SHREE HANUMANT PAKSHIGHAR CHARITABLE TRUST-UJALVAV,BHAVNAGAR vs. THE CIT(EXEMPTION), AHMEDABAD

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ITA 221/AHD/2025Status: DisposedITAT Ahmedabad12 September 2025Bench: SHRI SANJAY GARG (Judicial Member), SHRI NARENDRA PRASAD SINHA (Accountant Member)5 pages
AI SummaryAllowed for statistical purposes

What did the Tribunal hold?

The Tribunal observed that Explanation 3 to Section 80G permits incidental religious objects and Section 80G(5B) allows trusts to spend up to 5% of their income on religious purposes. The Tribunal found that the CIT(E) erred in denying approval solely based on a religious object without examining the actual religious expenditure. The matter was remanded to the CIT(E) to ascertain if religious expenditure exceeded the 5% limit and to grant approval if all conditions are met.

What were the facts?

The assessee, a registered public charitable trust, applied for approval under Section 80G(5) of the Income Tax Act, which was rejected by the CIT(E). The rejection was based on one of the trust's objects being deemed religious in nature. The assessee argued that incidental religious objects do not preclude 80G approval, especially when no religious expenditure has been incurred or if such expenditure is within the permissible limits.

What were the issues?

Can approval under Section 80G(5) be rejected solely due to a religious object in the trust deed, or must the CIT(E) also verify whether religious expenditure exceeds the 5% limit specified in Section 80G(5B)?

Which sections of the Income-tax Act were involved?

Section 80G,Section 80G(5),Section 80G(5)(iii),Section 80G(5B),Section 12AB,Section 10AB

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Mohit Balani, AR
For Respondent: Shri Rignesh Das, CIT-DR
Hearing: 04.09.2025Pronounced: 12.09.2025

O R D E R

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

1.

This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Exemption), Ahmedabad (in short ‘the CIT(E)’) dated 26.12.2024 rejecting the application for grant of approval under Section 80G(5)(iii) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

The assessee has raised the following grounds in this appeal: - 2.

Learned CIT(E) has erred in law and on the facts of the case in 1. rejecting application for registration u/s.80G of the Act.

Shree Hanumant Pakshighar Charitable Trust vs CIT (E) Page 2 of 5 Learned CIT(E) has erred in law and on the facts of the case in not 2. appreciating that the trust activities are exclusively charitable, with no religious expenditure incurred since its inception. 3. Learned CIT(E) has erred in law and on the facts of the case in not appreciating that interpretation of Explanation 3 of section 80G does not bar trusts with incidental religious objects provided they adhere to Section 80G(5B).

3.

Shri Mohit Balani, the Ld. AR of the assessee submitted that the assessee is a registered public charitable trust and was granted registration under Section 12AB of the Act. The assessee had filed an application in Form No.10AB for approval under Section 80G(5) of the Act which was rejected by the Ld. CIT(E) vide the impugned order. The Ld. AR explained that the Ld. CIT(E) had rejected the application of the assessee for the reason that one of the objects of the trust (object nos.6) was held to be religious in nature. The Ld. AR explained that the object no.6 relates to spiritual or culturally inspired object and a mere presence of such object does not render the trust religious in nature. In this regard, he placed reliance on the decision of Co- ordinate Bench of this Tribunal in the case of Gurukrupa Foundation vs. CIT(E), 172 taxmann.com 737 (ITAT Ahmedabad). The Ld. AR further submitted that the assessee had incurred no religious expenditure since its inception. He, therefore, requested that the matter may be restored to the file of the Ld. CIT(E) with a direction to issue specific show cause notice regarding classification of expenses and allow an opportunity to the assessee to explain the nature of expenses.

On the other hand, the Ld. CIT-DR relied upon the order of the 4. Ld. CIT(E) rejecting the application of the Trust and requested to uphold the same.

Shree Hanumant Pakshighar Charitable Trust vs CIT (E) Page 3 of 5 We have considered the rival contentions and carefully gone 5. through the order of the Ld. CIT(E). The Explanation-3 to Section 80G of the Act defines charitable purpose, as per which “charitable purpose” does not include any purpose the whole or substantially the whole of which is of a religious nature. Thus, as per the definition of charitable purpose given in Section 80G of the Act, the charitable purpose should not include any purpose of substantial religious nature. The Ld. CIT(E) had reproduced the following object no-6 in his order which was held to be religious in nature and for which the registration under Section 80G(5) of the Act was denied to the assessee.

Doing all kind of religious services, promoting and spreading sanatan dharma. To do the work of maintenance of divinity and belief and faith in the Gods and Goddesses among the people. To serve the monks, saints, renunciates and pilgrims, to perform daily fasts. The Ld. CIT(E) held that the above object involving propagation 5.1 of Sanathan Dharm and developing knowledge of God-Goddesses was religious in nature and contravened the main condition of section 80G(5) of the Act. Even if certain tenets of religious activity are embedded in this object, this does not make the overall objects of the trust as substantially religious in nature. It was held by the Co- ordinate Bench of this Tribunal in the case of Gurukrupa Foundation (supra) that since the assessee was given option as per statute to spend upto 5% of its total income for religious purpose, it was imperative that some of the objects would have tenets of religious nature, otherwise it might not be able to spend that 5% permissible expense for religious purpose. Therefore, the action of the Ld. CIT(E) in rejecting the application under Section 80G(5) of the Act on the ground that one of the objects of the assessee was religious in nature, cannot be sustained. We don’t find this object to be substantially Shree Hanumant Pakshighar Charitable Trust vs CIT (E) Page 4 of 5 religious in nature so as to deny the approval.

5.2 At the same time, a finding was also given in the case of Gurukrupa Foundation (supra) that if the assessee had spent more than 5% of its total income on religious purpose as stipulated under Section 80G(5B) of the Act, then the registration of the trust can be denied. Therefore, what was relevant to consider was whether the assessee had incurred any expenditure in excess of the permissible limit of 5% on the religious activities. No finding in this regard has been given in the order of the Ld. CIT(E). We, therefore, deem it proper to set-aside the matter to the file of Ld. CIT(E) with a direction to examine whether the assessee had incurred any expenditure on religious activities beyond the permissible limit of 5%. If not, the assessee should be allowed approval u/s.80G(5) of the Act, after ensuring that all other conditions as stipulated u/s. 80G(5) of the Act are complied. The assessee may also be allowed an opportunity of being heard in the matter.

6.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open Court on this 12th September, 2025.

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