SHRI SANT GAJANAN MAHARAJ PATTEKAR CHARITABLE TRUST,THANE vs. CIT EXEMPTION, PUNE, PUNE

This appeal filed by the assessee is directed against the order dated 26.12.2024 passed by Ld. CIT, Exemption, Pune rejecting the application for registration u/s 80G(5) of the IT Act.

Facts of the case, in brief, are, that the assessee filed its application for registration in Form No.10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the IT Act on 21.06.2024. With a view to verify the genuineness of activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G(5) of the IT Act, a notice was issued through ITBA portal on 18.07.2024 requesting the assessee to upload certain information/clarification on or before 06.08.2024. In reply to the said notice, the desired information was furnished by the assessee. On verification of the information furnished by the assessee, Ld. CIT, Exemption, Pune found certain discrepancies, therefore, issued another notice on 17.12.2024 and asked the assessee to furnish various other details. Not being satisfied with the explanation furnished by the assessee in response to notice dated 17.12.2024, Ld. CIT, Exemption, Pune rejected the application for approval u/s 80G(5) of the IT Act by observing as under :- “7. The assessee was requested to show cause as to why the application should not be rejected and why the approval granted under section 80G(5) of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the approval shall also be liable to be cancelled. The compliance to the said notice was due on 20/12/2024. The notice was duly served on the assessee through e-portal and email.

The assessee furnished its compliance on 19/12/2024. It contended that the trust's activities were not aimed at any specific caste, creed, community, or religion but focused on spiritual and societal upliftment as a whole and that none of the trust's objectives are exclusively or substantially religious, as per Explanation 3 of Section 80G. The assessee further contended that the provisions of sec. 80G(5B), permits religious expenditure up to 5% of the total income in a previous year without disqualifying the trust from Section 80G benefits. On verification of the same, it is noticed that the assessee has itself confirmed that the trust has carried out religious activities.

In light of the above, it is reveals that the assessee has carried out religious activities, which is more than the prescribed limit of 5% of the total income. Therefore, the conditions laid down u/s. 80G(5)(ii) read with section 80G(5B) of the Act are not fulfilled. Hence, the request for approval u/s 80G(5) (vi) of the Income-tax Act, 1961 cannot be accepted.

In view of the above, the application filed by the assessee is hereby rejected and the provisional approval granted on 02/10/2021 under clause (iv) for first proviso to section 80G(5) of the Income Tax Act, 1961 is hereby cancelled.”

It is this above order against which the assessee is in appeal before this Tribunal.

Ld. AR appearing from side of the assessee submitted before us that the order passed by Ld. CIT, Exemption, Pune is unjustified. Ld. AR submitted before us that if Ld. CIT, Exemption, Pune was not satisfied with the reply of the assessee trust he should have had provided one more opportunity to the assessee so that the assessee can produce further evidences in support of its claim. Accordingly, Ld. AR requested before the bench to provide one more opportunity to the assessee to substantiate its claim before Ld. CIT, Exemption, Pune.

In this regard, we find that admittedly the assessee was registered u/s 80G & 12AA since long i.e. way back from the year 2017. We further find that the application for approval u/s 80G(5) was rejected by Ld. CIT, Exemption, Pune on the ground that the expenditure relating to religious activities are more than the prescribed limit of 5% of the total income. In this regard, it was the contention of Ld. AR of the assessee that the expenditure shown as religious expenses were wrongly grouped under religious heading & if one more opportunity is provided to the assessee he is in a position to substantiate this ground before Ld. CIT, Exemption, Pune. Considering the totality of the facts of the case & also in the interest of justice, we deem it appropriate to set-aside the order passed by Ld, CIT, Exemption, Pune & remand the matter back to his file to decide the issue a fresh as per fact & the law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to comply with the notices issued by Ld. CIT, Exemption, Pune and produce requisite documents/information/ evidences in support of its contention that