PUJA FOUNDATION,AHMEDABAD vs. THE CIT(EXEMPTION), AHMEDABAD

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ITA 341/AHD/2025Status: DisposedITAT Ahmedabad12 August 2025Bench: Shri T.R. Senthil Kumar, Judicial Member\nAnd Shri Narendra Prasad Sinha, Accountant Member\nITA No. 341/Ahd/2025\nPuja Foundation\nC/22 Riveri Antilia,\nCorporate Road,\nAhmedabad-380015\nGujarat\nPAN: AATFP1718R\n(Appellant)\nCIT(Exemption),\nAhmedabad\nVs\n(Respondent)\nAssessee Represented: Shri Parin S. Shah, A.R.\nRevenue Represented: Shri R. P. Rastogi, CIT-DR\nDate of hearing\nDate of pronouncement\n: 06-08-2025\n: 12-08-2025\nआदेश/ORDER\nPER : T.R. SENTHIL KUMAR (Judicial Member)4 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the CIT(E)'s denial of registration under section 80G(5) was arbitrary and the impugned order was liable to be set aside. The reasoning was that the CIT(E) denied registration without verifying the accounts and despite the assessee's submission that no expenditure was incurred towards religious activities. The Tribunal found that the CIT(E) reproduced the assessee's submissions but failed to conduct a proper verification. The ratio decidendi is that denial of registration under section 80G(5) without proper verification of accounts and evidence, especially when the assessee claims no expenditure on religious activities, is unsustainable. The Tribunal set aside the order and directed the CIT(E) to consider the materials on record and grant registration under section 80G(5), providing one more opportunity of hearing to the assessee.

What were the facts?

The assessee, Puja Foundation, filed an appeal against the order dated 28/12/2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad (CIT(E)). The CIT(E) denied registration under section 80G(5) of the Income Tax Act, 1961, citing that the Trust's activities were not purely for charitable purposes but also included religious activities, thus violating sections 80G(5)(ii) and 80G(5B). The assessee had previously been granted provisional registration under sections 12AB and 80G for Assessment Years 2021-22 to 2023-24. The assessee submitted that its main objects were education and medical aid, and it had incurred no expenditure on religious activities, providing supporting documents. The CIT(E) issued a show cause notice alleging religious nature of objects and clauses, and subsequently denied final registration and cancelled provisional registration.

What were the issues?

1. Whether the order passed by the CIT(Exemption) denying registration under section 80G(5) of the Act is bad in law and liable to be quashed? (Question of law) 2. Whether the CIT(Exemption) erred in rejecting the application for registration under section 80G(5) of the Act by observing that the trust is a charitable-cum-religious trust, thereby violating provisions of section 80G(5)(ii) & 80G(5B) of the Act? (Question of mixed law and fact) Assessee's contentions: The assessee argued that its objects were purely charitable (education and medical aid) and no expenditure was incurred on religious activities. They relied on the provisional registration granted and submitted audit reports and bank statements to support their claims. The assessee contended that the CIT(E) ought to have considered the facts and activities and granted registration. Revenue's contentions: The Revenue, through the CIT-DR, supported the order passed by the CIT(E). No specific authorities or precedents were mentioned by the revenue.

Which sections of the Income-tax Act were involved?

Section 80G(5),Section 80G(5)(ii),Section 80G(5B),Section 12AB

AI-generated summary — verify with the full judgment below

Before: Shri T.R. Senthil Kumar & Shri Narendra Prasad Sinha

Puja Foundation CIT(Exemption), C/22 Riveri Antilia, Ahmedabad Corporate Road, Vs Ahmedabad-380015 Gujarat PAN: AATFP1718R (Respondent) (Appellant) Assessee Represented: Shri Parin S. Shah, A.R. Revenue Represented: Shri R. P. Rastogi, CIT-DR Date of hearing : 06-08-2025 Date of pronouncement : 12-08-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the assessee as against the order dated 28/12/2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as “CIT(E)”] denying registration under section 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) on the ground that the activities of the Trust are not purely for charitable purpose but also for religious activities.

Page No 2 Puja Foundation vs. CIT(E)

2.

The Grounds of Appeal

raised by the Assessee are as follows:

1. The order passed by CIT (Exemption) is bad in law and required to be quashed.

2. Ld. CIT (Exemption) erred in rejecting application for registration u/s 80G(5) of the Act by observing that trust is charitable cum religious trust and thus violated provision of section 80G(5)(ii) & 80G(5B) of the Act.

3. Ld. CIT (Exemption) ought to have considered the fact and activities of the trust and ought to have granted registration.

4. Without prejudice to the above and in alternative, appellant trust pray to set aside the case with direction to verify activities of the trust and ought to have granted registration.

3.

The Ld. Counsel submitted that the assessee Trust was created on 25-07-2016 for the purpose of Education, Medial Aid to the needy people irrespective of Caste, Creed and Religion. The assessee filed provisional registration u/s 12AB and u/s 80G which were granted by Ld.CIT(E) vide separate orders both dated 27-05- 2021 granting exemption from the Asst. Year 2021-22 to 2023-24. The assessee filed application for final registration u/s 80G(5) of the Act. Ld. PCIT issued a detailed notice asking for various details and activities carried out by the assessee Trust.

4.

In reply, the assessee Trust filed all the required details including the questions relating to religious activities and explained that no expenditure incurred by the assessee Trust towards religious activities and furnished Audit Report for the Financial Years 2021-22, 2022-23 and 2023-24. The assessee Trust also filed copy of the Ledger account of all the expenditures towards the objects of the Trust relating to the preceding assessment years. The Page No 3 Puja Foundation vs. CIT(E)

Ld. PCIT issued a show cause notice dated 20-12-2024 that the objects as well as other Clauses of the Trust is religious in nature which is violation of clause (3) of Section 80G(5) of the Act and why application for final registration not be denied.

4.1. In reply, the assessee Trust explained the main object of the Trust is to help the students by way of fees, books, equipments etc. and help the poor people. The assessee Trust has not undertaken any religious activity and no expenditure incurred during the last three years and produced copy of the bank pass book, statements and profit and loss account in support of its claim. However without verifying the same, Ld. CIT(E) denied the final registration u/s. 80G(5) of the Act to the assessee and also cancelled the provisional registration already granted.

5.

Ld. D.R. appearing for the Revenue supported the order passed by the Ld. CIT(E).

6.

We have perused the materials available on record and heard rival submission. Ld. CIT(E) in the impugned order reproduced the submissions of the assessee. However without verification of the accounts and no expenditure incurred by the assessee towards religious activities, Ld. CIT(E) denied the registration u/s 80G(5) of the Act which in our considered opinion, is highly arbitrary and the impugned order is liable to be set-aside. Thus the order passed by Ld. CIT(E) is hereby set-aside with a direction to Ld. CIT(E) to consider the materials available on record and grant registration Page No 4 Puja Foundation vs. CIT(E) u/s 80G(5) of the Act by providing one more opportunity of hearing to the assessee.

7.

In the result, the appeal filed by the Assessee is allowed for statistical purpose.

Order pronounced in the open court on 12 -08-2025

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