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Facts
The assessee, an educational trust, applied for registration under Section 80G(5). The CIT(E) denied the application, observing that the trust had incurred religious expenses exceeding 5% of its total income and made substantial donations to other trusts, indicating that its activities were not exclusively for educational purposes and violated Section 10(23C)(vi) of the Act.
Held
The Income Tax Appellate Tribunal dismissed the appeal, noting that the assessee's counsel failed to adequately explain how the donations made to other trusts related to charitable purposes and did not provide any supporting documentation or a paper book. Consequently, the Tribunal found the grounds raised by the assessee to be without merit.
Key Issues
Whether the denial of registration under Section 80G(5) to an educational trust was justified, given its religious expenses exceeding 5% of income and unexplained donations to other trusts, suggesting activities not exclusively for educational purposes.
Sections Cited
80G(5), 10(23C)(vi), 80G(5)(iii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: DR. BRR Kumar & Shri T. R. Senthil Kumar
Shree Saurashtra Patel The CIT(Exemption), Seva Mandal Education Ahmedabad Trust 806 B/S Vs Shukan Bunglow, B/H Gas Godown, Nikol, Naroda Gam Road, Ahmedabad-382352 PAN: AAETS0113Q (Appellant) (Respondent) Assessee Represented: Shri Mehul K. Patel, Advocate Revenue Represented: Adjournment Application filed Date of hearing : 24-04-2025 Date of pronouncement : 26-06-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against the order dated 28.09.2024 passed by the Commissioner of Income Tax [Exemption] denying registration under section 80G of the Income Tax Act 1961 (hereinafter referred to as ‘the Act’). Page No 2 Shree Saurashtra Patel Seva Mandal Education Trust. vs. CIT(E)
Brief facts of the case is that the assessee is an Educational Trust running schools. The assessee filed application for registration u/s. 80G(5) in Form 10AB with relevant annexures. The Ld. CIT(E) found that the assessee had incurred expenditure of religious nature which is more than 5% of its total income for the year ended 31-03-2021. The assessee is also registered u/s. 10(23C)(vi) of the Act which is applicable in the case of any University or any other Educational Institution existing solely for educational purposes. Further perusal of Trust Deed, Ld. CIT(E) noticed that there are many other charitable objects not exclusively for educational objects. Therefore a show cause notice dated 23-09- 2024 was issued seeking explanation from the assessee.
2.1 The assessee vide its reply stated that there is no religious expenses made of Rs.58,05,555/-, but whereas it was donations made to two Trusts namely Shri Saurashtra Patel Samaj Charitable Trust, Saurashtra of Rs. 50,00,000/- and Uma Arogya Seva Foundation for Rs.2,50,000/- and Chief Minister Relief Fund of Rs.5,55,555/-. Further the donations made to the Trust do not carry any religious activities and are also not meant for any particular caste or community. The Assessee Trust is solely running schools and doing only educational activities, therefore requested to grant registration u/s. 80G(5) of the Act.
The Ld. CIT(E) considered the above reply and held that the objects of the Trust should be for the purpose of imparting education and all the activities should be relating to educational activities only. By making donation of Rs. 58,05,555/-, the Page No 3 Shree Saurashtra Patel Seva Mandal Education Trust. vs. CIT(E) assessee Trust has indulged in activities which are not for the purpose of education, thereby the Trust has violated the provisions of Section 10(23C)(vi) of the Act and the activities of the Trust are not genuine. Therefore denied for registration u/s. 80G(5) of the Act.
Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal:
1. That on facts, and in law, the learned CIT(Exemption) has grievously erred in rejecting the application for approval u/s. 80G(5)(iii) of the Act on erroneous premises.
2. That on facts and in law, the application made u/s. 80G(5)(iii) ought to have been granted as prayed for.
3. The appellant craves liberty to add, alter, amend any ground of appeal.
5. Ld. Counsel appearing for the assessee could not explain the donations made to the other Trusts and how they are relating to charitable purpose. In support of the same, the assessee has not filed any details or Paper Book either before the Ld. CIT(E) or before this Tribunal. In the absence of the same, the grounds raised by the assessee are devoid of merits and liable to be dismissed.
In the result, the appeal filed by the Assessee is hereby dismissed.