SARVABHAOOM HINDU DHARAM SRICHOBEES AVTAR TATWAGYAN MANDIR TRUST DEPALPUR,INDORE vs. CIT EXEMPTION, BHOPAL, BHOPAL

We have heard learned Representatives of both sides and carefully perused the impugned order.

Ld. AR for assessee at first drew us to Para 6 of impugned order and showed that the Ld. CIT(E) has observed that assessee is a ‘religious entity’ and therefore in terms of section 80G(5)(ii) read with Explanation-3 to section 80G, the assessee is not eligible for approval u/s 80G(5). He, however, submitted that assessee is a ‘charitable-cum-religious entity’ which is manifest from following documents:

Ld. AR next submitted that although the provision of section 80G(5)(ii) read with Explanation-3 to section 80G disentitles an assessee engaged in ‘religious activity’ from getting approval u/s 80G(5) but the law does not stop here. There is an over-riding section 80G(5B) which prescribes thus:

Ld. AR submitted that the expenses incurred by present assessee for religious nature were below the prescribed limit of 5% as per section 80G(5B) and therefore the assessee is entitled to approval. To show the status of assessee’s expenses, Ld. AR drew us to ‘Annexure-A’ to his Written-Synopsis where following certificate of assessee-trust is filed:

Referring to above certificate, Ld. AR submitted that the only expenditure on religious activity could be “Poojan Expenses”, rest of the expenses were incurred for carrying charitable activity. He submitted that the magnitude of “Poojan Expenses” is very small and never exceeded 5% limit. Therefore, the assessee deserves benefit of section 80G(5B) which must be given and the Ld. CIT(E) be directed to grant approval sought by assessee.

Per contra, Ld. DR for revenue initially submitted that the CIT(E) has rightly treated the assessee has a ‘religious entity’ but later, after considering Ld. AR’s submissions as narrated by us in foregoing Para No. 4 of this order, did not insist on that point. He accepted that the assessee trust is a charitable-cum-religious entity, more so when the department has granted registration u/s 12AA accepting such status of assessee. However, Ld. DR went ahead to make a submission that the details of expenses filed by assessee in the certificate need to be deeply examined by CIT(E) because there are expenses other than “Poojan Expenses” which might have been incurred for ‘religious activity’ and he is unsure of making any submission in this regard. Therefore, he submitted that the present case of assessee may be remanded to CIT(E) for a proper examination in terms of section 80G(5B).

Ld. AR for assessee agreed to the submissions of Ld. DR.

We have considered the submissions of both sides and perused the impugned order as also the documents filed in Paper-Book to which our attention has been drawn. So far as the nature of assessee-trust is concerned, the Order of Registrar of Public Trust as narrated in earlier Para No. 4(i) of this order, makes it clear that the assessee is existing for multiple objects of charitable as well as religious nature. Further, the Order issued by Income-tax Department granting registration to assessee u/s 12AA as narrated in Para No. 4(ii) of this order, also accepts that the assessee has activity of charitable-cum-religious nature. Therefore, in view of these evidences, we are inclined to accept the status of assessee as ‘charitable- cum-religious’. Having said thus, we find a merit in the claim of assessee that it deserves benefit of section 80G(5B). The Ld. DR has made a proposal to remand this matter back to the file of CIT(E) for a deeper analysis of expenses and take a call on the touchstone of section 80G(5B). We agree to this proposal made by Ld. DR for revenue which is also accepted by Ld. AR for assessee. Therefore, in the end, we remand this matter to the file of CIT(E) for examining assessee’s case in terms of section 80G(5B) and grant final approval to assessee, if the assessee is found eligible in terms of section 80G(5B). The assessee succeeds in this appeal accordingly.

Resultantly, this appeal is allowed for statistical purpose.