
In reply, the ld. CIT DR relied upon the findings of the ld. CIT (E).
We have considered the rival submissions. A perusal of the paper book filed by the assessee shows that the objective of the Trust are as follows: -
“The objectives of the trust are as follows:
1. 1. To provide all-round development of Agrawal young men and women at the social, economic, political, physical, intellectual and moral level, so that they can be properly helpful in the development and progress of the country and can make the Agrawal society proud.
2. To make efforts to form branches of Agrawal Sabha to build a strong Agrawal society.
3. To carry out public service and development programs for the benefit of the common people without caste and religious discrimination and to construct buildings, hospitals etc.
4. To organize matrimonial introduction conference and mass marriage for Agrawal community.
5. To make efforts to create effective public opinion against the social evils and bad practices prevalent in Agarwal society.
6. To propagate the glorious part of literature and culture related to Maharaja Agrasen and to carry out new creative activities.
7. To construct hostels as per requirement for the students of Agarwal community and to run them smoothly.
1) During covid we have done extensive Food Distribution and Blood Donation Camp for all communities. (Rs 104980/-appears in I/E A/c as on 31.03.2020) 2) We have organised flood Relief Camp at Boko during 2020 for all the communities effected (out of donation received in kind) 3) We have honoured Covid worriors during Covid. 4) We have distributed food material at B. Barooah Cancer Hospital for community at large (out of donation received in kind) 5) We have installed water filter at local hospital (out of donation received in kind) 6) We have donated one sewing machine to Local Assamese people (out of donation received in kind).
A perusal of the form 10AB shows that the corpus of the trust amounting to ₹5,20,100/-, their liabilities shown at ₹5,96,450/-. Their investments has shown ₹5,95,043/- and during F.Y. 2020, they have received specific grants which have not corporate or from Central or State Government of ₹3,29,100/- plus Other income totaling to ₹3,47,548/-, for F.Y. 2021, totaling to ₹2,84,850/- and for F.Y. 2022, totaling to ₹4,38,144/-. This is as shown in their application in form no. 10AB which read as follows: -
Intentionally left blank
When this is compared to the utilization which is claimed in 2020 they have utilized ₹1,04,980/-. The water filter at the local hospital is out of donation received in kind and the swing machine donated is out of donation received in kind. Thus, their activities cannot be deemed to be for public at large, especially when their object are clearly for the benefit of the Agarwal caste. This being so. We find no error on the order of ld.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 18.06.2025.