SHRI VARDHAMAN STHANAKVASI JAIN SANGH TRUST,BHARUCH vs. CIT(EXEMPTION), AHMEDABAD

O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 25.11.2024.

1. In view of the facts and circumstances of the case the Ld. CIT(Exemption), erred in law and in facts, in not cancelling the registration of the Appellant U/s. 12 AB of The Income Tax Act, 1961 and hence Your Appellant prays that the impugned order of the cancellation of registration of the appellant U/s. 12AA of be quashed and the Ld. CIT(Exemption) be directed to grant the registration to the appellant U/s. 12AA of The Act.

3. The brief facts of the case are that the assessee filed application for approval under Section 80G of the Act in Form No. 10AB. However, Ld. Shri Vardhman Sthanakvasi Jain Sangh Trust vs. CIT(E) Asst. Year –N.A. - 2– CIT(E) dismissed the application on the ground that the assessee / applicant trust has incurred expenses on religious activities, in excess of 5% of the total income in the last three years.

4. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(E). Before us, the Counsel for the assessee submitted that Ld. CIT(E) failed to appreciate that the assessee has engaged purely in providing charitable services like distribution of food to the poor, medical check-up of stray animals, reimbursement of travelling expenses of people having low income etc. It was submitted before us that Ld. CIT(E) erred in not appreciating that these expenses were not for religious purposes but were essentially charitable expenses which was incurred by the assessee / applicant trust on religious “occasions”. The assessee incurred charitable expenses like food distribution to needy people, medical check-up of stray animals etc. on various religious occasions like Chaturmas Expenses, Vihar Sewa Expenses, Mahavir Jayanti Expenses, Tap Mahotsav Expenses etc. but the expenses, it was submitted before us, were purely charitable in nature, and merely because they were incurred on religious occasions would not, by itself take away their charitable character.