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Facts
The assessee, Sadhujana Sahaya Sangham, a charitable society, applied for regular registration under Section 12AB of the Income Tax Act. The CIT (Exemption) rejected the application, holding that the society was engaged in religious activities by offering food to devotees of Lord Ayyappa. The assessee also appealed against the denial of approval under Section 80G.
Held
The Tribunal held that merely offering food to devotees of Lord Ayyappa does not automatically render the assessee's activities purely religious. It set aside the CIT (Exemption)'s order rejecting regular registration under Section 12AB and remanded the matter for fresh consideration to verify other conditions for Section 12AA registration. Consequently, the appeal against the denial of Section 80G approval was also restored to the CIT (Exemption).
Key Issues
Whether providing food to devotees of a specific deity constitutes a purely religious activity justifying rejection of registration under Section 12AB/12AA and denial of Section 80G approval.
Sections Cited
12AA, 12A(1)(ac)(vi), 12AB, 80G
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI SOUNDARARAJAN K., JM
O R D E R Per: Inturi Rama Rao, AM These appeals filed by the assessee are directed against the order of the Commissioner of Income Tax (Exemption), Kochi dated 30.10.2023 for Assessment Year (AY) 2022-23.
2. The appellant is a society incorporated under the Travancore- Cochin Literacy Act, 1955. It is founded with charitable objects. The appellant was duly registered u/s. 12AA of the Income Tax Act, & 6/Coch/2024 Sadhujana Sahaya Sangham 1961 (the Act) and also registered under the Foreign Contribution Regulation Act 2010 (FCRA). The appellant trust was granted provisional registration u/s. 12A(1)(ac)(vi) of the Act. Then the appellant trust filed application in Form 10AB on 25.04.2023 seeking regular registration. The said application came to be rejected vide order dated 30.10.2023 by the learned Commissioner of Income Tax (Exemption), Kochi on the ground that the appellant is incurring expenditure on religious activities such as offering food to devotees of Lord Ayyappa. Accordingly he rejected the application.
Being aggrieved by the said order an appeal was filed before Tribunal.
When the appeal was called on nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceeded to dispose of the appeal after hearing the learned Sr. DR.
On a perusal of the impugned order it would be clear that the learned Commissioner of Income Tax (Exemption) had rejected the application for regular registration u/s. 12AB of the Act by holding that the appellant is engaged in business activities. The learned Commissioner of Income Tax (Exemption) had reached this conclusion taking into consideration the fact that the appellant is offering food to devotees of Lord Ayyappa. No material was brought on record by the Commissioner of Income Tax (Exemption) to indicate that discrimination was meted out to the beneficiaries on religious ground. Merely because the beneficiaries of the & 6/Coch/2024 Sadhujana Sahaya Sangham programme launched by the appellant trust are Ayyappa devotees, it does not lead to the conclusion that the activities of the appellant trust are purely religious in nature. Therefore the reasoning of the Commissioner of Income Tax (Exemption) cannot be sustained in the eyes of law. The order is set aside and remand the matter back to the Commissioner of Income Tax (Exemption) with a direction to dispose of the application de novo on being satisfied that the other conditions precedent for grant of registration u/s. 12AA are satisfied.
6. This appeal is filed by the appellant being aggrieved by the denial of approval u/s. 80G of the Act vide order dated 30.10.2023. Since the appeal filed by the assessee against the order of denial of registration u/s. 12AA of the Act is restored to the file of the Commissioner of Income Tax (Exemption) for the reasons stated therein, this appeal challenging denial of approval 8ss 80G of the Act is also restored to the file of the CIT (Exemption).
In the result, appeals filed by the assessee are partly allowed.
Order pronounced in the open court on 29th April, 2025.