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Facts
The assessee, a charitable trust, filed an appeal against the order rejecting its application for registration under Section 80G of the Income Tax Act. The CIT(E) rejected the application finding that 31.5% of the trust's expenses were for religious activities.
Held
The Tribunal held that the CIT(E) erred in classifying expenses for cultural preservation and promotion as religious expenses. The matter was remanded to the CIT(E) for fresh verification of actual expenses.
Key Issues
Whether expenses on cultural preservation and promotion can be considered as religious expenses for the purpose of Section 80G registration. Whether the assessee was given adequate opportunity to be heard regarding the nature of expenses.
Sections Cited
80G, 80G(5)(B)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
Date of hearing : 18.02.2025 Date of pronouncement : 19.02.2025 आदेश/ORDER PER : DR. BRR KUMAR, VICE PRESIDENT:
This appeal is filed by the Assessee as against the appellate order dated 25.09.2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad, relating to the Assessment Year N.A.
2. The assessee has raised the following grounds of appeal:
A.Y. NA Page No 2
(1) Promotion of Culture and Heritage Does not Equate to Religious Purpose. (2) Guidance by a Jain Monk Does not imply Religious classification. (3) Trust’s activities focus on cultural preservation, humanitarian support, and social welfare, not solely religious purpose. (4) Donation to Akhil Bhartiya Shwetamber Murtipujak Tapagachha Jain Mahasangh is for charitable not religious purpose. (5) Opportunity of being heard is not provided for clarifying nature of expenses. (6) Opportunity of being is not provided for the reasons mentioned for rejection of application.
3. At the outset the Ld.AR for the assessee submitted the Ld. CIT(E) came to the conclusion that assessee has spent 31.5 % of the total expenses on account of religious activities and hence declined to grant registration u/s.80G of the Act. The Ld.AR argued that the Ld. CIT(E) erred in considering the amounts spent on preservation of cultural monuments and cultural promotion expenses as religious expenses . The Ld.AR argued that the expenses on account of religious activities should not exceed 5% of the total receipts for charitable purposes. Since the mater pertains to verification of the actual expenses, in the interest of justice, we remand the matter to the file of Ld.CIT(E) to verify the expenses and take a decision in accordance with the A.Y. NA Page No 3 provisions of Income tax Act, pertaining to the grant of registration u/s.80G(5)(B) of the Act.
4. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 19.02.2025.
Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR.BRR KUMAR) JUDICIAL MEMBER VICE PRESIDENT (True Copy) Ahmedabad : Dated 19.02.2025 आदेश क� �ितिलिप अ�ेिषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH BEFORE: DR. BRR KUMAR, VICE PRESIDENT And SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER
ITA No.2027/Ahd/2024 Assessment Year N.A
Mandan Parivar The Commissioner of Charitable Trust, Income Tax 127, Aadinath Society, Vs (Exemption) VIP Road, Ahmedabad. Karelibaug, Vadodara-390019. PAN: AAITM6892L (Appellant) (Respondent)
Assessee Represented: Shri Malhar Shah, AR. Revenue Represented: Shri Prathvi Raj Meena, CIT.D.R.
Date of hearing : 18.02.2025 Date of pronouncement : 19.02.2025 आदेश/ORDER PER : DR. BRR KUMAR, VICE PRESIDENT:
This appeal is filed by the Assessee as against the appellate order dated 25.09.2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad, relating to the Assessment Year N.A.
The assessee has raised the following grounds of appeal:
A.Y. NA Page No 2
(1) Promotion of Culture and Heritage Does not Equate to Religious Purpose. (2) Guidance by a Jain Monk Does not imply Religious classification. (3) Trust’s activities focus on cultural preservation, humanitarian support, and social welfare, not solely religious purpose. (4) Donation to Akhil Bhartiya Shwetamber Murtipujak Tapagachha Jain Mahasangh is for charitable not religious purpose. (5) Opportunity of being heard is not provided for clarifying nature of expenses. (6) Opportunity of being is not provided for the reasons mentioned for rejection of application.
At the outset the Ld.AR for the assessee submitted the Ld. CIT(E) came to the conclusion that assessee has spent 31.5 % of the total expenses on account of religious activities and hence declined to grant registration u/s.80G of the Act. The Ld.AR argued that the Ld. CIT(E) erred in considering the amounts spent on preservation of cultural monuments and cultural promotion expenses as religious expenses . The Ld.AR argued that the expenses on account of religious activities should not exceed 5% of the total receipts for charitable purposes. Since the mater pertains to verification of the actual expenses, in the interest of justice, we remand the matter to the file of Ld.CIT(E) to verify the expenses and take a decision in accordance with the A.Y. NA Page No 3 provisions of Income tax Act, pertaining to the grant of registration u/s.80G(5)(B) of the Act.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 19.02.2025.
Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR.BRR KUMAR) JUDICIAL MEMBER VICE PRESIDENT (True Copy) Ahmedabad : Dated 19.02.2025 आदेश क� �ितिलिप अ�ेिषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद