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Facts
The assessee, Manav Seva Trust, filed an appeal against the order of the CIT(E) denying approval under Section 80G(5). The CIT(E) rejected the application because one of the trust's objects was considered religious in nature, and the assessee allegedly did not provide sufficient evidence or opportunities for a hearing.
Held
The Tribunal disagreed with the CIT(E)'s order, finding that the object only mentioned 'helping religious place' and did not inherently make the object religious. The Tribunal also noted that the assessee had applied to amend its object and that an adequate opportunity of hearing was not provided.
Key Issues
Whether the CIT(E) erred in rejecting the approval under Section 80G(5) by misinterpreting the trust's object as religious and not providing adequate opportunity for hearing.
Sections Cited
80G(5), 10AB
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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & MS. SUCHITRA KAMBLE
O R D E R PER: ANNAPURNA GUPTA - AM: The present appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (hereinafter referred to as “CIT(E)”), Ahmedabad dated 29.12.2024 denying the approval under Section 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”).
2. The grounds of appeal raised by the assessee are as under:
“1. Learned CIT (Exemption) erred in law and facts by making the order by rejecting the application filed in form 10AB for granting approval under clause (iii) of the first proviso to section 80G(5) of the act for not producing evidence like affidavit and the document showing application made to the charity office for amending or removing the object as required by the authority.
Due to lack of knowledge, guidance and time limitation, documents are pending to produce against the notice issued by the authority.
Appellant craves to add, alter or delete any grounds either before or in the course of hearing of the appeal.”
Manav Seva Trust vs. CIT(E) Asst.Year –N.A. - 2 - 3. We have gone through the order of Ld. CIT(E) and we are not in agreement with his order denying approval to the assessee under Section 80G(5) of the Act. The reason for the same is that we have noted that the Ld. CIT(E) to have denied approval to the assessee noting that one of its objects was religious in nature. The object so noted by the Ld. CIT(E) is one mentioned in Para 8.1 of his order as under:
8.1 To begin with, on perusal of the objects of the applicant as stipulated in the instrument of creation, it is observed that the objectives/objects of the applicant is partly religious/composite in nature which put the applicant under the category of composite trust i.e. Religious-cum-charitable trust. The object under dispute is/are reproduced as under: Helping Religious place, food fields (annashetra) etc.
Reading this object the Ld. CIT(E) has arrived at a conclusion that it is religious in nature. We fail to understand how the reading of this object could lead to such a conclusion. The object only mentions helping religious place. This is the only connection with “religious” which is mentioned in the object. How helping the religious place makes it religious object we fail to understand.
We have noted that the assessee had submitted hand written reply explaining that it had not incurred any religious expenditure and has also submitted to have applied to the Joint Charity Commissioner, Ahmedabad for striking of the said object. However, in the absence of any corroborative evidences the Ld. CIT(E) rejected this contention of the assessee.
The Ld. Counsel for the assessee before us pointed out that firstly, adequate opportunity of hearing was not given to the assessee to furnish necessary evidences. That only two notices were issued to the assessee, one dated 05.10.2024 and other 06.12.2024 which is recorded in the order of Ld. CIT(E) also. She pointed out that since then the assessee has changed its object Manav Seva Trust vs. CIT(E) Asst.Year –N.A. - 3 - passing a special resolution to this effect and is now in possession of Notarized Affidavit of the special resolution. The said affidavit and the objects change application were filed before us.
In light of the above, it is clearly evident that the Ld. CIT(E) has acted in haste in rejecting application seeking approval under Section 80G(5) of the Act without considering all facts relating to the issue and without providing adequate opportunity of hearing to the assessee to demonstrate that none of it’s objects were religious in nature and neither had it incurred any expenditure for religious activities.
In light of the same we deem it fit to direct the Ld. CIT(E) to reconsider the application of the assessee for grant of approval in terms of Section 80G(5) of the Act after giving due opportunity of hearing to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.
This Order pronounced in Open Court on 20/05/2025 Sd/-- Sd/- (SUCHITRA KAMBLE) (ANNAPURNA GUPTA) (JUDICIAL MEMBER) ACCOUNTANT MEMBER Ahmedabad; Dated 20/05/2025 TANMAY, Sr. PS RUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,