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Facts
The assessee trust applied for approval under section 80G(5)(iii) of the Income Tax Act. The CIT(E) rejected the application, stating that the trust's objectives were community-specific (Visha Shrimali Jain Samaj) and not for the benefit of the public at large, and cancelled the provisional approval. The assessee argued that an amendment to the trust deed allowed for activities without discrimination of caste, but failed to provide a copy of this amendment.
Held
The Tribunal noted that the trust deed's objects were confined to the Visha Shrimali Jain Samaj community and were not for the benefit of the public at large. The claimed amendment to the trust deed, which would have allowed for broader charitable activities, was not substantiated with credible evidence, as a copy was not filed with the CIT(E) or the Tribunal. Therefore, the Tribunal found no reason to differ from the CIT(E)'s finding.
Key Issues
Whether the objects of the trust are for the benefit of the public at large, as required for approval under Section 80G, or are confined to a specific community, thereby disentitling it from such approval.
Sections Cited
80G(5)(iii), 80G(5), 2(15), 80G(5B), 11AA(1), 11AA(2)
AI-generated summary — verify with the full judgment below
Before: DINESH MOHAN SINHA & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal emanates from the order dated 24.12.2024 passed by the Commissioner of Income-tax (Exemption), Ahmedabad [in short “CIT(E)”], wherein CIT(E) was rejected the application for approval u/s 80G(5)(iii) of the Act and provisional approval also cancelled.
The grounds of appeal
raised by the assessee ae as follows: “1. On the facts and circumstances of the case as well as law on the subject, the ld. Commissioner of Income Tax (Exemption) has erred in rejecting the application filed by the Appellant Trust in form 10AB for grant of approval under clause (iii) of first proviso to section 80G(5) of the I.T. Act.
2. It is therefore prayed that order of ld. Commissioner of Income-tax (Exemptions) rejecting application of assessee may please be quashed.
Sheth Sobhagchand Dipchand Choksi & Ors.
3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
The brief facts of the case are that the assessee electronically filed application in Form No.10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the Act filed in Form No. 10AB. The CIT(E) issued three notices on 18.09.2024, 05.11.2024 and 09.12.2024, calling for various details. In response to the notices issued by the CIT(E), the assessee filed submission on 15.11.2024. He has discussed legal background of Rule 11AA(1), 11AA(2) and sections 2(15), 80G(5) along with Explanation – 3 and section 80G(5B). He subsequently issued a show cause notice dated 09.12.2024 and the assessee submitted its reply on 12.12.2024, which is at page 9 of this order. After perusing objects of the applicant as mentioned in the instrument of creation of the trust, the CIT(E) observed that objectives of the instrument are community specific in nature. The assessee had submitted that the trust was providing benefits not only to its community but also doing charitable activities for all. The assessee also submitted that an amendment was also made in Trust to carry out such activities without any discrimination of caste. However, no copy of the amendment was filed with the reply. The CIT(E) noted that the objective of trust deed is confined for specific community, i.e., Visha Shrimali Jain Samaj and not for benefit of public at large. Therefore, institution or fund is expressed to be for the benefit of any particular religious community or caste; and assessee is not entitled for the benefit u/s 80G(5) of the Act. Hence, he Sheth Sobhagchand Dipchand Choksi & Ors. rejected the application in Form 10AB and also cancelled the provisional approval.
Aggrieved by the order of CIT(E), the assessee filed appeal before this Tribunal. The learned Authorized Representative (ld. AR) submitted two paper books including trust deed, reply filed with CIT(E) against show cause notice, reply filed with CIT(E) u/s 80G(5), provisional registration certificate u/s 12A, provisional registration certificate u/s 80G, audited income and expenditure account and balance sheet for AYs 2021-22 and 2022-23. He submitted that the Trust was established in 1932. The objects cited by the CIT(E) are from the original trust deed. The ld. AR submitted that there is amendment in the trust deed and the assessee trust is not incurring any expenditure for the community but on education and other charitable activities. The CIT(E) did not verify the same and rejected the applicant.
On the other hand, the learned Commissioner of Income-tax - Departmental Representative (ld. CIT-DR) supported the order of CIT(E).
We have heard both parties and perused the materials available on record. We have also perused the trust deed from where the objects of the trust clearly reveal that the fund was open for the education of the boys and girls of Shri Visha Shrimali Jain Samaj. The ld. AR submitted that an amendment was made in the trust to carry out charitable activities without discrimination of caste. However, copy of the said amendment has not been filed either before the CIT(E) or before the Tribunal. Therefore, the finding of Sheth Sobhagchand Dipchand Choksi & Ors. the CIT(E) that it was not for the benefit of public at large and the objects of the trust are confined for the specific community, i.e., Visha Shrimali Jain Samaj has not been controverted by any credible evidence. Therefore, we do not find any justification to differ from the finding of the CIT(E). Accordingly, the appeal is dismissed.
In the result, appeal of the assessee is dismissed. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 29/08/2025.